SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-77169)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 28 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No.
The North Carolina Capital Management Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 617-570-7000
Arthur S. Loring, Secretary, 82 Devonshire St., Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On ( ) pursuant to paragraph (b) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a) of Rule 485
[x] On August 19, 1995 pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule on or around August 29, 1995.
North Carolina Capital Management Trust:
Cash Portfolio and Term Portfolio
Cross Reference Sheet
Form N-1A Item Number
Part A Prospectus Caption
1 a,b Cover Page
2 a Expenses
b,c Contents; Who May Want to Invest
3 a **
b *
c Performance
d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Securities and Investment
Practices; Fundamental Investment Policies and Restrictions
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and its Affiliates
b(ii) FMR and Its Affiliates; Breakdown of
Expenses
b(iii) Expenses; Breakdown of Expenses
c FMR and Its Affiliates
d Cover Page; Charter; Breakdown of Expenses; FMR and Its Affiliates
e FMR and Its Affiliates, Breakdown of Expenses
f Expenses
g Expenses; FMR and Its Affiliates, Breakdown of Expenses
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii) *
b *
c How to Buy Shares; Exchange Restrictions
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details
f,g Dividends, Capital Gains, and Taxes
7 a Cover page; FMR and its Affiliates
b How to Buy Shares; Transaction Details
c How to Buy Shares; Transaction Details
d How to Buy Shares
e Breakdown of Expenses
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
* Not applicable
** To be filed by subsequent amendment
THE
NORTH CAROLINA CAPITAL
MANAGEMENT TRUST:
CASH PORTFOLIO AND TERM PORTFOLIO
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the funds' most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated August 19, 1995. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, or for information or assistance in
opening an account, please call Sterling Capital Distributors, Inc.
(Sterling) in Charlotte, North Carolina:
(medium solid bullet) Toll-free (800)-222-3232
(medium solid bullet) or locally (704)-372-8798
INVESTMENTS IN CASH PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT CASH PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED
BY THE FDIC, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
CASH PORTFOLIO seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity, and to maintain
a constant net asset value per share of $1.00, through investment in
high-grade money market instruments, including obligations of the U.S.
Government and the State of North Carolina, and in bonds and notes of any
North Carolina local government or public authority.
TERM PORTFOLIO seeks to obtain as high a level of current income as is
consistent with the preservation of capital by investing in obligations of
the U.S. Government and agencies and instrumentalities of the U.S.
Government, obligations of the State of North Carolina, bonds and notes of
any North Carolina local government or public authority, and in high-grade
money market instruments.
PROSPECTUS
DATED AUGUST 19, 1995
AND
ANNUAL REPORT
FOR THE PERIOD ENDING(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
JUNE 30, 1995
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NC-pro-895
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PROSPECTUS
KEY FACTS P- WHO MAY WANT TO INVEST
P- EXPENSES Each fund's yearly operating expenses.
P- FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
P- PERFORMANCE How each fund has done over time.
THE FUNDS IN DETAIL P- CHARTER How each fund is organized.
P- INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
P- BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
P- TYPES OF ACCOUNTS Different ways to set up your
account.
P- HOW TO BUY SHARES Opening an account and
making additional investments.
P- HOW TO SELL SHARES Taking money out and closing
your account.
P- INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES P- DIVIDENDS, CAPITAL GAINS, AND TAXES
P- TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
P- EXCHANGE RESTRICTIONS
ANNUAL REPORT
PERFORMANCE A-__ How the funds have done over time.
The managers' review of each fund's performance,
FUND TALK A-__ strategy, and outlook.
A complete list of each fund's investments with
INVESTMENTS A-__ their market values.
Statements of assets and liabilities, operations,
FINANCIAL STATEMENTS A-__ and changes in net assets.
NOTES A-__ Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-__ The auditor's opinion.
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Shares of each of Cash Portfolio and Term Portfolio are offered exclusively
to local governments and public authorities of the State of North Carolina,
school administrative units, local ABC boards, community colleges or public
hospitals, as those terms are defined in 20 NCAC 3.07702(3). Each fund
offers an economical and convenient vehicle for investment of available
cash by North Carolina's state and local governments, their political
subdivisions, agencies, instrumentalities and public authorities.
Cash Portfolio may be appropriate for those investors who would like to
earn income at current money market rates while preserving the value and
liquidity of their investments. Cash Portfolio is managed to keep its
share price stable at $1.00 and because it emphasizes stability, it could
be well-suited for a portion of your investment. Cash Portfolio offers
free check writing to give you a convenient way to manage your assets.
Term Portfolio may be appropriate for those investors who would like to
earn a high level of current income while preserving the value of their
investments and who intend to remain invested for longer periods than Cash
Portfolio shareholders and seek the higher yields that normally are
available from instruments with longer maturities. Accordingly, Term
Portfolio may not be an appropriate investment for those investors who
require daily liquidity in order to meet current obligations. When you
sell your Term Portfolio shares, they may be worth more or less than what
you paid for them.
The value of the funds' investments and the income they generate vary from
day to day, and generally reflect changes in interest rates, market
conditions, and other economic and political news. Term Portfolio's
investments are also subject to prepayments, which can lower its yield,
particularly in periods of declining interest rates.
Each fund is not in itself a balanced investment plan. You should consider
your investment objective and tolerance for risk when making an investment
decision.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund.
Cash Term
Portfoli Portfo
o lio
Maximum sales charge on None None
purchases and
reinvested distributions
Maximum deferred sales None None
charge
Redemption fee None None
Exchange fee None None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). FMR
is responsible for the payment of all other expenses for each fund with
certain limited exceptions.
12b-1 fees are paid by FMR from its management fee, its past profits or
other source to certain third parties in connection with the distribution
of fund shares.
Each fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of each fund,
and are calculated as a percentage of average net assets of each fund.
Cash Term
Portfoli Portfoli
o o
Management fee* __% __%
12b-1 fee (Distribution Fee) __% __%
Other expenses 0.00% 0.00%
Total operating expenses __% __%
* The rate for management fees represents the net rate retained by FMR
after payment made to the distributor. The management fee before payments
made to the distributor by FMR is ___%.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment assuming a 5% annual return and full redemption, at the end of
each time period:
1 3 5 10
Year Years Years Years
Cash Portfolio $ $ $ $
Term Portfolio $ $ $ $
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements are included in the funds' Annual Report and have been audited
by ___________________, independent accountants. Their report on the
financial statements and financial highlights is included in the Annual
Report. The financial statements, the financial highlights, and the report
are attached.
[INSERT A TABLE FOR EACH FUND HERE]
PERFORMANCE
Performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields for
Term Portfolio are calculated according to a standard that is required for
all stock and bond funds. Because this differs from other accounting
methods, the quoted yield for Term Portfolio may not equal the income
actually paid to shareholders.
When a yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
Seven-day yield illustrates the income earned by an investment in Cash
Portfolio over a recent seven-day period. Since money market funds maintain
a stable $1.00 share price, current seven-day yields are the most common
illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call 1-800-___-____.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
The North Carolina Capital Management Trust, an open-end management
investment company organized as a Massachusetts business trust on April 26,
1982.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent, will mail proxy materials in advance, including a
voting card and information about the proposals to be voted on. You are
entitled to one vote for each share you own.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
Each fund is managed by FMR, which handles their business affairs and
chooses Term Portfolio's investments. FMR Texas Inc., located in Irving,
Texas (FMR Texas) has primary responsibility for providing investment
management services to Cash Portfolio.
As of June 30, 1995, FMR advised funds having approximately __million
shareholder accounts with a total value of more than $__ billion.
Robert Duby is vice president and portfolio manager of The North Carolina
Capital Management Trust's Term Portfolio, which he has managed since
November 1991. He also manages Massachusetts Municipal Depository Trust.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Through
ownership of voting common stock, members of the Edward C. Johnson 3d
family form a controlling group with respect to FMR Corp. Changes may occur
in the Johnson family group, through death or disability, which would
result in changes in each individual family member's holding of stock. Such
changes could result in one or more family members becoming holders of over
25% of the stock. FMR Corp. has received an opinion of counsel that changes
in the composition of the Johnson family group under these circumstances
would not result in the termination of the funds' management or
distribution contracts and, accordingly, would not require a shareholder
vote to continue operation under those contracts.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
CASH PORTFOLIO invests only in those high-grade money market instruments
which are authorized for investment by units of local government as
specified in North Carolina G.S. 159-30 (the Statute), as amended from time
to time, and in 20 NCAC 3.0730(a)(the Code). Cash Portfolio may also
invest more than 25% of its total assets in obligations of banks.
Cash Portfolio's investments in domestic bank obligations are limited to
those banks having total assets in excess of one billion dollars and
subject to regulation by the U.S. Government. Cash Portfolio may also
invest in certificates of deposits issued by banks insured by the Federal
Deposit Insurance Corporation (FDIC) having total assets of less than one
billion dollars, provided that the portfolio will at no time own more than
an aggregate of $100,000 in principal and interest obligations (or any
higher principal amount or principal and interest which in the future may
be fully covered by FDIC insurance) of any one such issuer. Cash Portfolio
will use its best efforts to maintain a constant NAV of $1.00.
Cash Portfolio follows industry-standard guidelines on the quality and
maturity of its investments, which are designed to help maintain a stable
$1.00 share price. Cash Portfolio will purchase only high-quality
securities that FMR believes present minimal credit risks and will observe
maturity restrictions on securities it buys. In general, securities with
longer maturities are more vulnerable to price changes, although they may
provide higher yields. It is possible that a major change in interest
rates or a default on Cash Portfolio's investments could cause its share
price (and the value of your investment) to change. It is important to
note that Cash Portfolio is not guaranteed by the U.S. Government.
Cash Portfolio stresses income, preservation of capital, and liquidity. It
does not seek the higher yields or capital appreciation that more
aggressive investments may provide. Cash Portfolio's yield will vary from
day to day, generally reflecting current short-term interest rates and
other market conditions.
TERM PORTFOLIO invests only in obligations of the U.S. Government, its
agencies or instrumentalities, or obligations fully guaranteed by the U.S.
Government as permitted pursuant to the Statute and the Code. Under the
current Code, Term Portfolio may invest in securities with maturities of
seven years or less. Term Portfolio may, under normal circumstances, invest
up to 25% of its total assets in the finance industry.
Term Portfolio's yield and share price change daily and are based on
changes in interest rates, market conditions, other economic and political
news, and on the quality and maturity of its investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. FMR may use various
investment techniques to hedge Term Portfolio's risks, but there is no
guarantee that these strategies will work as intended.
FMR normally invests Term Portfolio's assets according to its investment
strategy. Term Portfolio also reserves the right to invest without
limitation in investment-grade money market or short-term debt instruments
for temporary, defensive purposes.
Each fund's investments in instruments other than the direct obligations of
the U.S. Government are subject to the ability of the issuer to make
payment at maturity. Investments in obligations of the State of North
Carolina or municipalities within the State are subject to political or
economic conditions of the State or municipality.
THE STATUTE AND THE CODE. The following investment policies are
non-fundamental, which means that if the Statute or the Code, or any
legislation or regulations relating to those parameters change in the
future, the Trustees may authorize corresponding changes in the instruments
in which the funds may invest, without first obtaining shareholder
approval. Currently, the rulings, regulations and interpretations to which
the funds adhere allow the funds to invest only in the following
instruments:
(i) Obligations of the United States or obligations fully guaranteed both
as to principal and interest by the United States;
(ii) Obligations of the State of North Carolina and bonds and notes of any
North Carolina local government or public authority rated investment grade
or better;
(iii) Obligations of the Federal Financing Bank, the Federal Farm Credit
Bank, the Bank for Cooperatives, the Federal Intermediate Credit Bank, the
Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Housing
Administration, the Farmers Home Administration, and the United States
Postal Service;
(iv) Savings certificates issued by any savings and loan association
organized under the laws of the State of North Carolina or by any federal
savings and loan association having its principal office in North Carolina;
provided that any principal amount of such certificate in excess of the
amount insured by the federal government or any agency thereof, or by a
mutual deposit guaranty association authorized by the Administrator of the
Savings Institutions Division of the Department of Economic and Community
Development of the State of North Carolina, be fully collateralized;
(v) Evidences of ownership of, or fractional undivided interests in, future
interest and principal payments on either direct obligations of the United
States government or obligations the principal of and the interest on which
are guaranteed by the United States, which obligations are held by a bank
or trust company organized and existing under the laws of the United States
or any state in the capacity of custodian;
(vi) Commercial paper bearing the highest rating of at least one nationally
recognized rating service and not bearing a rating below the highest by any
nationally recognized rating service which rates the particular obligation;
(vii) Bills of exchange or time drafts drawn on and accepted by a
commercial bank (commonly referred to as "bankers' acceptances") and
eligible for use as collateral by member banks in borrowing from a federal
reserve bank, provided that the accepting bank or its holding company is
either (a) incorporated in the State of North Carolina or (b) has
outstanding publicly held obligations bearing the highest rating of at
least one nationally recognized service and not bearing a rating below the
highest by any nationally recognized rating service which rates the
particular obligations; or
(viii) Repurchase agreements with respect to either direct obligations of
the United States or obligations the principal of and the interest on which
are guaranteed by the United States if entered into with a broker or dealer
which is a dealer recognized as a primary dealer by the Federal Reserve
Bank, or any commercial bank, trust company or national banking
association, the deposits of which are insured by the FDIC or any successor
thereof.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. A complete listing of each fund's policies
and limitations and more detailed information about each fund's investments
is contained in the funds' SAI. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help a fund
achieve its goal. Current holdings and recent investment strategies are
described in the funds' financial reports which are sent to shareholders
twice a year. For a free SAI or financial report, call 1-800-222-3232.
MONEY MARKET SECURITIES are high-quality, short-term obligations that
present minimal credit risk. They may be issued by the U.S. Government,
corporations, financial institutions, and other entities. These
obligations may carry fixed, variable, or floating interest rates. A
security's credit may be enhanced by a bank, insurance company, or other
entity. Some money market securities employ a trust or other similar
structure to modify the maturity, price characteristics, or quality of
financial assets so that they are eligible investments for money market
funds. If the structure does not perform as intended, adverse tax or
investment consequences may result.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. Government. Not all U.S. Government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general , bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's debt
quality policy if it is rated at or above the stated level by Moody's or
rated in the equivalent categories by S&P, or is unrated but judged to be
of equivalent quality by FMR. Term Portfolio currently intends to limit its
investments in debt securities to those rated A-quality and above.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
purposes, including general financing for state and local governments, or
financing for specific projects or public facilities. They may be issued
in anticipation of future revenues, and may be backed by the full taxing
power of a municipality, the revenues from a specific project, or the
credit of a private organization. A security's credit may be enhanced by a
bank, insurance company, or other entity. The value of some or all
municipal securities may be affected by uncertainties in the municipal
market related to legislation or litigation involving the taxation of
municipal securities or the rights of municipal securities holders. A fund
may own a municipal security directly or through a participation interest.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other money market
securities, although they may be more volatile.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid and some other securities, may be subject to
legal restrictions. Difficulty in selling securities may result in a loss
or may be costly to a fund.
RESTRICTIONS. A fund may not purchase a security if, as a result, more than
10% of its net assets would be invested in illiquid and restricted
securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS. Cash Portfolio may not purchase the securities of any issuer
if, as a result, more than 5% of its total assets would be invested in the
securities of such issuer, provided, however, that in the case of
certificates of deposit and bankers' acceptances up to 25% of its total
assets may be invested without regard to such 5% limitation, but shall
instead be subject to a 10% limitation. With respect to 75% of its total
assets, Term Portfolio may not purchase a security if, as a result, (a)
more than 5% would be invested in the securities of any issuer, or (b) it
would hold more than 10% of the voting securities of any issuer. These
limitations do not apply to U.S. Government securities.
BORROWING. A fund may borrow from banks. If Term Portfolio borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If Term Portfolio makes additional investments while
borrowings are outstanding, this may be considered a form of leverage.
RESTRICTIONS. Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 33 1/3% of its total
assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33 1/3% of a
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Cash Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity, and to maintain
a constant net asset value per share of $1.00, through investment in
high-grade money market instruments, including obligations of the U.S.
Government and the State of North Carolina, and in bonds and notes of any
North Carolina local government or public authority.
Cash Portfolio invests only in those high-grade money market instruments
which are authorized for investment by units of local government as
specified in North Carolina G.S. 159-30 (the Statute), as amended from time
to time, and in 20 NCAC 3.0730(a)(the Code). Cash Portfolio may also
invest more than 25% of its total assets in obligations of banks. Cash
Portfolio will use its best efforts to maintain a constant NAV of $1.00.
Term Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital by investing in obligations of
the U.S. Government and agencies and instrumentalities of the U.S.
Government, obligations of the State of North Carolina, bonds and notes of
any North Carolina local government or public authority, and in high-grade
money market instruments.
Term Portfolio invests only in obligations of the U.S. Government, its
agencies or instrumentalities, or obligations fully guaranteed by the U.S.
Government as permitted pursuant to the Statute and the Code. Under the
current Code, Term Portfolio may invest in securities with maturities of
seven years or less. Term Portfolio may, under normal circumstances,
invest up to 25% of its total assets in the finance industry.
Cash Portfolio may not purchase the securities of any issuer if, as a
result, more than 5% of its total assets would be invested in the
securities of such issuer, provided, however, that in the case of
certificates of deposit and bankers' acceptances up to 25% of its total
assets may be invested without regard to such 5% limitation, but shall
instead be subject to a 10% limitation. With respect to 75% of its total
assets, Term Portfolio may not purchase a security if, as a result, (a)
more than 5% would be invested in the securities of any issuer, or (b) it
would hold more than 10% of the voting securities of any issuer. These
limitations do not apply to U.S. Government securities.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33 1/3% of its total assets.
Loans, in the aggregate, may not exceed 33 1/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each fund's assets are reflected in that
fund's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
FMR may, from time to time, agree to reimburse each fund for management
fees above a specified limit. Reimbursement arrangements, which may be
terminated at any time without notice, can decrease each fund's expenses
and boost its performance.
MANAGEMENT FEE
Each fund's management fee is calculated and paid to FMR every month. FMR
pays all of the expenses of each fund with limited exceptions. Each fund
pays an annual management fee according to the following schedule: 0.41%
of average net assets through $100 million; 0.40% of average net assets in
excess of $100 million through $200 million; 0.39% of average net assets in
excess of $200 million through $800 million; and 0.38% of average net
assets in excess of $800 million.
FMR HAS A SUB-ADVISORY AGREEMENT with FMR Texas, which has primary
responsibility for providing investment management for Cash Portfolio,
while FMR retains responsibility for providing Cash Portfolio with other
management services. For these services FMR pays FMR Texas 50% of its
management fee (before expense reimbursements, but after payments made by
FMR pursuant to Cash Portfolio's Distribution and Service Plan). FMR paid
FMR Texas ___% of Cash Portfolio's average net assets for fiscal 1995.
OTHER EXPENSES
Each fund's investments in instruments other than the direct obligations of
the U.S. Government are subject to the ability of the issuer to make
payment at maturity. Investments in obligations of the State of North
Carolina or municipalities within the State are subject to political or
economic conditions of the State or municipality.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for each fund. Fidelity Service Co. (FSC) calculates
the NAV and dividends for each fund, maintains the general accounting
records, and administers the securities lending program for each fund.
These expenses are paid by FMR pursuant to its management contract.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Under the Plans, FMR
is required to pay FDC a monthly distribution fee, all of which FDC pays
Sterling, as compensation for its services and expenses in connection with
the distribution of shares of each fund and providing personal service to
and/or maintenance of shareholder accounts. FMR currently pays FDC monthly
on behalf of each fund according to the following schedule: 0.14% of
average net assets through $100 million, 0.15% of average net assets in
excess of $100 million through $200 million; 0.16% of average net assets in
excess of $200 million through $800 million; 0.17% of average net assets in
excess of $800 million. Average net assets is determined at the close of
business on each day throughout the month.
Each fund also pays other expenses, such as brokerage fees and commissions,
interest on borrowings, taxes, and the compensation of trustees who are not
affiliated with Fidelity.
The portfolio turnover rate for Term Portfolio for fiscal 1995 was ___%.
This rate varies from year to year. [IF THE RATE EXCEEDS 100% FOR ONE OR
MORE FUNDS: High turnover rates for _____________ increase transaction
costs and may increase taxable capital gains. FMR considers these effects
when evaluating the anticipated benefits of short-term investing.]
YOUR ACCOUNT
TYPES OF ACCOUNTS
The different ways to set up (register) your account with Fidelity are
listed below.
WAYS TO SET UP YOUR ACCOUNT
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called NAV, is calculated every business day.
Cash Portfolio is managed to keep its share price stable at $1.00. Each
fund's shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. Cash Portfolio's NAV is
normally calculated at 12:00 p.m. and 4:00 p.m. Eastern time. Term
Portfolio's NAV is normally calculated at 4:00 p.m. Eastern time.
Share certificates are not available for Cash Portfolio or Term Portfolio
shares.
IF YOU ARE NEW TO THE FUNDS, you must complete and sign an account
application prior to making an initial investment.
Term Portfolio shares are available only to investors with a new or
existing account in Cash Portfolio.
Once you have opened an account, you may purchase shares of each fund
according to the methods described in the charts on pages P-__ and P-___.
If there is no account application accompanying this prospectus, call
Sterling toll-free at 800-222-3232 or locally at 704-372-8798.
SECURITIES EXCHANGE. Shares of Term Portfolio may be purchased in exchange
for securities you hold which meet Term Portfolio's investment objective,
policies, and limitations. FDC reserves the right to refuse a securities
exchange for any reason. You may realize a gain or loss for federal income
tax purposes upon a securities exchange. For further information,
including specific details about the securities exchange program and
instructions on submission of a letter of intention to Sterling, call
Sterling toll-free at 800-222-3232 or locally at 704-372-8798. DO NOT SEND
SECURITIES TO THE FUND, TO FDC, OR TO STERLING.
<TABLE>
<CAPTION>
<S> <C> <C>
CASH PORTFOLIO TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Mail (mail_graphic) (small solid bullet) Send a completed,
signed (small solid bullet) Make your check payable to "NCCMT:
application to the following address: Cash Portfolio." Indicate your account
The North Carolina Capital number and mail your check and a
Management Trust precoded fund investment slip, which will
c/o Sterling Capital Distributors, Inc. be supplied when you open your
One First Union Center account, to the address printed on your
301 S. College Street, Suite 3200 account statement.
Charlotte, NC 28202-6005
Phone 1-800-544-777
(phone_graphic) (small solid bullet) Not available. (small solid bullet) Exchange from a Term Portfolio account
with the same registration, including
name, address, and taxpayer ID
number.
(small solid bullet) Call Sterling toll-free at 800-222-3232 or
locally at 704-372-8798 before 4:00 p.m.
Eastern time.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
In Person (hand_graphic) (small solid bullet) Not available. (small solid bullet) Bring your check and a precoded fund
investment slip, which will be supplied
when you open your account, to any
branch of First Union before 4:00 p.m.
Eastern time if you want your investment
to be made that same day.
Wire (wire_graphic) (small solid bullet) Not available. (small solid bullet) You may obtain wire instructions by
calling Sterling toll-free at 800-222-3232
or locally at 704-372-8798.
(small solid bullet) Call Sterling before 12:00 p.m. Eastern
time on the day of the wire.
(small solid bullet) Federal funds and certain federal or
state transfer payments will be accepted
by wire.
(small solid bullet) If Sterling is not advised of the order
prior to 12:00 p.m. Eastern time on the
day of the wire, or if federal funds are
not received the same day the order is
placed, the order will be accepted on the
following business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TERM PORTFOLIO TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Mail (mail_graphic) (small solid bullet) Send a completed, signed (small solid bullet) Not available.
application to the following address:
The North Carolina Capital
Management Trust
c/o Sterling Capital Distributors,
Inc.
One First Union Center
301 S. College Street, Suite
3200
Charlotte, NC 28202-6005
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777
(phone_graphic) (small solid bullet) Not available. (small solid bullet) Exchange from a Cash Portfolio account
with the same registration, including
name, address, and taxpayer ID
number.
(small solid bullet) Call Sterling toll-free at 800-222-3232 or
locally at 704-372-8798 before 4:00 p.m.
Eastern time.
In Person (hand_graphic) (small solid bullet) Not available. (small solid bullet) Not available.
Wire (wire_graphic) (small solid bullet) Not available. (small solid bullet) You may obtain wire instructions by
calling Sterling toll-free at 800-222-3232
or locally at 704-372-8798.
(small solid bullet) Call Sterling before 4:00 p.m. Eastern
time on the business day prior to the
wiring of funds.
(small solid bullet) Only federal funds will be accepted by
wire.
(small solid bullet) If Sterling is not advised of the order
prior to 4:00 p.m. Eastern time on the
business day on which your order is
received or if the federal funds are not
received the next business day, your
order may be canceled, and you could
be held liable for resulting fees and
losses.
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. Cash Portfolio's NAV is normally calculated at 12:00 p.m.
Eastern time and 4:00 p.m. Eastern time. Term Portfolio's NAV is normally
calculated at 4:00 p.m. Eastern time.
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described on
these two pages.
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you, Fidelity, and Sterling from fraud. Your request must be made
in writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account;
(small solid bullet) You are a trustee whose name does not appear in the
account registration.
(small solid bullet) You are a person authorized by corporate resolution to
act on the account.
You should be able to obtain a signature guarantee from a bank,
broker-dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency, or savings association. A notary
public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
(small solid bullet) Any other applicable requirements listed in the chart
on page P-__.
Mail your letter to the following address:
The North Carolina Capital Management Trust
c/o Sterling Capital Distributors, Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
Unless otherwise instructed, the transfer agent will send a check to the
record address.
If you elected to do so on your account application, you may instruct that
redemption proceeds in any amount be wired directly to your existing
account in any North Carolina bank as designated on the application. You
should determine that such designated institutions satisfy any legal
requirements under North Carolina law prior to completing the application.
You may change the designated bank account, or add additional accounts
without limitation, by sending a signature guaranteed letter of instruction
to Sterling at the address shown above prior to requesting a redemption.
There is no fee imposed by the funds for wiring of redemption proceeds.
Redemption proceeds will be wired via the Federal Reserve Wire System to
the bank account of record. If a redemption request is received by
telephone by Sterling before 4:00 p.m. Eastern time, redemption proceeds
will normally be wired on the following business day.
CHECKWRITING
If you have a checkbook for your account in Cash Portfolio, you may write
an unlimited number of checks. Do not, however, try to close out your
account by check. You are advised to determine whether use of the
checkwriting feature may be limited by North Carolina G.S. 159-28, as
amended from time to time.
ACCOUNT TYPE SPECIAL REQUIREMENTS
PHONE All account types (small solid bullet) You may exchange to Cash
Portfolio from Term Portfolio, and
vice versa, if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(small solid bullet) Call Sterling toll-free at
800-222-3232 or locally at
704-372-8798 before 4:00 p.m.
Eastern time.
<TABLE>
<CAPTION>
<S> <C> <C>
Mail or in Person (mail_graphic)(hand_graphic) Trust (small solid bullet) The trustee must sign the letter
indicating capacity as trustee. If the
trustee's name is not in the account
registration, provide a copy of the
trust document certified within the
last 60 days with a signature
guaranteed letter.
Business or Organization (small solid bullet) At least one person authorized by
corporate resolution to act on the
account must sign the letter (with
signature guarantee).
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. To verify that
it is in place, call Sterling toll-free at
800-222-3232 or locally at
704-372-8798.
(small solid bullet) Your wire redemption request must
be received by Sterling before 12:00
p.m. Eastern time for Cash Portfolio
and 4:00 p.m. Eastern time for Term
Portfolio for money to be wired on
the next business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Check (check_graphic) Cash Portfolio accounts (small solid bullet) All account owners must sign a
signature card to receive a
checkbook.
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Sterling if you need
additional copies of financial reports or historical account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
ARBITRAGE REPORTING SERVICES. Special reporting is available for state and
local entities that require rebate calculations for the invested proceeds
of their issued tax-exempt obligations pursuant to the Tax Reform Act of
1986. Sterling, FMR, their affiliates and the funds do not assume
responsibility for the accuracy of the services provided. Please call
Sterling for more information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your shares of Cash Portfolio and buy
shares of Term Portfolio, and vice versa, by telephone or in writing.
Note that exchanges out of a fund may have tax consequences for you. For
details on policies and restrictions governing exchanges, including
circumstances under which a shareholder's exchange privilege may be
suspended or revoked, see "Exchange Restrictions," page P-__.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains earned by Term Portfolio are
normally distributed in January and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at each fund's NAV on the first business day
of the following month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution. The
mailing of distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. Your distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, the transfer agent will send you a
confirmation statement showing how many shares you sold and at what price.
You will also receive a transaction statement monthly. However, it is up to
you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. BE SURE TO KEEP YOUR
REGULAR ACCOUNT STATEMENTS; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a capital
gain distribution or dividend distribution, as applicable, from its NAV,
you will pay the full price for the shares and then receive a portion of
the price back in the form of a taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
It is anticipated that most investors in the funds will be "political
subdivisions" of the State of North Carolina. Section 115(1) of the
Internal Revenue Code, as amended (Internal Revenue Code), provides in part
that gross income does not include income derived from the exercise of any
essential governmental function and accruing to a state or any political
subdivision thereof. The receipt of revenue from each fund for the benefit
of a political subdivision investing in a fund may constitute an exercise
of an essential governmental function. A portion of the earnings derived
from funds which are subject to the arbitrage limitations or rebate
requirements of the Internal Revenue Code may be required to be paid to the
U.S. Treasury as computed in accordance with such requirements.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is calculated each day that both
the Federal Reserve Bank of Richmond (Richmond Fed) and First Union
National Bank of North Carolina (First Union), the funds' custodian, are
open.
The following holiday closings have been scheduled for 1995: New Year's
Day (observed), Dr. Martin Luther King Jr. Day (observed), President's Day
(observed), Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Columbus Day (observed), Thanksgiving Day and Christmas Day. Although
FMR expects the same holiday schedule to be observed in the future, the
Richmond Fed or First Union may modify its holiday schedule at any time.
On any day that the Richmond Fed or First Union closes early, the principal
government securities markets close early, such as on days in advance of
holidays generally observed by participants in such markets, or as
permitted by the SEC, the right is reserved to advance the time on that day
by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Richmond Fed or First Union is closed, each fund's NAV may be
affected on days when investors do not have access to the fund to purchase
or redeem shares.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding. Cash Portfolio values its portfolio securities on the
basis of amortized cost. This method minimizes the effect of changes in a
security's market value and helps Cash Portfolio maintain a stable $1.00
share price.
Term Portfolio's assets are valued primarily on the basis of market
quotations. If quotations are not readily available, assets are valued by
a method that the Board of Trustees believes accurately reflects fair
value.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of each fund are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and Sterling may
only be liable for losses resulting from unauthorized transactions if they
do not follow reasonable procedures designed to verify the identity of the
caller. Fidelity and Sterling will request personalized security codes or
other information, and may also record calls. You should verify the
accuracy of the confirmation statements immediately after receipt. If you
do not want the ability to redeem and exchange by telephone, call Sterling
for instructions. Additional documentation may be required from
corporations, associations and certain fiduciaries.
IF YOU ARE UNABLE TO REACH STERLING BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page __. Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Sterling
in advance of transactions in excess of $5 million.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) The funds do not accept cash.
(small solid bullet) Cash Portfolio reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees Cash Portfolio or
the transfer agent has incurred.
(small solid bullet) For Cash Portfolio investors, purchases processed at
12:00 p.m. Eastern time will earn the dividend declared for that day;
purchases processed at 4:00 p.m. Eastern time will begin to earn dividends
the following business day.
(small solid bullet) You begin to earn dividends on your shares of Term
Portfolio as of the first business day following the day of your purchase.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Cash Portfolio may hold payment on redemptions until
it is reasonably satisfied that investments made by check have been
collected, which can take up to seven business days.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments made in clearinghouse funds have been
collected.
