SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a [ ]
Party other than the
Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to Sec. 240.14a-11(c) or
Sec. 240.14a-12
(Name of Registrant as
Specified In Its Charter)
Fidelity Magellan Fund
Name of Person(s) Filing
Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below
per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of
securities to which
transaction applies:
(2) Aggregate number of
securities to which
transaction applies:
(3) Per unit price or other
underlying value of
transaction
computed pursuant to Exchange
Act Rule 0-11:
(4) Proposed maximum aggregate
value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with
preliminary materials.
[ ] Check box if any part of the
fee is offset as provided by
Exchange Act Rule 0-11(a) (2)
and identify the filing for
which the offsetting fee was
paid previously. Identify the
previous filing by
registration statement
number, or the Form or
Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or
Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY(registered trademark) MAGELLAN(registered trademark) FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-6666
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Fidelity Magellan Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Magellan Fund (the fund), a series of Fidelity
Magellan Fund, a single series trust (the trust), will be held at
an office of the trust, 27 State Street, 10th Floor, Boston,
Massachusetts 02109 on April 19, 2000, at 9:00 a.m. The purpose of the
Meeting is to consider and act upon the following proposals, and to
transact such other business as may properly come before the Meeting
or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
4. To approve an amended management contract for the fund .
5. To approve an amended sub-advisory agreement with Fidelity
Management & Research (U.K.) Inc. for the fund.
6. To approve an amended sub-advisory agreement with Fidelity
Management & Research (Far East) Inc. for the fund.
7. To approve a Distribution and Service Plan pursuant to Rule 12b-1
for the fund.
8. To amend the fund's fundamental investment
limitation s concerning diversification to permit increased
investment in the securities of any single issuer.
9. To amend the fund's fundamental investment limitation
concerning diversification to exclude securities of other investment
companies from the limitation.
The Board of Trustees has fixed the close of business on February 22,
2000 as the record date for the determination of the shareholders of
the fund entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
February 22, 2000
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
((REGISTRATION)) ((VALID SIGNATURE))
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY MAGELLAN FUND
TO BE HELD ON APRIL 19, 2000
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity Magellan Fund (the trust) to be used at the Special Meeting
of Shareholders of Fidelity Magellan Fund (the fund) and at any
adjournments thereof (the Meeting), to be held on April 19, 2000 at
9:00 a.m. at 27 State Street, 10th Floor, Boston, Massachusetts 02109,
an office of the trust and Fidelity Management & Research Company
(FMR), the fund's investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about February 22,
2000. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $ 40,000 . The fund may also
arrange to have votes recorded by telephone. D.F. King & Co., Inc. may
be paid on a per-call basis for vote-by-phone solicitations on behalf
of the fund at an anticipated cost of approximately $ 50,000 . If
the fund records votes by telephone, it will use procedures designed
to authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their
instructions, and to confirm that their instructions have been
properly recorded. Proxies voted by telephone may be revoked at any
time before they are voted in the same manner that proxies voted by
mail may be revoked. The expenses in connection with preparing this
Proxy Statement and its enclosures and of all solicitations, including
telephone voting, will be paid by the fund. The fund will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares.
The principal business address of Fidelity Distributors Corporation
(FDC), the fund's principal underwriter and distribution agent, and
Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity
Management & Research (Far East) Inc. (FMR Far East), subadvisers to
the fund, is 82 Devonshire Street, Boston, Massachusetts 02109.
Fidelity Investments Japan Limited (FIJ), located at Shiroyama JT Mori
Bldg., 4-3-1 Toranomon, Minato-Ku, Tokyo 105, Japan is also a
subadviser to the fund.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, by the trust's receipt of a subsequent valid telephonic
vote or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved. With respect to fund
shares held in Fidelity individual retirement accounts (including
Traditional, Rollover, SEP, SARSEP, Roth and SIMPLE IRAs), the IRA
Custodian will vote those shares for which it has received
instructions from shareholders only in accordance with such
instructions. If Fidelity IRA shareholders do not vote their shares,
the IRA Custodian will vote their shares for them, in the same
proportion as other Fidelity IRA shareholders have voted, but only to
the extent necessary to reach quorum at the Meeting.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
On December 31, 1999 there were 775,277,883 shares of the fund
issued and outstanding. To the knowledge of the trus t, no
shareholder owned of record or beneficially more than 5% of the
outstanding shares of the fund on that date. Shareholders of record at
the close of business on February 22, 2000 will be entitled to vote at
the Meeting. Each such shareholder will be entitled to one vote for
each dollar of net asset value held on that date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
MARCH 31, 1999 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED
SEPTEMBER 30, 1999, CALL 1-800-544-6666 OR WRITE TO FIDELITY
DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS
SUFFICIENT TO APPROVE PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL 2. APPROVAL
OF PROPOSAL 3 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF
PROPOSALS 4 THROUGH 9 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE FUND. UNDER THE INVESTMENT
COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE
LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the
trust. Pursuant to the provisions of the Declaration of Trust of
Fidelity Magellan Fund, the Trustees have determined that the number
of Trustees shall be fixed at twelve. It is intended that the enclosed
proxy card will be voted for the election as Trustees of the twelve
nominees listed below, unless such authority has been withheld in the
proxy card.
All nominees named below are currently Trustees of Fidelity Magellan
Fund and have served in that capacity continuously since originally
elected or appointed. Robert M. Gates, Ned C. Lautenbach, William O.
McCoy, and Robert C. Pozen were selected by the trust's Nominating and
Administration Committee (see page 14) and were appointed to the Board
in March 1997, January 2000, January 1997, and August 1997,
respectively. None of the nominees are related to one another. Those
nominees indicated by an asterisk (*) are "interested persons" of the
trust by virtue of, among other things, their affiliation with either
the trust, the fund's investment adviser (FMR, or the Adviser), or the
fund's distribution agent, FDC. The business address of each nominee
who is an "interested person" is 82 Devonshire Street, Boston,
Massachusetts 02109, and the business address of all other nominees is
Fidelity Investments(registered trademark), P.O. Box 9235, Boston,
Massachusetts 02205-9235. Except for Robert M. Gates, Ned C.
Lautenbach, William O. McCoy, and Robert C. Pozen, each of the
nominees is currently a Trustee of 57 registered investment companies
advised by FMR. Mr. Gates, Mr. McCoy and Mr. Pozen are currently
Trustees of 55 registered investment companies advised by FMR. Mr.
Lautenbach is currently a Trustee of 52 registered investment
companies advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
<TABLE>
<CAPTION>
Nominee (((Age))) ((Principal Occupation))** Year of Election or
((Appointment))
<S> <C> <C>
Ralph F. Cox (67) President of RABAR 1991
Enterprises (management
consulting-engineering
industry, 1994). Prior to
February 1994, he was
President of Greenhill
Petroleum Corporation
(petroleum exploration and
production). Until March
1990, Mr. Cox was President
and Chief Operating Officer
of Union Pacific Resources
Company (exploration and
production). He is a
Director of Waste Management
Inc. (non-hazardous waste,
1993), CH2M Hill Companies
(engineering), and
Bonneville Pacific
(independent power and
petroleum production). In
addition, he is a member of
advisory boards of Texas A&M
University and the
University of Texas at Austin.
Phyllis Burke Davis (68) Retired from Avon Products, 1992
Inc. where she held various
positions including Senior
Vice President of Corporate
Affairs and Group Vice
President of U.S. sales,
distribution, and
manufacturing. She is
currently a Director of
BellSouth Corporation
(telecommunications), Eaton
Corporation (manufacturing),
and the TJX Companies, Inc.
(retail stores), and
previously served as a
Director of Hallmark Cards,
Inc., Nabisco Brands, Inc.,
and Standard Brands, Inc. In
addition, she is a member of
the Board of Directors of
the Southampton Hospital in
Southampton, N.Y. (1998).
Robert M. Gates Consultant, author, and 1997
(56) lecturer (1993). Mr. Gates
was Director of the Central
Intelligence Agency (CIA)
from 1991-1993. From 1989 to
1991, Mr. Gates served as
Assistant to the President
of the United States and
Deputy National Security
Advisor. Mr. Gates is a
Director of Charles Stark
Draper Laboratory
(non-profit), NACCO
Industries, Inc. (mining and
manufacturing), and TRW Inc.
(automotive, space, defense,
and information technology).
Mr. Gates previously served
as a Director of LucasVarity
PLC (automotive components
and diesel engines). He is
currently serving as Dean of
the George Bush School of
Government and Public
Service at Texas A & M
University (1999-2000). Mr.
Gates also is a Trustee of
the Forum for International
Policy and of the Endowment
Association of the College
of William and Mary. In
addition, he is a member of
the National Executive Board
of the Boy Scouts of America.
*Edward C. Johnson 3d (69) President, is Chairman, Chief 1984
Executive Officer and a
Director of FMR Corp.; a
Director and Chairman of the
Board and of the Executive
Committee of FMR; Chairman
and a Director of Fidelity
Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.;
and a Director of FDC.
Donald J. Kirk (67) Executive-in-Residence (1995) 1987
at Columbia University
Graduate School of Business.
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
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and as a Director
of Valuation Research Corp.
(appraisals and valuations,
1993-1995). He serves as
Chairman of the Board of
Directors of National Arts
Stabilization Inc., Chairman
of the Board of Trustees of
the Greenwich Hospital
Association, Director of the
Yale-New Haven Health
Services Corp. (1998), Vice
Chairman of the Public
Oversight Board of the
American Institute of
Certified Public
Accountants' SEC Practice
Section (1995), and as a
Public Governor of the
National Association of
Securities Dealers, Inc.
(1996).
Ned C. Lautenbach (56) Partner of Clayton, Dubilier 2000
& Rice, Inc. (private equity
investment firm) since
September 1998. Mr.
Lautenbach was Senior Vice
President of IBM Corporation
from 1992 until his
retirement in July 1998.
From 1993 to 1995 he was
Chairman of IBM World Trade
Corporation. He also was a
member of IBM's Corporate
Executive Committee from
1994 to July 1998. He is a
Director of PPG Industries
Inc. (glass, coating and
chemical manufacturer),
Dynatech Corporation (global
communications equipment),
Eaton Corporation (global
manufacturer of highly
engineered products) and
ChoicePoint Inc. (data
identification, retrieval,
storage, and analysis).
*Peter S. Lynch (57) Vice Chairman and Director of 1990
FMR. Prior to May 31, 1990,
he was a Director of FMR and
Executive Vice President of
FMR (a position he held
until March 31, 1991); Vice
President of Fidelity
Magellan Fund and FMR Growth
Group Leader; and Managing
Director of FMR Corp. Mr.
Lynch was also Vice
President of Fidelity
Investments Corporate
Services (1991-1992). In
addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic
Deerfield (1989) and Society
for the Preservation of New
England Antiquities, and as
an Overseer of the Museum of
Fine Arts of Boston.
William O. McCoy (66) Interim Chancellor for the 1997
University of North Carolina
at Chapel Hill. Previously
he had served from 1995
through 1998 as Vice
President of Finance for the
University of North Carolina
(16-school system). Prior to
his retirement in December
1994, Mr. McCoy was Vice
Chairman of the Board of
BellSouth Corporation
(telecommunications, 1984)
and President of BellSouth
Enterprises (1986). He is
currently a Director of
Liberty Corporation (holding
company, 1984), Duke-Weeks
Realty Corporation (real
estate, 1994), Carolina
Power and Light Company
(electric utility, 1996),
the Kenan Transport Company
(trucking, 1996), and
Dynatech Corporation
(electronics, 1999).
Previously, he was a
Director of First American
Corporation (bank holding
company, 1979-1996). In
addition, Mr. McCoy served
as a member of the Board of
Visitors for the University
of North Carolina at Chapel
Hill (1994-1998) and
currently serves on the
Board of Visitors of the
Kenan-Flager Business School
(University of North
Carolina at Chapel Hill,
1988).
Gerald C. McDonough (71) Chairman of the 1989
non-interested Trustees, is
Chairman of G.M. Management
Group (strategic advisory
services). Mr. McDonough is
a Director and Chairman of
the Board of York
International Corp. (air
conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems,
and metal products, 1992),
CUNO, Inc. (liquid and gas
filtration products, 1996),
and Associated Estates
Realty Corporation (a real
estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products)
from 1987-1996 and
Brush-Wellman Inc. (metal
refining) from 1983-1997.
Marvin L. Mann (66) Chairman Emeritus, of Lexmark 1993
International, Inc. (office
machines, 1991) where he
still remains a member of
the Board. 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), Imation
Corp. (imaging and
information storage, 1997).
He is a Board member of
Dynatech Corporation
(electronics, 1999).
*Robert C. Pozen (53) Senior Vice President, is 1997
also President and a
Director of FMR (1997); and
President and a Director of
Fidelity Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc. (1997),
and Fidelity Management &
Research (Far East) Inc.
(1997). Previously, Mr.
Pozen served as General
Counsel, Managing Director,
and Senior Vice President of
FMR Corp.
Thomas R. Williams (71) President of The Wales Group, 1989
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
National Life Insurance
Company of Vermont and
American Software, Inc. Mr.
Williams was previously a
Director of ConAgra, Inc.
(agricultural products),
Georgia Power Company
(electric utility), and
Avado, Inc. (restaurants).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of December 31, 1999, the nominees, Trustees and officers of the
Trust and the fund owned, in the aggregate, less than 1% of the fund's
outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met 11 times during the twelve
months ended March 31, 1999. It is expected that the Trustees will
meet at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, in conjunction
with meetings of the Board of Trustees. Currently, Messrs. Kirk
(Chairman), Gates and Lautenbach , and Mrs. Davis are members of
the committee. The committee oversees and monitors the trust's
internal control structure, its auditing function and its financial
reporting process, including the resolution of material reporting
issues. The committee recommends to the Board of Trustees the
appointment of auditors for the trust. It reviews audit plans, fees
and other material arrangements in respect of the engagement of
auditors, including non-audit services to be performed. It reviews the
qualifications of key personnel involved in the foregoing activities.
The committee plays an oversight role in respect of the trust's
investment compliance procedures and the code of ethics. During the
twelve months ended March 31, 1999, the committee held 7 meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Cox, Mann, and
Williams. The committee members confer periodically and hold meetings
as required. The committee makes nominations for independent trustees,
and for membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended March 31, 1999, the committee held 1 meeting. The
Nominating and Administration Committee will consider nominees
recommended by shareholders. Recommendations should be submitted to
the committee in care of the Secretary of the Trust. The trust does
not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of the
fund for his or her services for the fiscal year ended March 31, 1999,
or calendar year ended December 31, 199 9 , as applicable.
<TABLE>
<CAPTION>
<S> <C> <C>
COMPENSATION TABLE
Trustees and Members ((of the Aggregate Compensation from Total Compensation from the
Advisory Board)) ((Magellan))B,C,D Fund ((Complex))*,A
Edward C. Johnson 3d** $ 0 $ 0
Ralph F. Cox $ 25,165 $ 217,500
Phyllis Burke Davis $ 24,654 $ 211,500
Robert M. Gates $ 25,168 $ 217,500
E. Bradley Jones**** $ 24,823 $ 217,500
Donald J. Kirk $ 25,327 $ 217,500
Ned C. Lautenbach*** $ 0 $ 54,000
Peter S. Lynch** $ 0 $ 0
William O. McCoy $ 25,168 $ 214,500
Gerald C. McDonough $ 30,627 $ 269,000
Marvin L. Mann $ 25,168 $ 217,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 25,168 $ 213,000
</TABLE>
* Information is for the calendar year ended December 31, 1999 for
236 funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Ned C. Lautenbach served as a Member of the Advisory Board of the
trust. Mr. Lautenbach was appointed to the Board of Trustees of
Fidelity Magellan Fund effective January 1, 2000.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
A Compensation figures include cash, amounts required to be
deferred, and may include amounts deferred at the election of
Trustees. For the calendar year ended December 31, 1999, the Trustees
accrued required deferred compensation from the funds as follows:
Ralph F. Cox, $ 75,000 ; Phyllis Burke Davis, $ 75,000 ;
Robert M. Gates, $ 75,000 ; E. Bradley Jones, $ 75,000 ;
Donald J. Kirk, $ 75,000 ; William O. McCoy, $ 75,000 ;
Gerald C. McDonough, $ 87,500 ; Marvin L. Mann, $ 75,000 ;
and Thomas R. Williams, $ 75,000 . Certain of the non-interested
Trustees elected voluntarily to defer a portion of their compensation
as follows: Ralph F. Cox, $ 53,735 ; William O. McCoy,
$53,735; and Thomas R. Williams, $62,319 .
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee : Ralph F. Cox, $ 11,343 , Phyllis
Burke Davis, $ 11,343 , Robert M. Gates, $ 11,343 , E.
Bradley Jones, $ 11,343 , Donald J. Kirk, $ 11,343 , William
O. McCoy, $ 11,343 , Gerald C. McDonough, $ 13,233 , Marvin
L. Mann, $ 11,343 , and Thomas R. Williams, $ 11,343 .
D For the fiscal year ended March 31, 1999, certain of the
non-interested Trustees' aggregate compensation from the fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox,
$9,622; William O. McCoy, $9,622; Marvin L. Mann, $7,153; and Thomas
R. Williams, $9,622.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 and January 2000 (the Plan),
non-interested Trustees must defer receipt of a portion of, and may
elect to defer receipt of an additional portion of, their annual fees.
Amounts deferred under the Plan are treated as though
equivalent dollar amounts had been invested in shares of a
cross-section of Fidelity funds including funds in each major
investment discipline and representing a majority of Fidelity's assets
under management (the Reference Funds). The amounts ultimately
received by the Trustees under the Plan will be directly linked to the
investment performance of the Reference Funds. Deferral of fees in
accordance with the Plan will have a negligible effect on a fund's
assets, liabilities, and net income per share, and will not obligate a
fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUND.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for the fund to sign or certify any financial statements
of the fund required by any law or regulation to be certified by an
independent accountant and filed with the Securities and Exchange
Commission (SEC) or any state. Pursuant to the 1940 Act, such
selection requires the ratification of shareholders. In addition, as
required by the 1940 Act, the vote of the Trustees is subject to the
right of the fund, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such
action, to terminate such employment without penalty.
