SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
(Name of Registrant as Specified In Its Charter)
(IF YOU CHECKED FILED BY REGISTRANT ABOVE" do not fill this in:
Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
<PAGE>
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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10/8/98
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
FIDELITY NEW MILLENNIUM(REGISTERED) FUND
FUNDS OF
FIDELITY MT. VERNON STREET TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Growth Company Fund, Fidelity Emerging Growth Fund, and
Fidelity New Millennium Fund (the funds) will be held at the office of Fidelity
Mt. Vernon Street Trust (the trust), 82 Devonshire Street, Boston, Massachusetts
02109 on January 13, 1999, at 9:00 a.m. The purpose of the Meeting is to
consider and act upon the following proposals, and to transact such other
business as may properly come before the Meeting or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the funds.
3. To authorize the Trustees to adopt an amended and restated Declaration
of Trust.
4. To approve an amended management contract for Fidelity Growth Company
Fund.
5. To approve an amended management contract for Fidelity Emerging Growth
Fund.
6. To approve an amended management contract for Fidelity New Millennium
Fund.
7. To approve a Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Growth Company Fund, Fidelity Emerging Growth Fund and
Fidelity New Millennium Fund.
8. To make Fidelity Growth Company Fund's fundamental policy concerning
investments in common stock and securities convertible into common
stock non-fundamental.
9. To amend the fundamental investment limitation concerning
diversification to exclude securities of other investment companies
from the limitation for Fidelity Growth Company Fund, Fidelity Emerging
Growth Fund and Fidelity New Millennium Fund.
The Board of Trustees has fixed the close of business on November 16, 1998
as the record date for the determination of the shareholders of each of the
funds entitled to notice of, and to vote at, such Meeting and any adjournments
thereof.
By order of the Board
of Trustees,
ERIC D. ROITER,
Secretary
November 16, 1998
<PAGE>
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN THE
ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN
ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN MAILING YOUR
PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote if
you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account registration
itself or by the individual executing the proxy card. For example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY MT. VERNON STREET TRUST:
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
FIDELITY NEW MILLENNIUM FUND
TO BE HELD ON JANUARY 13, 1999
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity Mt. Vernon
Street Trust (the trust) to be used at the Special Meeting of Shareholders of
Fidelity Growth Company Fund, Fidelity Emerging Growth Fund, and Fidelity New
Millennium Fund (the funds) and at any adjournments thereof (the Meeting), to be
held on January 13, 1999 at 9:00 a.m. at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and Fidelity
Management & Research Company (FMR), the funds' investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is being made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about November 16, 1998. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, electronic
means or by personal interview by representatives of the trust. In addition,
Management Information Services Corp. (MIS) and D.F. King & Co., Inc. may be
paid on a per-call basis to solicit shareholders on behalf of the funds at an
anticipated cost of approximately $______ (Fidelity Growth Company Fund),
$________ (Fidelity Emerging Growth Fund), and $________ (Fidelity New
Millennium Fund), respectively. The expenses in connection with preparing this
Proxy Statement and its enclosures and of all solicitations will be paid by the
funds. The funds will reimburse brokerage firms and others for their reasonable
expenses in forwarding solicitation material to the beneficial owners of shares.
The principal business address of Fidelity Distributors Corporation (FDC), the
funds' principal underwriter and distribution agent, and Fidelity Management &
Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East)
Inc. (FMR Far East), subadvisers to the funds, is 82 Devonshire Street, Boston,
Massachusetts 02109.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by the
trust, by the execution of a later-dated proxy card, by the trust's receipt of a
subsequent valid telephonic vote or by attending the Meeting and voting in
person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are not
revoked, will be voted at the Meeting. Shares represented by such proxies will
be voted in accordance with the instructions thereon. If no specification is
made on a proxy card, it will be voted FOR the matters specified on the proxy
card. Only proxies that are voted will be counted towards establishing a quorum.
Broker non-votes are not considered voted for this purpose. Shareholders should
note that while votes to ABSTAIN will count toward establishing a quorum,
passage of any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly, votes to
ABSTAIN and votes AGAINST will have the same effect in determining whether a
proposal is approved.
The funds may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting will be paid by the funds. If the
funds record votes by telephone, they will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to confirm
that their instructions have been properly recorded. Proxies voted by telephone
may be revoked at any time before they are voted at the meeting in the same
manner that proxies voted by mail may be revoked. D.F. King & Co., Inc. may be
paid on a per-call basis for vote-by-phone solicitations on behalf of the funds
at an anticipated cost of approximately $______, (Fidelity Growth Company Fund)
and $_______ Fidelity Emerging Growth Fund and $______ Fidelity New Millennium
Fund.