(small solid bullet) If you sell shares of Cash Portfolio by writing a
check and the amount of the check is greater than the value of your
account, your check will be returned to you and you may be subject to
additional charges.
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, a
fund may suspend redemption or postpone payment dates. In cases of
suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of Cash
Portfolio for shares of Term Portfolio, and vice versa.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Sterling toll-free at 800-222-3232 or locally at
704-372-8798 before 4:00 p.m. Eastern time.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES,
shares of Term Portfolio will be redeemed at the NAV next determined on the
business day on which your order is received, to pay for the purchase of
Cash Portfolio shares based on the NAV next determined. Shares of Cash
Portfolio will be redeemed at the NAV next determined to pay for the
purchase of Term Portfolio shares on the day your exchange request is
accepted at the NAV next determined. You should note that, under certain
circumstances, a fund may take up to seven days to make redemption proceeds
available for the exchange purchase of shares of another fund. In addition,
please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You begin to earn dividends in the acquired fund on
the following business day.
(small solid bullet) Exchanges from Term Portfolio to Cash Portfolio made
on Friday or the day before a fund holiday will not receive dividends from
Cash Portfolio until the next business day. However, you will continue
receiving dividends from Term Portfolio until the next business day.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds, FDC, or Sterling. This Prospectus and the related
SAI do not constitute an offer by the funds, FDC, or by Sterling to sell or
to buy shares of the fund to any person to whom it is unlawful to make such
offer.
North Carolina Capital Management Trust:
Cash Portfolio and Term Portfolio
Cross Reference Sheet
Form N-1A Item Number
Part B Statement of Additional Information Caption
10a,b Cover Page
11 Cover Page
12 *
13a,b,c Investment Policies and Limitations
d Portfolio Transactions
14a,b Trustees and Officers
c Trustees and Officers
15a Description of the Trust
b Description of the Trust
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c Management Contract
d *
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17a Portfolio Transactions
b Portfolio Transactions
c Portfolio Transactions
d *
e *
18a Description of the Trust
b *
19a Additional Purchase, Exchange and Redemption Information
b Valuation
c *
20 Distributions and Taxes
21a(i,ii) Contracts with FMR Affiliates
a(iii),b,c *
22a Performance
b Performance
23 **
* Not applicable
** To be filed by subsequent amendment
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST:
CASH PORTFOLIO
TERM PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 19, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
August 19, 1995). Please retain this document for future reference. The
funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended June 30, 1995, are incorporated
herein by reference. To obtain an additional copy of the Prospectus and
Annual Report, or this SAI, please call Sterling Capital Distributors, Inc.
in Charlotte, North Carolina at the appropriate number listed below:
(medium solid bullet)Toll-free (800)-222-3232
(medium solid bullet)or locally (704)-372-8798
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
DISTRIBUTION AND SERVICE AGENT
Sterling Capital Distributors, Inc. (Sterling)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
First Union National Bank of North Carolina (First Union)
NC-ptb-895
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of a fund's acquisition of
such security or other asset. Accordingly, any subsequent change in
values, net assets, or other circumstances will not be considered when
determining whether the investment complies with a fund's investment
policies and limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940 (1940 Act)) of the fund.
However, except for the fundamental investment limitations set forth below,
and the policies restated in the "Fundamental Policies" paragraph on page
___, the investment policies and limitations described in this SAI are not
fundamental and may be changed without shareholder approval.
CASH PORTFOLIO
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities), if, as a result, more than 5%
of the fund's total assets would be invested in the securities of such
issuer, provided, however, that in the case of certificates of deposit and
bankers' acceptances up to 25% of the fund's total assets may be invested
without regard to such 5% limitation, but shall instead be subject to a 10%
limitation;
(2) pledge assets except that the fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings made in
accordance with paragraph (5) below;
(3) make short sales of securities;
(4) purchase securities on margin (but the fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities);
(5) borrow money, except from a bank for temporary or emergency purposes
(not for leveraging or investment) in an amount not to exceed one-third of
the current value of the total assets of the fund (including the amount
borrowed) less its liabilities (not including the amount borrowed) at the
time the borrowing is made. (If at any time the fund's borrowings exceed
this limitation due to a decline in net assets, such borrowings will be
promptly (within three days) reduced to the extent necessary to comply with
the limitation. The fund will borrow only to facilitate redemptions
requested by shareholders which might otherwise require untimely
disposition of portfolio securities and will not purchase securities while
borrowings are outstanding);
(6) act as an underwriter (except as it may be deemed such in a sale of
restricted securities);
(7) knowingly purchase a security which is subject to legal or contractual
restrictions on resale or for which there is no readily available market
quotation or engage in a "qualified repurchase agreement" maturing in more
than seven days with respect to any security if, as a result, more than 10%
of the fund's total assets (taken at current value) would be invested in
such securities (investments in instruments of smaller banks which are not
readily marketable will be considered to be within this 10% limitation);
(8) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 25%
of the fund's total assets would be invested in the securities of one or
more issuers having their principal business activities in the same
industry, provided, however, that it may invest more than 25% of its total
assets in the obligations of banks. Neither finance companies as a group
nor utility companies as a group are considered a single industry for
purposes of this policy;
(9) buy or sell real estate;
(10) buy or sell commodities, or commodity (futures) contracts;
(11) make loans to other persons, except (i) by the purchase of debt
obligations in which the fund is authorized to invest in accordance with
its investment objective, and (ii) by engaging in "qualified repurchase
agreements". In addition, the fund may lend its portfolio securities to
broker-dealers or other institutional investors, provided that the borrower
delivers cash or cash equivalent collateral to the fund and agrees to
maintain such collateral so that it equals at least 100% of the value of
the securities loaned. Any such securities loan may not be made if, as a
result thereof, the aggregate value of all securities loaned exceeds 33
1/3% of the total assets of the fund;
(12) purchase the securities of other investment companies or investment
trusts;
(13) purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the fund's total assets
would be invested in securities of companies, which, including
predecessors, have a record of less than three years' continuous operation;
(14) invest in oil, gas, or other mineral exploration or development
programs;
(15) purchase or retain the securities of any issuer any of whose officers,
directors, or security holders is a Trustee, director, or officer of the
fund or of its investment adviser, if or so long as the Trustees,
directors, and officers of the fund and of its investment adviser together
own beneficially more than 5% of any class of securities of such issuer;
(16) write or purchase any put or call option; or
(17) invest in companies for the purpose of exercising control or
management.
Investment limitation (5) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than
a security issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that, with respect to certificates of deposit and bankers' acceptances, the
fund may invest up to 10% of its total assets in the first tier securities
of a single issuer for up to three business days.
(ii) The fund does not currently intend to engage in securities lending
and will do so only when the Trustees determine that it is advisable and
appropriate.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page ____.
TERM PORTFOLIO
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (except the United States
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
(a) more than 5% of its total assets would be invested in the securities of
such issuer, provided, however, that up to 25% of its total assets may be
invested without regard to such 5% limitation; or (b) the fund would hold
more than 10% of the voting securities of any issuer;
(2) make short sales of securities;
(3) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions, or write or purchase
any put or call options or any combinations thereof;
(4) borrow money, except from a bank for temporary or emergency purposes
and not for investment purposes, and then in an amount not exceeding 33
1/3% of the value of the fund's total assets at the time of borrowing; if
at any time the fund's borrowings exceed this limitation due to a decline
in net assets, such borrowings will be promptly (within three days) reduced
to the extent necessary to comply with the limitation (the fund will not
purchase securities for investment while borrowings equaling 5% or more of
its total assets are outstanding);
(5) underwrite any issue of securities, except to the extent that the
purchase of bonds in accordance with the fund's investment objective,
policies, and limitations, either directly from the issuer, or from an
underwriter for an issuer, may be deemed to be underwriting;
(6) knowingly purchase or otherwise acquire any securities which are
subject to legal or contractual restrictions on resale or for which there
is no readily available market or engage in any repurchase agreements which
mature in more than seven days if, as a result, more than 10% of the value
of its net assets would be invested in all such securities;
(7) purchase the securities of any issuer (except the United States
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
more than 25% of total fund assets would be invested in any one industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in bonds or other obligations secured by real estate or interests
therein;
(9) purchase or sell commodities or commodity contracts;
(10) make loans, except (i) by the purchase of a portion of an issue of
debt securities in accordance with its investment objective, policies, and
limitations, and (ii) by engaging in repurchase agreements and loan
transactions with respect to such debt obligations if, as a result thereof,
not more than 33 1/3% of the fund's total assets (taken at current value)
would be subject to loan transactions;
(11) purchase the securities of other investment companies or investment
trusts;
(12) invest in oil, gas or other mineral exploration or development
programs; or
(13) pledge, mortgage, or hypothecate its assets, except that, to secure
borrowings permitted by (4) above, it may pledge securities having a market
value at the time of pledge not exceeding 33 1/3% of the value of the
fund's total assets.
Investment limitation (4) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to engage in securities lending and
will do so only when the Trustees determine that it is advisable and
appropriate.
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission (SEC), the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price and/or yield, with payment and delivery taking place
after the customary settlement period for that type of security. Typically,
no interest accrues to the purchaser until the security is delivered. Term
Portfolio fund may receive fees for entering into delayed-delivery
transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
a fund's other investments. If a fund remains substantially fully invested
at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FUND'S RIGHTS AS A SHAREHOLDER. Term Portfolio does not intend to direct or
administer the day-to-day operations of any company. Term Portfolio,
however, may exercise its rights as a shareholder and may communicate its
views on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters could
have a significant effect on the value of the fund's investment in the
company. The activities that Term Portfolio may engage in, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate structure
or business activities; seeking changes in a company's directors or
management; seeking changes in a company's direction or policies; seeking
the sale or reorganization of the company or a portion of its assets; or
supporting or opposing third party takeover efforts. This area of corporate
activity is increasingly prone to litigation and it is possible that Term
Portfolio could be involved in lawsuits related to such activities. FMR
will monitor such activities with a view to mitigating, to the extent
possible, the risk of litigation against Term Portfolio and the risk of
actual liability if the fund is involved in litigation. No guarantee can be
made, however, that litigation against Term Portfolio will not be
undertaken or liabilities incurred.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by Cash Portfolio and Term Portfolio to be
illiquid include repurchase agreements not entitling the holder to payment
of principal and interest within seven days. Also, FMR may determine some
government-stripped fixed-rate mortgage-backed securities, restricted
securities and time deposits to be illiquid.
In the absence of market quotations, illiquid investments are valued for
Cash Portfolio for purposes of monitoring amortized cost valuation and
priced for Term Portfolio at fair value as determined in good faith by a
committee appointed by the Board of Trustees. If through a change in
values, net assets, or other circumstances, a fund were in a position where
more than 10% of its net assets was invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor
any other regulatory authority has ruled definitively on certain legal
issues presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY. (CASH PORTFOLIO ONLY) Pursuant to procedures adopted
by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be
considered high quality, a security must be rated in accordance with
applicable rules in one of the two highest categories for short-term
securities by at least two nationally recognized rating services (or by
one, if only one rating service has rated the security); or, if unrated,
judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g. Standard & Poor's A-1), and second tier securities
are those deemed to be in the second highest rating category (e.g.,
Standard & Poor's A-2). Split-rated securities may be determined to be
either first tier or second tier based on applicable regulations.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. The securities
purchased by a fund are used to collateralize the repurchase obligation.
As such, they are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy to engage in repurchase agreement transactions with a broker or
dealer which is a dealer recognized as a primary dealer by the Federal
Reserve Bank, or any commercial bank, trust company or national banking
association, the deposits of which are insured by the Federal Deposit
Insurance Company (FDIC) or any successor thereof.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, Cash Portfolio anticipates holding
restricted securities to maturity or selling them in an exempt transaction.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by the government
agencies also may be stripped in this fashion.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. Government
agency or financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest rates
change. In calculating its dividends, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value. Original issue zeros are zero coupon securities originally
issued by the U.S. Government or a government agency in zero coupon form.
THE FOLLOWING PARAGRAPH RESTATES FUNDAMENTAL POLICIES PREVIOUSLY DISCLOSED
IN THE ABOVE DESCRIPTIONS OF SECURITY TYPES AND INVESTMENT PRACTICES.
FUNDAMENTAL POLICIES: It is each fund's current policy to engage in
repurchase agreement transactions with a broker or dealer which is a dealer
recognized as a primary dealer by the Federal Reserve Bank, or any
commercial bank, trust company or national banking association, the
deposits of which are insured by the Federal Deposit Insurance Company
(FDIC) or any successor thereof.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the funds'
management contracts. If FMR grants investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), the
sub-adviser will be authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. Securities purchased and sold by Cash
Portfolio generally will be traded on a net basis (i.e., without
commission). In selecting broker-dealers, subject to applicable limitations
of the federal securities laws, FMR considers various relevant factors,
including, but not limited to, the size and type of the transaction; the
nature and character of the markets for the security to be purchased or
sold; the execution efficiency, settlement capability, and financial
condition of the broker-dealer firm; the broker-dealer's execution services
rendered on a continuing basis; and the reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of Cash Portfolio
are placed with broker-dealers (including broker-dealers on the list)
without regard to the furnishing of such services, it is not possible to
estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal periods ended June 30, 1995 and 1994, Term Portfolio's
turnover rates were ___% and 494%, respectively. Because a higher turnover
rate increases transaction costs and may increase taxable gains, FMR
carefully weighs the anticipated benefits of short-term investing against
these consequences. An increased turnover rate is due to a greater volume
of shareholder purchase orders, short-term interest rate volatility and
other special market conditions.
For fiscal years 1995, 1994, and 1993, Term Portfolio paid no brokerage
commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Investment decisions for each fund are made independently from those of
other funds managed by FMR or accounts managed by FMR affiliates. It
sometimes happens that the same security is held in the portfolio of more
than one of these funds or accounts. Simultaneous transactions are
inevitable when several funds and accounts are managed by the same
investment adviser, particularly when the same security is suitable for the
investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
FSC normally determines Cash Portfolio's NAV at 12:00 p.m. and 4:00 p.m.
Eastern time and Term Portfolio's NAV at 4:00 p.m. Eastern time. The
valuation of portfolio securities is determined as of this time for the
purpose of computing each fund's NAV.
CASH PORTFOLIO'S investments are valued on the basis of amortized cost.
This technique involves valuing an instrument at its cost as adjusted for
amortization of premium or accretion of discount rather than its value
based on current market quotations or appropriate substitutes which reflect
current market conditions. The amortized cost value of an instrument may be
higher or lower than the price the fund would receive if it sold the
instrument.
Valuing the fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted by Rule 2a-7 under the 1940 Act.
Cash Portfolio must adhere to certain conditions under Rule 2a-7; these
conditions are summarized on page __.
The Board of Trustees of the fund oversees FMR's adherence to SEC rules
concerning money market funds, and have established procedures designed to
stabilize the fund's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from Cash Portfolio's amortized cost per share may
result in material dilution or other unfair results to shareholders, the
Trustees have agreed to take such corrective action, if any, as they deem
appropriate to eliminate or reduce, to the extent reasonably practicable,
the dilution or unfair results. Such corrective action could include
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; establishing NAV by using available market
quotations; or such other measures as the Trustees may deem appropriate.
During periods of declining interest rates, the fund's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in Cash Portfolio would be able to
obtain a somewhat higher yield than would result if the fund utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
TERM PORTFOLIO'S investments are valued by various methods depending on
the primary market or exchange on which they trade. Fixed-income
securities and other assets for which market quotations are readily
available may be valued at market values determined by such securities'
most recent bid prices (sales prices if the principal market is an
exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets.
Fixed-income securities may also be valued on the basis of information
furnished by a pricing service that uses a valuation matrix which
incorporates both dealer-supplied valuations and electronic data processing
techniques. Use of pricing services has been approved by the Board of
Trustees. A number of pricing services are available, and the Trustees, on
the basis of an evaluation of these services, may use various pricing
services or discontinue the use of any pricing service.
Short-term securities are valued either at amortized cost or at original
cost plus accrued interest, both of which approximate current value.
Securities and other assets for which there is no readily available market
value are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more accurately
reflect the fair market value of such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Cash Portfolio's yield and total
return and Term Portfolio's share price, yield, and total return fluctuate
in response to market conditions and other factors, and the value of Term
Portfolio's shares when redeemed may be more or less than their original
cost.
YIELD CALCULATIONS. To compute Cash Portfolio's yield for a period, the net
change in value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the one original
share and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. Cash Portfolio
also may calculate a compound effective yield by compounding the base
period return over a one-year period. In addition to the current yield,
Cash Portfolio may quote yields in advertising based on any historical
seven-day period. Yields for Cash Portfolio are calculated on the same
basis as other money market funds, as required by regulation.
For Term Portfolio, yields are computed by dividing the fund's interest
income for a given 30-day or one-month period, net of expenses, by the
average number of shares entitled to receive dividends during the period,
dividing this figure by the fund's net asset value per share at the end of
the period, and annualizing the result (assuming compounding of income) in
order to arrive at an annual percentage rate. Income is calculated for
purposes of Term Portfolio's yield quotations in accordance with
standardized methods applicable to all stock and bond funds. In general,
interest income is reduced with respect to bonds trading at a premium over
their par value by subtracting a portion of the premium from income on a
daily basis, and is increased with respect to bonds trading at a discount
by adding a portion of the discount to daily income. Capital gains and
losses generally are excluded from the calculation.
Term Portfolio also may quote its distribution rate, which expresses the
historical amount of income dividends paid by the fund as a percentage of
the fund's share price. The distribution rate is calculated by dividing
the fund's daily dividend per share by its share price for each day in the
30-day period, averaging the resulting percentages, and then expressing the
average rate in annualized terms.
Income calculated for the purposes of determining Term Portfolio's yield
differs from income as determined for other accounting purposes. Because
of the different accounting methods used, and because of the compounding of
income assumed in yield calculations, Term Portfolio's yield may not equal
its distribution rate, the income paid to your account, or the income
reported in the fund's financial statements.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates, a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates, the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of a fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph or similar
illustration.
NET ASSET VALUE. Charts and graphs using Term Portfolio's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the fund
and reflects all elements of its return. Unless otherwise indicated, Term
Portfolio's adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS.The following table shows Cash Portfolio's current
yield and effective yield for the seven-day period ended June 30, 1995 and
total returns for periods ended June 30, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Current Effective One Five Ten One Five Ten
7-day 7-day Yield Year Years* Years* Year Years* Years*
Yield
Cash Portfolio
</TABLE>
* Note: If FMR had not reimbursed certain fund expenses during these
periods, Cash Portfolio's total returns would have been lower.
HISTORICAL FUND RESULTS. The following table shows Term Portfolio's 30-day
yield, 30-day distribution rate, and total returns for periods ended June
30, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-day 30-day One Five Life of One Five Life of
Yield Distribution Year Years Fund*+ Year Years Fund*+
Rate + +
Term Portfolio
</TABLE>
* From March 19, 1987 (commencement of operations).
+ Note: If FMR had not reimbursed certain fund expenses during these
periods, Term Portfolio's total returns would have been lower.
The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's return to the
record of the cost of living (measured by the Consumer Price Index, or CPI)
over the same period. The CPI information is as of the month end closest to
the initial investment date for each fund.
During the period from June 30, 1986 to June 30, 1995 (for Cash Portfolio),
and from March 19, 1987 (commencement of operations) to June 30, 1995 (for
Term Portfolio), a hypothetical $10,000 investment in Cash Portfolio and
Term Portfolio would have grown to $_______ and $______, respectively,
assuming all distributions were reinvested. These were periods of
fluctuating interest rates and bond prices and the figures below should not
be considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
CASH PORTFOLIO INDEX
Value of Value of Total CPI**
Period Initial Reinvested Value
Ended $10,000 Dividend
Investment Distributions
6/30/86
6/30/87
6/30/88
6/30/89
6/30/90
6/30/91
6/30/92
6/30/93
6/30/94
6/30/95
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on June 30,
1986, the net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of reinvested
dividends for the period covered (their cash value at the time they were
reinvested), amounted to $_______. If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments (dividends) for the period would
have amounted to $________. The fund did not distribute any capital gains
during the period. Tax consequences of different investments have not been
factored into the above figures.
TERM PORTFOLIO
INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Value of Value of Value of Total CPI**
Period Initial Reinvested Reinvested Value
Ended $10,000 Dividend Capital
Investment Distributions Gain
Distributions
6/30/87* $9,910 $186 $0 $10,096 $10,125
6/30/88 9,820 985 0 10,805 10,526
6/30/89 9,780 1,937 0 11,717 11,070
6/30/90 9,730 2,941 0 12,671 11,588
6/30/91 9,820 3,970 0 13,790 12,132
6/30/92 9,910 4,826 0 14,736 12,507
6/30/93 9,940 5,353 0 15,293 12,881
6/30/94 9,850 5,789 31 15,670 13,203
6/30/95
</TABLE>
*From March 19, 1987 (commencement of operations).
**From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on March 19,
1987 the net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $_______. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $________ for dividends and $_______ for
capital gains distributions. The fund did not distribute any capital gains
during the period. Tax consequences of different investments have not
been factored into the above figures.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to assess savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/Taxable
Money Market Funds, which is reported in the MONEY FUND REPORT(registered
trademark), covers over ________ taxable money market funds. The BOND FUND
REPORT AVERAGES(trademark)/taxable bond funds, which is reported in the
BOND FUND REPORT(registered trademark), covers over ________ taxable bond
funds. When evaluating comparisons to money market funds, investors should
consider the relevant differences in investment objectives and policies.
Specifically, money market funds invest in short-term, high quality
instruments and seek to maintain a stable $1.00 share price. The fund,
however, invests in longer-term instruments and its share price changes
daily in response to a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations, saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. Term Portfolio may quote various measures of volatility and
benchmark correlation in advertising. In addition, Term Portfolio may
compare these measures to those of other funds. Measures of volatility seek
to compare the fund's historical share price fluctuations or total returns
to those of a benchmark. Measures of benchmark correlation indicate how
valid a comparative benchmark may be. All measures of volatility and
correlation are calculated using averages of historical data. In
advertising, Term Portfolio may also discuss or illustrate examples of
interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
Term Portfolio may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of June 30, 1995, FMR advised over $___ billion in tax-free fund assets,
$___ billion in money market fund assets, $____ billion in equity fund
assets, $___ billion in international fund assets, and $___ billion in
Spartan fund assets. The funds may reference the growth and variety of
money market mutual funds and the adviser's innovation and participation in
the industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain
a worldwide information and communications network for the purpose of
researching and managing investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may
be waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) the fund suspends
the redemption of the shares to be exchanged as permitted under the 1940
Act or the rules and regulations thereunder, or the fund to be acquired
suspends the sale of its shares because it is unable to invest amounts
effectively in accordance with its investment objective and policies.
In the prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation.
CAPITAL GAIN DISTRIBUTIONS. Cash Portfolio may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its NAV at $1.00 per share. Cash Portfolio does not anticipate
earning long-term capital gains on securities held by the fund.
Long-term capital gains earned by Term Portfolio on the sale of securities
and distributed to shareholders are federally taxable as long-term capital
gains, regardless of the length of time shareholders have held their
shares. If a shareholder receives a long-term capital gain distribution on
shares of the fund, and such shares are held six months or less and are
sold at a loss, the portion of the loss equal to the amount of the
long-term capital gain distribution will be considered a long-term loss for
tax purposes. Short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. As of June 30, 1995,
Term Portfolio hereby designates approximately $______ as a capital gain
dividend for the purpose of the dividend-paid deduction.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other fund of The North
Carolina Capital Management Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the federal tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal taxes, shareholders may be subject to
state or local taxes on fund distributions. Investors should consult their
tax advisors to determine whether a fund is suitable to their particular
tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the funds are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 82 Devonshire Street,
Boston, MA, 02109 which is also the address of FMR. The Trustees who are
"interested persons" (as defined in the 1940 Act) by virtue of their
affiliation with the funds, FMR or Sterling are indicated by an asterisk
(*).
*WILLIAM L. BYRNES (AGE), PRESIDENT AND TRUSTEE (1990) is a Director of
Fidelity International Limited and Vice Chairman, a Director and Managing
Director of FMR Corp.
JOHN DAVID "J.D." FOUST (AGE), 609 Lakestone Drive, Raleigh, NC, TRUSTEE
(1990) is a financial consultant (Donaldson, Lufkin & Jenrette Securities
Corporation, 1990). Prior to 1990, he served as Deputy State Treasurer and
Secretary of the Local Government Commission (1977-1989).
*W. OLIN NISBET III (AGE), One First Union Center, 301 S. College Street,
Suite 3200, Charlotte, NC, TRUSTEE (1990) and Vice President, is Chairman
and a Director of Sterling Capital and President and Director of Sterling.
Mr. Nisbet is a director of United Asset Management Corporation (1988) and
serves as Governor of the Investment Counsel Association of America (1988),
an Advisor of the Kitty Hawk Capital-Venture Capital Partnership (1988),
and a Trustee of Davidson College (1987).
HELEN A. POWERS (AGE), CC-2 Crowfields Drive, Asheville, NC, TRUSTEE
(1990). Prior to Ms. Powers' retirement in April 1990, she served as
Secretary of the North Carolina Department of Revenue (1985-1990). Prior to
1985 she was Senior Vice President of North Carolina National Bank and
served as a member of the North Carolina Banking Commission. Ms. Powers is
a trustee of Warren Wilson College (1992), a director of Memorial Mission
Medical Center (1991) and the Memorial Mission Foundation (1993), for which
the New Women's Health Center has been designated the HELEN POWERS WOMEN'S
HEALTH CENTER.
BERTRAM H. WITHAM (AGE), 89 Fox Hill Road, Stamford, CT, TRUSTEE and
CHAIRMAN OF THE BOARD, is a consultant (Treasurer until his retirement in
1978) to IBM Corp. Chairman and Director of Villager Companies (property
management), Director and member of Executive Committee of Bill Glass
Ministries. Trustee of other funds advised by FMR.
J. GARY BURKHEAD (AGE), SENIOR VICE PRESIDENT, is President of FMR; and
President and a Director of FMR Texas Inc. (FMR Texas) (1989), Fidelity
Management & Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc. He is also a Trustee for other funds managed by FMR.
JAMES CALVIN RIVERS (AGE), Jr., One First Union Center, 301 S. College
Street, Suite 3200, Charlotte, NC, Vice President of the Trust (1992), is
Director and Senior Vice President of Sterling Capital and Vice President
of Sterling.
ROBERT K. DUBY (AGE), VICE PRESIDENT of Term Portfolio (1992) and an
employee of FMR.
BURNELL R. STEHMAN (AGE), VICE PRESIDENT of Cash Portfolio (1991), Vice
President of FMR Texas (1989) and of other funds advised by FMR.
FRED L. HENNING, JR. (AGE), VICE PRESIDENT (1994) and an employee of FMR.
THOMAS D. MAHER (AGE), ASSISTANT VICE PRESIDENT of Cash Portfolio (1990),
is Assistant Vice President of Fidelity's money market funds and Vice
President and Associate General Counsel of FMR Texas (1990). Prior to 1990,
Mr. Maher was an employee of FMR.
MICHAEL D. CONWAY (AGE), ASSISTANT TREASURER (1995) is Assistant Treasurer
of Fidelity's money market funds and is an employee of FMR (1995). Before
joining FMR, Mr. Conway was an employee of Waddell & Reed Inc. (investment
advisor; 1986-1994), where he served as Assistant Treasurer (1992) and as
Assistant Vice President and Director of Operations of Waddell & Reed Asset
Management Company (1994).
JOHN H. COSTELLO (AGE), TREASURER (1995) and an employee of FMR.
LEONARD M. RUSH (AGE), ASSISTANT TREASURER (1994) is an employee of FMR.
Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was
Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial Officer
of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President,
Assistant Controller, and Director of the Accounting Department - First
Boston Corp. (1986-1990).
ARTHUR S. LORING (AGE), SECRETARY, is Senior Vice President (1993) and
General Counsel of FMR, Vice President - Legal of FMR Corp., and Clerk of
FDC.
DAVID H. POTEL (AGE), ASSISTANT SECRETARY (1988) and an employee of FMR
Corp.
As of June 30, 1995, the Trustees and officers of the Trust owned in the
aggregate less than 1% of the outstanding shares of Cash Portfolio and Term
Portfolio.
The following table sets forth information describing the compensation of
each current Trustee of the fund for his or her services as trustee for the
fiscal year ended June 30, 1995.
Compensation Table
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Trustees Aggregate Aggregate Pension or Estimated Total
Compensation Compensation Retirement Annual Compensation
from Cash from Benefits Benefits from from the Fund
Portfolio* Term Accrued from the Fund Complex**
Portfolio* the Fund Complex upon
Complex** Retirement**
William L. Byrnes+
John David Foust
W. Olin Nisbet III+
Helen A. Powers
Bertram H. Witham
</TABLE>
* Includes compensation paid to the Trustees by each fund. The total
amount of deferred compensation (including interest) payable to or accrued
for Mr. Foust was $_____, Ms. Powers was $_______, and Mr. Witham was
$_________. Each fund's trustees do not receive any pension or retirement
benefits from the funds as compensation for their services as trustees of
the funds.
** Information is as of December 31, 1994 for 210 funds in the Fund
Complex. Mr. Witham is a Director or Trustee of four investment companies
in the Fund Complex, including Cash Portfolio and Term Portfolio. Under a
retirement program adopted in July 1988 by the other open-end investment
companies in the Fund Complex (the "other Open-End Funds"), Mr. Witham,
upon reaching age 72, became eligible to participate in a retirement
program under which he receives payments during his lifetime from a fund
based upon his basic trustee fees and length of service as trustee for the
other Open-End Funds. During the year ended June 30, 1995, he received
$_____________ in payments under that retirement program. The obligation
of the other Open-End Funds to make such payments is not secured or funded.
+ Messrs. Byrnes and Nisbet, who are "interested persons" of Cash
Portfolio and Term Portfolio, do not receive any compensation from Cash
Portfolio or Term Portfolio or other investment companies in the Fund
Complex for their services as Trustees, and are compensated by FMR.
MANAGEMENT CONTRACT
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition, FMR is responsible for the payment of all expenses of each
fund with certain exceptions. Specific expenses payable by FMR include,
without limitation, expenses for typesetting, printing, and mailing proxy
materials to shareholders; legal expenses, and the fees of the custodian,
auditor and non-interested Trustees; costs of typesetting, printing, and
mailing prospectuses and statements of additional information, notices and
reports to shareholders; each fund's proportionate share of insurance
premiums and Investment Company Institute dues. FMR also provides for
transfer agent and dividend disbursing services through FIIOC and portfolio
and general accounting record maintenance through FSC.
FMR pays all other expenses of each fund with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the Trust or FMR (the non-interested Trustees); interest on
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of any litigation to which a fund
may be a party, and any obligation it may have to indemnify the officers
and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated December
13, 1990, which were approved by shareholders on December 12, 1990.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at the annual rate of 0.41% of average net assets through
$100 million; 0.40% of average net assets in excess of $100 million through
$200 million; 0.39% of average net assets in excess of $200 million through
$800 million; and 0.38% of average net assets in excess of $800 million
throughout the month. Fees received by FMR for the last three fiscal years
are shown in the table below.
Management Fees
Fiscal Year Ended Paid to FMR
Cash Portfolio 1995 $__________
1994 $ 5,398,481
1993 $ 5,955,535
Term Portfolio 1995 $__________
1994 $ 302,965
1993 $ 342,067
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense
reimbursements by FMR will increase each fund's total returns and yield and
repayment of the reimbursement by each fund will lower its total returns
and yield.
SUB-ADVISER. On behalf of Cash Portfolio, FMR has entered into a
sub-advisory agreement with FMR Texas pursuant to which FMR Texas has
primary responsibility for providing portfolio investment management
services to the fund.