PricewaterhouseCoopers LLP has advised the fund that to the best of
its knowledge and belief, as of the record date, no
PricewaterhouseCoopers LLP professional had any direct or material
indirect ownership interest in the fund inconsistent with the
independence standards pertaining to accountants.
The independent accountants examine annual financial statements for
the fund and provide other audit and tax-related services. In
recommending the selection of the fund's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such
services would affect the accountants' independence. Representatives
of PricewaterhouseCoopers LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if
they so desire and will be available should any matter arise requiring
their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the fund
in the form attached to this Proxy Statement as Exhibit 1 (New
Declaration of Trust). The attached New Declaration of Trust has been
marked to show changes from the trust's existing Declaration of Trust
(Current Declaration of Trust). The New Declaration of Trust is a more
modern form of trust instrument for a Massachusetts business trust,
and, going forward, will be used as the standard Declaration of Trust
for all new Fidelity Massachusetts business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts
law, broader authority to act. This increased flexibility may allow
the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the fund to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will not result in any
changes in the fund's Trustees or officers or in the investment
policies described in the fund's current prospectus.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust. On December 18, 1997 and November 18, 1999, the
Board approved several additional changes to the form of the New
Declaration of Trust, which changes have been incorporated into the
form attached to this Proxy Statement. On July 15, 1999, September 16,
1999, and November 18, 1999, the Board authorized the submission of
the New Declaration of Trust to the trust's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES OR CLASSES.
Unlike the Current Declaration of Trust, the New Declaration of Trust
generally permits the Trustees, subject to applicable Federal and
state law, to reorganize or terminate all or a portion of the trust or
any of its series or classes. The Current Declaration of Trust
requires shareholder approval in order to reorganize or terminate the
trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit all or a portion
of the trust, a fund or class to reorganize into another entity. For
example, in order to reduce the cost and scope of state regulatory
constraints or to take advantage of a more favorable tax treatment
offered by another state, the Trustees may determine that it would be
in the shareholders' interests to reorganize a fund to domicile it in
another state or to change its legal form. Under the Current
Declaration of Trust, the Trustees cannot effectuate such a
potentially beneficial reorganization without first conducting a
shareholder meeting and incurring the attendant costs and delays. In
contrast, the New Declaration of Trust gives the Trustees the
flexibility to reorganize all or a portion of the trust or any of its
series or classes and achieve potential shareholder benefits without
incurring the delay and potential costs of a proxy solicitation. Such
flexibility should help to assure that the trust and the fund operate
under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate a fund or class. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing a trust, fund, or class
reorganization or termination to proceed without shareholder approval,
the Trustees have a fiduciary responsibility to first determine that
the proposed transaction is in the shareholders' interest. Any
exercise of the Trustees' increased authority under the New
Declaration of Trust is also subject to any applicable requirements of
the 1940 Act and Massachusetts law. Of course, in all cases, the New
Declaration of Trust would require that shareholders receive written
notification of any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund or class with another operating mutual fund or sell
all or a portion of a class's or fund's assets to another operating
mutual fund without first seeking shareholder approval. Under the New
Declaration of Trust, shareholder approval is still required for these
transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
REFERENCES TO CLASSES. The New Declaration of Trust includes explicit
references to "classes" of a fund in appropriate places throughout the
document. Classes are often a more efficient way of offering a
specific investment strategy to different types of investors without
creating separate funds for each type of investor. Each class
represents an interest in the same portfolio of securities but may be
offered with different service features, distribution arrangements or
fees. Although the Trustees are not prohibited from authorizing the
issuance of classes of shares under the Current Declaration of Trust,
the Trustees believe that it is appropriate to explicitly describe
their ability, without a vote of Shareholders, to establish new
classes of shares, to change or abolish existing classes of shares, to
divide an existing fund into classes of shares, and to take any other
action with respect to classes that they deem appropriate.
O THER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of
Trust modifies the Current Declaration of Trust in a number of
important ways, including the following:
1. The New Declaration of Trust modifies the Current Declaration of
Trust to allow FMR to enter into a Management Contract with the trust,
on behalf of the fund, and to amend the fund's Management
Contract subject to the provisions of Section 15 of the 1940 Act, as
modified or interpreted by the SEC. In contrast, the Current
Declaration of Trust explicitly requires the vote of a majority of the
outstanding voting securities of a fund to enter into and amend
Management Contracts. A corresponding change is also proposed for the
fund's Management Contract. For more information on this topic
generally, see "Modification of Management Contract Amendment
Provisions" on page 26.
2. The New Declaration of Trust broadens the authority of the
Trustees to redeem a shareholder for any reason deemed appropriate by
the Trustees. The Trustees' ability to do so could be limited by the
1940 Act and other applicable legal and regulatory requirements. The
Current Declaration of Trust explicitly allows the Trustees only to
redeem shareholders who do not meet a fund's minimum balance
requirement.
3. The New Declaration of Trust explicitly allows the Trustees to
effect Subportfolio Fund Structures, mergers, reorganizations and
similar transactions through any method approved by the Trustees,
including share-for-share exchanges, transfers or sale of assets,
shareholder in-kind redemptions and purchases, and exchange offers.
4. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
5. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees may employ as fund custodians ,
in addition to banks and trust companies, companies that are
members of a national securities exchange or other entities permitted
under the 1940 Act; delegate authority to investment advisers and
other agents; adopt and offer dividend reinvestment and related plans;
operate and carry on the business of an investment company; interpret
the investment policies, practices, and limitations of any fund; and
deal in shares of a fund.
6. The New Declaration of Trust clarifies that no shareholder of a
trust series shall have a claim on the assets of another series and
further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
7. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust,
including existing requirements that a Trustee vacancy be deemed to
occur when a Trustee is absent from his or her state of residence,
that Trustee vacancies must be filled within six calendar months, and
that portfolio securities be held pursuant to safeguards prescribed by
usual Massachusetts practice.
8. The New Declaration of Trust clarifies that the Trustees may
authorize dividends of fund property in addition to stock dividends.
9. The New Declaration of Trust permits the rights and preferences of
a Series or Class to be set forth in the registration statement for
such Series or Class or in any other document in addition to in a
resolution of the Board of Trustees.
10. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed
adoption of the New Declaration of Trust is in the best interests of
the trust's shareholders. Accordingly, the Trustees recommend that the
shareholders vote FOR the proposal to authorize them to adopt and
execute the New Declaration of Trust. If the proposal is not approved,
the Current Declaration of Trust will remain unchanged and in effect.
4. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR THE FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies several aspects of the
management fee that FMR receives from the fund for managing its
investments and business affairs. In addition, the Amended Contract
allows FMR and the trust, on behalf of the fund, to modify the
Management Contract subject to the requirements of the 1940 Act. The
existing Management Contract (Present Contract) currently requires the
vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page 27 for more details. (For information on
FMR, see the section entitled "Activities and Management of FMR" on
page .)
CURRENT MANAGEMENT FEE. The management fee is calculated and paid
monthly, and is normally expressed as an annual percentage of the
fund's average net assets. The fee has two components: a Basic Fee and
a Performance Adjustment. The Basic Fee is an annual percentage of the
fund's average net assets for the current month. The Basic Fee rate is
the sum of a Group Fee rate, which declines as FMR's fund assets under
management increase, and a fixed individual fund fee rate of 0.30%.
The Basic Fee rate for the fund's fiscal year ended March 31, 1999
(not including the fee amendments discussed below) was 0. 60 %.
The Performance Adjustment is a positive or negative dollar amount
based on the fund's performance and assets for the most recent 36
months. If the fund outperforms the Standard and Poor's 500 Index SM
(the Index) over 36 months, FMR receives a positive Performance
Adjustment, and if the fund underperforms the Index, the management
fee is reduced by a negative Performance Adjustment. The Performance
Adjustment is an annual percentage of the fund's average net assets
over the 36-month performance period. The Performance Adjustment rate
is 0.02% for each percentage point of outperformance or
underperformance, subject to a maximum of 0.20% if the fund
outperforms or underperforms the Index by more than ten percentage
points. Performance of the fund and the Index are rounded to the
nearest whole percentage point for purposes of the calculation.
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract, marked to
indicate the proposed amendments, is attached as Exhibit 2 on page .
The Amended Contract would (1) reduce the Group Fee rate further if
FMR's assets under management remain over $210 billion, (2) modify the
Performance Adjustment calculation to round the performance of the
fund and the Index to the nearest 0.01%, rather than the nearest
1.00%, and (3) allow FMR and the trust, on behalf of the fund, to
modify the Management Contract subject to the requirements of the 1940
Act. The existing Management Contract currently requires the vote of a
majority of the fund's outstanding voting securities to authorize all
amendments. See "Modification of Management Contract Amendment
Provisions" on page 27 for more details.
IMPACT OF GROUP FEE RATE REDUCTION. At FMR's current level of assets
under management (approximately $ 826 billion as of
Dec ember 3 1 , 1999), the changes to the Group Fee rate
reduce the management fee. FMR has voluntarily implemented the Group
Fee reductions pending shareholder approval, and the fund has paid
lower management fees as a result. For the fund's fiscal year ended
March 31, 1999, the management fee using the proposed Group Fee
reductions (including the Performance Adjustment) was 0.4299% of the
Fund's average net assets. The Group Fee reductions lowered the
management fee rate by 0.0128 % of average net assets
compared to the rate FMR was entitled to receive under the Present
Contract, 0.4427 %.
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding
method for the Performance Adjustment would have had no impact on the
management fee rate for the fiscal year ended March 31, 1999.
COMBINED EFFECT OF FEE CHANGES. In the fiscal year ended March 31,
1999, the Group Fee reductions and the changes to the Performance
Adjustment would have resulted in a 0.0128% reduction in the total
management fee based on average net assets . The future impact
will depend on many different factors, and may represent an increase
or decrease from the management fee under the Present Contract. The
Group Fee rate reductions will either reduce the management fee or
leave it unchanged, depending on the level of FMR's assets under
management. Calculating performance to the nearest 0.01% may increase
or decrease the Performance Adjustment, depending on whether
performance would have been rounded up or down.
E xcept for the modifications discussed above, the Amended
Contract is substantially identical to the fund's Present Contract
with FMR. (For a detailed discussion of the fund's Present Contract,
refer to the section entitled "Present Management Contract" on page .)
If approved by shareholders, the Amended Contract will take effect on
the first day of the first month following approval and will remain in
effect through July 31, 2000 and thereafter, but only as long as its
continuance is approved at least annually by (i) the vote, cast in
person at a meeting called for the purpose, of a majority of the
Independent Trustees and (ii) the vote of either a majority of the
Trustees or a majority of the outstanding shares of the fund. If the
Amended Contract is not approved, the Present Contract will continue
in effect through July 31, 2000, and thereafter only as long as its
continuance is approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on
the aggregate net assets of all registered investment companies having
management contracts with FMR (group assets). As group assets
increase, the Group Fee rate declines. The Amended Contract would not
change the Group Fee rate if group assets are $210 billion or less.
Above $210 billion in group assets, the Group Fee rate declines under
both contracts, but under the Amended Contract, it declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets.
The rate at which the Group Fee rate declines is determined by fee
"breakpoints" that provide for lower fee rates when group assets
increase. The Amended Contract would add 19 new, lower breakpoints
applicable when group assets are above $ 210 billion as
illustrated in the following table. (For an explanation of how the
Group Fee rate is used to calculate the management fee see the section
entitled "Present Management Contract" on page .)
GROUP FEE RATE BREAKPOINTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Group Assets ((($ Present ((Contract)) Group Assets ((($ billions))) Amended ((Contract))
billions)))
174 - 228 .3000% 174 - 210 .3000%
228 - 282 .2950% 210 - 246 .2950%
282 - 336 .2900% 246 - 282 .2900%
Over 336 .2850% 282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
534 - 587 .2500%
587 - 646 .2463%
646 - 711 .2426%
711 - 782 .2389%
782 - 860 .2352%
860 - 946 .2315%
946 - 1,041 .2278%
1,041 - 1,145 .2241%
1,145 - 1,260 .2204%
Over 1,260 .2167%
</TABLE>
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contract" on page .)
EFFECTIVE ANNUAL GROUP FEE RATES
Group Assets ((($ billions))) Present ((Contract)) Amended ((Contract))
150 0.3371% .3371%
200 0.3284% .3284%
250 0.3223% .3219%
300 0.3175% .3163%
350 0.3133% .3113%
400 0.3098% .3067%
450 0.3070% .3024%
500 0.3048% .2982%
550 0.3030% .2942%
600 0.3015% .2904%
650 0.3003% .2870%
700 0.2992% .2838%
750 0.2982% .2809%
800 0.2974% .2782%
850 0.2967% .2756%
900 0.2960% .2732%
950 0.2954% .2710%
1,000 0.2949% .2689%
1,050 0.2944% .2669%
1,100 0.2940% .2649%
1,150 0.2936% .2631%
1,200 0.2933% .2614%
1,250 0.2929% .2597%
1,300 0.2926% .2581%
1,350 0.2923% .2566%
1,400 0.2921% .2551%
FMR voluntarily adopted various additional Group Fee breakpoints for
group assets over $336 billion on August 1, 1994, January 1, 1996, and
August 1, 1999. Although the new fee breakpoints have not been added
to the management contract pending shareholder approval, FMR has
voluntarily based its management fee on the Group Fee schedule
contained in the Amended Contract since August 1, 199 9 . Group
assets for Dec ember 3 1 , 1999 were approximately
$8 26 billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT ROUNDING METHOD. The annual
Performance Adjustment rate equals 0.02% for each percentage point by
which the fund outperforms or underperforms the Index over a 36-month
performance period. Under the Present Contract, the investment
performance of both the fund and the Index are rounded to the nearest
full percentage point (for example, 15.5123% is rounded to 16%.)
Rounding to full percentage points results in the Performance
Adjustment rate being applied in 0.02% increments. In comparison,
under the Amended Contract, the investment performance of both the
fund and Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the
difference in investment performance. The more precise rounding method
results in a more accurate measure of the difference in investment
performance and allows for the Performance Adjustment to be applied in
0.0002% increments. This reduces the chance of minor changes in
performance resulting in significant changes to the Performance
Adjustment, and ultimately the fund's management fee.
During fiscal 1999, using the more precise rounding methodology,
there would have been no impact on the annual performance fee rate.
COMPARISON OF MANAGEMENT FEES. The following table compares the
fund's management fee as calculated under the terms of the Present
Contract (not including FMR's voluntary implementation of the Group
Fee reductions) for fiscal 1999 to the management fee the fund would
have incurred if the Amended Contract had been in effect. Management
fees are expressed in dollars and as percentages of the fund's average
net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
((Present Contract)) ((Amended Contract)) ((Difference))
$ % $ % $ %
Basic Fee 455,390,000 0.6008 445,647,000 0.5880 (9,743,000) (0.0128)
Performance Adjustment (( (119,834,000))) (( (0.1581))) (( (119,834,000))) (( (0.1581))) (( 0)) (( 0))
Total Management Fee 335,556,000 0.4427 325,813,000 0.4299 (9,743,000) (0.0128)
</TABLE>
The following table compares the fund's management fee as calculated
under the terms of the Present Contract (not including FMR's voluntary
implementation of the Group Fee reductions) for the twelve month
period ended Dec ember 3 1 , 1999 to the management fee the
fund would have incurred if the Amended Contract had been in effect.
Management fees are expressed in dollars and as percentages of the
fund's average net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
((Present Contract)) ((Amended Contract)) ((Difference))
$ % $ % $ %
Basic Fee 559,288,000 0.5973 543,528,000 0.5805 (15,760,000) (0.0168)
Performance
Adjustment (( (74,857,000))) (( (0.0799))) (( (75,552,000))) (( (0.0807))) (( (695,000))) (( (0.0008)))
Total Management
Fee 484,431,000 0.5174 467,976,000 0.4998 (16,455,000) (0.0176)
</TABLE>
The following table provides data concerning the fund's management
fees and expenses as a percentage of average net assets for the fiscal
year ended March 31, 1999 under the Present Contract (not including
FMR's voluntary implementation of the Group Fee reductions) and if the
Amended Contract had been in effect during the same period.
The following figures are based on historical expenses adjusted to
reflect current fees of the fund and are calculated as a percentage of
average net assets.
COMPARATIVE FEE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net
assets)
((Present Contract)) ((Amended Contract))
Management Fee 0.44% 0.43%
Other Expenses ((0.19%)) ((0.19%))
Total Fund Operating Expenses 0.63% 0.62%
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. The fund has entered into arrangements
with its custodian and transfer agent whereby credits realized as a
result of uninvested cash balances are used to reduce custodian and
transfer agent expenses. Including these reductions, the total
operating expenses presented in the table would have been 0.61% under
the Present Contract and 0.60% under the Amended Contract.