3
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If a quorum is not present at the Meeting, or if a quorum is present at
the Meeting but sufficient votes to approve one or more of the proposed items
are not received, or if other matters arise requiring shareholder attention, the
persons named as proxy agents may propose one or more adjournments of the
Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares present at the
Meeting or represented by proxy. When voting on a proposed adjournment, the
persons named as proxy agents will vote FOR the proposed adjournment all shares
that they are entitled to vote with respect to each item, unless directed to
vote AGAINST the item, in which case such shares will be voted AGAINST the
proposed adjournment with respect to that item. A shareholder vote may be taken
on one or more of the items in this Proxy Statement prior to such adjournment if
sufficient votes have been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of September
30, 1998 are indicated in the following table:
Fidelity Growth Company Fund X
Fidelity Emerging Growth Fund X
Fidelity New Millennium Fund X
As of September 30, 1998 the nominees and officers of the trust owned, in
the aggregate, less than 1% of the fund's outstanding shares.
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of each fund on September 30, 1998, was as follows:
Shareholders of record at the close of business on November 16, 1998 will
be entitled to vote at the Meeting. Each such shareholder will be entitled to
one vote for each dollar of net asset value held on that date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1997 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED MAY 31,
1998, CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS CORPORATION
AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSAL 1 and A MAJORITY OF ALL VOTES OF THE APPROPRIATE FUND CAST
AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL 2. Approval of Proposal 3
requires the affirmative vote of a "majority of the outstanding voting
securities" of the entire trust. APPROVAL OF PROPOSALS 4 THROUGH 8 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE
APPROPRIATE FUNDS. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE
VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR (B) MORE
THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT
CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following tables summarize the proposals applicable to each fund.
PROPOSAL # Proposal Description Applicable Fund(s)
1. To elect as Trustees the 12 nominees All
presented in proposal 1.
2. To ratify the selection of All
PricewaterhouseCoopers LLP as
independent accountants of the
funds.
3. To authorize the Trustees to adopt All
an amended and restated
Declaration of Trust.
4. To approve an amended management Fidelity Growth Company
contract for the fund that would Fund
reduce the management fee
payable to FMR by the fund as
4
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FMR's assets under management
increase, change the comparative
securities index used for
calculating the fund's
management fee performance
adjustment, and would modify the
performance adjustment
calculations to calculate the
fund's investment performance
and that of its comparative
index to the nearest 0.01%.
5. To approve an amended management Fidelity Emerging Growth
contract for the fund that would Fund
reduce the management fee
payable to FMR by the fund as
FMR's assets under management
increase, change the comparative
securities index used for
calculating the fund's
management fee performance
adjustment, and would modify the
performance adjustment
calculations to calculate the
fund's investment performance
and that of its comparative
index to the nearest 0.01%.
6. To approve an amended management Fidelity New
contract for the fund that would Millennium Fund
reduce the management fee
payable to FMR by the fund as
FMR's assets under management
increase, and would modify the
performance adjustment
calculations to calculate the
fund's investment performance
and that of its comparative
index to the nearest 0.01%.
7. To approve a Distribution and All
Service Plan for the fund which
describes all material aspects
of the proposed financing for
the distribution of fund shares.
8. To make the fundamental policy Fidelity Growth Company
concerning investment in common Fund
stock and securities convertible
into common stock
non-fundamental.
9. To amend the diversification All
limitation to exclude
"securities of other investment
companies" from issuer
diversification limits.
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the trust.
Pursuant to the provisions of the Declaration of Trust of Fidelity Mt. Vernon
Street Trust, the Trustees have determined that the number of Trustees shall be
fixed at twelve. It is intended that the enclosed proxy card will be voted for
the election as Trustees of the twelve nominees listed below, unless such
authority has been withheld in the proxy card.
All nominees named below are currently Trustees of Fidelity Mt. Vernon
Street Trust and have served in that capacity continuously since originally
elected or appointed. Robert M. Gates, William O. McCoy, and Robert C. Pozen
were selected by the trust's Nominating and Administration Committee (see page)
__ and were appointed to the Board in March 1997, January 1997 and August 1997,
respectively. None of the nominees are related to one another. Those nominees
indicated by an asterisk (*) are "interested persons" of the trust by virtue of,
among other things, their affiliation with either the trust, the funds'
investment adviser (FMR, or the Adviser), or the funds' distribution agent, FDC.