Under the sub-advisory agreement dated January 1, 1991, which was approved
by shareholders on December 12, 1990, FMR pays FMR Texas fees equal to 50%
of the management fee payable to FMR under its management contract with the
fund, after payments by FMR pursuant to the fund's 12b-1 Plan, if any. The
fees paid to FMR Texas are not reduced by any voluntary or mandatory
expense reimbursements that may be in effect from time to time. On behalf
of Cash Portfolio for fiscal 1995, 1994, and 1993, FMR paid FMR Texas fees
of $________, $1,574,452, and $1,692,977, respectively.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing and shareholders' servicing agent
for the funds. The costs of these services are borne by FMR pursuant to its
management contract with the funds. FSC performs the calculations
necessary to determine the funds' NAVs and dividends and maintains each
fund's general accounting records. The cost of these services are also
borne by FMR pursuant to its management contract with the funds.
The funds have 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. FDC has entered into a
Distribution and Service Agent Agreement with Sterling, a wholly-owned
subsidiary of Sterling Capital, which is an affiliate of United Asset
Management Corporation, Boston, MA, to act as distribution agent of shares
of each fund. Under the Distribution and Service Agent Agreement, Sterling
has assumed from FDC primary responsibility with respect to the
distribution of each fund's shares. Sterling Capital provides discretionary
investment management to approximately 140 pension, profit-sharing,
endowment, hospitals, and individual clients. The firm was established in
1971 and is one of the largest advisers headquartered in North Carolina
registered under the Investment Advisers Act of 1940. Assets under
management as of June 30, 1995 were in excess of $___ billion, with ____
clients geographically dispersed throughout the country.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the Rule). The
Rule provides in substance that a mutual fund may not engage directly or
indirectly in financing any activity that is primarily intended to result
in the sale of shares of a fund except pursuant to a plan approved on
behalf of the fund under the Rule. The Plans, as approved by the Trustees,
allow the funds and FMR to incur certain expenses that might be considered
to constitute direct or indirect payment by the funds of distribution
expenses.
Pursuant to the Plans, from its management fees, past profits, or other
source, FMR pays Sterling, through FDC, a distribution fee according to the
following schedule: 0.14% of average net assets through $100 million; 0.15%
of average net assets in excess of $100 million through $200 million; 0.16%
of average net assets in excess of $200 million through $800 million; and
0.17% of average net assets in excess of $800 million. No separate payments
are authorized to be made by the funds under the Plans.
For the fiscal year ended June 30, 1995, FMR paid Sterling through FDC
$______ on behalf of Cash Portfolio and $______ on behalf of Term
Portfolio.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
each fund and its shareholders. In particular, the Trustees noted that
each Plan does not authorize payments by each fund other than those made to
FMR under its management contract with each fund. To the extent that each
Plan gives FMR and FDC greater flexibility in connection with the
distribution of shares of each fund, additional sales of fund shares may
result. Furthermore, certain shareholder support services may be provided
more effectively under the Plans by local entities with whom shareholders
have other relationships.
The Plans were approved by shareholders on December 12, 1990.
Amounts payable under each Plan accrue in the fiscal period in which they
are incurred and are not carried over to future accounting periods. It is
possible that the fees paid by the funds pursuant to the Plans may exceed
the direct costs of providing services under the Plans. FDC and Sterling
reserve the right to reimburse the distribution fee from time to time.
Under each Plan, FDC and its agent, Sterling, use their best efforts to
distribute shares of each fund, print and distribute prospectuses and
statements of additional information and promotional literature to other
than existing shareholders, provide cash management advice through
financial management seminars and periodic newsletters to local
governmental units in North Carolina, maintain a local office, organize and
maintain an advisory board comprised of local government financial
officers, and provide assistance in servicing shareholder accounts.
Sterling also has assumed certain shareholder servicing functions which
include the processing of shareholder inquiries, account maintenance, and
processing purchases, redemptions, transfers and exchanges.
During the 1995 fiscal year, distribution fees were allocated to provide
marketing and promotional activities; presentations at seminars; the
publication and mailing of a quarterly newsletter to investors; servicing
of current investor accounts; office facilities and personnel; and
distribution of prospectuses and statements of additional information to
other than current investors. The employment of Sterling under each Plan
provides a local presence which is required under the North Carolina
administrative code, and enhances each fund's ability to provide the above
services to investors.
The Glass-Steagall Act generally prohibits federally and state chartered
or supervised banks from engaging in the business of underwriting, selling
or distributing securities. Although the scope of this prohibition under
the Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulator agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Cash Portfolio and Term Portfolio are funds of The
North Carolina Capital Management Trust, an open-end management investment
company organized as a Massachusetts business trust pursuant to a
Declaration of Trust, dated April 26, 1982, and amended and restated on
November 1, 1987. Currently, Cash Portfolio and Term Portfolio are the only
funds of the Trust. The Declaration of Trust permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the Trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the Trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the Trust. Expenses with respect to the Trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the Trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the Trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the Trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
Trust or the Trustees include a provision limiting the obligations created
thereby to the Trust and its assets. The Declaration of Trust provides for
indemnification out of each fund's property of any shareholders held
personally liable for the obligations of the fund. The Declaration of Trust
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of trust, call meetings of the trust or a fund
for any purpose related to the trust or a fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose of
voting on removal of one or more Trustees. The trust or any fund may be
terminated upon the sale of its assets to another open-end management
investment company, or upon liquidation and distribution of its assets, if
approved by vote of the holders of a majority of the outstanding shares of
the trust or the fund. If not so terminated, the trust and the funds will
continue indefinitely.
As of ______, 1995, the following owned of record or beneficially 5% or
more of outstanding shares of the funds: [to be filed by subsequent
amendment].
CUSTODIAN. First Union National Bank of North Carolina, Two First Union
Center, Charlotte, North Carolina, 28288, is custodian of the assets of the
funds. The custodian is responsible for the safekeeping of the funds'
assets and the appointment of the subcustodian banks and clearing agencies.
The custodian takes no part in determining the investment policies of the
funds or in deciding which securities are purchased or sold by the funds.
However, the funds may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian. Morgan
Guaranty Trust Company of New York, The Bank of New York, and Chemical
Bank, each headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with pooled repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board
of Trustees may, from time to time conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions
of those transactions were not influenced by existing or potential
custodial or other fund
AUDITOR. __________ serve as the Trust's independent accountants. The
auditor examines the financial statements for the funds and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
The funds' financial statements and financial highlights for the fiscal
year ended June 30, 1995 are included in the funds' Annual Report, which is
a separate report attached to the Prospectus. The funds' financial
statements and financial highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. The funds may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
MIG-3/VMIG-3 - This designation denotes favorable quality. All security
elements are accounted for, but there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Strong capacity to pay principal and interest. An issue determined
to possess a very strong capacity to pay debt services is given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
SP-3 - Speculative capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICES, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earning trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers rated PRIME-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and the requirement
for relatively high financial leverage. Adequate alternate liquidity is
maintained.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS:
A - Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with
the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for
issues designated A-1.
A-3 - This designation indicates that the capacity for timely payment is
satisfactory. These issues are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Audited Financial Statements and Financial Highlights for the
fiscal year ended June 30, 1995 will be filed by subsequent amendment.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust dated November 1, 1987, is
electronically filed herein as Exhibit 1.
(a) Supplement to the Declaration of Trust, dated October 18, 1993, is
electronically filed herein as Exhibit 1(a).
(2) By-Laws of the Trust are electronically filed herein as Exhibit 2.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between The North Carolina Cash Management
Trust: Term Portfolio and Fidelity Management & Research Company dated
December 13, 1990 is electronically filed herein as Exhibit 5(a).
(b) Management Contract between The North Carolina Cash Management
Trust: Cash Portfolio and Fidelity Management & Research Company dated
December 13, 1990 is electronically filed herein as Exhibit 5(b).
(c) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company on behalf of Cash Portfolio dated January 1,
1991 is electronically filed herein as Exhibit 5(c).
(6) (a) General Distribution Agreement between The North Carolina Cash
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 is electronically filed herein as Exhibit 6(a).
(b) General Distribution Agreement between The North Carolina Cash
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 is electronically filed herein as Exhibit 6(b).
(c) Amendment to the General Distribution Agreement dated January 1,
1988 for Cash Portfolio and Term Portfolio is electronically filed herein
as Exhibit 6(c).
(7) Not applicable.
(8) (a) Custodian Agreement between Registrant and First Union National
Bank dated August 25, 1982 is incorporated herein by reference to Exhibit 8
to Post-Effective Amendment No. 3.
(b) Subcustodian Agreement between First Union National Bank of North
Carolina and Shawmut Bank, N.A. dated November 1, 1990 is electronically
filed herein as Exhibit 8(b).
(c) Subcustodian Agreement between First Union National Bank of North
Carolina and Morgan Guaranty Trust Company of New York dated March 18, 1991
is electronically filed herein as Exhibit 8(c).
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) (a) Distribution and Service Plan between The North Carolina Cash
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated December 13, 1990 is electronically filed herein as Exhibit 15(a).
(b) Distribution and Service Plan between The North Carolina Cash
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated December 13, 1990 is electronically filed herein as Exhibit 15(b).
(c) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., dated
December 13, 1990 on behalf of Term Portfolio, is electronically filed
herein as Exhibit 15(c).
(d) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., dated
December 13, 1990 on behalf of Cash Portfolio, is electronically filed
herein as Exhibit 15(d).
(16) (a) Schedule for computations of performance quotations for Cash
Portfolio is incorporated herein by reference as Exhibit 16(a) to
Post-Effective Amendment No. 11.
(b) Schedule for computations of performance quotations for Term Portfolio
is incorporated herein by reference as Exhibit 16(b) to Post-Effective
Amendment No. 11.
(17) Financial Data Schedules for Cash Portfolio and Term Portfolio will
be filed by subsequent amendment.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is a separate entity from the Board of
other funds advised by FMR, each of which has Fidelity Management &
Research Company as its investment adviser. The officers of these funds are
elected separately and are substantially different. The Registrant takes
the position that it is not under common control with these other funds
since the power residing in the respective boards and officers arises as
the result of an official position with the respective funds.
Item 26. Number of Holders of Securities
May 31, 1995
Title of Class Number of Record Holders
Cash Portfolio 539
Term Portfolio 115
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephen P. Jonas Treasurer and Vice President of FMR (1993) and Treasurer
of the funds advised by FMR (1995); Treasurer of FMR
Texas Inc. (1993), Fidelity Management & Research (U.K.)
Inc. (1993), and Fidelity Management & Research (Far
East) Inc. (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Division Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
<TABLE>
<CAPTION>
<C> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief
Exective Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., Fidelity
Management & Research (Far East) Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a
Director of Fidelity Management & Research (Far East)
Inc. and Fidelity Management & Research (U.K.) Inc.;
Senior Vice President and Trustee of funds advised by
FMR.
Fred L. Henning, Jr. Senior Vice President of FMR Texas; Money Market
Division Leader.
Robert Auld Vice President of FMR Texas (1993).
Leland Barron Vice President of FMR Texas and of funds advised by
FMR.
Robert Litterst Vice President of FMR Texas and of funds advised by
FMR (1993).
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of funds advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds advised by
FMR.
John J. Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas and of funds advised by
FMR.
Stephen P. Jonas Treasurer of FMR Texas Inc. (1993), Fidelity
Management & Research (U.K.) Inc. (1993), and Fidelity
Mangement & Research (Far East) Inc. (1993); Treasurer
and Vice President of FMR (1993); and Treasurer of the
funds advised by FMR (1995).
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity Management &
Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
STERLING CAPITAL DISTRIBUTORS, INC.
Name and Principal Positions and Offices Posititons and Offices
Business Address* with Underwriter With Registrant
W. Olin Nisbet III President, Director Vice President
Robert Livingston Avinger Vice President, Director None
Tanya Lee Mitchell Secretary, Treasurer None
* 1770 Independence Center, Charlotte, NC
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the Portfolios' custodian,
First Union National Bank, Charlotte, North Carolina.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 28 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 8 day of June, 1995.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
By /s/William L. Byrnes+
William L. Byrnes, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/ John H. Costello Treasurer June 8, 1995
John H. Costello
/s/ William L. Byrnes* Trustee June 8, 1995
William L. Byrnes
/s/ John David Foust* Trustee June 8, 1995
John David Foust
/s/ W. Olin Nisbet III* Trustee June 8, 1995
W. Olin Nisbet III
/s/ Helen A. Powers** Trustee June 8, 1995
Helen A. Powers
/s/ Bertram H. Witham* Trustee June 8, 1995
Bertram H. Witham
+ Signature affixed by Arthur S. Loring pursuant to a power of attorney
dated July 17, 1991 and filed herewith.
* Signatures affixed by Robert C. Hacker pursuant to a power of attorney
dated April 17, 1991 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated July 17, 1991 and filed herewith.
POWER OF ATTORNEY
I, the undersigned Trustee of The North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur J. Brown, Robert C. Hacker, Richard M. Phillips, Dana L.
Platt and Arthur C. Delibert, each of them singly, my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and in my name in the appropriate capacities,
all Pre-Effective Amendments to any Registration Statements of the Trust,
any and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on this 17th day of July 1991
/s/Helen A. Powers
__________________
Helen A. Powers
POWER OF ATTORNEY
We, the undersigned Trustees of The North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur J. Brown, Robert C. Hacker, Richard M. Phillips, Dana L.
Platt and Arthur C. Delibert, each of them singly, our true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them, to sign for us and in our name in the appropriate capacities,
all Pre-Effective Amendments to any Registration Statements of the Trust,
any and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in our names and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this 17th day of April 1991
/s/William L. Byrnes
________________________
William L. Byrnes
/s/John David Foust
________________________
John David Foust
/s/W. Olin Nisbet III
________________________
W. Olin Nisbet III
________________________
Helen A. Powers
/s/Bertram H. Witham
________________________
Bertram H. Witham
POWER OF ATTORNEY
I, the undersigned President of the North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur S. Loring my true and lawful attorney-in-fact, with full
power of substitution, and with full power to sign for me and in my name in
the appropriate capacity, all Pre-Effective Amendments to any Registration
Statements of the Trust, any and all subsequent Post-Effective Amendments
to said Registration Statements, any Registration Statements on Form N-14,
and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorney-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue
hereof.
WITNESS my hand on this 17th day of July 1991
/s/ William L. Byrnes
William L. Byrnes
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
SECRETARY OF THE COMMONWEALTH
STATE HOUSE - BOSTON, MA
RESTATEMENT OF DECLARATION OF TRUST
We, J. Gary Burkhead, Senior Vice President and Arthur S. Loring,
Secretary of
THE NORTH CAROLINA CASH MANAGEMENT TRUST
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
do hereby certify that, in accordance with ARTICLE XII, SECTION 7 of the
Declaration of Trust of THE NORTH CAROLINA CASH MANAGEMENT TRUST, the
Restatement of said Declaration of Trust, which amends it in its entirety,
effective November 1, 1987, was duly adopted by a majority vote of the
Shareholders of the Trust at a Meeting duly called and held on October 21,
1987, and was authorized by a majority vote of the Board of Trustees of the
trust at a meeting duly called and held on July 23, 1987.
The attached Restatement will become effective provided that it is filed
in accordance with Chapter 182, Section 2 of the GENERAL LAWS.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto
signed our names this 10th day of November, 1987.
/s/J. Gary Burkhead /s/Arthur S. Loring
J. Gary Burkhead Arthur S. Loring
Senior Vice President Secretary
DECLARATION OF TRUST
AS AMENDED AND RESTATED November 1, 1987
DECLARATION OF TRUST, made April 26, 1982 by Edward C. Johnson 3d, Caleb
Loring, Jr., and Frank Nesvet, (the "Trustees").
WHEREAS, the Trustees desire 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 Trust
under this Declaration of Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "North Carolina Management
Trust".
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the context
or specifically provided:
(a) The Terms "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;
(b) The "Trust" refers to North Carolina Management Trust and reference to
the Trust, when applicable to one or more Series of the Trust, shall refer
to any such Series;
(c) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article X, Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for the
time being in office as such trustee or trustees;
(f) "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 class or classes of Shares
(including series of portfolios) as the Trustees may from time to time
create and establish and including fractions of Shares as well as whole
Shares consistent with the requirements of Federal and/or other securities
laws; and
(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
(h) "Series" refers to series of Shares of the Trust established in
accordance with the provisions of Article III.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of
managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided into such
transferable Shares of one or more separate and distinct Series or classes
as the Trustees shall from time to time create and establish. The number
of Shares is unlimited and each Share shall be without par value and shall
be fully paid and nonassessable. The Trustees shall have full power and
authority, in their sole discretion and without obtaining any prior
authorization or vote of the Shareholders or of any Series or class of
Shareholders of the Trust, to create and establish (and to change in any
manner) Shares or any Series or classes thereof with such preferences,
voting powers, rights and privileges as the Trustees may from time to time
determine, to divide or combine the Shares or any Series or classes thereof
into a greater or lesser number, to classify or reclassify any issued
Shares into one or more Series or classes of Shares, to abolish any one or
more Series or classes of Shares, and to take such other action with
respect to the Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES
Section 2. The establishment of any Series 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. At any time that there are no Shares
outstanding of any particular Series previously established and designated,
the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books of the
Trust. The Trustees may make such rules as they consider appropriate for
the transfer of Shares and similar matters. The record books of the Trust
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 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
upon investments in the Trust and (b) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
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
are not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series 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 for all purposes, and shall be referred to as assets
belonging to that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in Trust 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. Any general liabilities, expenses, costs,
charges or reserves of that Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees between or among any one or more of the Series in such manner as
the Trustees in their sole discretion deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Any creditor of any Series may look only to the
assets of that Series to satisfy such creditor's debt.
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust
or the Trustees.
LIMITATION OF PERSONAL LIABILITY
Section 7. 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 shall include a recitation limiting the obligation represented
thereby to the Trust and its assets (but the omission of such a recitation
shall not operate to bind any Shareholder).
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
Section 2. On or before July 1, 1983, on a date fixed by the Trustees,
the Shareholders shall elect not less than three Trustees. A trustee shall
not be required to be a Shareholder of the Trust. The initial Trustees
shall be Edward C. Johnson 3d, Caleb Loring, Jr. and Frank Nesvet and such
other individuals as the Board of Trustees shall appoint pursuant to
Section 4 of 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
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 Special Meeting of the Trust by a vote of two-thirds of the
outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Act. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office or by
recording in the records of the Trust, whereupon the appointment shall take
effect. Within three months of such appointment the Trustees shall cause
notice of such appointment to be mailed to each Shareholder at his address
as recorded on the books of the Trust. An appointment of a Trustee may be
made by the Trustees then in office and notice thereof mailed to
Shareholders as aforesaid in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16(a) of
the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate his power for
a period not exceeding six months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more than
twelve (12), serving hereunder at any time shall be determined by the
Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is absent from the Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy,
absence or incapacity, shall be conclusive, provided, however, that no
vacancy shall remain unfilled for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets of
the Trust shall at all times be considered as vested in the Trustees. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or any right of partition or possession thereof, but
each Shareholder shall have a proportionate undivided beneficial interest
in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees shall
have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The 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 they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in the Declaration of
Trust or the Bylaws of the Trust, 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 bank or trust company as custodian 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 principal underwriter 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, custodian or underwriter.
(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.
(n) To allocate assets, liabilities and expenses of the Trust to a
particular Series or to apportion the same between or among two or more
Series, provided that any liabilities or expenses incurred by a particular
Series 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 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.
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 or 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.
ACTION BY THE TRUSTEES
Section 3. The 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 the Trustees. 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 or telegram sent to his home or business address
at least twenty-four hours in advance of the meeting or by written notice
mailed to his home or business address at least seventy-two 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.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be Chairman of
the Board of Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and accounting officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets belonging
to the appropriate Series for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not Interested
Persons of the Trust, interest expense, taxes, fees and commissions of
every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares including expenses attributable
to a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and State
laws and regulations, charges of custodians, transfer agents, and
registrars, expenses of preparing and setting up in type prospectuses and
Statements of Additional Information, expenses of printing and distributing
prospectuses sent to existing Shareholders, auditing and legal expenses,
reports to Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefor, insurance expense, association membership dues and
for such non-recurring items as may arise, including litigation to which
the Trust is a party, and for all losses and liabilities by them incurred
in administering the Trust, and for the payment of such expenses,
disbursements, losses and liabilities the Trustees shall have a lien on the
assets belonging to the appropriate Series prior to any rights or interests
of the Shareholders thereto. This section shall not preclude the Trust
from directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees may in
their discretion 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,
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) contract(s) providing for the sale of the Shares, whereby the
Trust may either agree to sell the Shares to the other party to the
contract or appoint such other party its sales agent for such Shares. In
either case, the contract shall be on such terms and conditions as may be
prescribed in the Bylaws, if any, and such further terms and conditions as
the Trustees may in their discretion determine not inconsistent with the
provisions of this Article VII, or of the Bylaws, if any; and such contract
may also provide for the repurchase or sale of Shares by such other party
as principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time to time enter
into a transfer agency and Shareholder service contract(s) whereby the
other party shall undertake to furnish the Trustees with transfer agency
and Shareholder services. The contract 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 (including any amendments thereof or other
applicable Act of Congress hereafter enacted) with respect to its
continuance in effect, 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) for the election
of Trustees as provided in Article IV, Section 2, (ii) for the removal of
Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII,
Sections 1 and 5, (iv) with respect to the amendment of this Declaration of
Trust as provided in Article XII, Section 7, (v) 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) 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 State, as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all shares shall be voted
by individual Series, except (i) when required by the 1940 Act, Shares
shall be voted in the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects only the interests of
one or more Series, then only the Shareholders of such Series shall be
entitled to vote thereon. Each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote, and each fractional Share
shall be entitled to a proportionate fractional vote. 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 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
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 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 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 shall vote as a
Series, then a majority of the aggregate number of Shares of that Series
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series. 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 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
question 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 shall vote as a Series, then a majority of the
Shares of that Series voted on the matter shall decide that matter insofar
as that Series is concerned.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank or trust company
having capital, surplus and undivided profits of at least two million
dollars ($2,000,000) as custodian with authority as its agent, but subject
to such restrictions, limitations and other requirements, if any, as may be
contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order;
(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 in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by
it as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank or trust
company organized under the laws of the United States or one of the states
thereof and having capital, surplus and undivided profits of at least two
million dollars ($2,000,000)[.], 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.
CENTRAL CERTIFICATE 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.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
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 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 at the election of each Shareholder of
that Series.
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute pro rata among the
Shareholders of a particular Series as of the record date of that Series
fixed as provided in Section 3 hereof a "stock dividend."
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular Series
desires to dispose of his Shares, he may deposit at the office of the
transfer agent or other authorized agent of that Series a written request
or such other form of request as the Trustees may from time to time
authorize, requesting that the Series purchase the Shares in accordance
with this Section 2; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter
of the Series shall purchase his said Shares, but only at the Net Asset
Value thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series and payment for such Shares shall
be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective.
DETERMINATION OF NET ASSET VALUE AND
VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series, 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 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 Order of the Commission
applicable to the Series. The Trustees may delegate any of its powers and
duties under this Section 3 with respect to
appraisal of assets and liabilities. At any time the Trustees may cause
the value per Share last determined to be determined again in 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.
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
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 interested
persons 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 paragraph (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) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) 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.
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
Section 1. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power
to 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 [Trust]
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 [the] a Trustee against any
liability to which the Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
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, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of, and to vote at,
any such meeting, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to receive such
allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed or aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of time but subject to
the provisions of sub-section (b) of this Section 4.
(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.
Upon making provision for the payment of all such liabilities, accrued or
contingent, of the Trust, 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.
(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.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument and of each
declaration of trust 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 declaration of trust shall be filed by
the Trustees with the Secretary of the 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 declarations of trust 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 declaration of trust. In this instrument or in any such
supplemental declaration of trust, 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
declaration of trust. 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 trust set forth in this instrument is made in the
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.
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.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified date as
set forth in the Bylaws, 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 as investment adviser of each
Series. 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 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.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument as of the date first written
above.
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
/s/Caleb Loring, Jr.
Caleb Loring, Jr.
/s/Frank Nesvet
Frank Nesvet
dot-nc2/mm
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
SECRETARY OF THE COMMONWEALTH
STATE HOUSE - BOSTON, MA
SUPPLEMENT TO THE DECLARATION OF TRUST
We, William L. Byrnes, John David Foust, W. Olin Nisbet III., Helen A.
Powers, and Bertram H. Witham, Trustees of
The North Carolina Management Trust
82 Devonshire Street
Boston, Massachusetts 02109
do hereby certify that, in accordance with Article XII, Section 7 of the
Declaration of Trust of The North Carolina Cash Management Trust, the
following Supplement to said Declaration of Trust was duly adopted:
VOTED: That the Declaration of Trust made April 26, 1982, as amended and
restated
November 1, 1987, be and it hereby is, amended as follows:
That Article I, Section 1 of the Declaration of Trust of this Trust shall
be amended to read as follows:
"This Trust shall be known as "The North Carolina Capital Management
Trust"."
That Article I, Section 2(b) of the Declaration of Trust shall be amended
to read as follows:
"The "Trust" refers to "The North Carolina Capital Management Trust" and
reference to the Trust, when applicable to one or more Series of the Trust,
shall refer to any such Series;"
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto
signed our names this 18th day of October, 1993.
/s/William J. Byrnes /s/Helen A. Powers
William J. Byrnes Helen A. Powers
Trustee Trustee
/s/John David Foust /s/Bertram H. Witham
John David Foust Bertram H. Witham
Trustee Trustee
/s/W. Olin Nisbet III
W. Olin Nisbet III
Trustee
BY-LAWS
of
NORTH CAROLINA CASH MANAGEMENT FUND
ARTICLE I
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may from
time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be
chosen annually by the Trustees. The President shall be chosen annually by
and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their
successors are chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign
by filing a written resignation with the President or with the Trustees or
with the Secretary, which shall take effect on being so filed at such time
as may be therein specified. The Trustees may at any meeting remove any
officer.
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. 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 the responsibility, so far as such powers are not
inconsistent with the laws of the Commonwealth of Massachusetts, the
Declaration of Trust, or with these By-Laws.
SECTION 2. Executive and other Committees. The Trustees may elect from
their own number an executive committee to consist of not less than three
nor more than five members, which shall have the power and duty to conduct
the current and ordinary business of the Trust, including the purchase and
sale of securities, while the Trustees are not in session, and such other
powers and duties as the Trustees may from time to time delegate to such
committee. The Trustees may also elect from their own number other
committees from time to time, the number composing such committees and the
powers conferred upon the same to be determined by vote of the Trustees.
SECTION 3. Chairman of the Trustees. The Trustees may, but need not
appoint from among their number a Chairman. He shall perform any such
duties as the Trustees may from time to time designate.
SECTION 4. President. The President shall be the chief executive officer
of the Trust and, subject to the Trustees, shall have general supervision
over the business and policies of the Trust. When present, he shall
preside at all meetings of the shareholders and the Trustees, and he may,
subject to the approval of the Trustees, appoint a Trustee to preside at
such meetings in his absence. The President shall perform such duties
additional to all of the foregoing as the Trustees may from time to time
designate.
SECTION 5. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities
of the Trust which may come into his hands to such bank or trust company as
the Trustees shall employ as Custodian in accordance with Article IX of the
Declaration of Trust. He shall have the custody of the seal of the Trust.
He shall make annual reports in writing of the business conditions of the
Trust, which reports shall be preserved upon its records, and he shall
furnish such other reports regarding the business and condition as the
Trustees may from time to time require. The Treasurer shall perform such
duties additional to foregoing as the Trustees may from time to time
designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the shareholders at
their respective meetings.
The Secretary shall perform such duties additional to the foregoing as the
Trustees may from time to time designate.
SECTION 7. Vice President. Each Vice President of the Trust shall perform
such duties as the Trustees may from time to time designate.
SECTION 8. Assistant Treasurer. The Assistant Treasurer of the Trust shall
perform such duties as the Trustees may from time to time designate.
ARTICLE III
Shareholders' Meetings
SECTION 1. Special Meetings. A special meeting of the shareholders shall
be called by the Secretary whenever ordered by the Trustees or requested in
writing by the holder or holders of at least one-tenth of the outstanding
shares entitled to vote. If the Secretary, when so ordered or requested,
refuses or neglects for more than two days to call such special meeting,
the Trustees or the shareholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required
when notice is given by the Secretary.
SECTION 2. Notices. Except as above provided, notices of any special
meeting of the shareholders shall be given by the Secretary by delivering
or mailing, postage prepaid, to each shareholder entitled to vote at said
meeting, a written or printed notification of such meeting, at least
fifteen days before the meeting, to such address as may be registered with
the Trust by the shareholder.
SECTION 3. Place of Meeting. All special meetings of the shareholders
shall be held at the principal place of business of the Trust in Boston,
Massachusetts or at such other place in the United States as the Trustees
may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Special Meetings. Special meetings of the Trustees shall be
called by the Secretary at the written request of the President, the
Treasurer, or any two Trustees, and if the Secretary when so requested
refuses or fails for more than twenty-four hours to call such meeting, the
President, the Treasurer, or such two Trustees, may in the name of the
Secretary call such meeting by giving due notice in the manner required
when notice is given by the Secretary.
SECTION 2. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may
from time to time determine, provided that any Trustee who is absent when
such determination is made shall be given notice of the determination.
SECTION 3. Quorum. A majority of the Trustees shall constitute a quorum
for the transaction of business.
SECTION 4. Notices. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the Secretary to each Trustee, by
mailing to him, postage prepaid, addressed to him at his address as
registered on the books of the Trust or, if not so registered, at his last
known address, a written or printed notification of such meeting at least
three days before the meeting or by delivering such notice to him at least
two days before the meeting, or by sending to him at least 24 hours before
the meeting, by prepaid telegram, addressed to him at his said registered
address, if any, or if he has no such registered address, at his last known
address, notice of such meeting.
SECTION 5. Place of Meeting. All special meetings of the Trustees shall be
held at the principal place of business of the Trustees in Boston,
Massachusetts, or such other place within or without the Commonwealth as
the person or persons requesting said meeting to be called may designate,
but any meeting may adjourn to any other place.
SECTION 6. Special Action. When all the Trustees shall be present at any
meeting, however called,. or wherever held, or shall assent to the holding
of the meeting without notice, or after the meeting shall sign a written
assent thereto on the record of such meeting, the acts of such meeting
shall be valid as if such meeting has been regularly held.
SECTION 7. Action by Consent. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the
Trustees and filed with the records of the Trustees meetings, or by
telephone consent provided a quorum of Trustees participate in any such
telephone meeting. Such consent shall be treated as a vote of the Trustees
for all purposes.
ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust shall
at all times be divided into an unlimited number of transferable Shares
without par value, each of which shall represent an equal proportionate
interest in the class with each other Share of the class outstanding, none
having priority or preference over another.
SECTION 2. Transfer of Stock. The Shares of the Trust shall be
transferable, so as to affect the rights of the Trust, only by transfer
recorded on the books of the Trust, in person or by attorney.
SECTION 3. Equitable Interest Not Recognized. The Trust shall be entitled
to treat the holder of record of any share or shares of stock as the holder
in fact thereof, and shall not be bound to recognize any equitable or other
claim or interest in such share or shares on the part of any other person
except as may be otherwise expressly provided by law.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the
inspection of the shareholders; and no shareholder shall have any right to
inspecting any account or book or document of the Trust except as conferred
by law or otherwise by the Trustees or by resolution of the shareholders.
ARTICLE VII
Custodian
The Custodian employed by the Trust pursuant to Article IX to the
Declaration of Trust shall be required to enter into a contract with the
Trust which shall contain in substance the following provisions:
(a) The Trust will cause all securities and funds owned by the Trust to be
delivered or paid to the Custodian.
(b) The Custodian will receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department and in such other
banking institutions, if any, as the Custodian and the Trustees may
approve. The Custodian shall have the sole power to draw upon any such
account.