EXAMPLE: The following illustrates the expenses on a $10,000
investment under the fees and expenses stated above, assuming (1) 5%
annual return, (2) redemption at the end of each time period and (3)
payment of the fund's 3.00% sales charge:
((1 Year)) ((3 Years)) ((5 Years)) ((10 Years))
Present Contract $362 $496 $641 $1,063
Amended Contract $361 $493 $635 $1,051
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of
the fund. The example above should not be considered a representation
of past or future expenses of the fund. Actual expenses may vary from
year to year and may be higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the SEC. In contrast, the
Present Contract explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Present Contract's
amendment provisions will allow FMR and the trust, on behalf of the
fund, to amend the Management Contract without shareholder vote IF THE
1940 ACT PERMITS THEM TO DO SO. For example, under current
interpretations of Section 15 of the 1940 Act, the Amended Contract
would give FMR and the trust the ability to amend the Management
Contract to immediately reflect a management fee decrease without the
delay of having to first conduct a proxy solicitation. In short, the
proposed modification gives FMR and the trust added flexibility to
amend the Management Contract subject to 1940 Act constraints. Of
course, any future amendments to the Management Contract would require
the approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believes that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including all of the
Independent Trustees, on July 15, 1999 and October 14, 1999. The Board
of Trustees considered and approved the modifications to the Group Fee
Rate schedule during the two month period(s) from September to October
1999, November to December 1995, and June to July 1994, and the
modifications to the Performance Adjustment calculation during the
period from June to July 1995. The Board of Trustees received
materials relating to the Amended Contract in advance of the meeting
at which the Amended Contract was considered, and had the opportunity
to ask questions and request further information in connection with
such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their monthly meetings, the Trustees received materials specifically
relating to the Amended Contract. These materials included: (i)
information on the investment performance of the fund, a peer group of
funds and an appropriate index or combination of indices, (ii) sales
and redemption data in respect of the fund, and (iii) the economic
outlook and the general investment outlook in the markets in which the
fund invests. The Board of Trustees and the Independent Trustees also
consider periodically other material facts such as (1) FMR's results
and financial condition, (2) arrangements in respect of the
distribution of the fund's shares, (3) the procedures employed to
determine the value of the fund's assets, (4) the allocation of the
fund's brokerage, if any, including allocations to brokers affiliated
with FMR and the use of "soft" commission dollars to pay fund expenses
and to pay for research and other similar services, (5) FMR's
management of the relationships with the fund's custodian and
subcustodians, (6) the resources devoted to and the record of
compliance with the fund's investment policies and restrictions and
with policies on personal securities transactions and (7) the nature,
cost, and character of non-investment management services provided by
FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the impact of performance adjustments to management fees, (c)
the choice of performance indices and benchmarks, (d) the composition
of peer groups of funds, (e) transfer agency and bookkeeping fees paid
to affiliates of FMR, (f) investment performance, (g) investment
management staffing, (h) the potential for achieving further economies
of scale, (i) operating expenses paid to third parties, and (j) the
information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all of the matters considered. Matters considered by the Board
of Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of the
fund's portfolio manager, and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations, and
the senior management of Fidelity's equity group. Among other things
they considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, credit card, insurance,
publishing, real estate, international research and investment funds,
and others. The Board of Trustees and the Independent Trustees
considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
CONCLUSION. In considering the Amended Contract, the Board of
Trustees and the Independent Trustees did not identify any single
factor as all-important or controlling, and the foregoing summary does
not detail all of the matters considered. Based on their evaluation of
all material factors and assisted by the advice of independent
counsel, the Trustees concluded (i) that the existing management fee
structure is fair and reasonable and (ii) that the proposed
modifications to the management fee rates, that is the reduction of
the Group Fee Rate schedule and the modifications to the performance
adjustment calculation, and the proposed modification to the Present
Contract's amendment provisions, are in the best interest of the
fund's shareholders. The Board of Trustees, including the Independent
Trustees, voted to approve the submission of the Amended Contract to
shareholders of the fund and recommends that shareholders of the fund
vote FOR the Amended Contract.
5. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR THE
FUND.
The Board of Trustees, including the Independent Trustees, has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FMR
U.K., and the trust with respect to the fund (Amended Agreement). The
fund's Amended Agreement would allow FMR, FMR U.K., and the trust, on
behalf of the fund, to modify the Amended Agreement subject to the
requirements of the 1940 Act. The fund's existing sub-advisory
agreement (Present Agreement) requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments. FMR
PAYS ALL OF FMR U.K.'S FEES UNDER THE FUND'S AMENDED AGREEMENT. THE
FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND PAYS
TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENT. Under the fund's Present Agreement, FMR U.K. acts
as an investment consultant to FMR and supplies FMR with investment
research information and portfolio management advice as FMR reasonably
requests on behalf of the fund. FMR U.K. provides investment advice
and research services with respect to issuers located outside of the
United States, focusing primarily on companies based in Europe. Under
the fund's Present Agreement with FMR U.K., FMR, NOT THE FUND, pays
FMR U.K. a fee equal to 110% of FMR U.K.'s costs incurred in
connection with providing investment advice and research services.
Furthermore, under the fund's Present Agreement, FMR may grant FMR
U.K. investment management authority with respect to all or a portion
of the fund's assets, as well as the authority to buy and sell stocks,
bonds, and other securities for the fund, subject to the overall
supervision of FMR and the Board of Trustees. To the extent that FMR
grants FMR U.K. investment management authority under the fund's
Present Agreement, FMR, NOT THE FUND, pays FMR U.K. a fee equal to 50%
of FMR's monthly management fee with respect to the fund's average net
assets managed by FMR U.K. on a discretionary basis.
The fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMEN T TO THE PRESENT AGREEMENT. The fund's
Amended Agreement would allow FMR, FMR U.K., and the trust, on behalf
of the fund, to amend the Proposed Agreement subject to the provisions
of Section 15 of the 1940 Act, as modified or interpreted by the SEC.
In contrast, the fund's Present Agreement explicitly requires the vote
of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Agreement's amendment provisions would allow amendment of the
Amended Agreement without shareholder vote ONLY IF THE 1940 ACT SO
PERMITS. In short, the proposed modification gives FMR, FMR U.K., and
the trust added flexibility to amend the Amended Agreement subject to
1940 Act constraints. Of course, any future amendments to the Amended
Agreement would require the approval of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of the fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR U.K.'s,
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Amended Agreement without the delays and potential costs of
a proxy solicitation.
A corresponding modification is also proposed to the amendment
provisions in the fund's present management contract. See
"Modification of Management Contract Amendment Provision" for the fund
on page .
A copy of the form of Amended Agreement for the fund, marked to
indicate the proposed amendment, is supplied as Exhibit 3 beginning on
page 52. Except for the modification discussed above, the fund's
Amended Agreement is substantially identical to its Present
Agreement. (For a detailed discussion of the fund's Present Agreement,
refer to the section entitled "Sub-Advisory Agreements" beginning on
page ). If approved by shareholders, the fund's Amended Agreement will
take effect on th e f irst day of the first month
following approval and will remain in effect through July 31, 2000 and
from year to year thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a
meeting called for the purpose, of a majority of the Independent
Trustees and (ii) the vote of either a majority of the Trustees or a
majority of the outstanding shares of the fund. The fund's Amended
Agreement would be terminable on 60 days' written notice by either
party to the agreement and the Amended Agreement would terminate
automatically in the event of its assignment. If the fund's Amended
Agreement is not approved, its Present Agreement will continue in
effect through July 31, 2000 and thereafter only as long as its
continuance is approved at least annually as above.
FMR would continue to pay all of FMR U.K.'s fees under the fund's
Amended Agreement. If shareholders approve the Amended Agreement, FMR
could, in the future and subject to the approval of the Board of
Trustees, further amend the Amended Agreement to change the fees FMR
pays to FMR U.K. for providing the services described above. IF
SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT, HOWEVER, IN
THE FUTURE AMEND THE FUND'S PRESENT MANAGEMENT CONTRACT TO INCREASE
THE FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER WITHOUT
SHAREHOLDER APPROVAL.
FMR U.K., with its principal office in London, England, is a
wholly-owned subsidiary of FMR established in 1986 to provide
investment research to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FMR U.K. may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FMR U.K.'s only
client other than FMR is Fidelity International Limited (FIL), an
affiliate of FMR organized under the laws of Bermuda. FIL provides
investment advisory services to non-U.S. investment companies and
institutional investors investing in securities of issuers throughout
the world. Edward C. Johnson 3d, President and a Trustee of the trust,
is Chairman and a Director of FMR U.K., Chairman and a Director of
FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K., FMR Far East and FIJ" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit the fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to the fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR U.K. will remain in effect.
6. TO APPROVE AN AMENDED SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR
THE FUND.
The Board of Trustees, including the Independent Trustees, has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended sub-advisory agreement among FMR, FMR Far
East, and the trust with respect to the fund (Amended Agreement). The
fund's Amended Agreement would allow FMR, FMR Far East, and the trust,
on behalf of the fund, to modify the Amended Agreement subject to the
requirements of the 1940 Act. The fund's existing sub-advisory
agreement (Present Agreement) requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments. FMR
PAYS ALL OF FMR FAR EAST'S FEES UNDER THE FUND'S AMENDED AGREEMENT.
THE FUND'S AMENDED AGREEMENT WOULD NOT AFFECT THE FEES THAT THE FUND
PAYS TO FMR UNDER ITS PRESENT MANAGEMENT CONTRACT.
PRESENT AGREEMENT. Under the fund's Present Agreement, FMR Far East
acts as an investment consultant to FMR and supplies FMR with
investment research information and portfolio management advice as FMR
reasonably requests on behalf of the fund. FMR Far East provides
investment advice and research services with respect to issuers
located outside of the United States, focusing primarily on companies
based in the Far East. Under the fund's Present Agreement with FMR Far
East, FMR, NOT THE FUND, pays FMR Far East a fee equal to 105% of FMR
Far East's costs incurred in connection with providing investment
advice and research services. Effective January 1, 2000, FMR Far East,
in turn, has entered into an agreement with FIJ, a wholly owned
subsidiary of FIL, to provide such investment research and portfolio
management advice as FMR Far East reasonably requests. FMR Far East,
NOT THE FUND, pays FIJ a sub-advisory fee equal to 100% of FIJ's costs
incurred in connection with providing investment advice and research
services.
Furthermore, under the fund's Present Agreement, FMR may grant FMR
Far East investment management authority with respect to all or a
portion of the fund's assets, as well as the authority to buy and sell
stocks, bonds, and other securities for the fund, subject to the
overall supervision of FMR and the Board of Trustees. To the extent
that FMR grants FMR Far East investment management authority under the
fund's Present Agreement, FMR, NOT THE FUND, pays FMR Far East a fee
equal to 50% of FMR's monthly management fee with respect to the
fund's average net assets managed by FMR Far East on a discretionary
basis.
The fund's Present Agreement requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments.
PROPOSED AMENDMEN T TO THE PRESENT AGREEMENT. The fund's
Amended Agreement would allow FMR, FMR Far East, and the trust, on
behalf of the fund, to amend the Proposed Agreement subject to the
provisions of Section 15 of the 1940 Act, as modified or interpreted
by the SEC. In contrast, the fund's Present Agreement explicitly
requires the vote of a majority of the outstanding voting securities
of the fund to authorize all amendments. Generally, the proposed
modification to the Present Agreement's amendment provisions would
allow amendment of the Amended Agreement without shareholder vote ONLY
IF THE 1940 ACT SO PERMITS. In short, the proposed modification gives
FMR, FMR Far East, and the trust added flexibility to amend the
Amended Agreement subject to 1940 Act constraints. Of course, any
future amendments to the Amended Agreement would require the approval
of the Board of Trustees.
On July 15, 1999, the Board of Trustees agreed to submit the Amended
Agreement to shareholders of the fund pursuant to a unanimous vote of
both the full Board of Trustees and the Independent Trustees. The
Trustees considered the benefit to shareholders of FMR's, FMR Far
East's, and the trust's increased flexibility (within 1940 Act
constraints) to amend the Amended Agreement without the delays and
potential costs of a proxy solicitation.
A corresponding modification is also proposed to the amendment
provisions in the fund's present management contract. See
"Modification of Management Contract Amendment Provisions" on page .
A copy of the form of Amended Agreement for the fund, marked to
indicate the proposed amendment, is supplied as Exhibit 4 beginning on
page 56. Except for the modification discussed above, the fund's
Amended Agreement is substantially identical to its Present Agreement.
(For a detailed discussion of the fund's Present Agreement, refer to
the section entitled "Sub-Advisory Agreements" beginning on page .) If
approved by shareholders, the fund's Amended Agreement will take
effect on the first day of the first month following approval
and will remain in effect through July 31, 2000 and from year to year
thereafter, but only as long as its continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of the Independent Trustees and (ii) the vote
of either a majority of the Trustees or a majority of the outstanding
shares of the fund. The fund's Amended Agreement would be terminable
on 60 days' written notice by either party to the agreement and the
Amended Agreement would terminate automatically in the event of its
assignment. If the fund's Amended Agreement is not approved, its
Present Agreement will continue in effect through July 31, 2000 and
thereafter only as long as its continuance is approved at least
annually as above.
FMR would continue to pay all of FMR Far East's fees under the fund's
Amended Agreement. If shareholders approve the Amended Agreement, FMR
could, in the future and subject to the approval of the Board of
Trustees, further amend the Amended Agreement to change the fees FMR
pays to FMR Far East for providing the services described above. IF
SHAREHOLDERS APPROVE THE AMENDED AGREEMENT, FMR COULD NOT, HOWEVER, IN
THE FUTURE AMEND THE FUND'S PRESENT MANAGEMENT CONTRACT TO INCREASE
THE FUND'S MANAGEMENT FEE RATE PAYABLE TO FMR THEREUNDER WITHOUT
SHAREHOLDER APPROVAL.
FMR Far East, with its principal office in Tokyo, Japan, is a
wholly-owned subsidiary of FMR established in 1986 to provide
investment research to FMR with respect to foreign securities. This
research complements other research on foreign securities produced by
FMR's U.S.-based research analysts and portfolio managers, or obtained
from broker-dealers or other sources.
FMR Far East may also provide investment advisory services to FMR
with respect to other investment companies for which FMR serves as
investment adviser, and to other clients. Currently, FMR Far East's
only client other than FMR is FIL, an affiliate of FMR organized under
the laws of Bermuda. FIL provides investment advisory services to
non-U.S. investment companies and institutional investors investing in
securities of issuers throughout the world. Edward C. Johnson 3d,
President and a Trustee of the trust, is Chairman and a Director of
FMR Far East, Chairman and a Director of FIL, and a principal
stockholder of both FIL and FMR. For more information on FMR Far East,
see the section entitled "Activities and Management of FMR U.K., FMR
Far East and FIJ" on page .
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit the fund and its shareholders. The Trustees recommend
voting FOR the proposal. With respect to the fund, if the Amended
Agreement is approved by shareholders, the Amended Agreement will take
effect on the first day of the first month following approval. If the
Amended Agreement is not approved by shareholders, the Present
Agreement with FMR Far East will remain in effect.
7. TO APPROVE A DISTRIBUTION AND SERVICE PLAN PURSUANT TO RULE 12B-1
FOR THE FUND.
The Board of Trustees has approved, and recommends that shareholders
of Fidelity Magellan Fund approve a Distribution and Service Plan (the
Plan) for the fund. A copy of the Plan is attached to this Proxy
Statement as Exhibit 5.
THE PLAN. The Plan was approved by the Board as provided for by Rule
12b-1 (the Rule) promulgated by the SEC under the 1940 Act. The Rule
provides that an investment company (e.g., a mutual fund) acting as a
distributor of its shares must do so pursuant to a written Plan
"describing all material aspects of the proposed financing of
distribution.'' Under the Rule, an investment company is deemed to be
acting as a distributor of its shares if it engages "directly or
indirectly in financing any activity which is primarily intended to
result in the sale of shares issued by such company, including, but
not necessarily limited to, advertising, compensation of underwriters,
dealers, and sales personnel, the printing and mailing of prospectuses
to other than current shareholders, and the printing and mailing of
sales literature.''
The Plan is designed to avoid legal uncertainties which may arise
from the ambiguity of the phrase "primarily intended to result in the
sale of shares'' and from the term "indirectly'' as used in the Rule.
The SEC has neither approved nor disapproved the Plan.
The Plan contemplates that all expenses relating to the distribution
of fund shares shall be paid for by FMR, or FDC, a wholly owned
subsidiary of FMR Corp., out of past profits and other resources,
including management fees paid by a fund to FMR. The Plan also
recognizes that FMR, either directly or through FDC, may make payments
from these sources to securities dealers and to other third parties
who engage in the sale of fund shares or who render shareholder
services. The Plan provides that, to the extent that the fund's
payment of management fees to FMR might be considered to constitute
the "indirect'' financing of activities "primarily intended to result
in the sale of shares,'' such payment is expressly authorized. THE
PLAN DOES NOT AUTHORIZE PAYMENTS BY THE FUND OTHER THAN THOSE THAT ARE
TO BE MADE TO FMR UNDER ITS MANAGEMENT CONTRACT.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
Although the Plan contemplates that FMR and FDC may engage in various
distribution activities, it does not require them to perform any
specific type of distribution activity or to incur any specific level
of expense for such activities.
The Plan contains a number of provisions relating to reporting
obligations and to its amendment and termination as required by the
Rule. If approved by shareholders, the Plan will continue in effect as
long as its continuance is specifically approved at least annually by
a majority of the Board of Trustees, including a majority of the
Trustees who are not "interested persons'' of the trust and who have
no direct or indirect financial interest in the operation of the Plan
or any agreement related to the Plan (the non-interested Trustees),
cast in person at a meeting called for the purpose of voting on the
Plan. The Plan may be amended at any time by the Trustees, except that
it may not be amended to authorize direct payments by the fund to
finance any activity primarily intended to result in the sale of
shares issued by the fund or to increase materially the amount spent
by the fund for distribution without the approval of a majority of the
outstanding shares of the fund and the Trustees. All material
amendments to the Plan must be approved by a majority of the
non-interested Trustees. The Plan, and any agreements related to the
Plan, may be terminated at any time by a vote of the majority of the
non-interested Trustees or by a vote of the majority of the
outstanding shares of the fund. The Plan requires that the Trustees
receive, at least quarterly, a written report as to the amounts
expended during the quarter by FMR, or FDC, in connection with
financing any activity primarily intended to result in the sale of
shares issued by the fund, and the purposes for which such
expenditures were made. As required by the Rule, while the Plan is in
effect, the selection and nomination of those Trustees who are not
"interested persons" shall be committed to the discretion of the
non-interested Trustees then in office.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of
the Plan, the Board considered a variety of factors and was advised by
counsel who are not counsel to FMR or FDC. The Trustees believe that
the fees paid by the fund to FMR under the Management Contract are
fair and reasonable, that the services provided thereunder are
necessary and appropriate for the fund and its shareholders, and that
the fund does not indirectly finance the distribution of its shares in
contravention of the Rule. Nonetheless, the Trustees concluded that
adoption of the Plan would avoid legal uncertainties which might arise
as a result of what they and FMR believe to be potentially subjective
and ambiguous language contained in the Rule and in public releases
issued by the SEC in connection with the proposal and adoption of the
Rule (SEC Releases). The Trustees believe that the adoption of the
Plan is advisable to minimize such legal uncertainties and to provide
other benefits to the fund and its shareholders.