The business address of each nominee who is an "interested person" is 82
Devonshire Street, Boston, Massachusetts 02109, and the business address of all
other nominees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts
02205-9235. Except for Robert M. Gates and William O. McCoy, and Robert C. Pozen
each of the nominees is currently a Trustee or General Partner, as the case may
be, of 57 registered investment companies (trusts or partnerships) advised by
FMR. Mr. Gates and Mr. McCoy are currently a Trustee or General Partner, as the
case may be, of 54 registered investment companies (trusts or partnerships)
advised by FMR. Mr. Pozen is currently a Trustee or General Partner, as the case
may be, of 51 registered investment companies (trusts or partnership) advised by
FMR.
5
<PAGE>
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, provided a quorum is present, shall be
elected.
<TABLE>
<CAPTION>
NOMINEE PRINCIPAL OCCUPATION ** YEAR OF
(AGE) ELECTION OR
APPOINTMENT
<S> <C> <C>
Ralph F. Cox President of RABAR Enterprises (management 1991
consulting-engineering industry, 1994). Prior to
(66) February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and
production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union
Pacific Resources Company (exploration and
production). He is a Director of USA Waste
Services, Inc. (non-hazardous waste, 1993), CH2M
Hill Companies (engineering), Rio Grande, Inc.
(oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer).
In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas
at Austin.
Phyllis Burke Davis Prior to her retirement in September 1991, Mrs. 1992
Davis was the Senior Vice President of Corporate
(67) Affairs of Avon Products, Inc. She is currently
a Director of BellSouth Corporation
(telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies,
Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she is a member
of the President's Advisory Council of The
University of Vermont School of Business
Administration.
Robert M. Gates Consultant, author, and lecturer (1993). Mr. 1997
Gates was Director of the Central Intelligence
(55) Agency (CIA) from 1991-1993. From 1989 to 1991,
Mr. Gates served as Assistant to the President of
the United States and Deputy National Security
Advisor. Mr. Gates is a Director of LucasVarity
PLC (automotive components and diesel engines),
Charles Stark Draper Laboratory (non-profit),
NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment
and replacement products). Mr. Gates also is a
Trustee of the Forum for International Policy and
of the Endowment Association of the College of
William and Mary. In addition, he is a member of
the National Executive Board of the Boy Scouts of
America.
*Edward C. Johnson 3d President, is Chairman, Chief Executive Officer 1982
and a Director of FMR Corp.; a Director and
(68) Chairman of the Board and of the Executive
Committee of FMR; Chairman and a Director of
Fidelity Investments Money Management, Inc.
(1998), Fidelity Management & Research (U.K.)
Inc., and Fidelity Management & Research (Far
East) Inc.
6
<PAGE>
E. Bradley Jones Prior to his retirement in 1984, Mr. Jones was 1990
Chairman and Chief Executive Officer of LTV Steel
(71) Company. He is a Director of TRW Inc. (original
equipment and replacement products), Consolidated
Rail Corporation, Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of chemical
products), and he previously served as a Director
of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials
Handling, Inc. (1985-1995), and Cleveland-Cliffs
Inc (mining), and as a Trustee of First Union
Real Estate Investments. In addition, he serves
as a Trustee of the Cleveland Clinic Foundation,
where he has also been a member of the Executive
Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive
Committee of University School (Cleveland), and a
Trustee of Cleveland Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) at Columbia 1987
University Graduate School of Business and a
(66) financial consultant. From 1987 to January 1995,
Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he
was Chairman of the Financial Accounting
Standards Board. Mr. Kirk is a Director of
General Re Corporation (reinsurance), and he
previously served as a Director of Valuation
Research Corp. (appraisals and valuations,
1993-1995). In addition, he serves as Chairman of
the Board of Directors of National Arts
Stabilization Inc., Chairman of the Board of
Trustees of the Greenwich Hospital Association,
Director of the Yale-New Haven Health Services
Corp. (1998), a Member of the Public Oversight
Board of the American Institute of Certified
Public Accountants' SEC Practice Section (1995),
and as a Public Governor of the National
Association of Securities Dealers, Inc. (1996).