(c) The Custodian shall release and deliver securities owned by the Trust
in the following cases only:
(1) Upon the sale of such securities for the account of the Trust and
receipt of payment therefor;
(2) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that in any such
case, the cash is to be delivered to the Custodian;
(3) To the issuer thereof or its agent for transfer into the name of the
Trust, the Custodian or a nominee of either, or for exchange for a
different number of bonds or certificates representing the same aggregate
face amount or number of units; provided that in any such case the new
securities are to be delivered to the custodian;
(4) To the broker selling the same for examination, in accord with the
"street delivery" custom;
(5) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities or pursuant to provisions to
any deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the custodian;
(6) In the case of warrants, rights, or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities or
the surrender of interim receipts or temporary securities for definitive
securities;
(7) To any pledge by way of pledge or hypothecation to secure any loan, but
only within the limits permitted to the Trust by Article V, Section 1(p) of
the Declaration of Trust.
(8) For deposit in a system for the central handling of securities in
accordance with the provisions of Article IX, Section 2 of the Declaration
of Trust.
(d) The Custodian shall pay out moneys of the Trust only upon the purchase
of securities for the account of the Trust and the delivery in due course
of such securities to the Custodian, or in connection with the conversion,
exchange or surrender of securities owned by the Trust as set forth in (c),
or for the repurchase of shares issued by the Trust or for the making of
any disbursements authorized by the Trustees pursuant to the Declaration of
Trust or these By-laws, or for the payment of any expense or liability
incurred by the Trust; provided that, in every case where payment is made
by the Custodian in advance of receipt of the securities purchased, the
Custodian shall be absolutely liable to the Trust for such securities to
the same extent as if the securities had been received by the Custodian.
(e) The Custodian shall make deliveries of securities and payments of cash
only upon written instructions signed or initialled by such officer or
officers or other agent or agents of the Trust as may be authorized to sign
or initial such instructions by resolution of the Trustees; it being
understood that the Trustees may from time to time authorize a different
person or persons to sign or initial instructions for different purposes.
The contract between the Trust and the Custodian may contain any such
other provisions not inconsistent with the provisions of Article IX of the
Declaration of Trust or with these By-laws as the Trustees may approve.
Such contract shall be terminable by either party upon written notice to
the other within such time not exceeding sixty (60) days as may be
specified in the contract; provided, however, that upon termination of the
contract or inability of the Custodian to continue to serve, the Custodian
shall, upon written notice of appointment of another bank or trust company
as custodian, deliver and pay over to such successor custodian all
securities and moneys held by it for account of the Trust. In such case,
the Trustees shall promptly appoint a successor custodian, but in the event
that no successor custodian can be found having the required qualifications
and willing to serve, it shall be the duty of the Trustees to call as
promptly as possible a special meeting of the shareholders to determine
whether the Trust shall function without a custodian or shall be
liquidated. If so directed by vote of the holders of a majority of the
outstanding shares, the Custodian shall deliver and pay over all property
of the Trust held by it as specified in such vote.
Such contract shall also provide that, pending appointment of a successor
custodian or a vote of the shareholders specifying some other disposition
of the funds and property, the Custodian shall not deliver funds and
property of the Trust to the Trust, but may deliver them to a bank or trust
company doing business in Boston, Massachusetts, of its own selection
having an aggregate capital, surplus and undivided profits, as shown by its
last published report, of not less than $2,000,000 as the property of the
Trust to be held under terms similar to those on which they were held by
the retiring custodian.
Any sub-custodian employed by the Custodian pursuant to authorization to
do so granted by the Trust pursuant to Article IX of the Declaration of
Trust shall be required to enter into a contract with the Custodian
containing in substance the same provisions as those described in
paragraphs (a) through (e) above, except that any contract with a
sub-custodian performing its duties outside the United States and its
territories and possessions, may omit or limit any of such conditions,
provided that, any such omission or limitation shall be expressly approved
by a majority of the Trustees of the Trust.
ARTICLE VIII
Seal
The seal of the Trust shall be circular in form bearing the inscription:
"NORTH CAROLINA CASH MANAGEMENT FUND - 1982"
ARTICLE IX
Fiscal Year
The fiscal year of the Trust shall be the period of twelve months ending
on the 30th day of June in each calendar year.
ARTICLE X
Amendments
These By-laws may be amended at any meeting of the Trustees of the Trust
by a majority vote; provided, however, that any amendment which changes or
affects the provisions of Article VII, Article X, or Article XII shall be
approved by vote of a majority of the outstanding shares of the Trust
entitled to vote.
ARTICLE XI
Underwriting Arrangements
SECTION 1. Any contract entered into for the sale of shares of the Trust
pursuant to Article VII, Section 2 of the Declaration of Trust shall
require the other party thereto (hereinafter called the "underwriter")
whether acting as principal or as agent to use all reasonable efforts,
consistent with the other business of the underwriter, to secure purchasers
for the shares of the Trust. Such contract shall require the underwriter
to bear all expenses (a) of printing and distributing any Prospectus or
reports prepared for its use in connection with the offering of the shares
of the Trust for sale to the public, other than the expenses of preparing,
setting up in type, printing and distributing (i) Prospectuses used in
connection with the registration and qualification of shares under the
Securities Act of 1933 or various state laws, (ii) any report or other
communication to shareholders of the Trust in their capacity as such and
(iii) Prospectuses sent to existing shareholders, (b) of any other
literature used by it in connection with such offering, and (c) advertising
in connection with such offering.
ARTICLE XII
Reports to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including
financial statements which shall at least annually be certified by
independent public accountants.
MANAGEMENT CONTRACT
between
THE NORTH CAROLINA CASH MANAGEMENT TRUST: TERM PORTFOLIO
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 13th day of December, 1990 by and between The North
Carolina Cash Management Trust, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Trust"), on behalf of Term Portfolio (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser").
1.(a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Trust'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 Trust who are also employees of the Adviser
and of all personnel of the Trust 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 Trust's
Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance of) the management and administrative services necessary for
the operation of the Portfolio. 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 Portfolio's existence and its records; and
(vi) 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 also shall pay the following Portfolio fees and expenses: (i) legal
and audit expenses; (ii) custodian, registrar and transfer agent fees and
expenses; (iii) 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; (iv) expenses of printing and
mailing reports and notices and
proxy material to shareholders of the Portfolio; (v) all other expenses
incidental to holding meetings of the Portfolio's shareholders, including
proxy solicitations therefor; (vi) 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; (vii) its proportionate
share of association membership dues; (viii) expenses of typesetting for
printing Prospectuses and Statements of Additional Information and
supplements thereto; and (ix) expenses of printing and mailing Prospectuses
and Statements of Additional Information and supplements thereto sent to
existing shareholders.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Portfolio as the Trust'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 Trust's Board of Trustees with respect to
Portfolio policies, and shall carry out such policies as are adopted by the
Trustees. The Adviser shall, subject to review by the Board of Trustees,
furnish such other services as the Adviser shall from time to time
determine to be necessary or useful to perform its obligations under this
Contract.
(c) The Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Trust 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.
(d) 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
Trust 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 Trust, and that
the Adviser may be or become interested in the Portfolio as a shareholder
or otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee paid monthly based upon the average daily
net assets of the Portfolio (computed in the manner set forth in the
Declaration of Trust) throughout the month. The fee shall be payable as
soon as practicable after the last day of each month at an annual rate
determined as set forth below. The fee rate shall be determined on a
cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On average daily net assets of the
Portfolio through $100 million 0.410%
On average daily net assets in excess
of $100 million through $200 million 0.400%
On average daily net assets in excess
of $200 million through $800 million 0.390%
On average daily net assets in excess
of $800 million 0.380%
provided that the fee so computed shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees of the Trust who are not "interested persons" of the Trust or the
Adviser. In the case of initiation or termination of this Contract during
any month, the fee for that month shall be reduced proportionately on the
basis of the number of business days during which it is in effect and the
fee computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Trust's Trustees other than
those who are "interested persons" of the Trust or the Adviser; and (iv)
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.
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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31,
1991, 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 Trust 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 Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those
Trustees of the Trust 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 Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust 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 Trust. 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 are separate and distinct from those of any and all
other Portfolios.
8. The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
THE NORTH CAROLINA CASH MANAGEMENT TRUST
on behalf of Term Portfolio
SEAL By /s/ J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By /s/ J. Gary Burkhead
J. Gary Burkhead, President
J/CNTRCTS
mc-nctp90
MANAGEMENT CONTRACT
between
THE NORTH CAROLINA CASH MANAGEMENT TRUST: CASH PORTFOLIO
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 13th day of December, 1990 by and between The North
Carolina Cash Management Trust, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Trust"), on behalf of Cash Portfolio (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser").
1.(a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Trust'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 Trust who are also employees of the Adviser
and of all personnel of the Trust 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 Trust's
Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance of) the management and administrative services necessary for
the operation of the Portfolio. 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 Portfolio's existence and its records; and
(vi) 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 also shall pay the following Portfolio fees and expenses:(i) legal
and audit expenses; (ii) custodian, registrar and transfer agent fees and
expenses; (iii) 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; (iv) expenses of printing and
mailing reports and notices and proxy material to shareholders of the
Portfolio; (v) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (vi) 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; (vii) its proportionate share of association membership
dues; (viii) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; and (ix)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Portfolio as the Trust'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 Trust's Board of Trustees with respect to
Portfolio policies, and shall carry out such policies as are adopted by the
Trustees. The Adviser shall, subject to review by the Board of Trustees,
furnish such other services as the Adviser shall from time to time
determine to be necessary or useful to perform its obligations under this
Contract.
(c) The Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Trust 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.
(d) The Advis_ er 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
Trust 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 Trust, and that
the Adviser may be or become interested in the Portfolio as a shareholder
or otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee paid monthly based upon the average daily
net assets of the Portfolio (computed in the manner set forth in the
Declaration of Trust) throughout the month. The fee shall be payable
[monthly] as soon as practicable after the last day of each month at an
annual rate determined as set forth below. The fee rate shall be
determined on a cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On average daily net assets of the
Portfolio through $100 million 0.410%
On average daily net assets in excess
of $100 million through $200 million 0.400%
On average daily net assets in excess
of $200 million through $800 million 0.390%
On average daily net assets in excess
of $800 million 0.380%
provided that the fee so computed shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees of the Trust who are not "interested persons" of the Trust or the
Adviser. In the case of initiation or termination of this Contract during
any month, the fee for that month shall be reduced proportionately on the
basis of the number of business days during which it is in effect and the
fee computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Trust's Trustees other than
those who are "interested persons" of the Trust or the Adviser; and (iv)
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.
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.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, 1991
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 Trust 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 Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Trust 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 Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust 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 Trust. 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 are separate and distinct from those of any and all
other Portfolios.
8. The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
THE NORTH CAROLINA CASH MANAGEMENT TRUST
on behalf of Cash Portfolio
SEAL By /s/ J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By /s/ J. Gary Burkhead
J. Gary Burkhead, President
J/CNTRCTS
mc-nccp90
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 1st day of January, 1991, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with The North
Carolina Cash Management Trust, a Massachusetts business trust which may
issue one or more series of shares of beneficial interest (hereinafter
called the "Fund"), on behalf of Cash Portfolio (hereinafter called the
"Portfolio"), pursuant to which the Adviser is to act as investment manager
and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management or money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
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 or Sub-Adviser. The
Sub-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 personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, 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) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Portfolio policies, and shall
carry out such policies as are adopted by the Trustees. The Sub-Adviser
shall, subject to review by the Board of Trustees, furnish such other
services as the Sub-Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Sub-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
Sub-Adviser, Adviser or their affiliates exercise investment discretion.
The Sub-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 Sub-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 Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commission paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the Adviser on the following
basis for the services to be furnished hereunder: the Adviser agrees to
pay the Sub-Adviser a monthly fee equal to 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser 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 Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser 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 Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-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 Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, the
Sub-Adviser shall not be subject to liability to the Adviser, the Fund or
to any shareholder of the Portfolio for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this
Agreement shall continue in force until July 31, 1991 and indefinitely
thereafter, but
only so long as the continuance after such period shall be specifically
approved at
least annually by vote of the Fund's Board of Trustees or by vote of a
majority of the
outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser,
The Sub-
Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized
by vote of a majority of the outstanding voting securities of the
Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the
terms of any continuance or modification of the Agreement must have been
approved
by the vote of a majority of those Trustees of the Fund who are not
parties to such
Agreement or interested persons of any such party, cast in person at a
meeting called
for the purpose of voting on such approval.
(d) Either the Adviser, the Sub-Adviser 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 by vote
of a majority of its outstanding voting securities. This Agreement shall
terminate
automatically in the event of its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust of the Fund
and agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Adviser shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Adviser seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
Investment Company Act of 1940 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 all as of the date written above.
FMR TEXAS INC.
By /s/Charles F. Dornbush
Charles F. Dornbush, Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/J. Gary Burkhead
J. Gary Burkhead, President
GENERAL DISTRIBUTION AGREEMENT
between
NORTH CAROLINA CASH MANAGEMENT TRUST:
CASH PORTFOLIO
and
FIDELITY DISTRIBUTORS CORPORATION
Required authorizations and approvals having been obtained, North Carolina
Cash Management Trust, a Massachusetts business trust which may issue one
or more series of beneficial interest ("Issuer"), with respect to shares of
Cash Portfolio, a series of the Issuer, and Fidelity Distributors
Corporation, a Massachusetts corporation having its principal place of
business in Boston, Massachusetts ("Distributors"), hereby consent pursuant
to the existing General Distribution Agreement dated July 1, 1986, to an
amendment in its entirety of said Agreement as of April 1, 1987, as set
forth below.
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributors shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributors agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributors from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributors. In no case
(i) is the indemnity of the Issuer in favor of the Distributor or any
person indemnified to be deemed to protect Distributors or any person
against any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1988 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust of the Issuer and agrees that the obligations assumed by the Issuer
under this contract shall be limited in all cases to the Issuer and its
assets. The Distributors shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Declaration of Trust are separate and distinct
from those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf, and
its corporate seal affixed, by one of its officers duly authorized, as of
the day and year first above written.
NORTH CAROLINA CASH MANAGEMENT TRUST:
CASH PORTFOLIO
Attest: /s/ Arthur S. Loring By /s/ J. Gary Burkhead
Secretary
FIDELITY DISTRIBUTORS CORPORATION
Attest: /s/ Arthur S. Loring By /s/ John J. O'Brien
Clerk
gd-cashp/sm
GENERAL DISTRIBUTION AGREEMENT
between
NORTH CAROLINA CASH MANAGEMENT TRUST:
TERM PORTFOLIO
and
FIDELITY DISTRIBUTORS CORPORATION
Required authorizations and approvals having been obtained, North Carolina
Cash Management Trust, a Massachusetts business trust which may issue one
or more series of beneficial interest ("Issuer"), with respect to shares of
Term Portfolio, a series of the Issuer, and Fidelity Distributors
Corporation, a Massachusetts corporation having its principal place of
business in Boston, Massachusetts ("Distributors"), hereby consent pursuant
to the existing General Distribution Agreement dated July 1, 1986, to an
amendment in its entirety of said Agreement as of April 1, 1987, as set
forth below.
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributors shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributors agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributors from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributors. In no case
(i) is the indemnity of the Issuer in favor of the Distributor or any
person indemnified to be deemed to protect Distributors or any person
against any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1988 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust of the Issuer and agrees that the obligations assumed by the Issuer
under this contract shall be limited in all cases to the Issuer and its
assets. The Distributors shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Declaration of Trust are separate and distinct
from those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
NORTH CAROLINA CASH MANAGEMENT TRUST:
TERM PORTFOLIO
Attest: /s/ Arthur S. Loring By /s/ J. Gary Burkhead
Secretary
FIDELITY DISTRIBUTORS CORPORATION
Attest: /s/ Arthur S. Loring By /s/ John J. O'Brien
Clerk
gd-nccmt/sm
AMENDMENT TO GENERAL DISTRIBUTION AGREEMENT
Effective January 1, 1988, Paragraph 8 of the General Distribution
Agreement between each of the funds or portfolios indicated on the attached
Schedule A shall be amended to read in full as follows:
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may particpate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
Signed on behalf of each of the funds or portfolios identified on Schedule
A.
On Behalf of Each of the Funds or Portfolios:
Attest: /s/ Arthur S. Loring By: /s/ J. Gary Burkhead
Secretary
FIDELITY DISTRIBUTORS CORPORATION
Attest: /s/ Arthur S. Loring By: /s/ John J. O'Brien
Secretary
SCHEDULE A
California Tax-Free Fund:
High Yield Portfolio
Money Market Portfolio
Insured Portfolio
Fidelity Capital Trust:
Fidelity Capital Appreciation Fund
Fidelity Value Fund
Fidelity Cash Reserves
Fidelity Charles Street Trust:
Fidelity U.S. Government Reserves
Fidelity Stock Index Fund
Fidelity Contrafund
Fidelity Corporate Trust:
ARP (Adjustable-Rate Preferred Portfolio)
APP (Auction Preferred Portfolio)
Fidelity Court Street Trust:
Fidelity High Yield Municipals
Fidelity Connecticut Tax-Free Portfolio
Fidelity New Jersey Tax-Free High Yield Portfolio
Fidelity New Jersey Tax-Free Money Market Portfolio
Fidelity Colorado Tax-Free Portfolio
Fidelity North Carolina Tax-Free Portfolio
Fidelity Virginia Tax-Free Portfolio
Fidelity Georgia Tax-Free Portfolio
Fidelity Maryland Tax-Free Portfolio
Fidelity Missouri Tax-Free Portfolio
Fidelity Daily income Trust
Daily Money Fund:
Money Market Portfolio
U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
Fidelity Devonshire Trust:
Fidelity Equity-Income Fund
Fidelity Real Estate Investment Portfolio
Fidelity Utilities Income Fund
Equity Portfolio: Growth
Equity Portfolio: Income
Fidelity Fund
Fidelity Financial Trust:
Fidelity Convertible Securities
Fidelity Freedom Fund
Financial Reserves Fund
Fidelity Fixed-Income Trust:
Fidelity Flexible Bond Portfolio
Fidelity Short-Term Bond Portfolio
Fidelity Government Securities fund (a limited partnership)
Fidelity Growth Company Fund
Fidelity High Income Fund
Fidelity Income Fund:
Fidelity Ginnie Mae Portfolio
Fidelity Mortgage Securities Portfolio
Income Portfolios:
GNMA Series
Limited Term Series
Short Fixed-Income Series
Short Government Series
Short-Intermediate Fixed-Income Series
Variable Rate Series
Yield Plus Series
Liquid Assets Series
State and Local Asset Management Series:
Government Money Market Portfolio
Government Bond Portfolio
The California Portfolio
Fidelity Institutional Cash Portfolios:
Money Market Portfolio
U.S. Government Portfolio
U.S. Treasury Portfolio
U.S. Treasury Portfolio II
Domestic Money Market Portfolio
Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Institutional Trust
Fidelity U.S. Equity Index Portfolio
Fidelity U.S. Bond Index Portfolio
Fidelity Intermediate Bond Fund
Fidelity Investment Trust:
Fidelity Europe Fund
Fidelity Global Bond Fund
Fidelity International Growth & Income Fund
Fidelity Overseas Fund
Fidelity Pacific Basin Fund
Fidelity Canada Fund
Fidelity United Kingdom Fund
Fidelity Limited Term Municipals
Fidelity Magellan Fund
Fidelity Massachusetts Tax-Free:
Money Market Portfolio
High Yield Portfolio
Fidelity Money Market Trust:
Domestic Money Market Portfolio
U.S. Government Portfolio
U.S. Treasury Portfolio
Fidelity Municipal Trust:
Fidelity Aggressive Tax-Free Portfolio
Fidelity Insured Tax-Free Portfolio
Fidelity Municipal Bond Portfolio
Fidelity Pennsylvania Tax-Free High Yield Portfolio
Fidelity Pennsylvania Tax-Free Money Market Portfolio
Fidelity Ohio Tax-Free Portfolio
Fidelity Michigan Tax-Free Portfolio
Fidelity Minnesota Tax-Free Portfolio
Fidelity Short-Term Tax-Free Portfolio
Fidelity Texas Tax-Free Portfolio
The North Carolina Cash Management Trust:
Cash Portfolio
Term Portfolio
Fidelity New York Tax-Free Fund:
High Yield Portfolio
Insured Portfolio
Money Market Portfolio
Short-Term Portfolio
Fidelity New Jersey Tax-Free Portfolio, L.P.
Plymouth Fund:
Plymouth Aggressive Income Portfolio
Plymouth Government Securities Portfolio
Plymouth Growth Opportunities Portfolio
Plymouth Income & Growth Portfolio
Plymouth Short-Term Bond Portfolio
Plymouth Investment Series:
Plymouth High Income Municipal Portfolio
Plymouth Global Natural Resources Portfolio
Plymouth Securities Trust:
Plymouth Market Access Plus:
Bull Value Portfolio
Plymouth Market Access Plus:
Bear Value Portfolio
Fidelity Puritan Trust:
Fidelity Balanced Fund
Fidelity Puritan Fund
Fidelity Qualified Dividend Fund
Fidelity Securities Fund:
Fidelity Growth & Income Portfolio
Fidelity OTC Portfolio
Fidelity Blue Chip Fund
Fidelity Select Portfolios:
Air Transportation Portfolio
American Gold Portfolio
Automation and Machinery Portfolio
Automotive Portfolio
Biotechnology Portfolio
Broadcast and Media Portfolio
Brokerage and Investment Management Portfolio
Capital Goods Portfolio
Chemicals Portfolio
Computers Portfolio
Defense and Aerospace Portfolio
Electric Utilities Portfolio
Electronics Portfolio
Energy Portfolio
Energy Service Portfolio
Financial Services Portfolio
Food and Agriculture Portfolio
Health Care Portoflio
Health Care Delivery Portfolio (name changed to Medical Delivery
Housing Portfolio Portfolio on 7/10/87)
Industrial Materials Portfolio
Leisure Portfolio
life Insurance Portfolio
Money Market Portfolio
Paper and Forest Products Portfolio
Precious Metals and Minerals Portfolio
Property and Casualty Insurance Portfolio
Regional Banks Portfolio
Restaurant Industry Portfolio
Fidelity Select Portfolios (cont.)
Retailing Portfolio
Savings and Loan Portfolio
Software and Computer Services Portfolio
Technology Portfolio
Telecommunications Portfolio
Transportation Portfolio
Utilities Portfolio
Fidelity Special Situations Fund
Tax-Exempt Portfolios:
Limited Term Series
Short-Term Intermediate Series
Fidelity Tax-Exempt Money Market Trust
Fidelity Trend Fund
Fidelity U.S. Treasury Money Market Fund, L.P.
Variable Insurance Products Fund:
Equity-Income Portfolio
Growth Portfolio
High Income Portfolio
Money Market Portfolio
Overseas Portfolio
Fidelity U.S. Investments -
Government Securities Fund, L.P.
Bond Fund, L.P.
Zero Coupon Bond Fund;
The 1993 Portfolio
The 1998 Portfolio
The 2003 Portfolio
SECFIL2
SUBCUSTODIAN AGREEMENT
Dated As Of: November 1, 1990
Between
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
and
SHAWMUT BANK, N.A.
TABLE OF CONTENTS
1. Appointment 1
2. Powers and Duties 1
2.1. Safekeeping 1
2.2. Manner of Holding 1
2.3. Registered Name; Nominee 2
2.4. Purchases 2
2.5. Exchanges 3
2.6. Sales of Securities 3
2.7. Depository Receipts 3
2.8. Exercise of Rights: Tender Offers 4
2.9. Proxies, Notices, Other Communications, Etc 4
2.10. Stock Dividends, Rights, Etc 5
2.11. Options 5
2.12. Futures Contracts 5
2.13. Foreign Exchange Transactions 6
2.14. Borrowing 6
2.15. Demand Deposit Bank Accounts 6
2.16. Interest Bearing Call or Time Deposits 7
2.17. Collection of Income 7
2.18. Securities Loans 7
2.19. Receipt From and Disbursements to Shareholder
Servicing Agent 8
2.20. Bills and Other Disbursements 8
2.21. Nondiscretionary Details 8
2.22. Deposit of Fund Assets in Securities Systems 8
2.23. Other Transfers 10
2.24. Segregated Accounts 10
2.25. Authorized Persons 10
2.26. Proper Instructions 10
2.27. Persons Having Access to Assets of the Funds 11
2.28. Execution of Documents 12
2.29. Available Funds 12
3. Appointment of Secondary Subcustodians and Agents 12
3.1. Secondary Subcustodians 12
3.2. Agents 13
4. Books and Records 14
5. Opinions of Independent Accountants 14
6. Reports by Independent Accountants 14
7. Responsibility of Subcustodian 14
7.1. Proper Instructions 14
7.2. Standard of Care 15
7.3. Responsibility for Secondary Subcustodians,
Agents and Security Systems 16
7.4. Several Obligations of Funds, Etc 17
7.5. Limitation of Obligations of the Subcustodian 17
8. Fees and Disbursements 17
9. Termination 18
10. Representative Capacity 19
11. Entire Agreement, Amendment and Interpretation 19
12. Governing Law 20
13. Confidentiality, Survival or Obligations 20
14. Notices 20
15. Assignment 20
16. Counterparts 20
SUBCUSTODIAN AGREEMENT
AGREEMENT made as of November 1, 1990 by and between FIRST UNION NATIONAL
BANK OF NORTH CAROLINA (the "Custodian") and SHAWMUT BANK, N.A. (the
"Subcustodian").
WITNESSETH:
That in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. Appointment. The Custodian hereby employs and appoints the
Subcustodian to act as a subcustodian for the investment company set forth
on Appendix A hereto (the "Trust") for the term and subject to the
provisions of this Agreement. The Trust may from time to time organize one
or more series of shares in addition to the series set forth on Appendix A,
each such existing or additional series to be referred to as a "Fund" and
all Funds set forth on Appendix A, as it may be from time to time amended
in writing by mutual agreement, to be referred to collectively as the
"Funds". During the term of this Agreement, the Custodian shall deliver,
or shall cause to be delivered, to the Subcustodian certain securities,
cash, cash equivalents and other assets owned by one or more Funds and
shall specify the Fund to which the securities, cash, cash equivalents and
other assets are to be specifically allocated. The Subcustodian shall have
no responsibility or liability for or on account of securities or other
assets not so delivered.
The Custodian hereby certifies that it has authority to deposit with the
Subcustodian any securities and funds that the Subcustodian may receive
from the Custodian and to give instructions relative thereto.
The Custodian shall deliver to the Subcustodian copies of the Declaration
of Trust and By-Laws (or comparable documents) of the Trust and all
amendments thereto. Subcustodian hereby certifies that it has received a
copy of that certain Custodian Agreement Contract dated August 25, 1982
between the Trust and the Custodian and hereby acknowledges that Custodian
is entering into this Agreement pursuant to the terms and conditions of
said Custodian contract.
2. Powers and Duties. The Subcustodian shall have and perform the
following powers and duties:
2.1. Safekeeping. To keep safely the securities, cash, cash equivalents
and other assets of the Funds that have been delivered to the Subcustodian
and, with respect to each Fund, from time to time to receive delivery of
securities, cash, cash equivalents and other assets for safekeeping for
each Fund separately.
2.2. Manner of Holding. Except as otherwise specifically provided
herein, to hold non-cash assets, including securities, and segregate for
the account of each Fund separately:
(i) by physical possession of the share certificates or other instruments
representing such non-cash assets, including securities, in registered or
bearer form, together with appropriate entry on the books and records of
the Subcustodian of each Fund's interest therein; or
(ii) in book-entry form by a Securities System (as said term is defined
in Section 2.2) and by appropriate entry on the books and records of the
Subcustodian, in accordance with the provisions of Section 2.22.
2.3. Registered Name; Nominee. To hold securities (other than bearer
securities) for the account of each Fund separately.
(i) registered in the name of the Fund or any nominee thereof, in the
name of the Subcustodian or any nominee thereof, or in the name of any
agent appointed pursuant to Section 3.2 (an "Agent") or any nominee
thereof, or in the name of any Securities System (as said term is defined
in Section 2.22); provided, that securities are held in an account of the
Subcustodian or Agent containing only assets of a Fund or only assets held
by the Subcustodian or Agent as a custodian or as a subcustodian or in a
fiduciary capacity for customers; and
(ii) in street certificate form, so-called, and in any case with or
without any indication of fiduciary capacity, provided, that securities are
held in an account of the Subcustodian containing only assets of a Fund or
only assets held by the Subcustodian as custodian or as a subcustodian or
in a fiduciary capacity for customers.
2.4. Purchases. Upon receipt of Proper Instructions, as defined in
Section 2.26, and insofar as funds of a Fund are made available to the
Subcustodian for the purpose, to pay for and receive securities, options,
futures contracts or options on futures contracts purchased for the account
of the Fund, payment being made only
(i) upon receipt of the securities in good delivery form or evidence of
good title to the options, futures contracts or options on futures
contracts registered as provided in Section 2.3(i) or in proper form for
transfer, by the Subcustodian or by a clearing corporation of a national
securities exchange of which the Subcustodian is a member;
(ii) in the case of a purchase effected through a Securities System, upon
receipt of the securities by the Securities System in accordance with the
provisions of Section 2.22;
(iii) in the case of a repurchase agreement, upon receipt of the
securities underlying the repurchase agreement by the Subcustodian either
in certificate form or through a book-entry into the Account (as defined in
Section 2.22) of the Subcustodian maintained with such Securities System;
(iv) in the case of time deposits, call account deposits, currency
deposits, and other deposits pursuant to Section 2.15 and 2.16, upon the
receipt of an advice or confirmation evidencing said deposit or entry into
such transactions;
(v) with respect to securities purchased outside the United States, in
accordance with written procedures agreed to in writing from time to time
by the parties hereto, but in all events subject to the standard of care
set forth in Section 7.2 hereof; or
(vi) as otherwise specifically provided pursuant to Section 2.11, 2.12
and 2.13 hereof.
2.5. Exchanges. Upon receipt of Proper Instructions, to exchange
securities held by it for other securities and to deposit any such other
securities in accordance with said Proper Instructions. Without Proper
Instructions, the Subcustodian may, with respect to securities which are
required to be exchanged, surrender securities in temporary form for
definitive securities, may surrender securities for transfer into a name or
nominee name as permitted in Section 2.3(i), and may surrender securities
for a different number of certificates or instruments representing the same
number of shares or same principal amount of indebtedness; provided that,
in any such case, the cash, securities or other consideration to be paid,
issued or given are to be delivered only to the Subcustodian. Nothing in
this Section 2.5 shall alter the responsibilities of the Subcustodian under
Section 2.8 hereof.
2.6. Sales of Securities. Upon receipt of Proper Instructions, to make
delivery of securities which have been sold for the account of each Fund
separately, but only against receipt of payment therefor:
(i) in cash, by a certified check, bank cashier's check, bank credit, or
bank wire transfer;
(ii) by credit to the account of the Subcustodian with a clearing
corporation of a national securities exchange of which the Subcustodian is
a member;
(iii) by credit to the Account of the Subcustodian with a Securities
System, in accordance with the provisions of Section 2.22;
(iv) in accordance with street practice as may be agreed to in writing
from time to time by the parties hereto and subject to the standard of care
set forth in Section 7.2 hereof; or
(v) with respect to securities sold outside the United States, in
accordance with written procedures agreed to in writing from time to time
by the parties hereto but in all events subject to the standard of care set
forth in Section 7.2 hereof.
2.7. Depository Receipts. Upon receipt of Proper Instructions, to
surrender or cause to be surrendered securities to the depository used by
an issuer of American Depository Receipts or International Depository
Receipts (hereinafter collectively referred to as "ADRs" for such
securities, against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Subcustodian that the
depository has acknowledged receipt of instructions to issue with respect
to such securities ADRs in the name of the Subcustodian, or a nominee
thereof, for delivery to the Subcustodian at such place as the Subcustodian
may from time to time designate.
Upon receipt of Proper Instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Subcustodian that the
issuer of the ADRs has acknowledged receipt of instructions to cause its
depository to deliver the securities underlying such ADRs to the
Subcustodian.