The Trustees noted that the fund's Plan does not involve any direct
payment by the fund to finance any activity primarily intended to
result in the sale of shares issued by the fund, and that any
amendment of the fund's Management Contract with FMR to increase the
amount paid by the fund thereunder would require approval of both the
Trustees and the fund's shareholders. The Trustees also considered the
factors suggested in the SEC Releases including: the need for
independent counsel or experts to assist the Trustees in reaching a
determination; the nature and causes of the problems and circumstances
which made consideration of a Plan appropriate; the way in which a
Plan would resolve or alleviate the problems, including the nature and
approximate amount of the expenditures contemplated by the Plan; the
merits of possible alternatives to the Plan; the interrelationship
between the Plan and the activities of FMR in financing the
distribution of the fund's shares; the possible benefits of the Plan
to FMR and its affiliates relative to those expected to accrue to the
fund; and consequently the effects of the Plan on existing
shareholders.
The reduction in legal uncertainties arising from the potentially
subjective and ambiguous language that appears in the Rule and in the
SEC Releases enables the Trustees, in connection with their review of
the fund's Management Contract with FMR, to consider the full range of
services provided by FMR and FDC, including services which may be
related to the distribution of the fund's shares. In addition, the
Board of Trustees considered alternatives to the Plan, including
direct payments by the fund to FDC and/or third parties. The Trustees
believe it is appropriate to ensure that FMR and FDC have the
flexibility to direct their distribution activities in a manner
consistent with prevailing market conditions by using, subject to
approval of the Trustees, their resources, including the current
management fee, to make payments to third parties . To the
extent that FMR has greater flexibility under the Plan, additional
sales of the fund's shares may result. The Trustees believe that this
flexibility has the potential to benefit the fund by reducing the
possibility that the fund would experience net redemptions, which
might require the liquidation of portfolio securities in amounts and
at times that could be disadvantageous for investment purposes. Of
course, there can be no assurance that these events will occur.
The Board of Trustees recognized that a greater level of fund assets
benefits FMR by increasing its management fee revenues. The Board
noted the high quality of investment management services and the
expansion of, and many innovations in, investor services that have
been provided by FMR over the years. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and
retain a high caliber of investment and other personnel and to develop
and implement new systems for providing services and information to
shareholders. The Board considers this ability to be an important
benefit to the fund and its shareholders.
CONCLUSION. For the reasons stated above, the members of the Board of
Trustees concluded in the exercise of their business judgment and in
light of their fiduciary duties under state law and the 1940 Act that
there is a reasonable likelihood that the Plan will benefit the fund
and its shareholders. The Trustees recommend that shareholders of the
fund vote FOR approval of the Plan. With respect to the fund, if the
Plan is not approved, the Board and FMR will consider alternative
means of obtaining the services that are to be provided under the
Plan.
8. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION S
CONCERNING DIVERSIFICATION TO PERMIT INCREASED INVESTMENT IN THE
SECURITIES OF ANY SINGLE ISSUER.
The fund's current fundamental investment limitation s
concerning diversification are as follows:
"The fund may not purchase the securities of any issuer if such
purchase, at the time thereof, would cause more than 5% of the value
of the fund's total assets at market to be invested in the securities
of such issuer (other than obligations of the United States government
and its instrumentalities). The fund may not purchase the securities
of an issuer if, as a result the fund would own more than 10% of the
outstanding voting securities of such issuer."
The Trustees recommend that shareholders of the fund vote to replace
the fund's current fundamental investment limitation s
con c erning diversification with the following fundamental
investment limitation:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The percentage limitations in the proposed fundamental limitation are
required by the 1940 Act for diversified non-money market
funds . The proposed fundamental limitation allows the fund, with
respect to 25% of its total assets, to invest more than 5% of its
total assets in the securities of one or more issuers and to hold more
than 10% of the voting securities of any issuer. With respect to
75% of its total assets, the fund will continue to be required to
invest so that no more than 5% of total assets are invested in
any one issuer and so that the fund owns no more than 10% of the
voting securities of any such issuer.
The proposed limitation would permit the fund, for example, to invest
25% of its total assets in a single issuer's securities, or to
invest 10% of its total assets in securities of one issuer and 15%
of its total assets in securities of another issuer. The proposal
would give the fund greater investment flexibility by permitting it to
acquire larger positions in the securities of individual issuers. In
particular, it would increase fund management's ability, where
appropriate, to over-weight positions that represent significant
percentages of market benchmarks. FMR believes that this increased
flexibility may provide opportunities to enhance the fund's
performance. At the same time, investing a larger percentage of the
fund's assets in a single issuer's securities increases the fund's
exposure to risks associated with that issuer's financial
condition and business operations. FMR will use the increased
flexibility to invest more than 5% of the fund's total assets in an
issuer's securities only when it believes the securities' potential
return justifies accepting the risks associated with the higher level
of investment. Approval of this proposal may affect the way in which
the fund is managed with regard to investment of more than 5% of the
fund's total assets in a single issuer's securities; however, FMR does
not currently expect that approval of this proposal will materially
affect the way in which the fund is managed with regard to the fund's
holding more than 10% of the voting securities of an issuer.
If this proposal is approved, future amendments to the fund's
fundamental diversification limitation will continue to require
shareholder approval.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the fund's disclosure is revised to reflect the
change . If Proposal 9 is also approved, the fundamental
diversification limitation will be further changed as discussed below.
If this proposal is not approved by shareholders of the fund, but
Proposal 9 is approved, the fund's fundamental diversification
limitation s will be changed as discussed in Proposal 9. If
neither this proposal nor Proposal 9 is approved, the fund's
fundamental diversification limitation s will remain unchanged.
9. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER INVESTMENT COMPANIES.
The Trustees recommend that the shareholders of the fund amend the
fund's fundamental investment limitation concerning
diversification to exclude securities of other investment
companies.
If Proposal 8 is approved , this amendment would be effected by
adding the underlined text below to the fundamental diversification
limitation recommended in Proposal 8:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities(( , or securities of other investment
companies))) if, as a result, (a) more than 5% of the fund's total
assets would be invested in the securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of
that issuer."
If Proposal 8 is not approved , this amendment would be
effected by adding the same underlined language to the fund's current
fundamental diversification limitation s , so that the
fundamental diversification limitation s would read as
follows:
"The fund may not purchase the securities of any issuer if such
purchase, at the time thereof, would cause more than 5% of the value
of the fund's total assets at market to be invested in the securities
of such issuer (other than obligations of the United States government
and its instrumentalities(( , or securities of other investment
companies))). The fund may not purchase the securities of an issuer
(((other than securities of other investment companies))) if, as a
result the fund would own more than 10% of the outstanding voting
securities of such issuer."
In either case, the exclusion recommended in this Proposal 9 would
make one change to the fund's fundamental diversification
limitation (s) : it would permit the fund to invest without limit
in the securities of other investment companies including any
portion of the fund allocated to the fixed-income market. Pursuant to
an order of exemption granted by the SEC, the fund may invest in short
term bond or money market funds managed by FMR or an affiliate of FMR
(the Investment Funds). The Investment Funds currently do not bear the
cost of investment advisory, management, or transfer agent fees,
although they may do so subject to the conditions of the SEC order,
including Board review of the total fees paid by shareholders of the
fund. The Investment Funds currently pay minimal fees for services
such as custodian, auditor, certain pricing and bookkeeping services,
and Independent Trustee fees. FMR anticipates that investing in the
Investment Funds will benefit the fund by enhancing the efficiency of
investment of cash generated by fund shareholder or investment
activity, or through the investment of fund assets allocated to the
short term bond or money market funds in support of the fund's
investment objective. T he Investment Funds may serve as the
principal option for cash investment.
If this proposal is approved, future amendments to the fund's
fundamental diversification limitation(s) will continue to require
shareholder approval.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. If this proposal
is approved by shareholders of the fund , whether or not
Proposal 8 is adopted, the fund's fundamental limitation (s)
concerning diversification will be revised to exclude "securities
of other investment companies." The amended fundamental
diversification limitation (s) , upon shareholder approval, will
become effective when the fund's disclosure is revised to reflect
the change . If neither this proposal nor Proposal 8 is adopted,
the fund's fundamental diversification limit s will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees and average net assets of funds with investment objectives
similar to Fidelity Magellan Fund and advised by FMR is contained in
the Table of Average Net Assets and Expense Ratios in Exhibit 6
beginning on page 64.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; Peter S.
Lynch, Vice Chairman; and Abigail P. Johnson, Senior Vice President.
With the exception of Abigail P. Johnson, each of the Directors
is also a Trustee of the trust. Mr. Johnson 3d, Ms. Johnson,
Mes s r s . Pozen, John H. Costello, Matthew N. Karstetter,
Eric D. Roiter, Robert A. Dwight , and Robert Stansky are
currently officers of the trust and officers or employees of FMR or
FMR Corp. All of these persons hold or have options to acquire
stock of FMR Corp. The principal business address of each of the
Directors of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d and Ms. Abigail
P. Johnson's family are the predominant owners of a class of shares of
common stock, representing approximately 49% of the voting power of
FMR Corp., and, therefore, under the 1940 Act may be deemed to form a
controlling group with respect to FMR Corp.
During the period April 1, 1998 through December 31, 1999, no
transactions were entered into by Trustees and nominees as Trustee of
the trust involving more than 1% of the voting common, non-voting
common and equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K., FMR FAR EAST AND FIJ
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed
in 1986 to provide research and investment advice with respect to
companies based outside the United States for certain funds for which
FMR acts as investment adviser. FMR may grant FMR U.K. and FMR Far
East investment management authority as well as authority to buy and
sell securities for certain of the funds for which it acts as
investment adviser, if FMR believes it would be beneficial to a fund.
FIJ is a wholly owned subsidiary of FIL, organized in Japan in 1986 to
provide research and investment recommendations with respect to
companies primarily based in Japan and other parts of Asia.
Funds with investment objectives similar to Fidelity Magellan Fund
managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East, and the net assets of
each of these funds, are indicated in the Table of Average Net Assets
and Expense Ratios in Exhibit 6 beginning on page 64.
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d also is
President and a Trustee of the trust and other funds advised by FMR;
Chairman and a Director of Fidelity Investments Money Management, Inc.
(FIMM); Chairman, Chief Executive Officer, President, and a Director
of FMR Corp., and a Director and Chairman of the Board and of the
Executive Committee of FMR. In addition, Mr. Pozen is Senior Vice
President and a Trustee of the trust and of other funds advised by
FMR; President and a Director of FMR; and President and a Director of
FIMM. Each of the Directors is a stock holder of FMR Corp. The
principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
The Directors of FIJ are Billy Wilder, President, Simon Haslam,
Edward C. Johnson 3d, Noboru Kawai, Yasuo Kuramoto, Tetsuzo Nishimura,
Takeshi Okazaki, and Hiroshi Yamashita. With the exception of Mr.
Edward C. Johnson 3d, the principal business address of each of the
Directors is Shiroyama JT Mori Building, 4-3-1 Toranomon, Minato-ku,
Tokyo 105, Japan. The principal business address of Mr. Edward C.
Johnson 3d is 82 Devonshire Street, Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other
services. Under its management contract with the fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the fund in accordance with its
investment objective, policies, and limitations. FMR also provides the
fund with all necessary office facilities and personnel for servicing
the fund's investments, compensates all officers of the fund and all
Trustees who are "interested persons" of the trust or of FMR, and all
personnel of the fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal and state laws;
developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 4.
In addition to the management fee payable to FMR, the fund pays
transfer agent and pricing and bookkeeping fees to Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, its transfer, dividend
disbursing, and shareholder servicing agent. Although the
fund's current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust, on behalf of the fund has entered into a revised transfer agent
agreement with FSC, pursuant to which FSC bears the costs of providing
these services to existing shareholders. Other expenses paid by the
fund include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by the fund for
fiscal 1999 amounted to $134,819,000.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered. Promotional and
administrative expenses in connection with the offer and sale of
shares are paid by FMR. Sales charge revenue paid to FDC for fiscal
1999 amounted to $9,936,000 , of which $9,916,000 was retained .
FMR is the fund's manager pursuant to a management contract dated
April 1, 1994, which was approved by shareholders on March 23, 1994.
At that time, the fund's shareholders approved a proposal to modify
the group fee portion of the management fee to provide for lower fee
rates if FMR's assets under management remained above $138 billion.
For the services of FMR under the management contract, the fund pays
FMR a monthly management fee which has two components: a basic fee,
which is the sum of a group fee rate and an individual fund fee rate,
and a performance adjustment based on a comparison of the fund's
performance to that of the Standard & Poor's 500 Index (the Index).
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts and is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown on the following page on the
left. The schedule on the following page on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $722 billion of group net
assets - the approximate level for March 1999 - was 0.2836%, which is
the weighted average of the respective fee rates for each level of
group net assets up to $722 billion.
On August 1, 1994, January 1, 1996, and August 1, 1999, FMR
voluntarily modified the breakpoints in the group fee rate schedule.
The revised group fee rate schedule, depicted on the following
page , provides for lower management fee rates as FMR's assets
under management increase.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
((GROUP FEE RATE SCHEDULE)) ((EFFECTIVE ANNUAL FEE RATES))
Average Group ((Assets)) Annualized ((Rate)) Group Net ((Assets)) Effective Annual ((Fee Rate))
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
Over 1,260 .2167
</TABLE>
The fund's individual fund fee rate is 0.30%. Based on the average
group net assets of the funds advised by FMR for March 1999, the
fund's annual basic fee rate would be calculated as follows:
((Group Fee Rate)) Individual Fund ((Fee Rate)) ((Basic Fee Rate))
0.2836% + 0.30% = 0.5836%
One-twelfth of this annual basic fee rate is applied to the fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for the fund is
subject to upward or downward adjustment, depending upon whether, and
to what extent, the fund's investment performance for the performance
period exceeds, or is exceeded by, the record of the Index over the
same period. The performance period consists of the most recent month
plus the previous 35 months. Each percentage point of difference,
calculated to the nearest 1.00% (up to a maximum difference of
(plus/minus)10.00) is multiplied by a performance adjustment rate of
0.02%. Thus, the maximum annualized adjustment rate is
(plus/minus)0.20%. This performance comparison is made at the end of
each month. One twelfth (1/12) of this rate is then applied to the
fund's average net assets for the entire performance period, giving a
dollar amount which will be added to (or subtracted from) the basic
fee.
The fund's performance is calculated based on change in net asset
value (NAV). For purposes of calculating the performance adjustment,
any dividends or capital gain distributions paid by the fund are
treated as if reinvested in fund shares at the NAV as of the record
date for payment. The record of the Index is based on change in value
and is adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on the fund's
performance compared to the investment record of the Index, the
controlling factor is not whether the fund's performance is up or down
per se, but whether it is up or down more or less than the record of
the Index. Moreover, the comparative investment performance of the
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of time.
During fiscal 1999, FMR received $325,813,000 for its services as
investment adviser to the fund. This fee, which includes both the
basic fee and the performance adjustment, was equivalent to 0.43% of
the average net assets of the fund. For 1999, the downward performance
adjustment amounted to $119,834,000 for the fund.
FMR may, from time to time, voluntarily agree to reimburse all
or a portion of the fund's total operating expenses (exclusive of
interest, taxes, brokerage commissions, and extraordinary
expenses) , which is subject to revision or discontinuance . FMR
retains the ability to be repaid for these expense reimbursements in
the amount that expenses fall below the limit prior to the end of the
fiscal year.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Magellan Fund, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. FMR Far East,
in turn, has entered into a sub-advisory agreement with FIJ. Pursuant
to the sub-advisory agreements with FMR U.K. and FMR Far East, FMR may
receive investment advice and research services outside the United
States from FMR U.K. and FMR Far East. On behalf of Fidelity Magellan
Fund, FMR may also grant FMR U.K. and FMR Far East investment
management authority as well as the authority to buy and sell
securities if FMR believes it would be beneficial to the fund. The
sub-advisory agreements, dated April 1, 1994, were approved by
shareholders on March 23, 1994. FMR Far East's sub-advisory agreement
with FIJ is dated January 1, 2000.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. FIJ, which was organized in 1986, is a
wholly owned subsidiary of FIL. Under the sub-advisory agreements FMR
pays the fees of FMR U.K. and FMR Far East. For providing
non-discretionary investment advice and research services, FMR pays
FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of FMR U.K.'s and FMR Far East's costs incurred in connection with
providing investment advice and research services. FMR Far East pays
FIJ a fee equal to 100% of FIJ's costs incurred in connection with
providing investment advice and research services.
On behalf of Fidelity Magellan Fund, for providing discretionary
investment management and executing portfolio transactions, FMR pays
FMR U.K. and FMR Far East a fee equal to 50% of its monthly management
fee rate (including any performance adjustment) with respect to the
fund's average net assets managed by the sub-adviser on a
discretionary basis.
For providing investment advice and research services, the fees paid
to FMR U.K. and FMR Far East for the fiscal year ended March
31, 1999 were as follows:
((FMR U.K.)) ((FMR Far East))
Fidelity Magellan Fund $ 2,985,258 $ 2,440,699
For providing discretionary investment management and executing
portfolio transactions on behalf of the fund, no fees were paid by FMR
to FMR U.K. or FMR Far East for the fiscal year ended March 31, 1999.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the fund by FMR pursuant to authority contained in
the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (Japan), LLC
(FBSJ), indirect subsidiaries of FMR Corp., if the commissions are
fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services.
During fiscal 1999, the fund paid brokerage commissions of $4,323,919
to NFSC. During fiscal 1999, this amounted to approximately 11.73% of
the aggregate brokerage commissions paid by the fund.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.,
P.O. Box 789, Boston, Massachusetts 02109, whether other persons are
beneficial owners of shares for which proxies are being solicited and,
if so, the number of copies of the Proxy Statement and Annual Reports
you wish to receive in order to supply copies to the beneficial owners
of the respective shares.