*Peter S. Lynch Vice Chairman and Director of FMR. Prior to May 1990
31, 1990, he was a Director of FMR and Executive
(55) Vice President of FMR (a position he held until
March 31, 1991); Vice President of Fidelity
Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also
Vice President of Fidelity Investments Corporate
Services (1991-1992). In addition, he serves as a
Trustee of Boston College, Massachusetts Eye &
Ear Infirmary, Historic Deerfield (1989) and
Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of
Fine Arts of Boston.
William O. McCoy Vice President of Finance for the University of 1997
North Carolina (16-school system, 1995). Prior to
(65) his retirement in December 1994, Mr. McCoy was
Vice Chairman of the Board of BellSouth
Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is
currently a Director of Liberty Corporation
(holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and
Light Company (electric utility, 1996) and the
Kenan Transport Co. (1996). Previously, he was a
7
<PAGE>
Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr.
McCoy serves as a member of the Board of Visitors
for the University of North Carolina at Chapel
Hill (1994) and for the Kenan-Flager Business
School (University of North Carolina at Chapel
Hill, 1988).
Gerald C. McDonough Chairman of G.M. Management Group (strategic 1989
advisory services). Mr. McDonough is a Director
(70) of York International Corp. (air conditioning
and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas
filtration products, 1996), and Associated
Estates Realty Corporation (a real estate
investment trust, 1993). Mr. McDonough served as
a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic
products) from 1987-1996 and Brush-Wellman Inc.
(metal refining) from 1983-1997).
Marvin L. Mann Chairman of the Board of Lexmark International, 1993
Inc. (office machines, 1991). Prior to 1991, he
(65) held the positions of Vice President of
International Business Machines Corporation
("IBM") and President and General Manager of
various IBM divisions and subsidiaries. Mr. Mann
is a Director of M.A. Hanna Company (chemicals,
1993) and Imation Corp. (imaging and information
storage, 1997).
*Robert C. Pozen Senior Vice President, is also President and a 1997
Director of FMR (1997); and President and a
(52) Director of Fidelity Investments Money
Management, Inc. (1998), Fidelity Management &
Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997).
Previously, Mr. Pozen served as General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.
Thomas R. Williams President of The Wales Group, Inc. (management 1989
and financial advisory services). Prior to
(70) retiring in 1987, Mr. Williams served as Chairman
of the Board of First Wachovia Corporation (bank
holding company), and Chairman and Chief
Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank
holding company). He is currently a Director
of ConAgra, Inc. (agricultural products), Georgia
Power Company (electric utility), National Life
Insurance Company of Vermont, American Software,
Inc., and AppleSouth, Inc. (restaurants, 1992).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of September 30, 1998, the nominees, Trustees and officers of the Trust
and each fund owned, in the aggregate, less than 1% of each fund's outstanding
shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (c) any Trustee who requests to be retired or who has become
incapacitated by illness or injury may be retired by written instrument signed
8
<PAGE>
by a majority of the other Trustees; and (d) a Trustee may be removed at any
Special Meeting of shareholders by a two-thirds vote of the outstanding voting
securities of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another Trustee, so long
as, immediately after such appointment, at least two-thirds of the Trustees have
been elected by shareholders. If, at any time, less than a majority of the
Trustees holding office has been elected by the shareholders, the Trustees then
in office will promptly call a shareholders' meeting for the purpose of electing
a Board of Trustees. Otherwise, there will normally be no meeting of
shareholders for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
nine non-interested Trustees, met eleven times during the twelve months ended
November 30, 1997. It is expected that the Trustees will meet at least ten times
a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets four
times a year, or as required, prior to meetings of the Board of Trustees.