2.8. Exercise of Rights; Tender Offers. In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and expirations
of rights in connection therewith and notices of exercise of call and put
options and the maturity of futures contracts) affecting or relating to
securities held by the Subcustodian, the Subcustodian shall have
responsibility for promptly notifying the Custodian of all such offers in
accordance with the standard of reasonable care set forth in Section 7.2
hereof. For all such offers for which the Subcustodian is responsible as
provided in this Section 2.8, the Custodian shall have the responsibility
for providing the Subcustodian with all necessary instructions in timely
fashion. Upon receipt of Proper Instructions, the Subcustodian shall
timely deliver to the issuer or trustee thereof, or to the agent of either,
warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold upon proper receipt therefor and upon receipt of
assurances satisfactory to the Subcustodian that the new securities and
cash, if any, acquired by such action are to be delivered to the
Subcustodian. Upon receipt of Proper Instructions, the Subcustodian shall
timely deposit securities upon invitations for tenders of securities upon
proper receipt therefor and upon receipt of assurances satisfactory to the
Subcustodian that the consideration to be paid or delivered or the tendered
securities are to be returned to the Subcustodian. Notwithstanding any
provision of this Agreement to the contrary, the Subcustodian shall take
all necessary action, unless otherwise directed to the contrary by Proper
Instructions, to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall thereafter promptly notify the Custodian in writing of
such action.
2.9. Proxies, Notices, Other Communications, Etc. Promptly to deliver,
mail or transmit by any other mutually acceptable means to the Custodian,
all forms of proxies and all notices of meetings and any other notices,
announcements or written information affecting or relating to securities
held by the Subcustodian (the foregoing collectively referred to as
"Announcements"). For all such Announcements for which the Subcustodian is
responsible as provided in this Section 2.9, the Custodian shall have
responsibility for providing the Subcustodian with all necessary
instructions in timely fashion. Upon receipt of Proper Instructions, the
Subcustodian shall execute and deliver or cause its nominee to execute and
deliver such proxies or other authorizations as may be required to carry
out the Proper Instructions. Neither the Subcustodian nor its nominee
shall vote upon any of such securities or execute any proxy to vote thereon
or give any consent or take any other action with respect thereto unless
ordered to do so by Proper Instructions.
2.10. Stock Dividends, Rights, Etc. To receive and collect on a timely
basis all stock dividends, rights and other items of like nature; and to
deal with the same pursuant to Proper Instructions relative thereto.
2.11. Options. Upon receipt of Proper Instructions and in accordance
with the provisions of any agreement between the Subcustodian, any
registered broker-dealer and, if necessary, the Trust on behalf of a Fund,
relating to compliance with the rules of the Options Clearing Corporation
or of any registered national securities exchange or similar organization
or organizations, to receive and retain confirmations or other documents,
if any, evidencing the purchase or writing of an option on a security or
securities index by the Trust on behalf of a Fund; to deposit and maintain
in a segregated account for each Fund separately, either physically or by
book-entry in a Securities System, securities subject to a covered call
option written by the Trust on behalf of a Fund; and to release and/or
transfer such securities or other assets only in accordance with a notice
or other communication evidencing the expiration, termination or exercise
of such covered option furnished by the Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or
such other organization as may be responsible for the sufficiency of assets
held in each Fund's segregated account in compliance with applicable margin
maintenance requirements and the performance of other terms of any option
contract.
2.12. Futures Contracts. Upon receipt of Proper Instructions, to receive
and retain confirmations, if any, evidencing the purchase or sale of a
futures contract or an option on a futures contract by the Trust on behalf
of a Fund; to deposit and maintain in a segregated account, for the benefit
of any futures commission merchant, assets designated by the Trust on
behalf of a Fund as initial, maintenance, or variation "margin" deposits
(including mark-to-market payments) intended to secure the Fund's
performance of its obligations under any futures contracts purchased or
sold or any options on futures contracts written by the Trust on behalf of
a Fund, in accordance with the provisions of any agreement or agreements
among the Trust on behalf of the Fund, the Subcustodian and such futures
commission merchant, designed to comply with the rules of the Commodity
Futures Trading Commission and/or any contract market regarding such margin
deposits or payments; and to release and/or transfer assets in such margin
accounts only in accordance with any such agreements or rules. The Trust
on behalf of a Fund and the futures commission merchant shall be
responsible for the sufficiency of assets held in the segregated account in
compliance with applicable margin maintenance requirements and
mark-to-market payment requirements and the performance of other terms of
any futures contract or options on a futures contract, and the Custodian
and the Subcustodian shall have no responsibility therefor.
2.13. Foreign Exchange Transactions. Pursuant to Proper Instructions, to
enter into foreign exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on behalf and for the
account of any Fund. Such transactions may be undertaken by the
Subcustodian with such Banking Institutions, (as defined in Section 2.15),
including the Subcustodian as principal, or other currency brokers, as set
forth in Proper Instructions. Foreign exchange contracts and options other
than those executed with the Subcustodian, shall be deemed to be portfolio
securities of a Fund; and accordingly, the responsibility of the
Subcustodian therefore shall be the same as and no greater than the
Subcustodian's responsibility in respect of other portfolio securities of
the Fund. The Subcustodian shall be responsible for the transmittal to and
receipt of cash from the currency broker or Banking Institution with which
the contract or option is made, the maintenance of proper records with
respect to the transaction as set forth in Section 4 and the maintenance of
any required segregated account in accordance with section 2.24. The
Subcustodian shall have no duty with respect to the selection of the
currency brokers or Banking Institutions with which the Fund deals or for
their failure to comply with the terms of any contract or option.
Without limiting the foregoing, it is agreed that upon receipt of Proper
Instructions and insofar as funds are made available to the Subcustodian
for the purpose, the Subcustodian is hereby authorized to make free
outgoing payments of cash in the form of U.S. Dollars or foreign currency
before receiving confirmation of a foreign exchange contract or
confirmation that the countervalue currency completing the foreign exchange
contract has been delivered or received. The Subcustodian shall not be
responsible for any costs and interest charges which may be incurred by the
Fund or the Subcustodian as a result of the failure or delay of third
parties to deliver foreign exchange; provided that the Subcustodian shall
nevertheless be held to the standard of care set forth in, and shall be
liable to the Custodian in accordance with, the provisions of Section 7.
2.14. Borrowing. Upon receipt of Proper Instructions, to deliver
securities of a Fund to lenders or their agents as collateral for
borrowings; provided that, such collateral is delivered only against
receipt of amounts borrowed and is payable to or upon the Subcustodian's
order as Subcustodian for the Fund.
2.15. Demand Deposit Bank Accounts. Upon receipt of Proper Instructions,
to open and maintain a separate account or accounts in the name of any
Fund, subject only to draft or order by the Subcustodian acting pursuant to
the terms of this Agreement in its capacity as Subcustodian. Subject to
the provisions hereof, all funds received by the Subcustodian from or for
the account of a Fund shall be deposited in said account(s). Funds held by
the Subcustodian for a fund may be deposited by it to its credit as
Subcustodian in the banking department of the Subcustodian and the
responsibilities of the Subcustodian for deposits accepted on the
Subcustodian's books shall be that of a U.S. bank for a similar deposit.
If and when authorized by Proper Instructions, the Subcustodian may open
and maintain an additional account(s) in such other banks or trust
companies qualified to act as a custodian under the Investment Company Act
of 1940, as amended (the "1940 Act") and the rules and regulations
thereunder as may be designated in such Proper Instructions (any such bank
or trust company so designated being referred to hereafter as a "Banking
Institution"); provided that, (i) such account(s) (hereinafter collectively
referred to as "demand deposit bank accounts") shall be in the name of the
Subcustodian for account of a Fund and subject only to the Subcustodian's
draft or order acting pursuant to the terms of this Agreement in its
capacity as Subcustodian. Such accounts may be opened with Banking
Institutions in the United States and in other countries and may be
denominated in either U.S. Dollars or other currencies as the Custodian may
designate to the Subcustodian. All such deposits shall be deemed to be
portfolio securities of the applicable Fund; however, the Subcustodian
shall be responsible for the collection of income as set forth in Section
2.17, the maintenance of proper records as set forth in Section 4, and the
transmission of cash to and from such accounts. The Subcustodian will have
no duty with respect to the selection of the Banking Institution or for any
such Banking Institution's failure to pay upon demand.
2.16. Interest Bearing Call or Time Deposits. Upon receipt of Proper
Instructions, to place interest bearing fixed term and call deposits with
the banking department of the Subcustodian or such other Banking
Institution and in such amounts as the Custodian may designate for each
Fund. Deposits may be denominated in U.S. Dollars or other currencies.
The Subcustodian shall include in its records with respect to the assets of
the Fund appropriate notation as to the amount and currency of each such
deposit, the accepting Banking Institution and other appropriate details
and shall retain such forms of advice or receipt evidencing the deposit, if
any, as may be forwarded to the Subcustodian by the Banking Institution.
Such deposits, other than those placed with the Subcustodian, shall be
deemed portfolio securities of the applicable Fund and the responsibilities
of the Subcustodian therefor shall be the same as those for demand deposit
bank accounts placed with other Banking Institutions, as described in
Section 2.15 of this Agreement.
2.17 Collection of Income. To collect, receive and deposit in said
account or accounts on a timely basis all income and other payments with
respect to the securities held hereunder to which each Fund shall be
entitled either by law or pursuant to custom in the securities business, to
endorse and deliver any instruments required to effect such collection and
to execute ownership and other certificates and affidavits for all foreign
federal and state tax purposes in connection with receipt of income or
other payments with respect to securities of each Fund or in connection
with transfer of securities, and pursuant to Proper Instructions with
respect to collection or receipt of funds or transfer of securities which
involve an investment decision, to take all other necessary or proper
actions.
2.18. Securities Loans. Upon receipt of Proper Instructions, to deliver
or receive securities of a Fund, in connection with loans of securities by
the Fund or termination of such loans, to or from the borrower thereof;
provided that, such securities are delivered or received only against
receipt or delivery, respectively, of collateral as set forth in such
Proper Instructions; and provided further that, in connection with any
securities loans secured by cash collateral for which collateral is to be
credited to the Subcustodian's Account in a Securities System, the
Subcustodian's instructions to the Securities System require that the
Securities System may deliver the securities or return the collateral to
the borrower thereof only upon receipt of the specified collateral for such
borrowing or the loaned securities, respectively.
2.19. Receipt From and Disbursements to Shareholder Servicing Agent. The
Custodian will give the Subcustodian Proper Instructions as to the identity
of the Shareholder Servicing Agent or Agents ("SSA") for each Fund, and
will identify such persons authorized to give instructions on behalf of the
SSA. Upon receipt of such Proper Instructions, the Subcustodian shall
accept from the SSA and release to the SSA funds and securities, so far as
such are made available to the Subcustodian, in accordance with the SSA's
instructions.
2.20. Bills and other Disbursements. Upon receipt of Proper
Instructions, to pay or cause to be paid, insofar as funds are made
available to the Subcustodian for the purpose, bills, statements, or other
charges.
2.21. Nondiscretionary Details. Without Proper Instructions from the
Custodian, the Subcustodian shall attend to all nondiscretionary details in
connection with the authorized sale, exchange, substitution, purchase,
transfer or other dealings with securities, cash, cash equivalents or other
assets of a Fund held by the Subcustodian except as otherwise directed from
time to time by the Custodian.
2.22. Deposit of Fund Assets in Securities Systems. The Subcustodian may
deposit and/or maintain securities owned by a Fund in:
(i) the Depository Trust Company;
(ii) any book-entry system as provided in Subpart O or Treasury Circular
No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart O; or
(iii) any other domestic clearing agency registered with the Securities
and Exchange Commission under Section 17A of the Securities Exchange Act of
1934 (or as may otherwise be authorized by the Securities and Exchange
Commission to serve in the capacity of depository or clearing agent for the
securities or other assets of investment companies) which acts as a
securities depository and whose use has been specified in Proper
Instructions (each of the foregoing being referred to in this Agreement as
"Securities System").
Utilization of a Securities System shall be in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
(a) The Subcustodian may deposit and/or maintain a Fund's securities,
either directly or through one or more Agents appointed by the Subcustodian
pursuant to Section 3.2, in a Securities System; provided that, such
securities are represented in an account ("Account") of the Subcustodian or
such Agent in the Securities System which shall not include any assets of
the Subcustodian or Agent other than assets held as a fiduciary, custodian,
or otherwise for customers;
(b) The records of the Subcustodian with respect to securities of each
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to such Fund.
(c) The Subcustodian shall pay for securities purchased in book-entry
form for the account of a Fund upon (i) receipt of advice or reports sent
electronically from the Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on the records
of the Subcustodian to reflect such payment and transfer respecting the
account of such Fund. The Subcustodian shall transfer securities sold in
book-entry form from the account of a Fund upon (A) receipt of advice or
reports sent out electronically from the Securities System that payment for
such securities has been transferred to the Account or receipt of reports
from the Securities System representing reconciliation of aggregate trades
("reconciliation report"), and (B) the making of an entry on the records of
the Subcustodian to reflect such transfer and payment from the account of
such Fund. The Subcustodian shall furnish the Custodian confirmation of
each transfer to or from the account of a Fund in the form of data
transmitted through a system designated in writing by the Custodian or a
written advice or notice or reconciliation report and shall make available
or furnish to the Custodian data through such designated system or copies
of daily transaction sheets reflecting each day's transactions in the
Securities System in the account of each Fund on the next business day.
(d) The Subcustodian shall provide the Custodian with any report obtained
by the Subcustodian or any Agent as referred to above on the Securities
System's accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System; and the
Subcustodian and such Agents shall send to the Custodian such reports on
their own systems of internal accounting control as the Custodian may
reasonably request from time to time.
(e) At the written request of the Custodian, the Subcustodian will
terminate the use of any such Securities System on behalf of any Fund as
promptly as practicable.
(f) Notwithstanding anything to the contrary herein, the use of a
Securities System shall not relieve the Subcustodian of its
responsibilities or liabilities hereunder. Without limiting the generality
of the foregoing, the Subcustodian shall be subject to the same
responsibility with respect to all securities of the Funds, and all cash,
stock dividends, rights and items of like nature to which any of the Funds
are entitled, held or received by such Securities System as if the same
were held or received by the Subcustodian at its own office.
2.23. Other Transfers. Upon receipt of Proper Instructions, to deliver
securities, funds and other property in the account(s) of a Fund to another
subcustodian of the Fund; and, upon receipt of Proper Instructions so
enumerating, to make such other disposition of securities, funds or other
property of the Fund in a manner other than, or for purposes other than as
enumerated elsewhere in this Agreement.
2.24. Segregated Account. Upon receipt of Proper Instructions, the
Subcustodian shall establish and maintain on its books a segregated account
or accounts for and on behalf of each Fund, into which account or accounts
may be transferred cash, cash equivalents, and/or securities or other
assets of such Fund, including securities maintained by the Subcustodian
pursuant to Section 2.22, said account or accounts to be maintained (i) for
the purposes set forth in Section 2.11, 2.12 and 2.13, (ii) for the
purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies, and
(iii) as mutually agreed from time to time between the Subcustodian and the
Custodian.
2.25. Authorized Persons. The Custodian shall deliver to the
Subcustodian, duly certified as appropriate by a Secretary or Assistant
Secretary of the Custodian, the names, signatures and scope of authority of
all persons authorized to give Proper Instructions ("Authorized Person") or
any other such notice, request, direction,, instruction, certificate or
instrument on behalf of the Custodian, the name and address of the
Shareholder Servicing Agent, and any resolutions of the Trust's Board of
Trustees with respect thereto. Such certificate may be accepted and relied
upon by the Subcustodian as conclusive evidence of the facts set forth
therein and may be considered in full force and effect until receipt of a
similar certificate to the contrary.
2.26. Proper Instructions. Proper Instructions shall mean a tested
telex, a written request, direction, instruction or certification signed or
initialed by or on behalf of the Custodian by one or more Authorized
Persons, or a communication effected directly between an electro-mechanical
or electronic device or system (including facsimile transmission) by or on
behalf of the Custodian by one or more Authorized Persons, or a
communication effected directly between an electro-mechanical or electronic
device or system (including facsimile transmission) by or on behalf of the
Custodian by one or more Authorized Persons; provided, however, that no
instructions directing the delivery of securities or the payment of funds
to any individual authorized signatory of the Custodian shall be signed by
that individual; and provided, further, that any instructions which are not
consistent with the terms and conditions of this Agreement shall not be
Proper Instructions hereunder unless otherwise specifically acknowledged
and assented to in such instructions by the Treasurer of the Trust or by
any person designated in writing by the Treasurer of the Trust.
Telephonic, other oral or electro-mechanical or electronic instructions
given by one of the above Authorized Persons will be considered Proper
Instructions if the Subcustodian reasonably believes them to have been
given by an Authorized Person with respect to the transaction involved.
Oral instructions will be confirmed by the Custodian, by tested telex or in
writing in the manner set forth above, but the lack of such confirmation
shall in no way affect any action taken by the Subcustodian prior to its
receipt of written instructions in reliance upon such oral instructions.
The Custodian authorizes the Subcustodian to tape record any and all
telephonic or other oral instructions given to the Subcustodian. Proper
Instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
The Subcustodian shall, and is hereby authorized to, execute or endorse
and deliver all customary documents and instruments required to give effect
to Proper Instructions and to carry out its duties under this Agreement.
In performing its duties generally, and more particularly in connection
with the purchase, sale and exchange of securities made from or to an
account of a Fund, the Subcustodian may assume, unless and until notified
in writing by the Custodian to the contrary, that Proper Instructions
received by it are not in conflict with or in any way contrary to any
provisions of the Trust's Declaration of Trust or By-Laws (or comparable
documents), resolutions of the Shareholders or Trustees of the Trust, or
the Trust's currently-effective Registration Statement on file with the
Securities and Exchange Commission, including the Fund's investment
policies and limitations contained therein.
2.27. Persons Having Access to Assets of the Funds.
(i) No Trustee, officer, employee or agent of the Trust shall have
physical access to the assets of any Fund held by the Subcustodian or be
authorized or permitted to withdraw any investments of a Fund, nor shall
the Subcustodian deliver any assets of a Fund to any such person. No
officer or director, employee or agent of the Custodian or Subcustodian who
holds any similar position with the Trust or the investment advisor of any
Fund shall have access to the assets of such Fund. The identity of all
such persons shall be established solely and exclusively by a writing from
the Custodian to the Subcustodian referring to this Section 2.27.
(ii) Only duly authorized officers, employees, representatives or agents
of the Subcustodian shall have access to the assets of a Fund held
hereunder or other persons or entities for whose actions the Subcustodian
shall be responsible to the extent permitted hereunder, or the Trust's
independent accountants as provided in Section 5 hereof.
(iii) Nothing in this Section 2.27 shall prohibit any officer, employee
or agent of the Trust, or any officer, director, employee or agent of the
Custodian or investment advisor of any of the Funds, from giving oral
instructions or written instructions, including Proper Instructions, to the
Subcustodian or executing a certificate so long as it does not result in
delivery of or access to assets of any Fund prohibited by paragraph (i) of
this Section 2.27.
2.28. Execution of Documents. Upon request, the Custodian shall deliver,
or cause the Trust to deliver, to the Subcustodian such proxies, powers of
attorney or other instruments as may be reasonable and necessary or
desirable in connection with the performance by the Subcustodian of its
obligations under this Agreement.
2.29. Available Funds. The Subcustodian is not obligated to effect any
transaction or make any payment in connection therewith unless there are
sufficient available funds on deposit or funds have otherwise been made
available to the Subcustodian to its satisfaction. The amount by which
payments made by the Subcustodian pursuant to Proper Instructions or
otherwise pursuant to this Agreement exceed available funds and result in
an account overdraft shall be deemed a loan from the Subcustodian to the
Fund in the amount of such overdraft, payable on demand and bearing
interest at the Federal Funds rate in effect at the time of any such
overdraft. The Custodian confirms that all such loans shall be based on
the Subcustodian's sole determination to make the underlying advance in
each case. In the event that any such loan is not paid on demand made to
the Fund by notice given to the Custodian, the Subcustodian shall have the
right to charge the assets of the Fund to which such loan was made for all
or part of the principal amount of and interest due on such loan.
3. Appointment of Secondary Subcustodians and Agents.
3.1. Secondary Subcustodians. Securities, cash, cash equivalents and
other assets of a Fund may be held by a subcustodian of the Subcustodian
appointed pursuant to the provisions of this Section 3.1, including an
"eligible foreign custodian" as such term is defined below ("Secondary
Subcustodian"). The Subcustodian may, at any time and from time to time,
appoint any bank, trust company or other entity (meeting the requirements
of a custodian under the 1940 Act or an "eligible foreign custodian" under
Section 17(f) of the 1940 Act and the rules and regulations thereunder, as
the case may be) to act as a Secondary Subcustodian for the Subcustodian
with respect to a Fund; provided that, the Custodian shall have obtained
approval in writing from the respective Fund(s) as to:
(i) the identity and qualifications of any such Secondary Subcustodian
and the form of the secondary subcustodian agreement to be entered into
between such Secondary Subcustodian and the Subcustodian with respect to
the Fund; and
(ii) the country or countries in which and the securities depositories or
clearing agencies, if any, through which the Secondary Subcustodian is
authorized to hold securities and other assets of the Fund.
Those Secondary Subcustodians, and the countries where and the securities
depositories through which they may hold the securities, cash, cash
equivalents, and other assets of each Fund which have been approved by the
Trust on behalf of the Funds to date, are set forth on Appendix B hereto.
Such Appendix shall be amended from time to time as Secondary Subcustodians
and/or countries and/or securities depositories are changed, added or
deleted. The Custodian shall be responsible for informing the Subcustodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix B, in order that there shall be sufficient
time for the Subcustodian to effect the appropriate arrangements with such
Secondary Subcustodian including entering into a proposed secondary
subcustodian agreement and submission of such secondary subcustodian
agreement to the Trust's Board of Trustees for approval.
If a Fund shall have invested in a security to be held in a country before
the foregoing procedures have been completed, such security shall be held
by such agent as the Subcustodian may appoint. In such event, the
Subcustodian shall be liable to the Custodian for the actions of such agent
if and only to the extent the Subcustodian shall have recovered from such
agent for any damages caused the Custodian by such agent.
Notwithstanding anything to the contrary herein and except as provided in
the preceding paragraph, the appointment of any Secondary Subcustodian
shall not relieve the Subcustodian of its responsibilities or liability
hereunder.
In the event that any Secondary Subcustodian appointed pursuant to the
provisions of this Section 3 fails to perform any of its obligations under
the terms and conditions of the applicable secondary subcustodian
agreement, the Subcustodian shall use its best efforts to cause such
Secondary Subcustodian to perform such obligations. In the event that the
Subcustodian is unable to cause such Secondary Subcustodian to perform
fully its obligations thereunder, the Subcustodian shall forthwith upon the
request of the Custodian, terminate Secondary Subcustodian and if necessary
of desirable, appoint another Secondary Subcustodian, such appointment to
be made upon approval of the successor by the Trust's Board of Trustees in
accordance with the provisions of this Section 3.1.
The Subcustodian may, at any time in its discretion upon notification to
the Custodian, terminate any Secondary Subcustodian in accordance with the
termination provisions under the applicable secondary subcustodian
agreement, and at the written request of the Custodian, the Subcustodian
will terminate any Secondary Subcustodian appointed pursuant to the
provisions of this Section 3 in accordance with the termination provisions
under the applicable secondary subcustodian agreement or agree to change or
permit any changes thereunder except upon the prior written approval of the
Custodian.
3.2. Agents. The Subcustodian may at any time or times in its discretion
appoint (and may at any time remove) any other bank or trust company which
is itself qualified under the 1940 Act and the rules and regulations
thereunder to act as a custodian, as its agent (an "Agent") to carry out
such of the provisions of this Agreement as the Subcustodian may from time
to time direct. The appointment of any such Agent shall not relieve the
Subcustodian of its responsibilities or liabilities hereunder.
4. Books and Records. The Subcustodian shall provide the Custodian with
such information as may be agreed to in writing from time to time by the
parties hereto, at the time or times agreed upon and shall maintain the
books and records of the Funds in accordance with such requirements as may
be agreed to in writing from time to time by the parties hereto. All books
and records maintained with respect to each Fund shall be the property of
the Trust and at all times be available during normal business hours of the
Subcustodian for inspection and use by duly authorized officers, employees
or agents of the Custodian, auditors employed by the Custodian, and agents
of the Securities and Exchange Commission.
5. Opinion of Independent Accountants. The Subcustodian shall take all
reasonable action, as the Custodian may from time to time request, to
obtain from year to year favorable opinions from the Trust's independent
accountants with respect to the Subcustodian's activities hereunder in
connection with the preparation of the Trust's Form N-1A and the Trust's
Form N-SAR or other periodic reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
6. Reports by Independent Accountants. The Subcustodian shall provide the
Custodian, at such times as the Custodian may reasonably require, with
reports by independent public accountants on the accounting system,
internal accounting control and procedures for safeguarding securities,
options, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System or with a
Secondary Subcustodian or Agent, relating to the services provided by the
Subcustodian or Agent, relating to the services provided by the
Subcustodian under this Agreement; such reports, which shall be of
sufficient scope and in sufficient detail, as may reasonably be required by
the Custodian, and as may reasonably be obtained by the Subcustodian, to
provide reasonable assurance that any material inadequacies would be
disclosed, shall state in detail material indadequacies disclosed by such
examination, and, if there are no such inadequacies, shall so state.
7. Responsibility of Subcustodian.
7.1. Proper Instructions. So long as and to the extent that it is in the
exercise of reasonable care, the Subcustodian shall not be (i) responsible
for the title, validity or genuineness of any property or evidence of title
thereto received by it or delivered by it pursuant to this Agreement, or
(ii) liable for any action taken or omitted in reliance upon Proper
Instructions, other written notice, request, direction, instruction,
certificate or other instrument reasonably believed by it to be genuine and
signed by the proper party or parties. Notwithstanding the foregoing and
except as otherwise specifically provided herein, in any and every case
where payment for purchase of securities for the account of a Fund is made
by the Subcustodian in advance of receipt of the securities purchased in
the absence of Proper Instructions from the Custodian, to so pay in
advance, the Subcustodian shall be absolutely liable to the Custodian and
to the Fund for such securities to the same extent as if the securities had
been received by the Subcustodian.
The Subcustodian shall be entitled to receive and act upon advice of (a)
counsel for the Trust on behalf of the Fund, or (b) at the expense of the
Custodian, such other counsel as the Custodian and the Subcustodian may
agree upon, on all matters, and the Subcustodian shall be without liability
for any action reasonably taken or omitted in good faith pursuant to such
advice; provided, however, with respect to the performance of any action or
omission of any action upon such advice, the Subcustodian shall be required
to conform to the standards set forth in Section 7.2.
The Custodian hereby represents, warrants and covenants to the
Subcustodian that the services to be performed by the Subcustodian
hereunder generally, and pursuant to Proper Instructions specifically, do
not conflict with or violate the Declaration of Trust or the by-laws of the
Trust.
7.2. Standard of Care. The Subcustodian shall be obligated to exercise
reasonable care and diligence in carrying out the provisions of this
Agreement and shall be liable to the Custodian for any expenses and damages
to the Custodian, and shall be liable to the Trust for any expense or
damage to a Fund for breach of the Subcustodian's standard of conduct in
this Agreement; provided that, in no event shall the Subcustodian, any
Secondary Subcustodian, any Agent or any Securities System incur any
liability to the Custodian or any Fund if, by reason of any provisions of
any present or future law or regulation or order of the United States of
America, or any state thereof, or of any foreign country, or political
subdivision thereof or of any court of competent jurisdiction, it shall be
prevented or forbidden from doing or performing any act or thing which this
Agreement provides or warrants shall be done or performed, or by reason of
any delay in the performance or non-performance of any act or thing which
this Agreement provides or warrants shall be done or performed, as a result
of the foregoing or arising out of any act of God or war or any other
similar circumstance beyond its control, except as such are caused by its
own negligence, misfeasance or misconduct; and provided further that, the
Subcustodian, Secondary Subcustodian, Agent and Securities System shall
pursue all rights and remedies accorded to it.
The Custodian agrees to indemnify and hold harmless the Subcustodian from
all claims and liabilities (including counsel fees) incurred by it or
assessed against it by any third party (other than the Custodian or the
Trust on behalf of a Fund) in connection with the performance of this
Agreement, except such as may arise from the Subcustodian's own negligent
action or inaction, misfeasance, misconduct or other failure to act in
accordance with the standard of care set forth in this Agreement or breach
of the terms of this Agreement. Without limiting the foregoing
indemnification obligation of the Custodian, the Custodian agrees to
indemnify the Subcustodian and any nominee in whose name Fund securities or
other property of a Fund is registered against any liability the
Subcustodian or such nominee may incur by reason of taxes assessed to the
Subcustodian or such nominee or other costs, liability or expense incurred
by the Subcustodian or such nominee resulting directly or indirectly from
the fact that Fund securities or other property of the Fund is registered
in the name of the Subcustodian or such nominee.
In the event that the Subcustodian agrees, at the Custodian's request, to
appear on the Custodian's behalf and prosecute or defend any legal or
equitable proceeding, the Custodian agrees to indemnify the Subcustodian
for any and all costs and expenses related thereto, except as such relate
to the pursuit or the defense of the Subcustodian's interests or conduct
(provided that this exception is not intended to limit the Subcustodian's
rights to indemnification set forth in the preceding paragraph of this
Section 7.2).
The Custodian and the Subcustodian further agree that the Subcustodian
shall have no liability in respect of any loss, damage or expense suffered
by the Custodian or any Fund, insofar as such loss, damage or expense
arises in the performance of the Subcustodian's duties hereunder:
(i) by reason of the Subcustodian's reliance upon records that were
maintained for such Fund prior to the Subcustodian's employment hereunder
(such as records which are subsequently determined to be inaccurate or
insufficient in some manner in their description of portfolio securities of
each Fund, including the number of shares or principal amounts thereof); or
(ii) by reason of any acts or omissions of the Custodian or such Fund
occurring prior to the Subcustodian's employment hereunder.
7.3. Responsibility for Secondary Subcustodians, Agents and Securities
Systems. Notwithstanding anything to the contrary in this Agreement, with
the exception of any agent appointed pursuant to the third full paragraph
of Section 3.1, the Subcustodian shall be fully liable to the Custodian and
the Trust with respect to a Fund for loss, damage or expenses to the
Custodian or to a Fund caused by or resulting from (i) the acts or
omissions of any Secondary Subcustodian, Agent or Securities System to the
same extent as if the acts or omissions of such Secondary Subcustodian,
Agent or Securities System were the acts or omissions of the Subcustodian,
or (ii) any failure of the Subcustodian to enforce effectively such rights
as it may have against any such Secondary Subcustodian, Agent or Securities
System.
The Custodian shall have, at its election, the right to enforce, to the
extent permitted by any applicable agreement and applicable law, the
Subcustodian's rights against any such Secondary Subcustodian, Agent or
Securities System for loss, damage or expenses caused the Custodian or the
Fund by such Secondary Subcustodian, Agent or Securities System and shall
be entitled to be subrogated to the rights of the Subcustodian with respect
to any claim against such Secondary Subcustodian, Agent or Securities
System or any other person, which the Subcustodian may have as a
consequence of any such loss, damage or expenses if and to the extent that
the Custodian or a Fund has not been made whole for any such loss or
damage.
7.4. Several Obligations of Funds, Etc. Notwithstanding any provision of
this Section 7 to the contrary:
(i) the Subcustodian shall be limited in any claim for indemnity or
payment from the Custodian or the Trust with respect to a Fund to the
extent that the Subcustodian (a) may only recover from the Fund to which
the assessment, tax, cost, liability or expense relates or on behalf of
which Fund the disbursement was made or the charge or expense giving rise
to the claim was incurred, and (b) may not recover from either the
Custodian or the Fund or any of them an amount which in the aggregate could
not have been collected if the claim were made against the Fund directly;
and
(ii) in the event of any failure or delay in the performance or
non-performance of any act or thing which is required by this Agreement
arising out of circumstances set forth in Section 7.2, the Subcustodian
will take reasonable steps under the circumstances to minimize the effects
of any failure or delay and to avoid a continuing harm to the applicable
Fund.