EXHIBIT 1
((UNDERLINED)) DISCLOSURE WILL BE ADDED AND [BRACKETED]
LANGUAGE WILL BE DELETED
FORM OF
AMENDED AND RESTATED DECLARATION OF TRUST
[DATED APRIL 15, 1994]
AMENDED AND RESTATED DECLARATION OF TRUST, made [April 15,
1994]((____________, ____)) by each of the Trustees whose signature is
affixed hereto (the "Trustees")((.))
WHEREAS, the Trustees desire to amend and restate this Declaration of
Trust for the sole purpose of supplementing the Declaration ((of Trust
))to incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on [June 25,
1984]((_________)), ((____)) by Edward C. Johnson 3d, Caleb Loring,
Jr., and Frank Nesvet in(( ))order to establish a trust [fund] for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust [fund] hereunder shall be held and managed in
[T]((t))rust under this Amended and Restated Declaration of Trust as
herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "Fidelity Magellan Fund."
DEFINITIONS
SECTION 2. Wherever used here[r]in, unless otherwise required by the
context or specifically provided:
(a) The [T]((t))erms "Affiliated Person["],(("))
"Assignment["],((")) "Commission["],((" ))"Interested Person["],(("))
"Majority Shareholder Vote" (the 67% or 50% requirement of the third
sentence of Section 2(a)(42) of the 1940 Act, whichever may be
applicable)((,)) and "Principal Underwriter" shall have the meanings
given them in the 1940 Act, as [amended from time to time;]((modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder;))
[(b) The "Trust" refers to Fidelity Magellan Fund and references
to the Trust, when applicable to one or more series of the Trust,
shall refer to any such series.]
(((b) "Bylaws" shall mean the bylaws of the Trust, if any, as
amended from time to time;))
(((c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;))
(((d) "Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)](((e))) "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
[(d)](((f))) "Shareholder" means a record owner of Shares of the
Trust;
[(f)](((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of the Trust or
each Series shall be divided from time to time, including such
[c]((C))lass or [c]((C))lasses of [s]((S))hares as the Trustees may
from time to time create and establish[,] ((and)) including fractions
of [s]((S))hares as well as whole [s]((S))hares as consistent with the
requirements of Federal and/or [other] ((state)) securities laws;
[(g) "The 1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.]
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III[.]((;))
(((i) "Trust" refers to Fidelity Magellan Fund and reference to the
Trust, when applicable to one or more Series of the Trust, shall refer
to any such Series;))
(((j) "Trustees" refer to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors
for the time being in office as such trustee or trustees; and))
(((k) "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.))
ARTICLE II
PURPOSE OF TRUST
The [P]((p))urpose of this Trust is to provide investors a continuous
source of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series
or [c]((C))lasses(( of Series )) as the Trustees shall((,)) from time
to time((,)) create and establish. The number of ((authorized ))Shares
((of each Series, and Class thereof, ))is unlimited((.)) [and
e]((E))ach Share shall be without par value and shall be fully paid
and nonassessable. The Trustees shall have full [P]((p))ower and
authority, in their sole discretion((,)) and without obtaining any
[P]((p))rior authorization or vote of the Shareholders [or] of any
[s]((S))eries or [c]((C))lass [of Shareholders ]of the Trust (((a)
))to create and establish (and to change in any manner) Shares or any
[s]((S))eries or [c]((C))lasses thereof[,] with such preferences,
voting powers, rights((,)) and privileges as the Trustees may((,))
from time to time((,)) determine[,]((; (b))) to divide or combine the
Shares or any [s]((S))eries or [c]((C))lasses thereof into a greater
or lesser number[,]((; (c))) to classify or reclassify any issued
Shares into one or more Series or [c]((C))lasses of Shares[,]((; (d)))
to abolish any one or more Series ((or Classes ))of Shares[,]((;)) and
(((e) ))to take such other action with respect to the Shares as the
Trustees may deem desirable.
ESTABLISHMENT OF SERIES AND CLASSES
SECTION 2. The establishment of any Series ((or Class thereof ))shall
be effective upon the adoption of a resolution by a majority of the
then Trustees setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series ((or
Class, whether directly in such resolution or by reference to, or
approval of, another document that sets forth such relative rights and
preferences of the Shares of such Series or Class including, without
limitation, any registration statement of the Trust, or as otherwise
provided in such resolution)). At any time that there are no Shares
outstanding of any particular Series ((or Class ))previously
established and designated, the Trustees may by a majority vote
abolish [that]((such)) Series ((or Class ))and the establishment and
designation thereof.
OWNERSHIP OF SHARES
SECTION 3. The ownership of Shares shall be recorded in the books of
the Trust(( or a transfer or similar agent)). The Trustees may make
such rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of the Trust ((as kept by the Trust
or by any transfer or similar agent, as the case may be,)) shall be
conclusive as to who are the holders of Shares and as to the number of
Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
SECTION 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may((,)) from time to time((,))
authorize. Such investments may be in the form of cash((,)) [or]
securities((, or other property)) in which the appropriate Series is
authorized to invest, valued as provided in Article X, Section 3.
After the date of the initial contribution of capital, the number of
Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding((,)) and the amount received
by the Trustees on account of the contribution shall be treated as an
asset of the Trust. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full Shares at
the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion[,] (a) impose a sales charge ((or other fee ))upon
investments in the Trust ((or Series or any Classes thereof, ))and (b)
issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES AND CLASSES
SECTION 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange((,)) or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be referred to as
"assets belonging to" that Series. In addition((,)) any assets,
income, earnings, profits, and proceeds thereof, funds, or payments
[which]((that)) are not readily identifiable as belonging to any
particular Series ((or Class, ))shall be allocated by the Trustees
between and among one or more of the Series ((or Classes ))in such
manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series ((or Classes ))for all purposes[,] and
shall be referred to as assets belonging to that Series ((or Class)).
The assets belonging to a particular Series shall be so recorded upon
the books of the Trust[,](( or of its agent or agents)) and shall be
held by the Trustees in [T]((t))rust for the benefit of the holders of
Shares of that Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges((,))
and reserves attributable to that Series((, except that liabilities
and expenses may, in the Trustees' discretion, be allocated solely to
a particular Class and, in which case, shall be borne by that Class)).
Any general liabilities, expenses, costs, charges((,)) or reserves of
the Trust [which]((that)) are not readily identifiable as belonging to
any particular Series ((or Class ))shall be allocated and charged by
the Trustees between or among any one or more of the Series ((or
Classes ))in such manner as the Trustees((,)) in their sole
discretion((,)) deem fair and equitable ((and shall be referred to as
"liabilities belonging to" that Series or Class)). Each such
allocation shall be conclusive and binding upon the Shareholders of
all Series ((or Classes ))for all purposes. Any creditor of any Series
may look only to the assets of that Series to satisfy such creditor's
debt.(( No Shareholder or former Shareholder of any Series shall have
a claim on or any right to any assets allocated or belonging to any
other Series.))
NO PREEMPTIVE RIGHTS
SECTION 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
SECTION 7. ((Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every shareholder by
virtue of having become a shareholder shall be held to have expressly
assented and agreed to be bound by the terms hereof. No Shareholder of
the Trust and of each Series shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or by or on behalf of
any Series. ))The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum
of money or assessment whatsoever other than such as the Shareholder
may((,)) at any time((,)) personally agree to pay by way of
subscription for any Shares or otherwise. Every note, bond,
contract((,)) or other undertaking issued by or on behalf of the Trust
or the Trustees relating to the Trust ((or to a Series ))shall include
a recitation limiting the obligation represented thereby to the Trust
((or to one or more Series ))and its ((or their ))assets (but the
omission of such a recitation shall not operate to bind any
Shareholder or ((Trustee))).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
SECTION 1. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable
to carry out that responsibility.
[ELECTION:]INITIAL TRUSTEES; ELECTION
SECTION 2. ((The initial Trustees shall be at least three individuals
who shall affix their signatures hereto. ))On a date fixed by the
Trustees, the Shareholders shall elect not less than three Trustees. A
Trustee shall not be required to be a Shareholder of the Trust. [The
initial Trustees shall be Edward C. Johnson 3d, William L. Byrnes, and
Caleb Loring Jr., and such other individuals as the Board of Trustees
shall appoint pursuant to Section 4 of this Article IV.]
TERM OF OFFICE OF TRUSTEES
SECTION 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds (((2/3) ))of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [S]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds (((2/3) ))of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation,
retirement, ((or)) removal[, incapacity, or inability] of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number ((of the Trustees)), or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the [Investment Company Act of 1940]((1940 Act)).
Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by recording in the records of
the Trust, whereupon the appointment shall take effect. An appointment
of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement,
resignation((,)) or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only
at or after the effective date of said retirement, resignation((,)) or
increase in number of Trustees. As soon as any Trustee so appointed
shall have accepted this [t]((T))rust, the [t]((T))rust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The ((foregoing ))power of appointment is
subject to the provisions of Section 16(a) of the 1940 Act((, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission)).
TEMPORARY ABSENCE OF TRUSTEES
SECTION 5. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six (((6) ))months at any one time to any
other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
NUMBER OF TRUSTEES
SECTION 6. The number of Trustees, not less than three (3) nor more
than twelve (12), serving hereunder at any time shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee [is absent from the
Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or]is physically
or mentally incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy[, absence] or incapacity[,] shall
be conclusive[, provided, however, that no vacancy shall remain
unfilled for a period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust(( or
Series)).
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act, ))[T]((t))he Trustees shall not in
any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which]((that)) they, in their
[uncontrolled ]discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the]((this))
Declaration of Trust or the Bylaws of the Trust, ((if any, ))the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,)) being
bound or limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a]((one or more ))bank((s,))[or] trust
[company]((companies, companies that are members of a national
securities exchange, or other entities permitted under the 1940 Act,
as modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) as custodian((s)) of any
assets of the Trust subject to any conditions set forth in this
Declaration of Trust or in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [p]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent,] ((investment adviser,
manager, ))custodian((,))[or] underwriter((, or other agent or
independent contractor.))
(i) To sell or exchange any or all of the assets of the Trust,((
))subject to the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees[, subject in either case to proper safeguards according to
the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article III(( and to
establish Classes of such Series having relative rights, powers, and
duties as the Trustees may provide consistent with applicable laws)).
(n) To allocate assets, liabilities((,)) and expenses of the Trust
to a particular Series(( or Class, as appropriate)), or to apportion
the same between or among two or more Series, ((or classes, as
appropriate, ))provided that any liabilities or expenses incurred by a
particular Series ((or Class ))shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money((,)) and to pledge, mortgage((,)) or
hypothecate the assets of the Trust, subject to ((the ))applicable
requirements of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(((t) To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.))
(((u) To interpret the investment policies, practices or limitations
of any Series.))
(((v) To issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article III and Article X, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, or the
particular Series of the Trust, with respect to which such Shares are
issued.))
[(t)] (((w))) Notwithstanding any other provision hereof, to invest
all ((or a portion ))of the assets of any [s]((S))eries in [a
single]((one or more ))open[-]((-))end investment
[company]((companies)), including investment by means of transfer of
such assets in exchange for an interest or interests in such
investment company[;]((or companies or by any other method approved by
the Trustees.))
(((x) In general to carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any purpose or
the attainment of any object or the furtherance of any power
hereinbefore set forth, either alone or in association with others,
and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes,
objects or powers.))
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.))
((The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws((, if any)).
ACTION BY THE TRUSTEES
SECTION 3. ((Except as otherwise provided herein or in the 1940 Act,
))[T]((t))he Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of]((at which)) the
Trustees(( are present in person)). At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date((,))
and place of all meetings of the Trustees shall be given by the party
calling the meeting to each Trustee by telephone((, telefax,))[or]
telegram((, or other electro-mechanical means)) sent to his home or
business address at least twenty-four (((24) hours in advance of the
meeting or by written notice mailed to his home or business address at
least seventy-two (((72) ))hours in advance of the meeting. Notice
need not be given to any Trustee who attends the meeting without
objecting to the lack of notice or who executes a written waiver of
notice with respect to the meeting. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any one of
their number their authority to approve particular matters or take
particular actions on behalf of the Trust.(( Written consents or
waivers of Trustees may be executed in one or more counterparts.
Execution of a written consent or waiver and delivery thereof to the
Trust may be accomplished by telefax or other electro-mechanical
means.))
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the
Trust, and may be the chief executive, financial and accounting
officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from [t]((T))rust estate or the assets
belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust[,]((;)) interest
expense, taxes, fees and commissions of every kind[,]((;)) expenses of
pricing Trust portfolio securities[,]((;)) expenses of issue,
repurchase and redemption of shares including expenses attributable to
a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and
[S]((s))tate laws and regulations[,]((;)) charges of custodians,
transfer agents, and registrars[,]((;)) expenses of preparing and
setting up in type [P]((p))rospectuses and [S]((s))tatements of
[A]((a))dditional [I]((i))nformation[,]((;)) expenses of printing and
distributing prospectuses sent to existing Shareholders[,]((;))
auditing and legal expenses[,]((;)) reports to Shareholders[,]((;))
expenses of meetings of Shareholders and proxy solicitations
therefor[e,]((;)) insurance expense[,]((;)) association membership
dues((;)) and for such non-recurring items as may arise, including
litigation to which the Trust is a party[,]((;)) and for all losses
and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses((,)) and
liabilities the Trustees shall have a lien on the assets belonging to
the appropriate Series prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, AND TRANSFER AGENT
INVESTMENT ADVISER
SECTION 1. Subject to [a Majority Shareholder Vote]((applicable
requirements of the 1940 Act, as modified by or interpreted by any
applicable order of the Commission or any rules or regulations adopted
or interpretative releases of the Commission thereunder,)) the
Trustees may((,)) in their discretion ((and ))from time to time((,))
enter into an investment advisory or management contract(s) with
respect to the Trust or any Series thereof whereby the other
party(ies) to such contract(s) shall undertake to furnish the Trustees
such management, investment advisory, statistical((,)) and research
facilities and services and such other facilities and services, if
any, and all upon such terms and conditions, as the Trustees may((,))
in their discretion((,)) determine. Notwithstanding any provisions of
this Declaration of Trust, the Trustees may authorize the investment
adviser(s) (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities and other investment instruments of
the Trust on behalf of the Trustees or may authorize any officer,
agent, or Trustee to effect such purchases, sales((,)) or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales((,)) and
exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
((as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder, ))including those relating to
Shareholder approval, authorize the investment adviser to employ one
or more sub-advisers from time to time to perform such of the acts and
services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser.
PRINCIPAL UNDERWRITER
SECTION 2. The Trustees may in their discretion from time to time
enter into [a]((an exclusive or non-exclusive ))contract(s) ((on
behalf of the Trust or any Series or Class thereof ))providing for the
sale of the Shares, whereby the Trust may either agree to sell the
Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be
on such terms and conditions as may be prescribed in the Bylaws, if
any, and such further terms and conditions as the Trustees may((,)) in
their discretion((,)) determine not inconsistent with the
provision((s)) of this Article VII[,] or of the Bylaws, if any((.))[;
and s]((S))uch contract may also if any provide for the repurchase or
sale of Shares by such other party as principal or as agent of the
Trust.
TRANSFER AGENT
SECTION 3. The Trustees may((,)) in their discretion ((and ))from
time to time((,)) enter into [a]((one or more ))transfer agency and
Shareholder service contract[(]s[)] whereby the other party shall
undertake to furnish the Trustees with transfer agency and Shareholder
services. [The]((Such)) contract((s)) shall be on such terms and
conditions as the Trustees may((,)) in their discretion((,)) determine
not inconsistent with the provisions of this Declaration of Trust or
of the Bylaws, if any. Such services may be provided by one or more
entities.
PARTIES TO CONTRACT
SECTION 4. Any contract of the character described in Sections 1, 2
and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association,
although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or
rendered voidable by reason of the existence of any relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the Bylaws, if any. The same person
(including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections
1, 2 and 3 above or Article IX, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any
or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
SECTION 5. Any contract entered into pursuant to Sections 1 and 2 of
this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act((, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted rules or regulations adopted or
interpretative releases of the Commission ))([including any amendments
thereof] or other applicable Act of Congress hereafter enacted), with
respect to its continuance in effect, ((its amendment, ))its
termination, and the method of authorization and approval of such
contract or renewal thereof[, and no amendment to any contract entered
into pursuant to Section 1 shall be effective unless assented to by a
Majority Shareholder Vote].
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote [(i)](((a))) for
the election of Trustees as provided in Article IV, Section 2[,
(ii)](((b);)) for the removal of Trustees as provided in Article IV,
Section 3(d)[, (iii)]((; (c))) with respect to any investment advisory
or management contract as provided in Article VII, Sections 1 and 5[,
(iv)]((; (d) with respect to any termination, merger, consolidation,
reorganization, or sale of assets of the Trust or any of its Series or
Classes as provided in Article XII, Section 4; (e))) with respect to
the amendment of this Declaration of Trust as provided in Article XII,
Section 7[, (v)]((; (f))) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court
action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, provided, however, that a Shareholder of a particular
Series shall not be entitled to bring any derivative or class action
on behalf of any other Series of the Trust[,]((;)) and [(vi)] (((g)))
with respect to such additional matters relating to the Trust as may
be required or authorized by law, by this Declaration of Trust, or the
Bylaws of the Trust, if any, or any registration of the Trust with the
[Securities and Exchange Commission [(the "Commission")] or any
[S]((s))tate, as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all
[s]((S))hares shall be voted by individual Series, ((except as
provided in the following sentence and ))except [(i)](((a))) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and [(ii)](((b) when the Trustees have
determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to
vote thereon. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes. ))A
Shareholder of each [s]((Series ((or Class thereof shall be entitled
to one vote for each dollar of net asset value (number of
[s]((S))hares owned times net asset value per share) of such
[s]((S))eries ((or Class thereof))[,] on any matter on which such
[s]((S))hareholder is entitled to vote((,)) and each fractional dollar
amount shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Shares may
be voted in person or by proxy. Until Shares are issued, the Trustees
may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws
of the Trust((, if any,)) to be taken by Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as specified
in Section 2 of Article IV at the principal office of the Trust or
such other place as the Trustees may designate. Special meetings of
the Shareholders of any Series may be called by the Trustees and shall
be called by the Trustees upon the written request of Shareholders
owning at least one-tenth (((1/10) ))of the outstanding Shares
entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, ((as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission))[as the same may be amended from time to
time], seek the opportunity of furnishing materials to the other
Shareholders with a view to obtaining signatures on such a request for
a meeting, the Trustees shall comply with the provisions of said
Section 16(c) with respect to providing such Shareholders access to
the list of the Shareholders of record of the Trust or the mailing of
such materials to such Shareholders of record. Shareholders shall be
entitled to at least fifteen (((15) ))days' notice of any meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class ))shall vote as a Series[,](( or Class)) then a
majority of the aggregate number of Shares of that Series ((or Class
))entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series(( or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or ))by any
provision of this Declaration of Trust or the Bylaws, if any, a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class ))shall vote as a
Series(( or Class)), then a majority of the Shares of that Series ((or
Class)) voted on the matter shall decide that matter insofar as that
Series ((or Class ))is concerned.(( Shareholders may act by unanimous
written consent. Actions taken by a Series or Class may be consented
to unanimously in writing by Shareholders of that Series or Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank((, a company
that is a member of a national securities exchange, ))[or] trust
company((, or other entity permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) having capital, surplus((,)) and undivided
profits of at least two million dollars ($2,000,000), or such other
amount [or such other entity ]as shall be allowed by the Commission or
by the 1940 Act, as custodian with authority as its agent, but subject
to such restrictions, limitations [or] ((and)) other requirements, if
any, as may be contained in the Bylaws of the Trust((, if any)):
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; ((and))
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so [by the Trustees], the Net
Asset Value of any Series ((or Class thereof ))in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.