Currently, Messrs. Kirk (Chairman), Gates and McCoy, and Mrs. Davis are members
of the Committee. The committee oversees and monitors the trust's internal
control structure, its auditing function and its financial reporting process,
including the resolution of material reporting issues. The committee recommends
to the Board of Trustees the appointment of auditors for the trust. It reviews
audit plans, fees and other material arrangements in respect of the engagement
of auditors, including non-audit services to be performed. It reviews the
qualifications of key personnel involved in the foregoing activities. The
committee plays an oversight role in respect of the trust's investment
compliance procedures and the code of ethics. During the twelve months ended
November 30, 1997 the committee held four meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. McDonough (Chairman), Jones and Williams. The committee members
confer periodically and hold meetings as required. The committee makes
nominations for independent trustees, and for membership on committees. The
committee periodically reviews procedures and policies of the Board of Trustees
and committees. It acts as the administrative committee under the Retirement
Plan for non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and the
independent trustees. The committee in the first instance monitors compliance
with, and acts as the administrator of the provisions of the code of ethics
applicable to the independent trustees. During the twelve months ended November
30, 1997, the committee held no meetings. The Nominating and Administration
Committee will consider nominees recommended by shareholders. Recommendations
should be submitted to the committee in care of the Secretary of the Trust. The
trust does not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
9
<PAGE>
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of each fund for his or her
services for the fiscal year ended November 30, 1997, or calendar year ended
December 31, 1997, as applicable.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Aggregate Aggregate
Aggregate Compensation Compensation from Compensation from Total Compensation
from Fidelity Growth Fidelity Emerging Fidelity New from the
Trustees and Members COMPANY FUND B,C,E GROWTH FUND B,D,E Millennium B FUND COMPLEX*A
OF THE ADVISORY BOARD ------------------ ------------------ ----------------- -------------------
---------------------
<S> <C> <C> <C> <C>
J. Gary Burkhead **,# $ 0 $ 0 $ 0 $ 0
Ralph F. Cox $ 4,160 $ 784 $ 580 $ 214,500
Phyllis Burke Davis $ 4,069 $ 766 $ 568 $ 210,000
Richard J. Flynn*** $ 252 $ 52 $ 34 $ 0
Robert M. Gates **** $ 3,270 $ 603 $ 459 $ 176,000
Edward C. Johnson 3d ** $ 0 $ 0 $ 0 $ 0
E. Bradley Jones $ 4,101 $ 773 $ 572 $ 211,500
Donald J. Kirk $ 4,101 $ 773 $ 572 $ 211,500
Peter S. Lynch ** $ 0 $ 0 $ 0 $ 0
William O. McCoy***** $ 4,279 $ 806 $ 593 $ 214,500
Gerald C. McDonough $ 5,044 $ 949 $ 704 $ 264,500
Edward H. Malone*** $ 245 $ 50 $ 32 $ 0
Marvin L. Mann $ 4,160 $ 784 $ 580 $ 214,500
Robert C. Pozen** $ 0 $ 0 $ 0 $ 0
Thomas R. Williams $ 4,163 $ 785 $ 581 $ 214,500
</TABLE>
* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees and Advisory Board members of the fund's are
compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** Mr. Gates was appointed to the Board of Trustees effective March 1, 1997.
***** During the period from May 1, 1996 through December 31, 1996, William O.
McCoy served as a Member of the Advisory Board of the trust. Mr. McCoy
was appointed to the Board of Trustees of Fidelity Mt. Vernon Street
Trust effective January 1, 1997.
10
<PAGE>
# J. Gary Burkhead served on the Board of Trustees through July 31, 1997.
Effective August 1, 1997, Mr. Burkhead serves as a Member of the Advisory
Board of the trust.
A Compensation figures include cash, amounts required to be deferred, and
may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox, $75,000;
Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E. Bradley Jones,
$75,000; Donald J. Kirk, $75,000; William O. McCoy, $75,000; Gerald C.
McDonough, $87,500; Marvin L. Mann, $75,000; and Thomas R. Williams,
$75,000. Certain of the non-interested Trustees elected voluntarily to
defer a portion of their compensation as follows: Ralph F. Cox, $53,699;
Marvin L. Mann, $53,699; and Thomas R. Williams, $62,462.
B Compensation figures include cash, and may include amounts required to be
deferred, a pro rata portion of benefits accrued under the retirement
program for the period ended December 30, 1996 and required to be
deferred, and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $1,863,
Phyllis Burke Davis, $1,863, Richard J. Flynn, $0, Robert M. Gates, $802,
E. Bradley Jones, $1,863, Donald J. Kirk, $1,863, William O. McCoy,
$1,791, Gerald C. McDonough, $2,172, Edward H. Malone, $9, Marvin L.
Mann, $1,863, and Thomas R. Williams, $1,863.
D The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $350, Phyllis
Burke Davis, $350, Richard J. Flynn, $0, Robert M. Gates, $284, E.
Bradley Jones, $350, Donald J. Kirk, $350, William O. McCoy, $359, Gerald
C. McDonough, $407, Edward H. Malone, $2, Marvin L. Mann, $350, and
Thomas R. Williams, $350.