7.5. Limitation of Obligations of the Subcustodian. The Custodian and
the Trust with respect to a Fund shall be limited in any claim for
indemnity or payment from the Subcustodian to the extent that if the
Custodian recovers an amount from the Subcustodian that includes indemnity
payments for damages to a Fund, the Trust on behalf of that Fund may not
recover from the Subcustodian, in a separate action, indemnity payments for
damages to the Fund arising out of the same claim, which are duplicative of
the payments received by the Custodian on behalf of the Fund, and
conversely, if the Trust recovers an amount from the Subcustodian that
includes indemnity payments for damages to the Custodian, the Custodian may
not recover from the Subcustodian, in a separate action, indemnity payments
for damages to the Custodian arising out of the same claim, which are
duplicative of the payments received by the Trust on behalf of the
Custodian.
8. Fees and Disbursements. The Custodian shall pay the Subcustodian a
custody fee (which may include the fees of Secondary Subcustodians and
Agents employed by it in accordance with Section 3) based on such schedule
as may from time to time be agreed upon in writing by the Subcustodian and
the Custodian. Such fee, together with all amounts for which the
Subcustodian is to be reimbursed in accordance with the following
paragraph, shall be billed to the Custodian in such a manner as to permit
payment by a direct cash payment to the Subcustodian or in such other
manner as may be agreed to in writing by the parties from time to time.
The Subcustodian shall be entitled to receive reimbursement from the
Custodian on demand, for its reasonable cash disbursements, expenses and
charges (including reasonable out-of-pocket expenses for any Secondary
Subcustodian or any Agent employed by it in accordance with Section 3) in
connection with this Agreement, but excluding salaries and usual overhead
expenses.
9. Termination. This Agreement shall continue in full force and effect
until terminated by either party by an instrument in writing delivered or
mailed, postage prepaid, to the other party, such termination to take
effect not sooner than sixty (60) days after the date of such delivery or
mailing. In the event of termination the Subcustodian shall be entitled to
receive prior to delivery of the securities cash, cash equivalents and
other assets held by it, all accrued fees and unreimbursed expenses the
payment of which is contemplated by Section 8, upon receipt by the
Custodian of statement setting forth such fees and expenses. The
execution and delivery of an amended Appendix A which deletes one or more
Funds shall constitute a termination of this Agreement only with respect to
such deleted Fund or Funds, shall be governed by the preceding provisions
of this Section 9 as to notice, payments and delivery of securities, cash,
cash equivalents and other assets and shall not affect the obligations of
the parties hereunder with respect to the Funds set forth in Appendix A, as
amended from time to time.
It is further agreed that the Custodian may at any time:
(i) substitute another bank or trust company for the Subcustodian with
respect to any Fund or Funds by giving notice as described above to the
Subcustodian; or
(ii) immediately terminate this Agreement in the event of the appointment
of a conservator or receiver for the Subcustodian, any Secondary
Subcustodian or any Agent or upon the happening of a like event at the
direction of any appropriate regulatory agency or court of competent
jurisdiction.
In the event of the appointment of a successor subcustodian, it is agreed
that the securities, cash, cash equivalents and other assets owned by the
Fund or Funds as to which this Agreement has been terminated and held by
the Subcustodian, any Secondary Subcustodian or Agent shall be delivered to
the successor subcustodian at the office of the Subcustodian duly endorsed
and in form for transfer (and in the case of securities held in a
Securities System, shall be transferred to an account of the successor
subcustodian in such Securities System). The Subcustodian agrees to
cooperate with the Custodian in the execution of documents and performance
of other actions necessary or desirable in order to substitute the
successor subcustodian for the Subcustodian under this Agreement. If no
such successor subcustodian is appointed, the Subcustodian shall, in like
manner, upon receipt of written instructions from the Custodian, deliver to
the Custodian at the office of the Subcustodian such securities, cash, cash
equivalents and other assets in accordance with such instructions.
In the event that no written notice designating a successor subcustodian
shall have been delivered to the Subcustodian on or before the date when
such termination shall become effective, then the Subcustodian shall have
the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, doing business in Boston, Massachusetts, of its
own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, cash, cash equivalents and other assets held by the
Subcustodian on behalf of each Fund and to transfer to an account of such
successor subcustodian all of the securities of each such Fund held in any
Securities System and all instruments held by the Subcustodian relative
thereto and all other property held by it under this Agreement on behalf of
each Fund. Thereafter, such bank or trust company shall be the successor
of the Subcustodian under this Agreement.
In the event that securities, cash equivalents and other assets remain in
the possession of the Subcustodian after the date of termination hereof
owing to failure of the Trust or the Custodian to appoint a successor
Subcustodian, the Subcustodian shall be entitled to compensation for its
services in accordance with the fee schedule most recently in effect during
such period as the Subcustodian retains possession of such securities,
cash, cash equivalents and other assets, and the provisions of this
Agreement relating to the duties and obligations of the Subcustodian shall
remain in full force and effect.
10. Representative Capacity. The Subcustodian and Custodian agree that no
shareholder, trustee or officer of the Trust may be held personally liable
or responsible for any obligations of the Trust arising out of this
Agreement. With respect to any obligation of the Trust which may arise out
of this Agreement, the Subcustodian and Custodian shall look for payment or
satisfaction of any claim solely to the assets and property of each Fund as
though the Fund were separately obligated to the Subcustodian by separate
written instrument or otherwise.
11. Entire Agreement, Amendment and Interpretation. This Agreement
supersedes and terminates, as of the date hereof, all prior contracts
between the Subcustodian and the Custodian with respect to the Funds
relating to the custody of any Fund's assets hereunder. This Agreement
(including the exhibits attached hereto) constitutes the entire
understanding of and agreement of the parties hereto with respect to the
subject matter hereof. No provision of this Agreement may be amended or
terminated except by an instrument in writing signed by the parties hereto,
and unless assented to by the Trust on behalf of the Funds.
In connection with the operation of this Agreement, the Subcustodian and
Custodian may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may
in their joint opinion be consistent with the general tenor of this
Agreement. No interpretative or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this
Agreement. Headings contained in this Agreement, which are included as
convenient references only, shall have no bearing upon the interpretation
of the terms of the Agreement or the obligations of the parties hereto.
12. Governing Law. Insofar as any question or dispute may arise in
connection with the custodianship of foreign securities pursuant to an
agreement with a Subcustodian, Secondary Subcustodian or Agent that is
governed by the laws of the State of New York, the provisions of this
Agreement shall be construed in accordance with and governed by the laws of
the State of New York. As to all other matters, this Agreement shall be
construed in accordance with and governed by the laws of the Commonwealth
of Massachusetts.
13. Confidentiality; Survival of Obligations. The parties hereto agree
that each shall treat confidentially the terms and conditions of this
Agreement and all information provided by each party to the other regarding
its business and operations. All confidential information provided by a
party hereto shall be used by any other party hereto solely for the purpose
of rendering services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any
third party without the prior consent of such providing party. The
foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required to be disclosed by
judicial or administrative process or otherwise by applicable law The
provisions of this Section 13 and Section 7 and Section 9 (but only with
regard to the rights and obligations set forth in the last paragraph
thereof) shall survive any termination of this Agreement.
14. Notices. Notices and other writings delivered or mailed postage
prepaid to the Custodian addressed to Fidelity Management Trust Company at
the address set forth on Appendix C hereto, or to such other address as the
Custodian may have designated to the Subcustodian in writing, or to the
Subcustodian at the address set forth in Appendix D hereto, or to such
other address as the Subcustodian may have designated to the Custodian in
writing, shall be deemed to have been properly delivered or given hereunder
to the respective addressee.
15. Assignment. This Agreement shall be binding on and shall inure to the
benefit of the Custodian and the Subcustodian and their respective
successors and assigns; provided that, except as provided in the next
succeeding sentence, neither party hereto may assign this Agreement or any
of its rights or obligations hereunder without the prior written consent of
the other party. This Agreement shall expressly inure to the benefit of
the Trust on behalf of the Funds as third party beneficiaries hereunder and
in addition, the Custodian may assign any or all of its rights and
obligations hereunder to the Trust at the written request of the Trust.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
FIRST UNION NATIONAL BANK OF NORTH SHAWMUT BANK, N.A.
CAROLINA
By: /s/Patricia P. Balentine By: /s/Joseph P. Sullivan
Name: Patricia P. Balentine Name: Joseph P. Sullivan
Title: Vice President Title: Senior Vice President
ACKNOWLEDGED AND ASSENTED TO AS OF November 1, 1990
NORTH CAROLINA CASH MANAGEMENT TRUST
By: /s/John E. Ferris
Name: John E. Ferris
Title: Treasurer
NORTH CAROLINA CASH MANAGEMENT TRUST
Appendix A
The following is the name of the Trust and a list of Funds of the Trust
for which the Subcustodian shall serve under a Subcustodian Agreement dated
as of November 1, 1990 (the "Agreement:):
Trust Name:
North Carolina Cash Management Trust
Fund Name: Effective as of:
Cash Portfolio November 1, 1990
Term Portfolio November 1, 1990
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Fund.
FIRST UNION NATIONAL BANK OF NORTH SHAWMUT BANK, N.A.
CAROLINA
By: /s/Patricia P. Balentine By: /s/Joseph P. Sullivan
Name: Patricia P. Balentine Name: Joseph P. Sullivan
Title: Vice President Title: Senior Vice President
Date: December 10, 1990
NORTH CAROLINA CASH MANAGEMENT TRUST
Appendix B
The following is a list of Secondary Subcustodians under the Subcustodian
Agreement dated as of November 1, 1990 (the "Agreement"):
Country Secondary Subcustodian Depository
None None None
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
below.
FIRST UNION NATIONAL BANK OF NORTH SHAWMUT BANK, N.A.
CAROLINA
By: /s/Patricia P. Balentine By: /s/Joseph P. Sullivan
Name: Patricia P. Balentine Name: Joseph P. Sullivan
Title: Vice President Title: Senior Vice President
Date: December 10, 1990
NORTH CAROLINA CASH MANAGEMENT TRUST
Appendix C
The following is the address to which Notices are to be sent to the
Custodian under the Subcustodian Agreement dated as of November 1, 1990
(the "Agreement"):
First Union National Bank of North Carolina
Trust Operations
Two First Union Center
Charlotte, North Carolina 28288
Attention: Nancy Stoker
IN WITNESS WHEREOF, the undersigned has caused this Appendix to be
executed in its name and behalf as of the day and year set forth below.
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: /s/Patricia P. Balentine
Name: Patricia P. Balentine
Title: Vice President
Date: December 10, 1990
NORTH CAROLINA CASH MANAGEMENT TRUST
Appendix D
The following is the address to which Notices are to be sent to the
Subcustodian under the Subcustodian Agreement dated as of November 1, 1990
(the "Agreement"):
Connecticut National Bank - Agent
Attention Louis A. Dunlap, Jr.
777 Main Street
MSN 209
Hartford, CT 06115
IN WITNESS WHEREOF, the undersigned has caused this Appendix to be
executed in its name and behalf as of the day and year set forth below.
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: /s/Joseph P. Sullivan
Name: Joseph P. Sullivan
Title: Senior Vice President
Date:
SUBCUSTODIAN AGREEMENT
Dated as of : March 18, 1991
Among
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
and
FIDELITY INVESTMENT COMPANIES
TABLE OF CONTENTS
ARTICLE Page
I. APPOINTMENT OF SUBCUSTODIAN 2
II. POWERS AND DUTIES OF SUBCUSTODIAN 2
2.01 Establishment of FICASH Account 2
2.02 Receipt Funds 2
2.03 Repurchase Transactions 2
2.04 Other Transfers 4
2.05 Subcustodian's Books and Records 4
2.06 Reports by Independent Certified
Public Accountants 5
2.07 Securities Systems 5
2.08 Collections 6
2.09 Notices, Consents, Etc. 6
2.10 Notice of Subcustodian's Inability to Perform 6
III. PROPER INSTRUCTIONS AND RELATED MATTERS 6
3.01 Proper Instructions; Special Instructions 6
3.02 Authorized Persons 7
3.03 Investment Limitations 8
3.04 Persons Having Access to Assets
of the Funds 8
3.05 Actions of Subcustodian Based on Proper
Instructions and Special Instructions 8
IV. THIRD-PARTY SUBCUSTODIANS 8
V. STANDARD OF CARE; INDEMNIFICATION 9
5.01 Standard of Care 9
5.02 Liability of Subcustodian for Actions of
Third-Party Subcustodians and Securities
Systems 9
5.03 Indemnification 10
5.04 Funds' Right to Proceed 11
5.05 Liability of Custodian for Actions of Subcustodian 11
VI. COMPENSATION 11
6.01 Compensation 11
6.02 Waiver of Right of Set-Off 11
VII. TERMINATION 11
7.01 Events of Termination 11
7.02 Successor Subcustodian; Payment of
Compensation 12
VIII. MISCELLANEOUS 12
8.01 Representative Capacity and Binding
Obligation 12
8.02 Entire Agreement 13
8.03 Amendments 13
8.04 Interpretation 13
8.05 Captions 13
8.06 Governing Law 13
8.07 Notices 13
8.08 Assignment 14
8.09 Counterparts 14
8.10 Confidentiality; Survival of Obligations 14
SUBCUSTODIAN AGREEMENT
AGREEMENT dated as of March 18, 1991, by and among First Union National
Bank of North Carolina (hereinafter referred to as the "Custodian"), Morgan
Guaranty Trust Company of New York (hereinafter referred to as the
"Subcustodian"), and each of the registered investment companies listed on
Appendix "A" attached hereto on behalf of itself or, in the case of a
series company, one or more of its portfolios or series listed on Appendix
"A" (individually, a "Fund," and collectively the "Funds").
W I T N E S S E T H
WHEREAS, the Custodian acts as custodian for, and has entered into
custodian agreements with, each of the Funds, all of which are open-end
management investment companies registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Securities and Exchange Commission, in an order originally
dated November 27, 1981 and published in Investment Company Act Release No.
12061, granted an application for exemptive relief, thereby allowing the
Funds to participate in a joint trading account (the "FICASH Account") for
the purpose of participating in repurchase transactions; and
WHEREAS, the Funds desire for the Custodian to appoint the Subcustodian as
its subcustodian for the purpose of establishing the FICASH Account and
holding cash and securities for the Funds in connection with repurchase
transactions effected through the FICASH Account; and
WHEREAS, other registered open-end management investment companies for
which Fidelity Management & Research Company serves as investment adviser
may, along with the Funds, participate in repurchase transactions through
the FICASH Account (collectively, together with the Funds, the "Fidelity
Funds"); and
WHEREAS, the Subcustodian will, from time to time, enter into subcustodian
agreements with other Fidelity Funds and each of the custodians employed by
such Fidelity Funds (collectively, together with the Custodian, the
"Fidelity Custodians"); and
WHEREAS, the Fidelity Funds may, from time to time, enter into one or more
written repurchase agreements, pursuant to which one or more of the
Fidelity Funds shall agree to purchase and resell, and the sellers named in
such agreements shall agree to sell and repurchase through the FICASH
Account, certain securities (collectively, the "Securities") (such
repurchase agreements being hereinafter referred to collectively, as the
"Repurchase Agreements").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
APPOINTMENT OF SUBCUSTODIAN
On behalf of the Funds, the Custodian hereby employs and appoints the
Subcustodian as a subcustodian, subject to the terms and provisions of this
Agreement.
ARTICLE II
POWERS AND DUTIES OF SUBCUSTODIAN
As subcustodian, the Subcustodian shall have and perform the powers and
duties, and only such powers and duties, set forth in this Agreement.
Pursuant to Article IV hereof, upon receipt of Special Instructions (as
hereinafter defined), the Subcustodian shall appoint one or more
Third-Party Subcustodians (as hereinafter defined) to exercise the powers
and perform the duties set forth in this Agreement and/or additional powers
and duties related to repurchase transactions effected through the FICASH
Account.
Section 2.01. Establishment of FICASH Account. The Subcustodian shall
establish the FICASH Account as a segregated joint trading account for the
Fidelity Funds through which the Fidelity Funds shall, from time to time,
effect repurchase transactions. Upon receipt of Special Instructions, the
Subcustodian shall designate on its books and records one or more
subaccounts of the FICASH Account (individually, a "Subaccount," and
collectively, the "Subaccounts"), through which the Fidelity Funds shall,
from time to time, effect repurchase transactions.
Section 2.02. Receipt of Funds. The Subcustodian shall, from time to
time, receive funds for or on behalf of the Custodian and shall hold such
funds in safekeeping. Upon receipt of Proper Instructions, the
Subcustodian shall credit funds so received to one or more Subaccounts
designated in such Proper Instructions. Promptly after receipt of such
funds from the Custodian or a Third-Party Subcustodian, the Subcustodian
shall send written confirmation of such receipt to the Custodian or
Third-Party Subcustodian, as the case may be, by facsimile transmission or
in such other manner as the parties hereto may agree in writing. The
Subcustodian shall at all times designate on its books and records the
funds allocable to each Subaccount and the respective interests of the
Custodian and all other Fidelity Custodians in such funds.
Section 2.03. Repurchase Transactions. The Funds may, from time to
time, enter into repurchase transactions through the FICASH Account. In
connection with each such repurchase transaction, unless otherwise
specifically directed by Special Instructions, the Subcustodian shall take
the following actions:
(a) Purchase of Securities. Upon receipt of Proper Instructions, the
Subcustodian shall pay for and receive Securities, provided that payment
therefor shall be made by the Subcustodian: (1) with respect to Securities
to be held by the Subcustodian, only against prior or simultaneous receipt
of the Securities in the manner prescribed in subsection 2.03(b) below; or
(2) with respect to Securities to be held by a Third Party Subcustodian, in
accordance with the terms and conditions of the subcustodian agreement with
such Third Party Subcustodian. In no event shall the Subcustodian deliver
funds from a Subaccount for the purchase of Securities prior to receipt of
the Securities by the Subcustodian or a Securities System. Promptly after
the transfer of funds and receipt of Securities, the Subcustodian shall
send a confirmation to the Funds by facsimile transmission or such other
manner as the parties hereto may agree in writing, setting forth (i) the
Securities which the Subcustodian has received pursuant to the repurchase
transaction, (ii) the amount of funds transferred from the applicable
Subaccount, and (iii) any security or transaction identification numbers
reasonably requested by the Funds.
(b) Receipt and Holding of Securities. In connection with each
repurchase transaction, the Subcustodian shall receive and hold the
Securities as follows: (i) in the case of certificated securities, by
physical receipt of the share certificates or other instruments
representing such Securities and by physical segregation of such
certificates or instruments from other assets of the Subcustodian in a
manner indicating that such Securities and being held for the benefit of
the Custodian and other identified Fidelity Custodians through the
applicable Subaccount, as their respective interests therein may appear;
and (ii) in the case of Securities held in book-entry form by a Securities
System (as hereinafter defined), by appropriate transfer and registration
of such Securities to a customer only account of the Subcustodian on the
book-entry records of the Securities System, and by appropriate entry on
the books and records of the Subcustodian identifying such Securities as
being held for the benefit of the Custodian and other identified Fidelity
Custodians through the applicable Subaccount, as their respective interests
therein may appear.
(c) Sale of Securities. Upon receipt of Proper Instructions, the
Subcustodian shall make delivery of Securities held in or credited to a
Subaccount against prior or simultaneous payment for such securities in
immediately available funds in the form of: (i) cash, bank credit, or bank
wire transfer received by the Subcustodian; or (ii) credit to the customer
only account of the Subcustodian with a Securities System. Notwithstanding
the foregoing, the Subcustodian shall make delivery of Securities held in
physical form in accordance with "street delivery custom" to a broker or
its clearing agent, against delivery to the Subcustodian of a receipt for
such Securities; provided that the Subcustodian shall have taken all
actions possible to ensure prompt collection of the payment for, or the
return of such Securities by the broker or its clearing agent. Promptly
after the transfer of Securities and the receipt of funds, the Subcustodian
shall send a confirmation to the Funds by facsimile transmission or such
other manner as the parties hereto may agree in writing, setting forth the
amount of funds received by the Subcustodian, a Third-Party Subcustodian or
a Securities System for credit to the applicable Subaccount.
(d) Additional Functions. Upon receipt of Proper Instructions, the
Subcustodian shall take all such other actions as specified in such Proper
Instructions and as shall be reasonable or necessary with respect to
repurchase transactions and the Securities and funds transferred and
received pursuant to such transactions, including, without limitation, all
such actions as shall be prescribed in the event of a default under a
Repurchase Agreement.
(e) Nondiscretionary Functions. The Subcustodian shall attend to all
non-discretionary details in connection with the purchase, sale, transfer
or other dealings with securities or other assets of the Funds held by the
Subcustodian.
Section 2.04. Other Transfers. In addition to transfers of funds and
Securities referred to in Section 2.03(a) and 2.03(c), the Subcustodian
shall transfer funds and Securities held in a Subaccount: (a) upon receipt
of Proper Instructions, to the Custodian or a Third-Party Subcustodian, or
(b) upon receipt of Special Instructions, and subject to Section 3.04
hereof, to any other person or entity designated in such Special
Instructions. In the case of a transfer of funds to the Custodian, the
Custodian shall, upon receipt, send written confirmation of such receipt to
the Funds and the Subcustodian by facsimile transmission or such other
manner as the parties hereto may agree in writing.
Section 2.05. Subcustodian's Books and Records. The Subcustodian shall
provide any assistance reasonably requested by the Funds in the preparation
of reports to shareholders of the Funds and others, audits of accounts, and
other ministerial matters of like nature. The Subcustodian shall maintain
complete and accurate records with respect to cash and Securities held for
the benefit of the Funds as required by the rules and regulations of the
Securities and Exchange Commission applicable to investment companies
registered under the Investment Company Act, including: (a) journals or
other records of original entry containing detailed and itemized daily
record of all receipts and deliveries of Securities (including certificate
and transaction identification numbers, if any), and all receipts and
disbursements of cash; (b) ledgers or other records reflecting Securities
in transfer, and Securities in physical possession; and (c) canceled checks
and bank records related thereto. The Subcustodian shall keep such other
books and records of the Funds relating to repurchase transactions through
the FICASH Account as the Funds shall reasonably request. Such books and
records maintained by the Subcustodian shall reflect at all times the
respective interests, if any, of the Custodian and each of the other
Fidelity Custodians in each Subaccount, and in the aggregate of Securities
held in each Subaccount by the Subcustodian on behalf of the Custodian and
the other Fidelity Custodians. All such books and records maintained by
the Subcustodian shall be maintained in a form acceptable to the Funds and
in compliance with the rules and regulations of the Securities and Exchange
Commission, including, but not limited to, books and records required to be
maintained by Section 31(a) of the Investment Company Act and the rules
from time to time adopted thereunder. All books and records maintained by
the Subcustodian relating to the FICASH Account shall at all times be the
property of the Funds and shall be available during normal business hours
for inspection and use by the Funds and their agents, including, without
limitation, their independent certified public accountants.
Notwithstanding the preceding sentence, the Funds shall not take any
actions or cause Subcustodian to take any actions which would cause, either
directly or indirectly, the Subcustodian to violate any applicable laws,
regulations, rules or orders.
Section 2.06. Reports by Independent Certified Public Accountants. At
the request of the Funds, the Subcustodian shall deliver to the Funds such
annual reports and other interim reports prepared by the independent
certified public accountants of the Subcustodian with respect to the
services provided by the Subcustodian under this Agreement, including,
without limitation, the Subcustodian's accounting system, internal
accounting control and procedures for safeguarding Securities, including
Securities deposited and/or maintained in a Securities System. Such
reports, which shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Funds and as may reasonably be obtained by
the Subcustodian, shall provide reasonable assurance to the Funds that the
procedures employed by the independent certified public accountants are
reasonably designed to detect any material inadequacies with respect to the
matters discussed in the report, shall state in detail the material
inadequacies disclosed by such examination, and, if no such inadequacies
exist, shall so state.
Section 2.07. Securities System. As used herein the term "Securities
System" shall mean each of the following: (a) the Depository Trust
Company; (b) the Participants Trust Company; (c) and book-entry system as
provided in (i) Subpart O of Treasury Circular No. 300, 31 CFR 306.115,
(ii) Subpart B of Treasury Circular Public Debt Series No. 27-76, 31 CFR
350.02, or (iii) the book-entry regulations of federal agencies
substantially in the form of 31 CFR 306.115; or (d) any domestic clearing
agency registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934 (or as may otherwise be
authorized by the Securities and Exchange Commission to serve in the
capacity of depository or clearing agent for the securities or other assets
of investment companies) which acts as a securities depository and the use
of which has been approved in Special Instructions. Use of a Securities
System by the Subcustodian shall be in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and regulations,
if any, and subject to the following provisions:
(A) The Subcustodian may deposit and/or maintain Securities held
hereunder in a Securities System, provided that such Securities are
represented in an account of the Subcustodian in the Securities System
which account shall not contain any assets of the Subcustodian other than
assets held as a fiduciary, custodian, or otherwise for customers.
(B) the Subcustodian shall, if requested by the Funds, provide the Funds
with all reports obtained by the Subcustodian with respect to the
Securities System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities System.
(C) Upon receipt of Special Instructions, the Subcustodian shall
terminate the use of any Securities System (except for the federal
book-entry system) as promptly as practicable and shall take all actions
reasonably practicable to safeguard the Securities and other assets of the
Funds maintained with such Securities System.
Section 2.08. Collections. The Subcustodian shall (a) collect, receive
and deposit in the applicable Subaccount all income and other payments with
respect to Securities held by the Subcustodian hereunder; (b) endorse and
deliver any instruments required to effect such collection; and (c) execute
ownership and other certificates and affidavits for all federal, state and
foreign tax purposes in connection with receipt of income or other payments
with respect to Securities, or in connection with the transfer of
Securities.
Section 2.09. Notices, Consents, Etc. The Subcustodian shall deliver to
the Funds, in the most expeditious manner practicable, all notices,
consents or announcements affecting or relating to Securities held by the
Subcustodian on behalf of the Funds that are received by the Subcustodian,
and, upon receipt of Proper Instructions, the Subcustodian shall execute
and deliver such consents or other authorizations as may be required.
Section 2.10. Notice of Subcustodian's Inability to Perform. The
Subcustodian shall promptly notify the Funds and the Custodian in writing
by facsimile transmission or such other manner as the Funds may designate,
if, for any reason: (a) the Subcustodian determines that it is unable to
perform any of its duties or obligations hereunder or its duties or
obligations with respect to any repurchase transaction; or (b) the
Subcustodian reasonably foresees that it will be unable to perform any such
duties or obligations.
ARTICLE III
PROPER INSTRUCTIONS AND RELATED MATTERS
Section 3.01. Proper Instructions; Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by one or more Authorized Persons (as hereinafter
defined); (ii) a telephonic or other oral communication by one or more
Authorized Persons; or (iii) a communication effected directly between an
electro-mechanical or electronic device or system (including, without
limitation, computers) by one or more Authorized Persons; provided,
however, that communications of the types described in clauses (ii) and
(iii) above purporting to be given by an Authorized Person shall be
considered Proper Instructions only if the Subcustodian reasonably believes
such communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the Funds by tested telex or in
writing in the manner set forth in clause (i) above, but the lack of such
confirmation shall in no way affect any action taken by the Subcustodian in
reliance upon such oral instructions prior to the Subcustodian's receipt of
such confirmation. Each of the Funds and the Subcustodian is hereby
authorized to record any and all telephonic or other oral instructions
communicated to the Subcustodian. Proper Instructions may relate to
specific transactions or to types or classes of transactions, and may be in
the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or confirmed in
writing by the Treasurer or any Assistant Treasurer of the Funds or any
other person designated in writing by the Treasurer of the Funds, which
countersignature or written confirmation shall be (i) included on the same
instrument containing the Proper Instructions or on a separate instrument
relating thereto, and (ii) delivered by hand, by facsimile transmission, or
in such other manner as the parties hereto may agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the
Subcustodian at the address and/or telephone, telecopy or telex number
agreed upon from time to time by the Subcustodian and the Funds.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the Funds
shall deliver to the Subcustodian, duly certified as appropriate by a
Secretary or Assistant Secretary of the Funds, a certificate setting forth
(a) the names, signatures and scope of authority of all persons authorized
to give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Funds,
(collectively, the "Authorized Persons," and individually, an "Authorized
Person"), and (b) the names and signatures of those persons authorized to
issue Special Instructions. Such certificate may be accepted and relied
upon by the Subcustodian as conclusive evidence of the facts set forth
therein and shall be considered to be in full force and effect until
delivery to the Subcustodian of a similar certificate to the contrary.
Upon delivery of a certificate which deletes the name of a person
previously authorized to give Proper Instructions or to issue Special
Instructions, such person shall no longer be considered an Authorized
Person or authorized to issue Special Instructions, as applicable.
Section 3.03. Investment Limitations. In performing its duties
hereunder the Subcustodian may assume, unless and until it receives Special
Instructions to the contrary (a "Contrary Notice"), that Proper
Instructions received by it are not in conflict with or in any way contrary
to any investment or other limitation applicable to any of the Funds. The
Subcustodian shall in no event be liable to the Funds and shall be
indemnified by the Funds for any loss, damage or expense to the
Subcustodian arising out of any violation of any investment or other
limitation to which any Fund is subject, except to the extent that such
loss, damage or expense: (i) relates to a violation of any investment or
other limitation of a Fund occurring after receipt by the Subcustodian of a
Contrary Notice; or (ii) arises from a breach of this Agreement by the
Subcustodian.
Section 3.04. Persons Having Access to Assets of the Funds. No
Authorized Person, Trustee, officer, employee or agent of the Funds (other
than the Custodian) shall have physical access to the assets of the Funds
held by the Subcustodian, or be authorized or permitted to withdraw any
such assets for delivery to an account of such person, nor shall the
Subcustodian deliver any such assets to any such person; provided, however,
that nothing in this Section 3.04 shall prohibit: (a) any Authorized
Person from giving Proper Instructions, or the Treasurer or any Assistant
Treasurer of the Fund from issuing Special Instructions, so long as such
action does not result in delivery of or access to assets of the Funds
prohibited by this Section 3.04; or (b) the Funds' independent certified
public accountants from examining or reviewing the assets of the Funds held
by the Subcustodian.
Section 3.05. Actions of Subcustodian Based on Proper Instructions and
Special Instructions. Subject to the provisions of Section 5.01 hereof,
the Subcustodian shall not be responsible for the title, validity or
genuineness of any property, or evidence of title thereof, received by it
or delivered by it pursuant to this Agreement.
ARTICLE IV
THIRD-PARTY SUBCUSTODIANS
Upon receipt of Special Instructions, the Subcustodian shall, on behalf of
the Custodian and the Fidelity Funds, appoint one or more banks, trust
companies or other entities designated in such Special Instructions to act
as its subcustodian (a "Third-Party Subcustodian") for purposes of
facilitating third-party repurchase transactions from time to time entered
into by one or more of the Fidelity Funds through the FICASH Account. The
Subcustodian shall, at the request of the Funds, enter into such agreements
as shall be satisfactory in form and substance to the Subcustodian and the
Funds as required in order to employ any Third-Party Subcustodian, and
shall take all other actions as may be reasonable and desirable to effect
and facilitate such third-party repurchase transactions.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Subcustodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Custodian and/or the Funds, for
all loss, damage and expense incurred or suffered by the Custodian and/or
the Funds, resulting from the failure of the Subcustodian to exercise such
reasonable care and diligence or from any other breach by the Subcustodian
of the terms of this Agreement.
(b) Acts of God, Etc. In no event shall the Subcustodian incur liability
hereunder if the Subcustodian or any Third-Party Subcustodian is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Agreement provides shall be performed or omitted to be performed
by reason of: (i) any provision of any present or future law or regulation
or order of the United States of America, or any state thereof, or of any
foreign country, or political subdivision thereof or of any court of
competent jurisdiction; or (ii) any act of God or war; unless, in each
case, such delay or nonperformance is caused by (A) the negligence,
misfeasance or misconduct of the Subcustodian, or (B) a malfunction or
failure of equipment maintained or operated by the Subcustodian other than
a malfunction or failure caused by events beyond the Subcustodian's control
and which could not reasonably be anticipated and/or prevented by the
Subcustodian.