[If so directed by a Majority Shareholder Vote, the custodian shall
deliver and pay over all property of the Trust held by it as specified
in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and [the]((such)) sub-custodian
and approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((, a company that is a member of a
national securities exchange, ))[or] trust company((, or other entity
permitted under the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder, ))[organized under the laws of the United States or one of
the states thereof and] having capital [and]((,)) surplus((,)) and
[individual]((undivided)) profits of at least [2]((two)) million
dollars ($2,000,000)((,)) or such other [person]((amount)) as [may]
((shall ))be [permitted]((allowed)) by the Commission[,] or [otherwise
in accordance with]((by)) the 1940 Act[as from time to time amended].
CENTRAL [CERTIFICATE]DEPOSITORY SYSTEM
SECTION 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act [as from time to time
amended], pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities[,]((;)) provided that all
such deposits shall be subject to withdrawal only upon the order of
the Trust(( or its custodian, subcustodians, or other authorized
agents)).
ARTICLE X
DISTRIBUTIONS, [AND]REDEMPTIONS AND DETERMINATION
OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends.
The amount of such dividends and the payment of them shall be wholly
in the discretion of the Trustees.
(b) The Trustees shall have ((the ))power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series((, or Classes thereof,)) at the election of each Shareholder of
that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a dividend of stock
or other property ))pro rata among the Shareholders of a particular
Series((, or Class thereof,)) as of the record date of that Series
((or Class ))fixed as provided in ((Article XII, ))Section 3[ hereof a
"stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series ))desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees
))shall be made by the Series or the principal underwriter of the
Series to the Shareholder of record within seven (7) days after the
date upon which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series ((or Class
))shall mean that amount by which the assets of that Series[,](( or
Class)) exceed its liabilities, all as determined by or under the
direction of the Trustees. Such value per Share shall be determined
separately for each Series ((or Class ))of Shares and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities
for which market quotations are readily available, at the market value
of such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees,
provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations((,)) and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any [O]((o))rder of the Commission applicable
to the Series. The Trustees may delegate any of [their]((its)) powers
and duties under this Section 3 with respect to appraisal of assets
and liabilities. At any time((,)) the Trustees may cause the value per
Share last determined to be determined again in ((a)) similar manner
and may fix the time when such redetermined value shall become
effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension.(( In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
REDEMPTION OF SHARES
((SECTION 5. The Trustees may require Shareholders to redeem Shares
for any reason under terms set by the Trustees, including, but not
limited to, (i) the determination of the Trustees that direct or
indirect ownership of Shares of any Series has or may become
concentrated in such Shareholder to an extent that would disqualify
any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute thereto),
(ii) the failure of a Shareholder to supply a tax identification
number if required to do so, or (iii) the failure of a Shareholder to
pay when due for the purchase of Shares issued to him. The redemption
shall be effected at the redemption price and in the manner provided
in this Article X.))
((The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership
of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code, or to comply with the requirements of
any other taxing authority.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
INDEMNIFICATION OF COVERED PERSONS
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((, ))or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]((I))nterested [p]((P))ersons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry;
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of
a defense to any claim, action, suit((,)) or proceeding of the
character described in [p]((P))aragraph (a) of this Section 2 may be
paid by the applicable Series from time to time prior to final
disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the
applicable Series if it is ultimately determined that he is not
entitled to indemnification under this Section 2; provided, however,
that either [(a)](((i) ))such Covered Person shall have provided
appropriate security for such undertaking[,]((;)) [(b)](((ii))) the
Trust is insured against losses arising out of any such advance
payments((;)) or [(c)] (((iii))) either a majority of the Trustees who
are neither interested persons of the Trust nor parties to the matter,
or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be found entitled to
indemnification under this Section 2.
INDEMNIFICATION OF SHAREHOLDERS
SECTION 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators((,)) or
other legal representatives or((,)) in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP, ETC.
SECTION 1. It is hereby expressly declared that a trust ((is created
hereby ))and not a partnership((, joint stock association,
corporation, bailment, or any form of a legal relationship other than
a trust))[is created hereby]((.)) No Trustee hereunder shall have any
power to ((personally ))bind [personally ]either the Trust's officers
or any Shareholder. All persons extending credit to, contracting
with((,)) or having any claim against the Trust or the Trustees shall
look only to the assets of the appropriate Series for payment under
such credit, contract((,)) or claim; and neither the Shareholders nor
the Trustees, nor any of their agents, whether past, present((,)) or
future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect a Trustee against any liability to
which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of the office of Trustee hereunder.
[TRUSTEE'S ]TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section((
))1 of this Article XII and to Article XI, shall be under no liability
for any act or omission in accordance with such advice or for failing
to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date[,] not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.
[Section 4].
[(a) This] ((SECTION 4.1. DURATION. The ))Trust shall continue
without limitation of time((,)) but subject to the provisions [of
sub-section (b) ]of this [Section 4]((Article XII)).
[(b) Subject to a Majority Shareholder Vote of each Series affected
by the matter or, if applicable, to a Majority Shareholder Vote of the
Trust, the Trustees may]
[(i) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or]
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
((SECTION 4.2. TERMINATION OF THE TRUST, A SERIES OR A CLASS. (a)
Subject to applicable Federal and state law, the Trust or any Series
or Class thereof may be terminated (i) by Majority Shareholder Vote of
the Trust, each Series affected, or each Class affected, as the case
may be; or (ii) without the vote or consent of Shareholders by a
majority of the Trustees either at a meeting or by written consent.
The Trustees shall provide written notice to the affected Shareholders
of a termination effected under clause (ii) above. Upon the
termination of the Trust or the Series or Class,))
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
(((ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below; and))
(((iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights; and))
[Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding.]
(((b) after termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.))
[(c) Upon completion of the distribution of the remaining proceeds
or the remaining assets as provided in sub-section (b), the Trust or
any affected Series shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder and
the right, title and interest of all parties shall be cancelled and
discharged.]
((SECTION 4.3. MERGER, CONSOLIDATION, AND SALE OF ASSETS. Subject to
applicable Federal and state law and except as otherwise provided in
Section 4.4 below, the Trust or any Series or Class thereof may merge
or consolidate with any other corporation, association, trust, or
other organization or may sell, lease, or exchange all or a portion of
the Trust property or Trust property allocated or belonging to such
Series or Class, including its good will, upon such terms and
conditions and for such consideration when and as authorized at any
meeting of Shareholders called for such purpose by a Majority
Shareholder Vote of the Trust or affected Series or Class, as the case
may be. Such transactions may be effected through share-for-share
exchanges, transfers or sale of assets, shareholder in-kind
redemptions and purchases, exchange offers, or any other method
approved by the Trustees. ))
((SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all or a portion of the Trust property
or all or a portion of the Trust property allocated or belonging to
such Series or Class or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell, convey
and transfer the Trust property or the Trust property allocated or
belonging to such Series or Class to any such corporation, trust,
limited liability company, partnership, association, or organization
in exchange for the shares or securities thereof or otherwise, and to
lend money to, subscribe for the shares or securities of, and enter
into any contracts with any such corporation, trust, partnership,
limited liability company, association, or organization, or any
corporation, partnership, limited liability company, trust,
association, or organization in which the Trust or such Series holds
or is about to acquire shares or any other interest. Subject to
applicable Federal and state law, the Trustees may also cause a merger
or consolidation between the Trust or any successor thereto or any
Series or Class thereof and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series or Class thereof sells, conveys, or transfers
all or a portion of its assets to another entity or merges or
consolidates with another entity. Such transactions may be effected
through share-for-share exchanges, transfers or sale of assets,
shareholder in-kind redemptions and purchases, exchange offers, or any
other method approved by the Trustees.))
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION 5. The original or a copy of this instrument and of each
[d]((D))eclaration of [t]((T))rust supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each supplemental
[d]((D))eclaration of [t]((T))rust shall be filed by the Trustees with
the Secretary of [t]((T))he Commonwealth of Massachusetts and the
Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer or Trustee of the Trust
as to whether or not any such supplemental [d]((D))eclarations of
[t]((T))rust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this instrument or of any such supplemental
[d]((D))eclaration of [t]((T))rust. In this instrument or in any such
supplemental [d]((D))eclaration of [t]((T))rust, references to this
instrument and all expressions like ['](("))herein,['](("))
['](("))hereof[']((")) and ['](("))hereunder,[']((")) shall be deemed
to refer to this instrument as amended or affected by any such
supplemental [d]((D))eclaration of [t]((T))rust. Headings are placed
herein for convenience of reference only and in case of any conflict,
the text of this instrument, rather than the headings, shall control.
This instrument may be executed in any number of counterparts each of
which shall be deemed an original.
APPLICABLE LAW
SECTION 6. The [t]((T))rust set forth in this instrument is made in
[t]((T))he Commonwealth of Massachusetts, and it is created under and
is to be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust((, and the absence of a specific
reference herein to any such power, privilege, or action shall not
imply that the Trust may not exercise such power or privilege or take
such actions)).
AMENDMENTS
[Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case,
the Trustees shall amend or otherwise supplement this instrument, by
making a declaration of trust supplemental hereto, which thereafter
shall form a part hereof, except that an amendment which shall affect
the Shareholders of one or more Series but not the Shareholders of all
outstanding Series shall be authorized by vote of the Shareholders
holding a majority of the Shares entitled to vote of each Series
affected and no vote of Shareholders of a Series not affected shall be
required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Copies of the supplemental declaration of trust shall be filed as
specified in Section 5 of this Article XII.]
((Section 7. Except as specifically provided herein, the Trustees
may, without shareholder vote, amend or otherwise supplement this
Declaration of Trust by making an amendment, a Declaration of Trust
supplemental hereto or an amended and restated Declaration of Trust.
Shareholders shall have the right to vote (a) on any amendment that
would affect their right to vote granted in Section 1 of Article VIII;
(b) on any amendment that would alter the maximum number of Trustees
permitted under Section 6 of Article IV; (c) on any amendment to this
Section 7; (d) on any amendment as may be required by law or by the
Trust's registration statement filed with the Commission; and (e) on
any amendment submitted to them by the Trustees. Any amendment
required or permitted to be submitted to Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more
Series or Classes shall be authorized by vote of the Shareholders of
each Series or Class affected and no vote of shareholders of a Series
or Class not affected shall be required. Notwithstanding anything else
herein, any amendment to Article XI shall not limit the rights to
indemnification or insurance provided therein with respect to action
or omission of Covered Persons prior to such amendment.))
FISCAL YEAR
SECTION 8. The fiscal year of the Trust shall end on a specified date
as set forth in the Bylaws((,)) if any, provided, however, that the
Trustees may, without Shareholder approval, change the fiscal year of
the Trust.
USE OF THE WORD "FIDELITY"
SECTION 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying
word "Fidelity" in the name of any Series of the Trust at some future
date. Such consent is conditioned upon the employment of FMR or a
subsidiary or affiliate thereof as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of
the name of the Trust insofar as such name contains the identifying
word "Fidelity["].((")) FMR may from time to time use the identifying
word "Fidelity" in other connections and for other purposes,
including, without limitation, in the names of other investment
companies, corporations((,)) or businesses [which]((that)) it may
manage, advise, sponsor or own or in which it may have a financial
interest. FMR may require the Trust or any Series thereof to cease
using the identifying word "Fidelity" in the name of the Trust or any
Series thereof if the Trust or any Series thereof ceases to employ FMR
or a subsidiary or affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS
(( SECTION 10. (a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.))
(((b) If any provision of this Declaration Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this 14th day of April,
1994] ((as of the date set forth above)).
[SIGNATURE LINES OMITTED]
EXHIBIT 2
((UNDERLINED)) DISCLOSURE WILL BE ADDED AND
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY MAGELLAN FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION made ]((AGREEMENT AMENDED and RESTATED as of)) this
[1st day of April 1994, (reformed April 16, 1998)] ((___ day of
_____200_,)) by and between Fidelity Magellan Fund, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Fund"), on behalf of its
single existing series of shares of beneficial interest (hereinafter
called the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser")(( as set
forth in its entirety below.))
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract dated [November 1. 1989] ((April 1, 1994,)) to a
modification of said Contract in the manner set forth below. The
[Modified] ((Amended)) Management Contract shall((,)) when
execute((d)) by duly authorized officers of the Fund and [the]Adviser,
take effect on [the later of April 1, 1994]((____________)) or the
first day of the month following approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser((,)) which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Basic Fee
and a Performance Adjustment. The Performance Adjustment is added to
or subtracted from the Basic Fee depending on whether the Portfolio
experienced better or worse performance than the Standard & Poor's
[Daily Stock Price Index of 500 Common Stocks]((500 Index)) (the
"Index"). The Performance Adjustment is not cumulative. An increased
fee will result even though the performance of the Portfolio over some
period of time shorter than the performance period has been behind
that of the Index, and, conversely, a reduction in the fee will be
made for a month even though the performance of the Portfolio over
some period of time shorter than the performance period has been ahead
of that of the Index. The Basic Fee and the Performance Adjustment
will be computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the
nearest millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the [charter of each
investment company] ((Fund's Declaration of Trust or other
organizational document))) determined as of the close of business on
each business day throughout the month. The Group Fee Rate shall be
determined on a cumulative basis pursuant to the following schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
138 - 174 .3050
174 ((- 210)) .3000
((210 - 246)) .2950
((246 - 282)) .2900
((282 - 318)) .2850
((318 - 354)) ((.2800))
((354 - 390)) ((.2750))
((390 - 426)) ((.2700))
((426 - 462)) ((.2650))
((462 - 498)) ((.2600))
((498 - 534)) ((.2550))
((534 - 587)) ((.2500))
((587 - 646)) ((.2463))
((646 - 711)) ((.2426))
((711 - 782)) ((.2389))
((782 - 860)) ((.2352))
((860 - 946)) ((.2315))
((946 - 1,041)) ((.2278))
((1,041 - 1,145)) ((.2241))
((1,145 - 1,260)) ((.2204))
((Over 1,260)) ((.2167))
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall
be 30%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner
set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day
throughout the month. The resulting dollar amount comprises the Basic
Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is
0.02% for each percentage point (the performance of the Portfolio and
the Index each being calculated to the nearest [percentage
point]((.01%))) that the Portfolio's investment performance for the
performance period was better or worse than the record of the Index as
then constituted. The maximum performance adjustment rate is 0.20%.
[Upward Adjustment. The performance adjustment rate will be a
positive number at the annual rate of 0.02% for each percentage point,
rounded to the nearer point (the higher point if exactly one-half a
point), that the Portfolio's investment performance over the month and
the preceding 35 months (the "Performance Period") exceeds the record
of the Index, as then constituted, for the performance period, with
the maximum such increase in the fee rate being at the annual rate of
0.20%.]
[Downward Adjustment. The performance adjustment rate will be a
negative number at the annual rate of 0.02% for each percentage point
rounded to the nearer point (the higher point if exactly one-half a
point), that the record of the Index for the performance period
exceeds the investment performance of the Portfolio, with the maximum
such reduction in fee rate being at the annual rate of 0.20%.]
((The performance period will commence with the first day of the
first full month following the Portfolio's commencement of operations.
During the first eleven months of the performance period for the
Portfolio, there will be no performance adjustment. Starting with the
twelfth month of the performance period, the performance adjustment
will take effect. Following the twelfth month a new month will be
added to the performance period until the performance period equals 36
months. Thereafter the performance period will consist of the current
month plus the previous 35 months.))
The Portfolio's investment performance will be measured by comparing
(i) the opening net asset value of one share of the Portfolio on the
first business day of the performance period with (ii) the closing net
asset value of one share of the Portfolio as of the last business day
of such period. In computing the investment performance of the
Portfolio and the investment record of the Index, distributions of
realized capital gains, the value of capital gains taxes per share
paid or payable on undistributed realized long[-]((-))term capital
gains accumulated to the end of such period and dividends paid out of
investment income on the part of the Portfolio, and all cash
distributions of the securities included in the Index, will be treated
as reinvested in accordance with Rule 205-1 or any other applicable
rules under the Investment Advisers Act of 1940, as the same from time
to time may be amended.
[The computation of the performance adjustment will not be
cumulative. A positive fee rate will apply even though the performance
of the Portfolio over some period of time shorter than the performance
period has been behind that of the Index, and conversely, a negative
fee rate will apply for a month even though the performance of the
Portfolio over some period of time shorter than the performance period
has been ahead of that of the Index.]