(c) Mitigation by Subcustodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Funds or the
Custodian, the Subcustodian shall use all commercially reasonable efforts
and shall take all reasonable steps under the circumstances to mitigate the
effects of such event and to avoid continuing harm to the Funds and the
Custodian.
Section 5.02. Liability of Subcustodian for Actions of Third-Party
Subcustodians and Securities Systems. Notwithstanding the provisions of
Section 5.01 to the contrary, the Subcustodian shall not be liable to the
Funds or the Custodian for any loss, damage or expense resulting from any
action or inaction of a Third-Party Subcustodian or the use by the
Subcustodian or a Third-Party Subcustodian of a Securities System, unless
such loss, damage or expense is caused by, or results from negligence,
misfeasance or misconduct of the Subcustodian. In the case of loss, damage
or expense resulting from use of a Securities System by the Subcustodian,
the Subcustodian shall take all reasonable steps to enforce such rights as
it may have against the Securities System to protect the interest of the
Funds. The Subcustodian shall have no implied duty to supervise the
activities of any Third Party Subcustodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Funds severally agree to indemnify and hold harmless
the Subcustodian from all claims and liabilities (including reasonable
attorneys' fees) incurred or assessed against the Subcustodian for actions
taken in reliance upon Proper Instructions or Special Instructions;
provided, however, that such indemnity shall not apply to claims and
liabilities occasioned by or resulting from the negligence, misfeasance or
misconduct of the Subcustodian, or any other breach of this Agreement by
the Subcustodian. In addition, the Funds severally agree to indemnify the
Subcustodian against any liability incurred by the Subcustodian by reason
of taxes assessed to the Subcustodian, or other costs, liability or
expenses incurred by the Subcustodian, resulting directly or indirectly
solely from the fact that securities and other property of the Funds is
registered in the name of the Subcustodian; provided, however, in no event
shall such indemnification be applicable to income, franchise or similar
taxes which may be imposed or applied against the Subcustodian.
(b) Extent of Liability. Notwithstanding anything to the contrary
contained herein, with respect to the indemnification obligations of the
Funds provided in this Section 5.03, each Fund shall be: (i) severally,
and not jointly and severally, liable with each of the other Fidelity
Funds; and (ii) liable only for its pro rata share of such liabilities,
determined with reference to such Fund's proportionate interest in the
aggregate of assets held by the Subcustodian in the Subaccount with respect
to which such liability relates at the time such liability was incurred, as
reflected on the books and records of the Funds.
(c) Notice of Litigation, Right to Prosecute, Etc. The Subcustodian
shall promptly notify the Funds in writing of the commencement of any
litigation or proceeding brought against the Subcustodian in respect of
which indemnity may be sought against the Funds pursuant to this Section
5.03. The Funds shall be entitled to participate in any such litigation or
proceeding and, after written notice from the Funds to the Subcustodian,
the Funds may assume the defense of such litigation or proceeding with
counsel of their choice at their own expense. The Subcustodian shall not
consent to the entry of any judgment or enter into any settlement in any
such litigation or proceeding without providing the Funds with adequate
notice of any such settlement or judgment, and without the Funds' prior
written consent. The Subcustodian shall submit written evidence to the
Funds with respect to any cost or expense for which it seeks
indemnification in such form and detail as the Funds may reasonably
request.
Section 5.04. Funds' Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Funds shall have, at their election upon
reasonable notice to the Subcustodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the
Subcustodian's rights against any Third-Party Subcustodian, Securities
System or other person for loss, damage or expense caused the Subcustodian,
the Custodian or the Funds by such Third-Party Subcustodian, Securities
System or other person, and shall be entitled to enforce the rights of the
Subcustodian with respect to any claim against such Third-Party
Subcustodian, Securities System or other person which the Subcustodian may
have as a consequence of any such loss, damage or expense if and to the
extent that the Custodian or any Fund has not been made whole for any such
loss, damage or expense.
Section 5.05. Liability of Custodian for Actions of Subcustodian.
Notwithstanding any provision to the contrary in the custodian agreements
by and among the Custodian and each of the Funds, the Custodian shall not
be liable to the Funds for any loss, damage or expense resulting from any
action or inaction of the Subcustodian or a Third-Party Subcustodian or the
use by the Subcustodian or a Third-Party Subcustodian of a Securities
System, unless such loss, damage or expense is occasioned by, or results
from, the negligence, misfeasance or misconduct of the Custodian or other
breach of the terms of this Agreement by the Custodian. The Custodian
shall have no implied duty to supervise the activities of the Subcustodian
or any Third-Party Subcustodian.
ARTICLE VI
COMPENSATION
Section 6.01. Compensation. The Subcustodian shall be compensated for
its services hereunder in an amount, and at such times, as may be agreed
upon, from time to time, by the Subcustodian and the Funds. Each Fund
shall be severally, and not jointly, liable with the other Fidelity Funds
only for its pro rata share of such compensation, determined with reference
to such Funds' proportionate interest in each repurchase transaction to
which such compensation relates. In no event shall the Custodian be liable
for the payment of such compensation hereunder.
Section 6.02. Waiver of Right of Set-Off. The Subcustodian hereby
waives and relinquishes all contractual and common law rights of set-off to
which it may now or hereafter be or become entitled with respect to any
obligations of the Funds to the Subcustodian arising under this Agreement.
ARTICLE VII
TERMINATION
Section 7.01. Events of Termination. This Agreement shall continue in
full force and effect until the first to occur of: (a) termination by the
Subcustodian or the Funds by an instrument in writing delivered to the
other party, such termination to take effect not sooner than ninety (90)
days after the date of such delivery; or (b) termination by the Funds by
written notice delivered to the Subcustodian with a copy to the Custodian,
based upon the Funds' determination that there is a reasonable basis to
conclude that the Subcustodian is insolvent or that the financial condition
of the Subcustodian is deteriorating in any material respect, in which case
termination shall take effect upon the Subcustodian's receipt of such
notice or at such later time as the Funds shall designate; provided,
however, that this Agreement may be terminated as to one or more Funds (but
less than all Funds) by delivery of an amended Appendix "A" pursuant to
Section 8.03 hereof. The execution and delivery of an amended Appendix "A"
which deletes one or more Funds shall constitute a termination of this
Agreement only with respect to such deleted Fund(s). In addition, this
Agreement shall terminate upon the effective date of the termination of the
Funds' agreements with the Custodian by which the Custodian ceases to serve
as the Custodian for the securities, cash and other assets of all of the
Funds; provided, however, that if the Custodian ceases to serve as the
custodian with respect to any of the Funds, this Agreement shall terminate
only with respect to such Fund or Funds.
Section 7.02. Successor Subcustodian; Payment of Compensation. Each of
the Funds may identify a successor subcustodian to which the cash,
Securities and other assets of such Fund shall, upon termination of the
Agreement, be delivered; provided that in the case of the termination of
this Agreement with respect to any of the Funds, such Fund or Funds shall,
direct the Subcustodian to transfer the assets of such Fund or Funds held
by the Subcustodian pursuant to Proper Instructions. The Subcustodian
agrees to cooperate with the Funds and Custodian in the execution of
documents and performance of all other actions necessary or desirable in
order to substitute the successor subcustodian for the Subcustodian under
this Agreement. In the event of termination, each Fund shall direct the
Custodian to make payment of such Fund's applicable share of unpaid
compensation within a reasonable time following termination and delivery of
a statement to the Funds setting forth such fees. The termination of this
Agreement with respect to any of the Funds shall be governed by the
provisions of this Article VII as to notice, payment and delivery of
securities and other assets, and shall not affect the obligations of the
parities hereunder with respect to the other Funds set forth in Appendix
"A," as amended from time to time.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Representative Capacity and Binding Obligation. A COPY OF
THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENTS OF EACH FUND IS
ON FILE WITH THE SECRETARY OF THE STATE OF EACH FUND'S FORMATION, AND
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE
TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT
ARE NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR
PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND
PROPERTY OF THE FUNDS, AND IN THE CASE OF SERIES COMPANIES, SUCH FUNDS'
RESPECTIVE PORTFOLIOS OR SERIES.
THE SUBCUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR PARTNER
OF ANY FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY
OBLIGATIONS OF THE FUNDS ARISING OUT OF THIS AGREEMENT. WITH RESPECT TO
OBLIGATIONS OF EACH FUND ARISING OUT OF THIS AGREEMENT, THE SUBCUSTODIAN
SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY CLAIM SOLELY TO THE ASSETS
AND PROPERTY OF THE FUND TO WHICH SUCH OBLIGATION RELATES AS THOUGH EACH
FUND HAD SEPARATELY CONTRACTED WITH THE SUBCUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT.
Section 8.02. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
subject matter hereof.
Section 8.03. Amendments. No provision of this Agreement may be amended
except by a statement in writing signed by the party against which
enforcement of the amendment is sought; provided, however, Appendix "A"
listing the Funds which are parties hereto may be amended from time to time
to add or delete one or more Funds, by the Fund's delivery of an amended
Appendix "A" to the Custodian and the Subcustodian. The deletion of one or
more Funds from Appendix "A" shall have the effect of terminating this
Agreement as to such Fund(s), but shall not affect this Agreement with
respect to any other Fund.
Section 8.04. Interpretation. In connection with the operation of this
Agreement, the Subcustodian, the Custodian and the Funds may agree in
writing from time to time on such provisions interpretative of or in
addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative
or additional provisions made as provided in the preceding sentence shall
be deemed to be an amendment of this Agreement.
Section 8.05. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 8.06. Governing Law. THE PROVISIONS OF THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 8.07. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid) to the parties at the following addresses:
(a) If to the Funds:
c/o Fidelity Research & Management Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: John E. Ferris, Treasurer
Telephone: (617) 570-6556
Telefax: (617) 742-1231
(b) If to the Custodian:
First Union National Bank of North Carolina.
Two First Union Plaza CMG-1151
Charlotte, North Carolina 28288-1151
Attn: Nancy Stoker
Telephone: (704) 374-6157
Telefax: (704) 374-3211
(c) If to the Subcustodian:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attn: Stella V. Milano, Vice President
Telephone: (212) 648-3194
Telefax: (212) 837-5113
or to such other address as the parties may have designated in writing to
each of the other parties hereto.
Section 8.08. Assignment. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective successors
and assigns, provided that, no party hereto may assign this Agreement or
any of its rights or obligations hereunder without the prior written
consent of the other parties.
Section 8.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original. This
Agreement shall become effective when one or more counterparts have been
signed and delivered by each of the parties.
Section 8.10. Confidentiality; Survival of Obligations. The parties
hereto agree that they shall each treat confidentially the terms and
conditions of this Agreement and all information provided by each party to
the others regarding its business and operations. All confidential
information provided by a party hereto shall be used by any other party
hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information
that is publicly available when provided or thereafter becomes publicly
available other than through a breach of this Agreement, or that is
required to be disclosed by any bank examiner of the Subcustodian or the
Custodian, any auditor of the parties hereto or by judicial or
administrative process or otherwise by applicable law or regulation. The
provisions of this Section 8.10 and Sections 3.03, 5.01, 5.02, 5.03, 5.04,
8.01 and 8.06 shall survive any termination of this Agreement, provided
that in the event of termination the Subcustodian agrees that it shall
transfer and return Securities and other assets held by the Subcustodian
for the benefit of the Funds as the Funds direct pursuant to Proper
Instructions.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA.
By: /S/ M.J. Gilbert
Name: M.J. Gilbert
Title: Vice President & Trust Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /S/ Stella Milano
Name: Stella Milano
Title: Vice President
FIDELITY INVESTMENT COMPANIES
LISTED ON APPENDIX A HERETO
By: /S/ John E. Ferris
Name: John E. Ferris
Title: Treasurer
APPENDIX A
TO SUBCUSTODIAN AGREEMENT AMONG
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
AND
FIDELITY INVESTMENT COMPANIES
Dated as of: April 17, 1991
The following is a list of Funds for which the Subcustodian shall serve
under a Subcustodian Agreement dated as of March 18, 1991:
TRUST FUND EFFECTIVE AS OF
North Carolina Cash Cash Portfolio April 17, 1991
Management Trust
North Carolina Cash Term Portfolio April 17, 1991
Management Trust
FIDELITY INVESTMENT COMPANIES LISTED ON THIS APPENDIX A
By: /S/ John E. Ferris
Name: John E. Ferris
Title: Treasurer
LG932530001
THE NORTH CAROLINA CASH MANAGEMENT TRUST:
TERM PORTFOLIO
DISTRIBUTION AND SERVICE PLAN
THIS PLAN made as of the 13th day of December , 1990 by and between THE
NORTH CAROLINA CASH MANAGEMENT TRUST a Massachusetts business trust which
may issue one or more series of shares of beneficial interest (hereinafter
called the "Trust"), on behalf of TERM PORTFOLIO, a series of the Trust
(hereinafter called the "Portfolio"), FIDELITY MANAGEMENT & RESEARCH
COMPANY a Massachusetts Corporation (hereinafter called the "Adviser"), and
FIDELITY DISTRIBUTORS CORPORATION, a Massachussets corporation (hereinafter
called the "Distributor");
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, the Trust intends to distribute the Portfolio's shares of
beneficial interest ("shares") in accordance with Rule 12b-1 under the Act,
and desires to adopt a Distribution and Service Plan pursuant to such Rule,
and the Board of Trustees of the Trust has determined that there is a
reasonable likelihood that this will benefit the Portfolio and its
shareholders; and
WHEREAS, the Trust desires to increase the level of shareholder services
provided within the State of North Carolina, and the Board of Trustees has
determined that there is a reasonable likelihood that such in-state service
will benefit the Portfolio and its shareholders; and
WHEREAS, the Trust desires to retain the Distributor to provide, or secure
the provision of through an agent(s), facilities and personnel and to
render services with respect to the Portfolio in accordance with such
Distribution and Service Plan in the manner and on the terms and conditions
hereinafter set forth; and
WHEREAS, the Trust understands that the Distributor has retained the
services of Sterling Capital Distributors, Inc. ("Sterling"), a corporation
organized and existing under the laws of the State of North Carolina, as
its agent to perform or provide various of the facilities, personnel and
services described herein:
NOW, THEREFORE, the Trust hereby adopts a Distribution and Service Plan on
behalf of the Portfolio in accordance with Rule 12b-1 under the Act, and
the parties hereto agree to the following terms and conditions of the Plan:
1. Subject to the supervision of the Board of Trustees, the Trust hereby
retains the Distributor to provide facilities, personnel and a program with
respect to the marketing and promotional activities of the Portfolio (the
"Distribution Services"). Without limiting the generality of the
foregoing, the Distributor shall be responsible for, and shall accomplish
itself, through its affiliates, or through its agent, Sterling, the
following: (i) formulate and implement marketing and promotional
activities, including but not limited to direct mail promotions, regional
orientation meetings and financial management seminars; (ii) prepare and
contract for printing of a periodic newsletter and the mailing and
distribution thereof, such newsletter to be distributed to potential and
participating local units and to provide information regarding the
Portfolio and items of technical and general interest to local treasurers
and/or other financial officials; (iii) provide office space and equipment,
telephone facilities and dedicated personnel as necessary to provide the
services hereunder; (iv) arrange and contract for the preparation and
printing of sales literature and seminar materials and the mailing and
distribution thereof; (v) bear the expenses of printing (not including
typesetting) and distributing Prospectuses and Statements of Additional
Anformation to other than existing shareholders; (vi) obtain, evaluate and
provide to the Portfolio such information, analyses and opinions with
respect to marketing and promotional activities as the Portfolio may, from
time to time, reasonably request; and (vii) organize and maintain a Trust
advisory board comprised of local government financial officials. Such
board shall meet at least semi-annually with a primary purpose of providing
a representative review of Trust, Distributor or Sterling service
initiatives, as well as providing an informal communication device between
shareholders and the Trust. The Board shall not be responsible for
providing any advice with respect to investment matters.
2. Subject to the supervision of the Board of Trustees, the Distributor
shall also facilitate and coordinate a program whereby certain shareholder
servicing functions (the "Shareholder Services") are provided by the
Distributor, its affiliates, or its agent, Sterling, within the boundaries
of the state of North Carolina. Such program shall be undertaken in
conjunction with the Trust's transfer agent, and shall be subject to such
controls, provisions and procedures as shall be satisfactory to
Distributors and said transfer agent. To the extent deemed practicable by
the Distributor, such program shall provide for the following functions and
services to be performed, in whole or in part, in North Carolina: (i)
establishment, maintainance and close-out of shareholder accounts; (ii)
shareholder inquiry, communication and problem resolution services; (iii)
completion of shareholder audit confirmations; (iv) receipt of orders for
transactions in shares of the Portfolio, and timely conveyance of such
orders to the Trust or its transfer agent; and (v) such concomitant duties
as are deemed approporiate by the Distributor.
3. The Distributor, its affiliates or its agent(s) shall directly bear all
costs of rendering the services to be performed under this Plan, including
but not limited to the compensation of personnel necessary to provide such
services, and all other costs for travel, office space, facilities,
equipment, printing, telephone service, heat, light, power and other
utilities.
4. The Portfolio shall, from time to time, furnish or otherwise make
available to the Distributor such financial reports, proxy statements and
other information relating to the business and affairs of the Portfolio as
the Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
5. The Adviser agrees to pay the Distributor as soon as practicable after
the end of each month and the Distributor agrees to accept, as full
compensation for all services and facilities to be provided hereunder, a
fee based on the monthly average of the net assets of the Portfolio
determined as of the close of business on each business day throughout the
month. The fee shall be payable by the Adviser from the Management Fee
paid to the Adviser by the Portfolio pursuant to the Management Contract
dated December 13, 1990 between the Adviser and the Portfolio. The fee due
the Distributor shall be payable at an annual rate determined on a
cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On the first $100 million of
average daily net assets 0.140%
On average daily net assets in
excess of $100 million to $200
million 0.150%
On average daily net assets in
excess of $200 million to $800 0.160%
million
On average daily net assets in
excess of $800 million 0.170%
All parties to this Plan understand that the agreement between the
Distributor and its agent, Sterling, will provide for a full pass-through
to Sterling of the fees payable hereunder, such payments by the Distributor
to Sterling to be made in consideration of Sterling's responsibilities
under its agreement with the Distributor. The Distributor, in consultation
with Sterling, reserves the right to reduce or waive the distribution fee
from time to time.
If this Plan becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for the part
of the month the Plan is in effect shall be prorated based on the number of
business days during such month that this Plan was in effect.
6. Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or relieve or deprive the Board of Trustees of the Trust
of the responsibility for and control of the conduct of the affairs of the
Portfolio.
7. This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Portfolio," and upon
approval by a vote of the Trustees of the Trust, and of the Trustees who
are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements related to the Plan, cast in person at a meeting called for the
purpose of voting on this Plan. For the purposes of this Plan, the terms
"interested persons" and "majority of the outstanding voting securities of
the Portfolio" are used as defined in the Act.
8. This Plan shall remain in effect until July 31, 1991, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of the Trustees of the Trust and of the
Trustees who are not interested persons of the Trust, and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on this Plan. If such annual approval is not
obtained, the Plan shall expire 12 months after the date of the last
approval. This Plan may be amended at any time by the Board of Trustees
provided that (a) any amendment to increase materially the amount to be
spent for the services described herein shall be effective only upon
approval by a vote of a majority of the outstanding shares 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.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of 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 this Plan or in any agreements related to this Plan, or
by a vote of a majority of the outstanding voting securities of the
Portfolio.
10. Nothing herein contained shall limit the freedom of the Distributor or
any "affiliated person," as defined in the Act, to render investment
supervisory and corporate administrative services to other investment
companies, to act as distributor, adviser or investment counselor to other
persons, firms or corporations and to engage in other business activities.
11. Neither the Distributor nor any of its employees or agents are
authorized to make any representations with respect to the sale of shares
except those contained in the then current Prospectus and Statement of
Additional Information of the Portfolio.
12. The provisions of this Paragraph 12 shall be applicable only with
respect to the provision of Distribution Services. The provision of
Shareholder Services shall not be affected by this Paragraph 12, but shall
be governed by the provisions of Paragraph 13, below. The Portfolio will
indemnify and hold the Distributor harmless from judgments against the
Distributor resulting from specific acts or omissions in the performance of
Distribution Services under this Plan which are the result of written
instructions of a majority of the Board of Trustees of the Trust, so long
as there is an express finding that such acts or omissions did not
constitute willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties or a breach of fiduciary duty. The Portfolio shall
similarly indemnify and hold harmless any agent of the Distributor with
respect to such judgments against the agent resulting from specific acts or
omissions in the performance of Distribution Services under this Plan which
are the result of written instructions of a majority of the Board of
Trustees of the Trust, so long as there is an express finding that such
acts or omissions did not constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or a breach of fiduciary
duty. No provision of this Paragraph 12 shall be deemed to protect the
Distributor or an agent against any liability to the Portfolio or its
shareholders to which it might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
its Distribution Services duties or the reckless disregard of its
Distribution Services obligations under this Plan. No provision hereof
shall be deemed to protect any Trustee or officer of the Trust against any
such liability to which he might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
his duties or the reckless disregard of his obligation.
13. The provisions of this Paragraph 13 shall be applicable only with
respect to the provision of Shareholder Services. The provision of
Distribution Services shall not be affected by this Paragraph 13, but shall
be governed by the provisions of Paragraph 12, above.
- - A. The Trust shall indemnify and hold the Distributor harmless against
any losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Trust, including by a shareholder, which names the Distributor and/or
the Trust as a party and is not based on and does not result from the
Distributor's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with the
Distributor's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by the Distributor's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Trust, or from the Distributor's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Trust, or as a result of the Distributor's acting in
reliance upon advice reasonably believed by the Distributor to have been
given by counsel for the Trust.
B. The Distributor shall indemnify and hold the Trust harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit
brought by any person other than the Distributor, which names the Trust
and/or the Distributor as a party and is based upon and arises out of acts,
errors or omissions of the Distributor constituting negligence, lack of
good faith or willful misconduct in the performance of the Distributor's
Shareholder Service duties under this Agreement.
14. In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the
"Indemnified Party") shall inform the other party (the "Indemnifying
Party") of the relevant facts known to Indemnified Party concerning the
matter in question. The Indemnified Party shall use reasonable care to
identify and promptly to notify the Indemnifying Party concerning any
matter which presents, or appears likely to present, a claim for
indemnification. The Indemnifying Party shall have the election of
defending the Indemnified Party against any claim which may be the subject
of indemnification or of holding the Indemnified Party harmless hereunder.
In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
defense of the claim and, if so requested by the Indemnifying Party, the
Indemnified Party shall incur no further legal or other expenses related
thereto for which it shall be entitled to indemnity or to being held
harmless hereunder; provided, however, that nothing herein shall prevent
the Indemnified Party from retaining counsel at its own expense to defend
any claim. Except with the Indemnifying Party's prior written consent,
the Indemnified Party shall in no event confess any claim or make any
compromise in any matter in which the Indemnifying Party will be asked to
indemnify or hold Indemnified Party harmless hereunder.
15. The Distributor shall provide the Trust, for review by its Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended pursuant to the Plan and the purposes for
which such expenditures were made. Such written report shall be in a form
satisfactory to the Trust and shall supply all information necessary for
the Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
16. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Trust shall be committed to the
discretion of the Trustees who are not interested persons.
17. The Trust shall preserve copies of this Plan and any agreements
related to and all reports made pursuant to Section 15 hereof, for a period
of not less than six years from the date of this Plan or any such report,
as the case may be, the first two years in an easily accessible place.
18. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
19. The Distributor is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this Plan and
any agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and neither the Distributor nor its agents shall
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. In addition, neither the Distributor nor its
agents shall seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Distributor understands that the rights and
obligations of any series of the Trust under the Trust's Declaration of
Trust are separate and distinct from those of any and all other series.
20. 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.
THE NORTH CAROLINA CASH MANAGEMENT TRUST
on behalf of Term Portfolio
by /s/ J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY MANAGEMENT & RESERARCH COMPANY
by /s/ J. Gary Burkhead
J. Gary Burkhead, President
FIDELITY DISTRIBUTORS CORPORATION
by /s/ Rodger A. Lawson
Rodger A. Lawson, President
J/PLANS
d&s-nctp90
THE NORTH CAROLINA CASH MANAGEMENT TRUST:
CASH PORTFOLIO
DISTRIBUTION AND SERVICE PLAN
THIS PLAN made as of the 13th day of December , 1990 by and between THE
NORTH CAROLINA CASH MANAGEMENT TRUST a Massachusetts business trust which
may issue one or more series of shares of beneficial interest (hereinafter
called the "Trust"), on behalf of CASH PORTFOLIO, a series of the Trust
(hereinafter called the "Portfolio"), FIDELITY MANAGEMENT & RESEARCH
COMPANY a Massachusetts Corporation (hereinafter called the "Adviser"), and
FIDELITY DISTRIBUTORS CORPORATION, a Massachussets corporation (hereinafter
called the "Distributor");
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, the Trust intends to distribute the Portfolio's shares of
beneficial interest ("shares") in accordance with Rule 12b-1 under the Act,
and desires to adopt a Distribution and Service Plan pursuant to such Rule,
and the Board of Trustees of the Trust has determined that there is a
reasonable likelihood that this will benefit the Portfolio and its
shareholders; and
WHEREAS, the Trust desires to increase the level of shareholder services
provided within the State of North Carolina, and the Board of Trustees has
determined that there is a reasonable likelihood that such in-state service
will benefit the Portfolio and its shareholders; and
WHEREAS, the Trust desires to retain the Distributor to provide, or secure
the provision of through an agent(s), facilities and personnel and to
render services with respect to the Portfolio in accordance with such
Distribution and Service Plan in the manner and on the terms and conditions
hereinafter set forth; and
WHEREAS, the Trust understands that the Distributor has retained the
services of Sterling Capital Distributors, Inc. ("Sterling"), a corporation
organized and existing under the laws of the State of North Carolina, as
its agent to perform or provide various of the facilities, personnel and
services described herein:
NOW, THEREFORE, the Trust hereby adopts a Distribution and Service Plan on
behalf of the Portfolio in accordance with Rule 12b-1 under the Act, and
the parties hereto agree to the following terms and conditions of the Plan:
1. Subject to the supervision of the Board of Trustees, the Trust hereby
retains the Distributor to provide facilities, personnel and a program with
respect to the marketing and promotional activities of the Portfolio (the
"Distribution Services"). Without limiting the generality of the
foregoing, the Distributor shall be responsible for, and shall accomplish
itself, through its affiliates, or through its agent, Sterling, the
following: (i) formulate and implement marketing and promotional
activities, including but not limited to direct mail promotions, regional
orientation meetings and financial management seminars; (ii) prepare and
contract for printing of a periodic newsletter and the mailing and
distribution thereof, such newsletter to be distributed to potential and
participating local units and to provide information regarding the
Portfolio and items of technical and general interest to local treasurers
and/or other financial officials; (iii) provide office space and equipment,
telephone facilities and dedicated personnel as necessary to provide the
services hereunder; (iv) arrange and contract for the preparation and
printing of sales literature and seminar materials and the mailing and
distribution thereof; (v) bear the expenses of printing (not including
typesetting) and distributing Prospectuses and Statements of Additional
Anformation to other than existing shareholders; (vi) obtain, evaluate and
provide to the Portfolio such information, analyses and opinions with
respect to marketing and promotional activities as the Portfolio may, from
time to time, reasonably request; and (vii) organize and maintain a Trust
advisory board comprised of local government financial officials. Such
board shall meet at least semi-annually with a primary purpose of providing
a representative review of Trust, Distributor or Sterling service
initiatives, as well as providing an informal communication device between
shareholders and the Trust. The Board shall not be responsible for
providing any advice with respect to investment matters.
2. Subject to the supervision of the Board of Trustees, the Distributor
shall also facilitate and coordinate a program whereby certain shareholder
servicing functions (the "Shareholder Services") are provided by the
Distributor, its affiliates, or its agent, Sterling, within the boundaries
of the state of North Carolina. Such program shall be undertaken in
conjunction with the Trust's transfer agent, and shall be subject to such
controls, provisions and procedures as shall be satisfactory to
Distributors and said transfer agent. To the extent deemed practicable by
the Distributor, such program shall provide for the following functions and
services to be performed, in whole or in part, in North Carolina: (i)
establishment, maintainance and close-out of shareholder accounts; (ii)
shareholder inquiry, communication and problem resolution services; (iii)
completion of shareholder audit confirmations; (iv) receipt of orders for
transactions in shares of the Portfolio, and timely conveyance of such
orders to the Trust or its transfer agent; and (v) such concomitant duties
as are deemed approporiate by the Distributor.
3. The Distributor, its affiliates or its agent(s) shall directly bear all
costs of rendering the services to be performed under this Plan, including
but not limited to the compensation of personnel necessary to provide such
services, and all other costs for travel, office space, facilities,
equipment, printing, telephone service, heat, light, power and other
utilities.
4. The Portfolio shall, from time to time, furnish or otherwise make
available to the Distributor such financial reports, proxy statements and
other information relating to the business and affairs of the Portfolio as
the Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
5. The Adviser agrees to pay the Distributor as soon as practicable after
the end of each month and the Distributor agrees to accept, as full
compensation for all services and facilities to be provided hereunder, a
fee based on the monthly average of the net assets of the Portfolio
determined as of the close of business on each business day throughout the
month. The fee shall be payable by the Adviser from the Management Fee
paid to the Adviser by the Portfolio pursuant to the Management Contract
dated December 13, 1990 between the Adviser and the Portfolio. The fee due
the Distributor shall be payable at an annual rate determined on a
cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On the first $100 million of
average daily net assets 0.140%
On average daily net assets in
excess of $100 million to $200
million 0.150%
On average daily net assets in
excess of $200 million to $800 0.160%
million
On average daily net assets in
excess of $800 million 0.170%
All parties to this Plan understand that the agreement between the
Distributor and its agent, Sterling, will provide for a full pass-through
to Sterling of the fees payable hereunder, such payments by the Distributor
to Sterling to be made in consideration of Sterling's responsibilities
under its agreement with the Distributor. The Distributor, in consultation
with Sterling, reserves the right to reduce or waive the distribution fee
from time to time.
If this Plan becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for the part
of the month the Plan is in effect shall be prorated based on the number of
business days during such month that this Plan was in effect.
6. Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or relieve or deprive the Board of Trustees of the Trust
of the responsibility for and control of the conduct of the affairs of the
Portfolio.
7. This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Portfolio," and upon
approval by a vote of the Trustees of the Trust, and of the Trustees who
are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements related to the Plan, cast in person at a meeting called for the
purpose of voting on this Plan. For the purposes of this Plan, the terms
"interested persons" and "majority of the outstanding voting securities of
the Portfolio" are used as defined in the Act.
8. This Plan shall remain in effect until July 31, 1991, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of the Trustees of the Trust and of the
Trustees who are not interested persons of the Trust, and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on this Plan. If such annual approval is not
obtained, the Plan shall expire 12 months after the date of the last
approval. This Plan may be amended at any time by the Board of Trustees
provided that (a) any amendment to increase materially the amount to be
spent for the services described herein shall be effective only upon
approval by a vote of a majority of the outstanding shares 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.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of 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 this Plan or in any agreements related to this Plan, or
by a vote of a majority of the outstanding voting securities of the
Portfolio.
10. Nothing herein contained shall limit the freedom of the Distributor or
any "affiliated person," as defined in the Act, to render investment
supervisory and corporate administrative services to other investment
companies, to act as distributor, adviser or investment counselor to other
persons, firms or corporations and to engage in other business activities.
11. Neither the Distributor nor any of its employees or agents are
authorized to make any representations with respect to the sale of shares
except those contained in the then current Prospectus and Statement of
Additional Information of the Portfolio.
12. The provisions of this Paragraph 12 shall be applicable only with
respect to the provision of Distribution Services. The provision of
Shareholder Services shall not be affected by this Paragraph 12, but shall
be governed by the provisions of Paragraph 13, below. The Portfolio will
indemnify and hold the Distributor harmless from judgments against the
Distributor resulting from specific acts or omissions in the performance of
Distribution Services under this Plan which are the result of written
instructions of a majority of the Board of Trustees of the Trust, so long
as there is an express finding that such acts or omissions did not
constitute willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties or a breach of fiduciary duty. The Portfolio shall
similarly indemnify and hold harmless any agent of the Distributor with
respect to such judgments against the agent resulting from specific acts or
omissions in the performance of Distribution Services under this Plan which
are the result of written instructions of a majority of the Board of
Trustees of the Trust, so long as there is an express finding that such
acts or omissions did not constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or a breach of fiduciary
duty. No provision of this Paragraph 12 shall be deemed to protect the
Distributor or an agent against any liability to the Portfolio or its
shareholders to which it might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
its Distribution Services duties or the reckless disregard of its
Distribution Services obligations under this Plan. No provision hereof
shall be deemed to protect any Trustee or officer of the Trust against any
such liability to which he might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
his duties or the reckless disregard of his obligation.
13. The provisions of this Paragraph 13 shall be applicable only with
respect to the provision of Shareholder Services. The provision of
Distribution Services shall not be affected by this Paragraph 13, but shall
be governed by the provisions of Paragraph 12, above.
- - A. The Trust shall indemnify and hold the Distributor harmless against
any losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Trust, including by a shareholder, which names the Distributor and/or
the Trust as a party and is not based on and does not result from the
Distributor's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with the
Distributor's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by the Distributor's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Trust, or from the Distributor's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Trust, or as a result of the Distributor's acting in
reliance upon advice reasonably believed by the Distributor to have been
given by counsel for the Trust.
B. The Distributor shall indemnify and hold the Trust harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit
brought by any person other than the Distributor, which names the Trust
and/or the Distributor as a party and is based upon and arises out of acts,
errors or omissions of the Distributor constituting negligence, lack of
good faith or willful misconduct in the performance of the Distributor's
Shareholder Service duties under this Agreement.
14. In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the
"Indemnified Party") shall inform the other party (the "Indemnifying
Party") of the relevant facts known to Indemnified Party concerning the
matter in question. The Indemnified Party shall use reasonable care to
identify and promptly to notify the Indemnifying Party concerning any
matter which presents, or appears likely to present, a claim for
indemnification. The Indemnifying Party shall have the election of
defending the Indemnified Party against any claim which may be the subject
of indemnification or of holding the Indemnified Party harmless hereunder.
In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
defense of the claim and, if so requested by the Indemnifying Party, the
Indemnified Party shall incur no further legal or other expenses related
thereto for which it shall be entitled to indemnity or to being held
harmless hereunder; provided, however, that nothing herein shall prevent
the Indemnified Party from retaining counsel at its own expense to defend
any claim. Except with the Indemnifying Party's prior written consent,
the Indemnified Party shall in no event confess any claim or make any
compromise in any matter in which the Indemnifying Party will be asked to
indemnify or hold Indemnified Party harmless hereunder.
15. The Distributor shall provide the Trust, for review by its Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended pursuant to the Plan and the purposes for
which such expenditures were made. Such written report shall be in a form
satisfactory to the Trust and shall supply all information necessary for
the Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
16. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Trust shall be committed to the
discretion of the Trustees who are not interested persons.
17. The Trust shall preserve copies of this Plan and any agreements
related to and all reports made pursuant to Section 15 hereof, for a period
of not less than six years from the date of this Plan or any such report,
as the case may be, the first two years in an easily accessible place.
18. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
19. The Distributor is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this Plan and
any agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and neither the Distributor nor its agents shall
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. In addition, neither the Distributor nor its
agents shall seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Distributor understands that the rights and
obligations of any series of the Trust under the Trust's Declaration of
Trust are separate and distinct from those of any and all other series.
20. 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.
THE NORTH CAROLINA CASH MANAGEMENT TRUST
on behalf of Cash Portfolio
by /s/ J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY MANAGEMENT & RESERARCH COMPANY
by /s/ J. Gary Burkhead
J. Gary Burkhead, President
FIDELITY DISTRIBUTORS CORPORATION
by /s/ Rodger A. Lawson
Rodger A. Lawson, President
J/PLANS
d&s-nccp90
DISTRIBUTION AND SERVICE AGENT AGREEMENT
between
FIDELITY DISTRIBUTORS CORPORATION
and
STERLING CAPITAL DISTRIBUTORS, INC.
with respect to shares of
THE NORTH CAROLINA CASH MANAGEMENT TRUST:
TERM PORTFOLIO
WHEREAS, Fidelity Distributors Corporation ("Distributors"), a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts 02109, has entered into a Distribution and Service
Plan (the "Plan," set forth as Exhibit A hereto) with The North Carolina
Cash Management Trust (the "Trust"), an open-end, diversified, management
investment company organized as a Massachusetts business trust with
principal offices at 82 Devonshire Street, Boston, Massachusetts 02109, on
behalf of Term Portfolio, a series of the Trust (the "Portfolio") and
Fidelity Management & Research Company (the "Adviser") an investment
adviser with principal offices at 82 Devonshire Street, Boston,
Massachusetts 02109, pursuant to the provisions of Rule 12b-1 under the
Investment Company Act of 1940 (the "Act"); and
WHEREAS, Distributors has entered into a General Distribution Agreement
with the Portfolio, set forth as Exhibit B hereto; and
WHEREAS, the Plan contemplates the retention by Distributors of Sterling
Capital Distributors, Inc. ("Sterling"), a North Carolina corporation with
principal offices at 1770 Independence Center, Charlotte, NC 28246, as
agent with respect to the provision of various distribution and shareholder
services required to be performed under the Plan;
NOW THEREFORE, the parties hereto enter into this Agreement as of the 13th
day of December, 1990, on the following terms and conditions:
1. Subject to the overall supervision of Distributors and the Board of
Trustees of the Trust, Distributors hereby retains Sterling to provide
facilities, personnel and a program with respect to the marketing and
promotional activities of the Portfolio. Without limiting the generality
of the foregoing, Sterling shall accomplish the following: (i) formulate
and implement marketing and promotional activities, including but not
limited to direct mail promotions, regional orientation meetings and
financial management seminars; (ii) prepare and contract for printing of a
periodic newsletter and the mailing and distribution thereof, such
newsletter to be distributed to potential and participating local units and
to provide information regarding the Portfolio and items of technical and
general interest to local treasurers and/or other financial officials;
(iii) provide office space and equipment, telephone facilities and
dedicated personnel as necessary to provide the services hereunder; (iv)
arrange and contract for the preparation and printing of sales literature
and seminar materials and the mailing and distribution thereof; (v) bear
the expenses of printing (not including typesetting) and distributing
prospectuses to other than existing shareholders, (vi) obtain, evaluate
and provide to Distributors such information, analyses and opinions with
respect to marketing and promotional activities as Distributors may, from
time to time, reasonably request in connection with its reporting and
informational responsibilities to the Portfolio; and (vii) organize and
maintain a Portfolio advisory board comprised of local government financial
officials. Such board shall meet at least semi-annually with a primary
purpose of providing a representative review of Portfolio, Distributors or
Sterling service initiatives, as well as providing an informal
communication device between shareholders and the Portfolio. Sterling
understands that the board shall not be responsible for providing any
advice with respect to investment matters.
2. Subject to such controls, provisions and procedures as shall be
provided to Sterling by the Distributor or the Trust's transfer agent,
Sterling shall perform the following functions and shareholder services at
its facilities within the boundaries of the State of North Carolina: (i)
establishment, maintenance and close-out of shareholder accounts; (ii)
shareholder inquiry, communication and problem resolution services; (iii)
completion of shareholder audit confirmations; (iv) receipt of orders for
transactions in shares of the Portfolio, and timely conveyance of such
orders to the Trust or its transfer agent; and (v) such concomitant duties
as are deemed appropriate by the Distributor.
3. Subject to such terms as Sterling and the Distributor shall, from time
to time, agree upon Sterling shall directly bear all costs of rendering the
services to be performed under this Agreement, including but not limited to
the compensation of personnel necessary to provide such services, and all
other costs for travel, office space, facilities, equipment, printing,
telephone service, heat, light, power and other utilities.
4. Distributors shall, from time to time, furnish or otherwise make
available to Sterling such financial reports, proxy statements and other
information relating to the business and affairs of the Portfolio as
Sterling may reasonably require in order to discharge its duties and
obligations hereunder.
5. Distributors agrees to pay Sterling as soon as practicable after the
end of each month and Sterling agrees to accept, as full compensation for
all services and facilities to be provided hereunder, a fee based on the
monthly average of the net assets of the Portfolio determined as of the
close of business on each business day throughout the month. The fee shall
be payable at an annual rate determined on a cumulative basis pursuant to
the following schedule:
The Annual Fee
Rate Is
On the first $100 million of
average daily net assets 0.140%
On average daily net assets in
excess of $100 million to $200
million 0.150%
On average daily net assets in excess
of $200 million to $800 million 0.160%
On average daily net assets in
excess of $800 million 0.170%
Sterling understands that Distributors, with the consent of Sterling, has
reserved the right to reduce or waive the distribution fee from time to
time.
If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for the
part of the month this Agreement is in effect shall be prorated based on
the number of business days during such month that this Agreement was in
effect.
6. Sterling hereby warrants and represents that it has obtained all
regulatory licenses and approvals, and has otherwise done all things
legally necessary, to perform its duties under this Agreement; and further
represents and warrants that Sterling will maintain its legal ability to so
perform during the term of this Agreement.
7. This Agreement shall become effective on December 13, 1990, if approved
by a vote of the Trustees of the Trust, and 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, cast in person at a
meeting called for the purpose of voting on this Agreement. For the
purpose of the Agreement, the terms "interested persons" and "majority of
the outstanding voting securities of the Portfolio" are used as defined in
the Act.
8. Sterling is not authorized to give any information or make any
representations with respect to the sale of shares, other than those
contained in the appropriate registration statements or prospectuses of the
Portfolio filed with the Securities and Exchange Commission under the
Securities Act of 1933 (as they may be amended from time to time), or
contained in shareholder reports or other material that may be prepared by
or on behalf of the Portfolio for Distributors's or Sterling's use. This
shall not be construed to prevent Sterling from preparing and distributing
sales literature or other material as it may deem appropriate, provided any
such material is delivered to Distributors for its approval in advance of
its use.
9. This Agreement shall remain in effect until July 31, 1991, and from
year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of the Trustees of the Trust and of
the Trustees who are not interested persons of the Trust, and who have no
direct or indirect financial interest in the operation of this Agreement,
cast in person at a meeting called for the purpose of voting on this
Agreement. If such annual approval is not obtained, the Agreement shall
expire 12 months after the date of the last approval. Sterling understands
that the Plan may be amended at any time by the Board of Trustees provided
that (a) any amendment to increase materially the amount to be spent for
the services therein described shall be effective only upon approval by a
vote of a majority of the outstanding shares of the Portfolio, and (b) any
material amendments of the Plan shall be effective only upon approval in
the manner provided in the first sentence in this paragraph.
10. This Agreement may be terminated at any time, without the payment of
any penalty, by vote of 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 this Agreement or by a vote of a majority of the
outstanding voting securities of the Portfolio, on not more than sixty
days' written notice. Notwithstanding anything contained herein, in the
event that the Plan shall terminate or Sterling shall fail to
satisfactorily perform its responsibilities hereunder, such determination
to be made in good faith by Distributors, this Agreement may be terminated
effective upon 30 days' written notice to Sterling by Distributors.
11. Nothing herein contained shall limit the freedom of Sterling or any
"affiliated person," as defined in the Act, to render investment
supervisory or distribution services to other investment companies, to act
as distributor, adviser or investment counselor to other persons, firms or
corporations and to engage in other business activities, provided that
Sterling shall not render investment supervisory, shareholder or
distribution services to any other investment company of the Term Portfolio
type whose shares are offered for sale in North Carolina during the term of
this Agreement.
12. The provisions of this Paragraph 12 shall be applicable only with
respect to the provision of Distribution Services. The provision of
Shareholder Services shall not be affected by this Paragraph 12, but shall
be governed by the provisions of Paragraph 13, below. Distributors will
indemnify and hold Sterling harmless from judgments against Sterling
resulting from specific acts or omissions in the performance of
Distribution Services under this Agreement which are the result of written
instructions of a majority of the Board of Trustees of the Trust so long as
there is an express finding that such acts or omissions did not constitute
willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties or a breach of fiduciary duty.
No provision of this Paragraph 12 shall be deemed to protect Sterling
against any liability to the Portfolio or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith
or gross negligence in the performance of its Distribution Services duties
or the reckless disregard of its Distribution Services obligations under
this Agreement.
13. The provisions of this Paragraph 13 shall be applicable only with
respect to the provision of Shareholder Services. The provision of
Distribution Services shall not be affected by this Paragraph 13, but shall
be governed by the provisions of Paragraph 12, above.
A. To the extent that the Distributor is indemnified by the Trust, the
Distributor shall indemnify and hold Sterling harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Distributor, which names Sterling and/or the Distributor as a party and
is not based on and does not result from Sterling's willful misfeasance,
bad faith or negligence or reckless disregard of duties, and arises out of
or in connection with Sterling's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by Sterling's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the
Distributor,or from Sterling's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Trust or the Distributor, or as a result of Sterling's
acting in reliance upon advice reasonably believed by Sterlingto have been
given by counsel for the Trust.
B. Sterling shall indemnify and hold the Distributor and its affiliates
(including, without limitation, the Trust's transfer agent) harmless
against any losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand,
action or suit brought by any person other than Sterling, (including
without limitation, any suit which names the Trust, the Distributor, the
Trust's transfer agent, an affiliate of any of the foregoing, and/or
Sterling), and is based upon and arises out of acts, errors or omissions of
Sterling constituting negligence, lack of good faith or willful misconduct
in the performance of Sterling's Shareholder Service duties under this
Agreement.
14. In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the
"Indemnified Party") shall inform the other party (the "Indemnifying
Party") of the relevant facts known to Indemnified Party concerning the
matter in question. The Indemnified Party shall use reasonable care to
identify and promptly to notify the Indemnifying Party concerning any
matter which presents, or appears likely to present, a claim for
indemnification. The Indemnifying Party shall have the election of
defending the Indemnified Party against any claim which may be the subject
of indemnification or of holding the Indemnified Party harmless hereunder.
In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
defense of the claim and, if so requested by the Indemnifying Party, the
Indemnified Party shall incur no further legal or other expenses related
thereto for which it shall be entitled to indemnity or to being held
harmless hereunder; provided, however, that nothing herein shall prevent
the Indemnified Party from retaining counsel at its own expense to defend
any claim. Except with the Indemnifying Party's prior written consent,
the Indemnified Party shall in no event confess any claim or make any
compromise in any matter in which the Indemnifying Party will be asked to
indemnify or hold Indemnified Party harmless hereunder.
15. This Plan and Agreement shall automatically terminate in the event of
its "assignment," as defined in the Act.
16. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
17. Sterling is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust and
agrees that any obligations of the Portfolio shall be limited in all cases
to the Portfolio and its assets, and neither Sterling nor its agents shall
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. In addition, neither Sterling nor its agents
shall seek satisfaction of any such obligations from the Trustees or any
individual Trustee.
18. If any provision of this Plan and Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise the remainder of
the Plan shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by the respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year
first above written.
STERLING CAPITAL DISTRIBUTORS, INC.
By /s/ W. Olin Nisbet III
President
ATTEST:
/s/ Mary D. Chavez
Secretary
(SEAL)
FIDELITY DISTRIBUTORS CORPORATION
By /s/ Rodger A. Lawson
Rodger A. Lawson, President
ATTEST:
/s/ Arthur S. Loring
Clerk
(SEAL)
J/AGMTS
d&sncc90
Supplemental Agreement
Whereas Fidelity Distributors Corporation ("the Distributor") and Sterling
Capital Distributors, Inc. ("Sterling") have entered into a Distribution
and Service Agent Agreement (the "Agreement") dated as of December 13,
1990, with respect to the shares of the North Carolina Cash Management
Trust: Term Portfolio (the "Portfolio").
And whereas Paragraph 3 of the Agreement provides:
3. Subject to such terms as Sterling and the Distributor shall, from time
to time, agree upon, Sterling shall directly bear all costs of rendering
the services to be performed under this Agreement, including but not
limited to the compensation of personnel necessary to provide such
services, and all other costs for travel, office space, facilities,
equipment, printing, telephone service, heat, light, power and other
utilities.
Now, therefore, representatives of the Distributor and Sterling have
entered into negotiations and have agreed upon the following terms with
reference to the provisions of said Paragraph 3:
(i) The Distributor or its affiliate shall bear 50% of the cost of Tymnet
Xlink 9.6 Leased Line Service (the "Xlink Service") providing data
telecommunication service between Sterling and the Portfolio's transfer
agent. If, in the reasonable judgment of the Distributor, the replacement
or improvement of such Xlink Service is appropriate, the cost of such
replacement or improvement shall be allocated upon such basis as the
parties shall then agree.
(ii) In addition to its obligations under the Agreement, Sterling shall
bear all costs of appropriate postage paid or payable by the Distributor or
its affiliates for the purpose of providing confirmations and monthly
statements to shareholders of the Portfolio.
(iii) The expenses to be borne by Sterling (i) of Xlink Service, and (ii)
of postage described in the preceding paragraph, shall be paid by the
Distributor or its affiliate and shall be deducted from the fee payable to
Sterling pursuant to Paragraph 5 of the Agreement. All other expenses to
be borne by Sterling pursuant to the Agreement shall be paid by Sterling
directly.
(iv) Paragraph 3 of the Agreement shall not be construed to require
Sterling to bear the costs of printing prospectuses which offer shares of
the Portfolio.
(v) The terms of this letter shall be effective as of December 13, 1990.
(vi) Except as expressly set forth in paragraphs (i)-(vi) hereof, all
terms and conditions of the Agreement shall remain unchanged and in full
force and effect.
Agreement with terms (i)-(vi) hereof is signified by Sterling and the
Distributor by authorized signature below.
Sterling Capital Distributors, Inc.
By /s/_W. Olin Nisbet III
President
Fidelity Distributors Corp.
By _/s/ Arthur S. Loring
Vice President
DISTRIBUTION AND SERVICE AGENT AGREEMENT
between
FIDELITY DISTRIBUTORS CORPORATION
and
STERLING CAPITAL DISTRIBUTORS, INC.
with respect to shares of
THE NORTH CAROLINA CASH MANAGEMENT TRUST:
CASH PORTFOLIO
WHEREAS, Fidelity Distributors Corporation ("Distributors"), a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts 02109, has entered into a Distribution and Service
Plan (the "Plan," set forth as Exhibit A hereto) with The North Carolina
Cash Management Trust (the "Trust"), an open-end, diversified, management
investment company organized as a Massachusetts business trust with
principal offices at 82 Devonshire Street, Boston, Massachusetts 02109, on
behalf of Cash Portfolio, a series of the Trust (the "Portfolio") and
Fidelity Management & Research Company (the "Adviser") an investment
adviser with principal offices at 82 Devonshire Street, Boston,
Massachusetts 02109, pursuant to the provisions of Rule 12b-1 under the
Investment Company Act of 1940 (the "Act"); and
WHEREAS, Distributors has entered into a General Distribution Agreement
with the Portfolio, set forth as Exhibit B hereto; and
WHEREAS, the Plan contemplates the retention by Distributors of Sterling
Capital Distributors, Inc. ("Sterling"), a North Carolina corporation with
principal offices at 1770 Independence Center, Charlotte, NC 28246, as
agent with respect to the provision of various distribution and shareholder
services required to be performed under the Plan;
NOW THEREFORE, the parties hereto enter into this Agreement as of the 13th
day of December, 1990, on the following terms and conditions:
1. Subject to the overall supervision of Distributors and the Board of
Trustees of the Trust, Distributors hereby retains Sterling to provide
facilities, personnel and a program with respect to the marketing and
promotional activities of the Portfolio. Without limiting the generality
of the foregoing, Sterling shall accomplish the following: (i) formulate
and implement marketing and promotional activities, including but not
limited to direct mail promotions, regional orientation meetings and
financial management seminars; (ii) prepare and contract for printing of a
periodic newsletter and the mailing and distribution thereof, such
newsletter to be distributed to potential and participating local units and
to provide information regarding the Portfolio and items of technical and
general interest to local treasurers and/or other financial officials;
(iii) provide office space and equipment, telephone facilities and
dedicated personnel as necessary to provide the services hereunder; (iv)
arrange and contract for the preparation and printing of sales literature
and seminar materials and the mailing and distribution thereof; (v) bear
the expenses of printing (not including typesetting) and distributing
prospectuses to other than existing shareholders, (vi) obtain, evaluate
and provide to Distributors such information, analyses and opinions with
respect to marketing and promotional activities as Distributors may, from
time to time, reasonably request in connection with its reporting and
informational responsibilities to the Portfolio; and (vii) organize and
maintain a Portfolio advisory board comprised of local government financial
officials. Such board shall meet at least semi-annually with a primary
purpose of providing a representative review of Portfolio, Distributors or
Sterling service initiatives, as well as providing an informal
communication device between shareholders and the Portfolio. Sterling
understands that the board shall not be responsible for providing any
advice with respect to investment matters.
2. Subject to such controls, provisions and procedures as shall be
provided to Sterling by the Distributor or the Trust's transfer agent,
Sterling shall perform the following functions and shareholder services at
its facilities within the boundaries of the State of North Carolina: (i)
establishment, maintenance and close-out of shareholder accounts; (ii)
shareholder inquiry, communication and problem resolution services; (iii)
completion of shareholder audit confirmations; (iv) receipt of orders for
transactions in shares of the Portfolio, and timely conveyance of such
orders to the Trust or its transfer agent; and (v) such concomitant duties
as are deemed appropriate by the Distributor.
3. Subject to such terms as Sterling and the Distributor shall, from time
to time, agree upon Sterling shall directly bear all costs of rendering the
services to be performed under this Agreement, including but not limited to
the compensation of personnel necessary to provide such services, and all
other costs for travel, office space, facilities, equipment, printing,
telephone service, heat, light, power and other utilities.
4. Distributors shall, from time to time, furnish or otherwise make
available to Sterling such financial reports, proxy statements and other
information relating to the business and affairs of the Portfolio as
Sterling may reasonably require in order to discharge its duties and
obligations hereunder.
5. Distributors agrees to pay Sterling as soon as practicable after the
end of each month and Sterling agrees to accept, as full compensation for
all services and facilities to be provided hereunder, a fee based on the
monthly average of the net assets of the Portfolio determined as of the
close of business on each business day throughout the month. The fee shall
be payable at an annual rate determined on a cumulative basis pursuant to
the following schedule:
The Annual Fee
Rate Is
On the first $100 million of
average daily net assets 0.140%
On average daily net assets in
excess of $100 million to $200
million 0.150%
On average daily net assets in excess
of $200 million to $800 million 0.160%
On average daily net assets in
excess of $800 million 0.170%
Sterling understands that Distributors, with the consent of Sterling, has
reserved the right to reduce or waive the distribution fee from time to
time.
If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for the
part of the month this Agreement is in effect shall be prorated based on
the number of business days during such month that this Agreement was in
effect.
6. Sterling hereby warrants and represents that it has obtained all
regulatory licenses and approvals, and has otherwise done all things
legally necessary, to perform its duties under this Agreement; and further
represents and warrants that Sterling will maintain its legal ability to so
perform during the term of this Agreement.
7. This Agreement shall become effective on December 13, 1990, if approved
by a vote of the Trustees of the Trust, and 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, cast in person at a
meeting called for the purpose of voting on this Agreement. For the
purpose of the Agreement, the terms "interested persons" and "majority of
the outstanding voting securities of the Portfolio" are used as defined in
the Act.
8. Sterling is not authorized to give any information or make any
representations with respect to the sale of shares, other than those
contained in the appropriate registration statements or prospectuses of the
Portfolio filed with the Securities and Exchange Commission under the
Securities Act of 1933 (as they may be amended from time to time), or
contained in shareholder reports or other material that may be prepared by
or on behalf of the Portfolio for Distributors's or Sterling's use. This
shall not be construed to prevent Sterling from preparing and distributing
sales literature or other material as it may deem appropriate, provided any
such material is delivered to Distributors for its approval in advance of
its use.
9. This Agreement shall remain in effect until July 31, 1991, and from
year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of the Trustees of the Trust and of
the Trustees who are not interested persons of the Trust, and who have no
direct or indirect financial interest in the operation of this Agreement,
cast in person at a meeting called for the purpose of voting on this
Agreement. If such annual approval is not obtained, the Agreement shall
expire 12 months after the date of the last approval. Sterling understands
that the Plan may be amended at any time by the Board of Trustees provided
that (a) any amendment to increase materially the amount to be spent for
the services therein described shall be effective only upon approval by a
vote of a majority of the outstanding shares of the Portfolio, and (b) any
material amendments of the Plan shall be effective only upon approval in
the manner provided in the first sentence in this paragraph.
10. This Agreement may be terminated at any time, without the payment of
any penalty, by vote of 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 this Agreement or by a vote of a majority of the
outstanding voting securities of the Portfolio, on not more than sixty
days' written notice. Notwithstanding anything contained herein, in the
event that the Plan shall terminate or Sterling shall fail to
satisfactorily perform its responsibilities hereunder, such determination
to be made in good faith by Distributors, this Agreement may be terminated
effective upon 30 days' written notice to Sterling by Distributors.
11. Nothing herein contained shall limit the freedom of Sterling or any
"affiliated person," as defined in the Act, to render investment
supervisory or distribution services to other investment companies, to act
as distributor, adviser or investment counselor to other persons, firms or
corporations and to engage in other business activities, provided that
Sterling shall not render investment supervisory, shareholder or
distribution services to any other investment company of the Cash Portfolio
type whose shares are offered for sale in North Carolina during the term of
this Agreement.
12. The provisions of this Paragraph 12 shall be applicable only with
respect to the provision of Distribution Services. The provision of
Shareholder Services shall not be affected by this Paragraph 12, but shall
be governed by the provisions of Paragraph 13, below. Distributors will
indemnify and hold Sterling harmless from judgments against Sterling
resulting from specific acts or omissions in the performance of
Distribution Services under this Agreement which are the result of written
instructions of a majority of the Board of Trustees of the Trust so long as
there is an express finding that such acts or omissions did not constitute
willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties or a breach of fiduciary duty.
No provision of this Paragraph 12 shall be deemed to protect Sterling
against any liability to the Portfolio or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith
or gross negligence in the performance of its Distribution Services duties
or the reckless disregard of its Distribution Services obligations under
this Agreement.
13. The provisions of this Paragraph 13 shall be applicable only with
respect to the provision of Shareholder Services. The provision of
Distribution Services shall not be affected by this Paragraph 13, but shall
be governed by the provisions of Paragraph 12, above.
A. To the extent that the Distributor is indemnified by the Trust, the
Distributor shall indemnify and hold Sterling harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Distributor, which names Sterling and/or the Distributor as a party and
is not based on and does not result from Sterling's willful misfeasance,
bad faith or negligence or reckless disregard of duties, and arises out of
or in connection with Sterling's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by Sterling's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the
Distributor,or from Sterling's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Trust or the Distributor, or as a result of Sterling's
acting in reliance upon advice reasonably believed by Sterlingto have been
given by counsel for the Trust.
B. Sterling shall indemnify and hold the Distributor and its affiliates
(including, without limitation, the Trust's transfer agent) harmless
against any losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand,
action or suit brought by any person other than Sterling, (including
without limitation, any suit which names the Trust, the Distributor, the
Trust's transfer agent, an affiliate of any of the foregoing, and/or
Sterling), and is based upon and arises out of acts, errors or omissions of
Sterling constituting negligence, lack of good faith or willful misconduct
in the performance of Sterling's Shareholder Service duties under this
Agreement.
14. In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the
"Indemnified Party") shall inform the other party (the "Indemnifying
Party") of the relevant facts known to Indemnified Party concerning the
matter in question. The Indemnified Party shall use reasonable care to
identify and promptly to notify the Indemnifying Party concerning any
matter which presents, or appears likely to present, a claim for
indemnification. The Indemnifying Party shall have the election of
defending the Indemnified Party against any claim which may be the subject
of indemnification or of holding the Indemnified Party harmless hereunder.
In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
defense of the claim and, if so requested by the Indemnifying Party, the
Indemnified Party shall incur no further legal or other expenses related
thereto for which it shall be entitled to indemnity or to being held
harmless hereunder; provided, however, that nothing herein shall prevent
the Indemnified Party from retaining counsel at its own expense to defend
any claim. Except with the Indemnifying Party's prior written consent,
the Indemnified Party shall in no event confess any claim or make any
compromise in any matter in which the Indemnifying Party will be asked to
indemnify or hold Indemnified Party harmless hereunder.
15. This Plan and Agreement shall automatically terminate in the event of
its "assignment," as defined in the Act.
16. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
17. Sterling is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust and
agrees that any obligations of the Portfolio shall be limited in all cases
to the Portfolio and its assets, and neither Sterling nor its agents shall
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. In addition, neither Sterling nor its agents
shall seek satisfaction of any such obligations from the Trustees or any
individual Trustee.
18. If any provision of this Plan and Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise the remainder of
the Plan shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by the respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year
first above written.
STERLING CAPITAL DISTRIBUTORS, INC.
By /s/ W. Olin Nisbet III
President
ATTEST:
/s/ Mary D. Chavez
Secretary
(SEAL)
FIDELITY DISTRIBUTORS CORPORATION
By /s/ Rodger A. Lawson
Rodger A. Lawson, President
ATTEST:
/s/ Arthur S. Loring
Clerk
(SEAL)
J/AGMTS
d&sncc90
Supplemental Agreement
Whereas Fidelity Distributors Corporation ("the Distributor") and Sterling
Capital Distributors, Inc. ("Sterling") have entered into a Distribution
and Service Agent Agreement (the "Agreement") dated as of December 13,
1990, with respect to the shares of the North Carolina Cash Management
Trust: Cash Portfolio (the "Portfolio").
And whereas Paragraph 3 of the Agreement provides:
3. Subject to such terms as Sterling and the Distributor shall, from time
to time, agree upon, Sterling shall directly bear all costs of rendering
the services to be performed under this Agreement, including but not
limited to the compensation of personnel necessary to provide such
services, and all other costs for travel, office space, facilities,
equipment, printing, telephone service, heat, light, power and other
utilities.
Now, therefore, representatives of the Distributor and Sterling have
entered into negotiations and have agreed upon the following terms with
reference to the provisions of said Paragraph 3:
(i) The Distributor or its affiliate shall bear 50% of the cost of Tymnet
Xlink 9.6 Leased Line Service (the "Xlink Service") providing data
telecommunication service between Sterling and the Portfolio's transfer
agent. If, in the reasonable judgment of the Distributor, the replacement
or improvement of such Xlink Service is appropriate, the cost of such
replacement or improvement shall be allocated upon such basis as the
parties shall then agree.
(ii) In addition to its obligations under the Agreement, Sterling shall
bear all costs of appropriate postage paid or payable by the Distributor or
its affiliates for the purpose of providing confirmations and monthly
statements to shareholders of the Portfolio.
(iii) The expenses to be borne by Sterling (i) of Xlink Service, and (ii)
of postage described in the preceding paragraph, shall be paid by the
Distributor or its affiliate and shall be deducted from the fee payable to
Sterling pursuant to Paragraph 5 of the Agreement. All other expenses to
be borne by Sterling pursuant to the Agreement shall be paid by Sterling
directly.
(iv) Paragraph 3 of the Agreement shall not be construed to require
Sterling to bear the costs of printing prospectuses which offer shares of
the Portfolio.
(v) The terms of this letter shall be effective as of December 13, 1990.
(vi) Except as expressly set forth in paragraphs (i)-(vi) hereof, all
terms and conditions of the Agreement shall remain unchanged and in full
force and effect.
Agreement with terms (i)-(vi) hereof is signified by Sterling and the
Distributor by authorized signature below.
Sterling Capital Distributors, Inc.
By /s/_W. Olin Nisbet III
President
Fidelity Distributors Corp.
By __/s/ Arthur S. Loring
Vice President