(d) Performance Adjustment. One[-]((-))twelfth of the annual
Performance Adjustment Rate will be applied to the average of the net
assets of the Portfolio (computed in the manner set forth in the
Fund's Declaration of Trust or other organizational document)
determined as of the close of business on each business day throughout
the month and the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect for that
month. The Basic Fee Rate will be computed on the basis of and applied
to net assets averaged over that month ending on the last business day
on which this Contract is in effect. The amount of this Performance
Adjustment to the Basic Fee will be computed on the basis of and
applied to net assets averaged over the 36-month period ending on the
last business day on which this Contract is in effect provided that if
this Contract has been in effect less than 36 months, the computation
will be made on the basis of the period of time during which it has
been in effect.
4. It is understood that the Portfolio will pay all its expenses
[other than those expressly stated to be payable by the Adviser
hereunder], which expenses payable by the Portfolio shall include,
without limitation, (i) interest and taxes; (ii) brokerage commissions
and other costs in connection with the purchase or sale of securities
and other investment instruments; (iii) fees and expenses of the
Fund's Trustees other than those who are ["](("))interested persons"
of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees
and expenses related to the registration and qualification of the Fund
and the Portfolio's shares for distribution under state and federal
securities laws; (vii) expenses of printing and mailing reports and
notices and proxy material to shareholders of the Portfolio; (viii)
all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other
registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums
for fidelity and other coverage; (x) its proportionate share of
association membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security ((or other investment
instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until July
31, [1994]((2000)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding securities of the Portfolio] ((subject to the provisions
of Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules regulations adopted by, or
interpretative releases of, the Commission)).
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
((The terms "vote of a majority of the outstanding voting
securities," "assignment," and "interested persons," when used herein,
shall have the respective meanings specified in the 1940 Act, as now
in effect or as hereafter amended, and subject to such orders as may
be granted by the Commission.))
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
((UNDERLINED)) DISCLOSURE WILL BE ADDED AND [BRACKETED] DISCLOSURE
WILL BE DELETED
FORM OF
SUB[-]((-))ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY MAGELLAN FUND ON BEHALF OF FIDELITY MAGELLAN FUND
[AGREEMENT]((AMENDMENT)) made this [1st day of April 1994 ]((__ day
of_______, ))by ((and between ))Fidelity Management & Research
Company, a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (U.K.) Inc. (hereinafter
called the "Sub-Advisor"); and Fidelity Magellan Fund, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust(("))) [or the
Portfolio]((on behalf of Fidelity Magellan Fund (hereinafter called
the "Portfolio"))).
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, the
Advisor and the Sub-Advisor hereby consent, pursuant to Paragraph 9 of
the existing Sub-Advisory Agreement dated April 1, 1994, to a
modification of said Agreement in the manner set forth below. The
Amended Sub-Advisory Agreement shall, when executed by duly authorized
officers of the Fund, the Advisor and the Sub-Advisor, take effect on
________________.))
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, [including]((and)) securities [issued in] ((of))
issuers located in such countries, and providing investment advisory
services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub-Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The Sub-Advisor shall
pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research,
statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations [all ]as the Advisor
may reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker[-]((-))dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but
only to the extent such duties are delegated in writing by the
Advisor, to provide additional investment management services to the
Portfolio, including but not limited to services such as managing
foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money or lending securities
on behalf of the Portfolio. All investment management and any other
activities of the Sub[-]((-))Advisor shall at all times be subject to
the control and direction of the Advisor and the Trust's Board of
Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor[,at
its own expense,] shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio
and((/or)) to [any]((the)) other accounts over which the Sub-Advisor
or Advisor exercise investment discretion. The Sub-Advisor is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction
for the Portfolio which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub[-]((-))Advisor a monthly Sub-Advisory Fee. The
Sub-Advisory Fee shall be equal to 110% of the Sub-Advisor's costs
incurred in connection with rendering the services referred to in
subparagraph (a) of paragraph 1 of this Agreement. The Sub-Advisory
Fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers or reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non[-]((-))recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio
is a party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor, the Sub[-]((-))Advisor shall
not be subject to liability to the Advisor, the Trust or to any
shareholder of the Portfolio for any act or omission in the course of,
or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, [1994]((2000)) and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved at
least annually by vote of the Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on the part of the
Portfolio to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio]((subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.))
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust or other organizational document of the Trust
and agrees that any obligations of the Trust or the Portfolio arising
in connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts,
without giving effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
((UNDERLINED)) DISCLOSURE WILL BE ADDED AND
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF
SUB[-]((-))ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY MAGELLAN FUND ON BEHALF OF FIDELITY MAGELLAN FUND
[AGREEMENT]((AMENDMENT)) made this [1st day of April 1994]((__ day of
_______ )), by ((and between ))Fidelity Management & Research Company,
a Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the "Advisor");
Fidelity Management & Research (Far East) Inc. (hereinafter called the
"Sub-Advisor"); and Fidelity Magellan Fund, a Massachusetts business
trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust(("))) [or the Portfolio]((on
behalf of Fidelity Magellan Fund (hereinafter called the
"Portfolio"))).
((Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, the
Advisor and the Sub-Advisor hereby consent, pursuant to Paragraph 9 of
the existing Sub-Advisory Agreement dated April 1, 1994, to a
modification of said Agreement in the manner set forth below. The
Amended Sub-Advisory Agreement shall, when executed by duly authorized
officers of the Fund, the Advisor and the Sub-Advisor, take effect on
________________ .))
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is
to act as investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and
have been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, [including]((and)) securities [issued in] ((of))
issuers located in such countries, and providing investment advisory
services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Trust, the Advisor and the
Sub[-]((-))Advisor agree as follows:
1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio. The
services and the portion of the investments of the Portfolio to be
advised or managed by the Sub-Advisor shall be as agreed upon from
time to time by the Advisor and the Sub-Advisor. The
Sub[-]((-))Advisor shall pay the salaries and fees of all personnel of
the Sub-Advisor performing services for the Portfolio relating to
research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice shall
furnish the Portfolio and the Advisor such factual information,
research reports and investment recommendations as the Advisor may
reasonably require. Such information may include written and oral
reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio
in accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and
such other limitations as the Trust or Advisor may impose with respect
to the Portfolio by notice to the Sub-Advisor. With respect to the
portion of the investments of the Portfolio under its management, the
Sub-Advisor is authorized to make investment decisions on behalf of
the Portfolio with regard to any stock, bond, other security or
investment instrument, and to place orders for the purchase and sale
of such securities through such broker[-]((-))dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but
only to the extent such duties are delegated in writing by the
Advisor, to provide additional investment management services to the
Portfolio, including but not limited to services such as managing
foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities
on behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of
Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through
such of its subsidiaries or other affiliated persons as the
Sub-Advisor shall determine; provided, however, that performance of
such services through such subsidiaries or other affiliated persons
shall have been approved by the Trust to the extent required pursuant
to the 1940 Act and rules thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees
or the Advisor may reasonably request from time to time, or as the
Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor[,
at its own expense,] shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions
at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio
and((/or)) to [any]((the)) other accounts over which the Sub-Advisor
or Advisor exercise investment discretion. The Sub-Advisor is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction
for the Portfolio which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor has
with respect to accounts over which it exercises investment
discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under
subparagraph (a) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Sub[-]((-))Advisory Fee. The
Sub-Advisory Fee shall be equal to 105% of the Sub-Advisor's costs
incurred in connection with rendering the services referred to in
subparagraph (a) of paragraph 1 of this Agreement. The Sub-Advisory
Fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Advisor agrees
to pay the Sub-Advisor a monthly Investment Management Fee. The
Investment Management Fee shall be equal to: (i) 50% of the monthly
management fee rate (including performance adjustments, if any) that
the Portfolio is obligated to pay the Advisor under its Management
Contract with the Advisor, multiplied by: (ii) the fraction equal to
the net assets of the Portfolio as to which the Sub-Advisor shall have
provided investment management services divided by the net assets of
the Portfolio for that month. If in any fiscal year the aggregate
expenses of the Portfolio exceed any applicable expense limitation
imposed by any state or federal securities laws or regulations, and
the Advisor waives all or a portion of its management fee or
reimburses the Portfolio for expenses to the extent required to
satisfy such limitation, the Investment Management Fee paid to the
Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements
and the Advisor subsequently recovers all or any portion of such
waivers and reimbursements, then the Sub-Advisor shall be entitled to
receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the
Advisor required by such limitations are in excess of the Advisor's
management fee, the Investment Management Fee paid to the Sub-Advisor
will be reduced to zero for that month, but in no event shall the
Sub-Advisor be required to reimburse the Advisor for all or a portion
of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the
Sub-Advisor hereunder or by the Advisor under the Management Contract
with the Portfolio, which expenses payable by the Portfolio shall
include, without limitation, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses
of the Trust's Trustees other than those who are "interested persons"
of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy
solicitations therefore; (ix) a pro rata share, based on relative net
assets of the Portfolio and other registered investment companies
having Advisory and Service or Management Contracts with the Advisor,
of 50% of insurance premiums for fidelity and other coverage; (x) its
proportionate share of association membership dues; (xi) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non[-]((-))recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio
is a party and the legal obligation which the Portfolio may have to
indemnify the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the
Advisor or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor or the
Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in
the Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor being free to render services to others and engage in
other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or
the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub[-]((-))Advisor, the
Sub[-]((-))Advisor shall not be subject to liability to the Advisor,
the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until July
31, [1994]((2000)) and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved at
least annually by vote of the Trust's Board of Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio[, such consent on the part of the
Portfolio to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.]((subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission
(the "Commission") or any rules or regulations adopted by, or
interpretative releases of, the Commission.))
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of
its Board of Trustees or Directors, or with respect to the Portfolio
by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put
on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust or other organizational document of the Trust
and agrees that any obligations of the Trust or the Portfolio arising
in connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any
individual Trustee.
11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested
persons," when used herein, shall have the respective meanings
specified in the 1940 Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to
be signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 5
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY MAGELLAN FUND: FIDELITY MAGELLAN FUND
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") of
Fidelity Magellan Fund (the "Portfolio"), a series of shares of
Fidelity Magellan Fund (the "Fund").
2. The Fund has entered into a General Distribution Agreement with
respect to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest
("shares"). Under the agreement, the Distributor pays the expenses of
printing and distributing any prospectuses, reports and other
literature used by the Distributor, advertising, and other promotional
activities in connection with the offering of shares of the Portfolio
for sale to the public. It is recognized that the Adviser may use its
management fee revenues as well as past profits or its resources from
any other source, to make payment to the Distributor with respect to
any expenses incurred in connection with the distribution of Portfolio
shares, including the activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to
the approval of the Trustees, make payments to securities dealers and
other third parties who engage in the sale of shares or who render
shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions
and providing such other shareholder services as the Fund may
reasonably request.
4. The Portfolio will not make separate payments as a result of this
Plan to the Adviser, Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to
pay, a management fee to the Adviser. To the extent that any payments
made by the Portfolio to the Adviser, including payment of management
fees, should be deemed to be indirect financing of any activity
primarily intended to result in the sale of shares of the Portfolio
within the context of Rule 12b-1 under the Act, then such payments
shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of at
least a "majority of the outstanding voting securities of the
Portfolio" (as defined in the Act), the plan having been approved by a
vote of a majority of the Trustees of the Fund, including a majority
of Trustees who are not "interested persons" of the Fund (as defined
in the Act) and who have no direct or indirect financial interest in
the operation of this Plan or in any agreements related to this Plan
(the "Independent Trustees"), cast in person at a meeting called for
the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain
in effect from the date specified above until April 30, 2001 and from
year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of a majority of the Trustees
of the Fund, including a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on this Plan.
This Plan may be amended at any time by the Board of Trustees,
provided that (a) any amendment to authorize direct payments by the
Portfolio to finance any activity primarily intended to result in the
sale of shares of the Portfolio, or to increase materially the amount
spent by the Portfolio for distribution, shall be effective only upon
approval by a vote of a majority of the outstanding voting securities
of the Portfolio, and (b) any material amendments of this Plan shall
be effective only upon approval in the manner provided in the first
sentence in this paragraph.
7. This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Trustees or by a
vote of a majority of the outstanding voting securities of the
Portfolio.
8. During the existence of this Plan, the Fund shall require the
Adviser and/or Distributor to provide the Fund, for review by the
Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of
shares of the Portfolio (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures
were made.
9. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any
specific level of expenses for activities primarily intended to result
in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set
forth in the Fund's Declaration of Trust or other organizational
document, any obligations assumed by the Portfolio pursuant to this
Plan and any agreements related to this Plan shall be limited in all
cases to the Portfolio and its assets, and shall not constitute
obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
EXHIBIT 6
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE
RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
<S> <C> <C> <C> <C>
GROWTH
Contrafund (i) 12/31/98 $ 33,442.4 0.45%
Trend (i) 12/31/98 1,354.1 0.39
Variable Insurance Products:
Growth
Initial Class 12/31/98 9,027.5 0.59
Service Class 12/31/98 50.6 0.59
Overseas (h)
Initial Class 12/31/98 2,073.3 0.74
Service Class 12/31/98 15.9 0.74
Variable Insurance Products II:
Asset Manager: Growth (i)
Initial Class 12/31/98 495.2 0.59
Service Class 12/31/98 1.1 0.59
Contrafund (i)
Initial Class 12/31/98 4,974.2 0.59
Service Class 12/31/98 61.3 0.59
Variable Insurance Products
III:
Growth Opportunities (i)
Initial Class 12/31/98 1,296.4 0.59
Service Class 12/31/98 66.4 0.59
Mid Cap (e)(i)
Initial Class 12/31/98 0.5 0.59(f)
Service Class 12/31/98 0.5 0.59(f)
Select Portfolios:
Air Transportation (i) 2/28/99 98.2 0.58
Automotive (i) 2/28/99 60.6 0.59
Biotechnology (i) 2/28/99 574.0 0.59
Brokerage and Investment 2/28/99 728.9 0.59
Management (i)
Business Services and 2/28/99 55.4 0.59
Outsourcing (i)
Chemicals (i) 2/28/99 47.2 0.59
Computers (i) 2/28/99 1,008.6 0.60
Select Portfolios: continued
Construction and Housing (i) 2/28/99 $ 83.1 0.59%
Consumer Industries (i) 2/28/99 77.9 0.59
Cyclical Industries (i) 2/28/99 3.9 0.59
Defense and Aerospace (i) 2/28/99 53.5 0.58
Developing Communications 2/28/99 310.5 0.60
(i)
Electronics (i) 2/28/99 2,259.4 0.59
Energy (i) 2/28/99 140.5 0.59
Energy Service (i) 2/28/99 653.1 0.59
Environmental Services (i) 2/28/99 20.8 0.59
Financial Services (i) 2/28/99 624.8 0.59
Food and Agriculture (i) 2/28/99 227.4 0.59
Gold (i) 2/28/99 206.8 0.59
Health Care (i) 2/28/99 2,518.2 0.59
Home Finance (i) 2/28/99 1,350.2 0.58
Industrial Equipment (i) 2/28/99 42.5 0.59
Industrial Materials (i) 2/28/99 16.1 0.59
Insurance (i) 2/28/99 110.1 0.59
Leisure (i) 2/28/99 292.2 0.59
Medical Delivery (i) 2/28/99 155.5 0.59
Medical Equipment and 2/28/99 16.1 0.60(d)
Systems (e)(i)
Multimedia (i) 2/28/99 130.4 0.59
Natural Gas (i) 2/28/99 51.5 0.59
Natural Resources (i) 2/28/99 6.5 0.59
Paper and Forest Products 2/28/99 15.0 0.59
(i)
Precious Metals and 2/28/99 150.1 0.59
Minerals (i)
Regional Banks (i) 2/28/99 1,247.4 0.59
Retailing (i) 2/28/99 282.2 0.59
Software and Computer 2/28/99 572.6 0.59
Services (i)
Technology (i) 2/28/99 758.6 0.60
Telecommunications (i) 2/28/99 783.1 0.59
Transportation (i) 2/28/99 24.4 0.58
Utilities Growth (i) 2/28/99 408.1 0.59
Magellan (i) 3/31/99 75,792.2 0.43
Large Cap Stock (i) 4/30/99 $ 286.2 0.54%
Mid Cap Stock (i) 4/30/99 1,687.0 0.50
Small Cap Stock (i) 4/30/99 557.9 0.73
Contrafund II (i) 6/30/99 226.3 0.59
Fidelity Fifty (i) 6/30/99 180.5 0.43
Advisor Focus Funds:
Consumer Industries: (i)
Class A 7/31/99 2.7 0.58
Class T 7/31/99 17.5 0.58
Class B 7/31/99 7.5 0.58
Class C 7/31/99 1.9 0.58
Institutional Class 7/31/99 5.0 0.58
Cyclical Industries: (i)
Class A 7/31/99 0.6 0.58
Class T 7/31/99 2.8 0.58
Class B 7/31/99 1.1 0.58
Class C 7/31/99 0.5 0.58
Institutional Class 7/31/99 1.9 0.58
Financial Services: (i)
Class A 7/31/99 23.2 0.58
Class T 7/31/99 111.8 0.58
Class B 7/31/99 76.1 0.58
Class C 7/31/99 25.5 0.58
Institutional Class 7/31/99 8.0 0.58
Health Care: (i)
Class A 7/31/99 40.3 0.58
Class T 7/31/99 186.3 0.58
Class B 7/31/99 130.3 0.58
Class C 7/31/99 57.0 0.58
Institutional Class 7/31/99 20.0 0.58
Natural Resources: (i)
Class A 7/31/99 6.3 0.58
Class T 7/31/99 274.3 0.58
Class B 7/31/99 40.3 0.58
Class C 7/31/99 4.9 0.58
Institutional Class 7/31/99 4.0 0.58
Advisor Focus Funds: continued
Technology: (i)
Class A 7/31/99 $ 42.1 0.58%
Class T 7/31/99 192.9 0.58
Class B 7/31/99 118.4 0.58
Class C 7/31/99 34.3 0.58
Institutional Class 7/31/99 16.7 0.58
Utilities Growth: (i)
Class A 7/31/99 6.7 0.58
Class T 7/31/99 32.9 0.58
Class B 7/31/99 29.3 0.58
Class C 7/31/99 9.2 0.58
Institutional Class 7/31/99 4.4 0.58
Blue Chip Growth (i) 7/31/99 20,095.3 0.47
Dividend Growth (i) 7/31/99 10,816.0 0.64
Low-Priced Stock (i) 7/31/99 8,273.4 0.82
OTC Portfolio (i) 7/31/99 5,575.5 0.50
Export and Multinational Fund 8/31/99 404.7 0.58
(i)
Destiny I: (i)
Class O 9/30/99 7,214.4 0.29
Class N (e) 9/30/99 0.2 0.29(d)
Destiny II: (i)
Class O 9/30/99 5,093.0 0.45
Class N (e) 9/30/99 0.5 0.45(d)
Advisor Diversified
International: (e)(g)
Class A 10/31/99 1.9 0.72(d)
Class T 10/31/99 11.8 0.72(d)
Class B 10/31/99 4.0 0.72(d)
Class C 10/31/99 3.4 0.72(d)
Institutional Class 10/31/99 1.6 0.72(d)
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
Advisor Europe Capital
Appreciation: (e)(g)
Class A 10/31/99 $ 1.5 0.72%(d)
Class T 10/31/99 8.4 0.72(d)
Class B 10/31/99 2.5 0.72(d)
Class C 10/31/99 2.6 0.72(d)
Institutional Class 10/31/99 0.7 0.72(d)
Advisor Emerging Asia: (e)(g)
Class A 10/31/99 82.3 1.07(d)
Class T 10/31/99 0.7 1.07(d)
Class B 10/31/99 0.4 1.07(d)
Class C 10/31/99 0.3 1.07(d)
Institutional Class 10/31/99 0.1 1.07(d)
Advisor Global Equity: (e)(g)
Class A 10/31/99 1.4 0.73(d)
Class T 10/31/99 2.2 0.73(d)
Class B 10/31/99 1.5 0.73(d)
Class C 10/31/99 1.7 0.73(d)
Institutional Class 10/31/99 1.1 0.73(d)
Advisor International Capital
Appreciation: (e)(g)
Class A 10/31/99 1.6 0.73(d)
Class T 10/31/99 21.1 0.73(d)
Class B 10/31/99 6.0 0.73(d)
Class C 10/31/99 3.7 0.73(d)
Institutional Class 10/31/99 5.9 0.73(d)
Advisor Japan: (e)(g)
Class A 10/31/99 2.3 0.72(d)
Class T 10/31/99 8.4 0.72(d)
Class B 10/31/99 5.7 0.72(d)
Class C 10/31/99 6.4 0.72(d)
Institutional Class 10/31/99 1.3 0.72(d)
Advisor Latin America: (e)(g)
Class A 10/31/99 $ 0.6 0.73%(d)
Class T 10/31/99 0.8 0.73(d)
Class B 10/31/99 0.7 0.73(d)
Class C 10/31/99 0.6 0.73(d)
Institutional Class 10/31/99 0.4 0.73(d)
Advisor Overseas: (h)
Class A 10/31/99 16.5 0.90
Class T 10/31/99 1,212.8 0.90
Class B 10/31/99 70.9 0.90
Class C 10/31/99 22.3 0.90
Institutional Class 10/31/99 81.3 0.90
Canada (h) 10/31/99 45.3 0.32
Capital Appreciation (i) 10/31/99 2,734.2 0.43
Disciplined Equity (i) 10/31/99 3,168.8 0.42
Diversified International (h) 10/31/99 2,607.3 0.83
Emerging Markets (h) 10/31/99 343.0 0.73
Europe (h) 10/31/99 1,467.1 0.60
Europe Capital Appreciation 10/31/99 568.9 0.66
(h)
France (h) 10/31/99 12.8 0.00 (z)
Germany (h) 10/31/99 24.6 0.74
Hong Kong and China (g) 10/31/99 148.8 0.73
International Value (g) 10/31/99 441.9 0.83
Japan (g) 10/31/99 450.4 0.86
Japan Small Companies (g) 10/31/99 668.5 0.72
Latin America (h) 10/31/99 329.7 0.73
Nordic (h) 10/31/99 104.8 0.73
Overseas (h) 10/31/99 3,964.2 0.92
Pacific Basin (g) 10/31/99 352.2 0.92
Small Cap Selector (i) 10/31/99 582.3 0.42
Southeast Asia (g) 10/31/99 300.1 0.89
Stock Selector (i) 10/31/99 1,676.3 0.38
TechnoQuant Growth 10/31/99 50.6 0.33
United Kingdom (h) 10/31/99 6.7 0.00 (z)
Value (i) 10/31/99 5,311.3 0.32
Worldwide (h) 10/31/99 962.4 0.73
Advisor Dividend Growth: (i)
Class A 11/30/99 $ 23.1 0.58%
Class T 11/30/99 172.6 0.58
Class B 11/30/99 145.7 0.58
Class C 11/30/99 79.3 0.58
Institutional Class 11/30/99 24.1 0.58
Advisor Equity Growth: (i)
Class A 11/30/99 236.8 0.58
Class T 11/30/99 6,598.6 0.58
Class B 11/30/99 789.5 0.58
Class C 11/30/99 221.9 0.58
Institutional Class 11/30/99 1,262.1 0.58
Advisor Growth Opportunities:
(i)
Class A 11/30/99 526.9 0.43
Class T 11/30/99 25,620.7 0.43
Class B 11/30/99 1,976.6 0.43
Class C 11/30/99 537.7 0.43
Institutional Class 11/30/99 635.8 0.43
Advisor Large Cap: (i)
Class A 11/30/99 11.8 0.58
Class T 11/30/99 172.1 0.58
Class B 11/30/99 72.7 0.58
Class C 11/30/99 15.8 0.58
Institutional Class 11/30/99 12.1 0.58
Advisor Mid Cap: (i)
Class A 11/30/99 17.0 0.58
Class T 11/30/99 424.8 0.58
Class B 11/30/99 93.4 0.58
Class C 11/30/99 22.2 0.58
Institutional Class 11/30/99 42.9 0.58
Advisor Retirement Growth: (i)
Class A 11/30/99 1.8 0.58
Class T 11/30/99 10.8 0.58
Class B 11/30/99 6.0 0.58
Class C 11/30/99 3.5 0.58
Institutional Class 11/30/99 0.5 0.58
Advisor Small Cap: (i)
Class A 11/30/99 $ 33.4 0.73%
Class T 11/30/99 231.8 0.73
Class B 11/30/99 95.2 0.73
Class C 11/30/99 77.2 0.73
Institutional Class 11/30/99 43.0 0.73
Advisor TechnoQuant Growth: (i)
Class A 11/30/99 3.2 0.58
Class T 11/30/99 15.1 0.58
Class B 11/30/99 12.0 0.58
Class C 11/30/99 0.9 0.58
Institutional Class 11/30/99 1.1 0.58
Advisor Value Strategies: (i)
Class A 11/30/99 5.0 0.35
Class T 11/30/99 420.3 0.35
Class B 11/30/99 94.0 0.35
Initial Class 11/30/99 18.7 0.35
Institutional Class 11/30/99 5.1 0.35
Aggressive Growth (i) 11/30/99 5,619.2 0.72
Growth Company (i) 11/30/99 13,628.6 0.51
New Millennium (i) 11/30/99 2,232.6 0.74
Retirement Growth (i) 11/30/99 5,370.5 0.43
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart
or as of November 30, 1999, if fiscal year end figures are not yet
available.
(b) Average net assets are computed on the basis of average net
assets of each fund or class at the close of business on each business
day throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or
due from FMR pursuant to voluntary or state expense limitations. Funds
so affected are indicated by a (z). The ratio for certain multi-class
funds is presented gross of expense reductions for presentation
purposes.
(d) Annualized
(e) Less than a complete fiscal year
(f) Based on estimated expenses for the first year
(g) Fidelity Management & Research Company (FMR) has entered into
sub-advisory agreements with the following affiliates: Fidelity
Management & Research (U.K.) Inc. (FMR U.K.), Fidelity Management &
Research (Far East) Inc. (FMR Far East), Fidelity Investments Japan
Ltd. (FIJ), Fidelity International Investment Advisors (FIIA), and
Fidelity International Investment Advisors (U.K.) Limited (FIIA (U.K.)
L), with respect to the fund.
(h) FMR has entered into sub-advisory agreements with the following
affiliates: FMR U.K., FMR Far East, FIIA, and FIIA (U.K.) L, with
respect to the fund.
(i) FMR has entered into sub-advisory agreements with FMR U.K. and
FMR Far East, with respect to the fund.
Fidelity, Magellan, and Fidelity Investments are registered
trademarks of FMR Corp.
MAG-pxs-0200 CUSIP# 316184100/FUND# 021
1.735016.100
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY MAGELLAN FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Gerald C. McDonough , or any
one or more of them, attorneys, with full power of substitution, to
vote all shares of Fidelity Magellan Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the fund to
be held at an office of the trust at 27 State Street, 10th Floor,
Boston, MA 02109, on April 19, 2000 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date , 2000
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
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.
cusip # 316184100/fund# 021
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees [ ]FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as (except as marked to the vote for all nominees.
Trustees: (01) Ralph F. contrary below).
Cox, (02) Phyllis Burke
Davis, (03) Robert M. Gates,
(04) Edward C. Johnson 3d,
(05) Donald J. Kirk, (06)
Ned C. Lautenbach, (07)
Peter S. Lynch, (08) William
O. McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams.
(INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL
NOMINEE(S), WRITE THE
NAME(S) OF THE NOMINEE(S) ON
THE LINE BELOW.)
</TABLE>
______________________________________________________________________
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an Amended and
Restated Declaration of
Trust.
4. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
management contract for the
fund.
5. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
sub-advisory agreement with
Fidelity Management &
Research (U.K.) Inc. for the
fund.
6. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
sub-advisory agreement with
Fidelity Management &
Research (Far East) Inc. for
the fund.
7. To approve a Distribution and FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Service Plan pursuant to
Rule 12b-1 for the fund.
8. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
fundamental limitation
concerning diversification
to permit increased
investment in the securities
of any single issuer.
9. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
fundamental limitation
concerning diversification
to exclude securities of
other investment companies
from the limitation.
MAG- PXC -0200 cusip # 316184100/fund# 021
(PHOTO_OF_EDWARD_C_JOHNSON_3D)
PROXY MATERIALS
I M P O R T A N T
PLEASE CAST YOUR VOTE NOW!
FIDELITY(registered trademark) MAGELLAN(registered trademark) FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
Fidelity Magellan Fund (the fund) will be held on April 19, 2000. The
purpose of the meeting is to vote on several important proposals that
affect the fund and your investment. As a shareholder, you have the
opportunity to voice your opinion on the matters that affect your
fund. This package contains information about the proposals and the
materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card(s). PLEASE VOTE AND RETURN YOUR CARD(S) PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with Fidelity,
are responsible for protecting your interests as a shareholder. The
Trustees believe these proposals are in the best interests of
shareholders. They recommend that you vote FOR each proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of the proposals is described in greater detail in the
enclosed proxy statement.
VOTING IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To cast
your vote, simply complete the proxy card(s) enclosed in this package.
Be sure to sign the card(s) before mailing it in the postage-paid
envelope.
If you have any questions before you vote, please call Fidelity at
1-800-544-6666. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important information to help you understand and vote on the
proposals.
PLEASE READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT. BELOW IS A
BRIEF OVERVIEW OF THE PROPOSALS TO BE VOTED UPON. YOUR VOTE IS
IMPORTANT. WE APPRECIATE YOU PLACING YOUR TRUST IN FIDELITY AND LOOK
FORWARD TO HELPING YOU ACHIEVE YOUR FINANCIAL GOALS.
WHAT ARE THE PROPOSALS?
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
4. To approve an amended management contract for Fidelity Magellan
Fund.
5. To approve an amended sub-advisory agreement with Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) for the fund.
6. To approve an amended sub-advisory agreement with Fidelity
Management & Research (Far East) Inc. (FMR Far East) for the fund.
7. To approve a Distribution and Service Plan pursuant to Rule 12b-1
for the fund.
8. To amend the fund's fundamental investment limitations concerning
diversification to permit increased investment in the securities of
any single issuer.
9. To amend the fund's fundamental investment limitation concerning
diversification to exclude securities of other investment companies
from the limitation.
WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of the fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of shareholders, including approving policy changes such as
those proposed in the proxy statement. In addition, the Trustees
review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to the
fund.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants act as the fund's auditors. They review
the fund's annual financial statements and provide other audit and
tax-related services.
WHY IS THE FUND PROPOSING TO ADOPT AN AMENDED AND RESTATED DECLARATION
OF TRUST? (PROPOSAL 3)
The new Declaration of Trust is a more modern form of trust instrument
for a Massachusetts business trust. It gives the Trustees more
flexibility, and, subject to the applicable requirements of federal
and state law, broader authority to act. This increased flexibility
may allow the Trustees to react more quickly to changes in competitive
and regulatory conditions.
Adoption of the new Declaration of Trust will not alter the Trustees'
existing fiduciary obligations to act with due care and in the
interests of shareholders. Before utilizing any new flexibility that
the new Declaration of Trust may afford, the Trustees must first
consider the shareholders' interests and act in accordance with such
interests. Adoption of the new Declaration of Trust will not result in
any changes in the fund's trustees or officers or in the investment
policies described in the fund's current prospectus.
WHY IS THE FUND PROPOSING AN AMENDED MANAGEMENT CONTRACT? (PROPOSAL 4)
The changes are threefold. First, the amended management contract
would provide for lower management fees to be paid to Fidelity
Management & Research Company (FMR) when FMR's assets under management
exceed certain levels.
Second, the proposal would revise the fund's performance adjustment
calculation by rounding the investment performance of both the fund
and its comparative index to the nearest 0.01%, rather than the
nearest 1.00%. This reduces the chance of minor changes in performance
resulting in significant changes to the performance adjustment, and
ultimately to the fund's management fee.
Third, the proposal would allow FMR and the fund to amend the
management contract without shareholder vote if the Investment Company
Act of 1940 (the 1940 Act) permits them to do so. For example, this
would allow the management contract to be amended to reflect a
management fee decrease without holding a shareholder meeting.
WHAT IS A SUB-ADVISORY AGREEMENT AND HOW WILL THE PROPOSED AMENDED
SUB-ADVISORY AGREEMENTS AFFECT THE FUND? (PROPOSALS 5 AND 6)
Generally, the sub-advisory agreements allow FMR increased access to
more specialized investment expertise in foreign markets. The fund's
amended sub-advisory agreements would allow FMR, FMR U.K., FMR Far
East, and the trust, on behalf of the fund, to modify the fund's
sub-advisory agreements subject to the requirements of the 1940 Act.
FMR U.K., with its principal office in London, England, and FMR Far
East, with its principal office in Tokyo, Japan, are wholly-owned
subsidiaries of FMR. FMR pays all fees of FMR U.K. and FMR Far East
under the fund's amended agreements. The amended agreements would not
increase the fees paid to FMR by the fund.
WHAT IS A DISTRIBUTION AND SERVICE PLAN, AND WHY IS THE FUND PROPOSING
TO ADOPT ONE? (PROPOSAL 7)
The Distribution and Service Plan was approved by the Board of
Trustees as provided for by Rule 12b-1 under the 1940 Act. The Rule
provides that a mutual fund acting as a distributor of its shares must
do so according to a written Plan describing all material aspects of
the proposed financing of distribution. The Plan is designed to avoid
legal uncertainties that may arise from ambiguities within the Rule.
The Plan dictates that all expenses relating to the distribution of
fund shares shall be paid for by FMR, or Fidelity Distributors
Corporation (FDC), a wholly-owned subsidiary of FMR Corp., out of past
profits and other resources including management fees paid by a fund
to FMR. The Plan does not authorize payments by the fund other than
those that are to be made to FMR under its management contract.
COULD YOU EXPLAIN THIS PROPOSAL TO AMEND THE FUND'S FUNDAMENTAL
INVESTMENT LIMITATIONS CONCERNING DIVERSIFICATION TO PERMIT INCREASED
INVESTMENT IN THE SECURITIES OF ANY SINGLE ISSUER? (PROPOSAL 8)
Currently, the fund may not invest more than 5% of its assets in any
one company (or issuer). The proposal would liberalize this limitation
and allow the fund to invest more than 5% of assets in a limited
number of issuers. Currently, the fund has a more restrictive
diversification policy than is outlined in the 1940 Act.
The proposed fundamental limitation would track the 1940 Act's
definition of diversification more closely, and allow the fund, with
respect to 25% of its total assets, to invest more than 5% of its
total assets in the securities of one or more issuers and to hold more
than 10% of the voting securities of any issuer.
The proposal would give the fund greater investment flexibility by
permitting it to acquire larger positions in the securities of
individual issuers. In particular, it would increase fund management's
ability, where appropriate, to over-weight positions that represent
significant percentages of market benchmarks.
Under the 1940 Act's definition of diversification, the fund would
also be permitted to acquire more than 10% of an issuer's voting
securities under certain conditions. This aspect of the proposal,
however, is not currently expected to materially affect the way the
fund is managed.
COULD YOU EXPLAIN THIS PROPOSAL TO AMEND THE FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING DIVERSIFICATION TO EXCLUDE SECURITIES
OF OTHER INVESTMENT COMPANIES FROM THE LIMITATION? (PROPOSAL 9)
This proposal would permit the fund to invest without limit in the
securities of other investment companies (the legal term for mutual
funds and similar entities). Pursuant to an order of exemption granted
by the SEC, the fund may invest in money market or short-term bond
funds managed by FMR or an affiliate of FMR (the Investment Funds).
FMR anticipates that investing in the Investment Funds will benefit
the fund by enhancing the efficiency of the fund's cash management.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has unanimously approved all of the
proposals and recommends that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of the fund on the record date. The record date is
February 22, 2000.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card(s) and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call Fidelity at 1-800-544-6666.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
REMEMBER, THE ABOVE IS ONLY A SUMMARY OF A FEW KEY FEATURES OF THE
PROPOSALS. PLEASE READ THE PROXY STATEMENT FOR COMPLETE DETAILS ON
EACH PROPOSAL.
(registered trademark)
MAG-pxl-0200
1.735017.100