E For the fiscal year ended November 30, 1997, certain of the
non-interested Trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox, $1,748,
Growth Company; Marvin L. Mann, $1,748, Growth Company; Edward H. Malone,
$236, Growth Company; Thomas R Williams, $1,544, Growth Company; Ralph F.
Cox, $331, Emerging Growth; Edward H. Malone, $48, Emerging Growth;
Marvin L. Mann, $331, Emerging Growth; and Thomas R. Williams, $289,
Emerging Growth.
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before December
30, 1996 may receive payments from a Fidelity fund during his or her lifetime
based on his or her basic trustee fees and length of service. The obligation of
a fund to make such payments is neither secured nor funded. A Trustee became
eligible to participate in the program at the end of the calendar year in which
he or she reached age 72, provided that, at the time of retirement, he or she
had served as a Fidelity fund Trustee for at least five years.
Under a deferred compensation plan adopted in September 1995 and amended
in November 1996 (the Plan), non-interested Trustees must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of, their
annual fees. Amounts deferred under the Plan are subject to vesting and are
treated as though equivalent dollar amounts had been invested in shares of a
cross-section of Fidelity funds including funds in each major investment
discipline and representing a majority of Fidelity's assets under management
(the Reference Funds). The amounts ultimately received by the Trustees under the
Plan will be directly linked to the investment performance of the Reference
Funds. Deferral of fees in accordance with the Plan will have a negligible
effect on a fund's assets, liabilities, and net income per share, and will not
obligate a fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the Reference Funds
under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection with
the termination of the retirement program, each then-existing non-interested
Trustee received a credit to his or her Plan account equal to the present value
of the estimated benefits that would have been payable under the retirement
program. The amounts credited to the non-interested Trustees' Plan accounts are
subject to vesting and are treated as though equivalent dollar amounts had been
invested in shares of the Reference Funds. The amounts ultimately received by
the Trustees in connection with the credits to their Plan accounts will be
directly linked to the investment performance of the Reference Funds. The
11
<PAGE>
termination of the retirement program and related crediting of estimated
benefits to the Trustees' Plan accounts did not result in a material cost to the
funds.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS OF THE FUNDS.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent accountants for each
fund to sign or certify any financial statements of each fund required by any
law or regulation to be certified by an independent accountant and filed with
the Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition, as
required by the 1940 Act, the vote of the Trustees is subject to the right of
each fund, by vote of a majority of its outstanding voting securities at any
meeting called for the purpose of voting on such action, to terminate such
employment without penalty. PricewaterhouseCoopers LLP has advised each fund
that it has no direct or material indirect ownership interest in each fund.
For the funds' most recently completed fiscal years, the firm of Coopers &
Lybrand L.L.P. acted as each fund's independent accountants. Effective July 1,
1998, Coopers & Lybrand L.L.P. and Price Waterhouse LLP combined their
businesses and practices and began doing business as PricewaterhouseCoopers LLP.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of each fund's accountants, the Audit Committee reviewed the nature
and scope of the services to be provided (including non-audit services) and
whether the performance of such services would affect the accountants'
independence. Representatives of PricewaterhouseCoopers LLP are not expected to
be present at the Meeting, but have been given the opportunity to make a
statement if they so desire and will be available should any matter arise
requiring their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED DECLARATION OF
TRUST.
The Board of Trustees has approved and recommends that the shareholders of
the trust authorize them to adopt and execute an Amended and Restated
Declaration of Trust for the trust and the funds of the trust in the form
attached to this Proxy Statement as Exhibit 1 (New Declaration of Trust). The
attached New Declaration of Trust has been marked to show changes from the
trust's existing Declaration of Trust (Current Declaration of Trust). The New
Declaration of Trust is a more modern form of trust instrument for a
Massachusetts business trust, and, going forward, will be used as the standard
Declaration of Trust for all new Fidelity Massachusetts business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts law,
broader authority to act. This increased flexibility may allow the Trustees to
react more quickly to changes in competitive and regulatory conditions and, as a
consequence, may allow the funds to operate in a more efficient and economical
manner. ADOPTION OF THE NEW DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE
TRUSTEES' EXISTING FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE
SHAREHOLDERS' INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH INTERESTS.
Adoption of the New Declaration of Trust will not result in any changes in
the funds' Trustees or officers or in the investment policies and shareholder
services described in the funds' current prospectuses.
Generally, a majority of the Trustees may amend the Current Declaration of
Trust when authorized by a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the trust. On October 16, 1997, the Trustees
approved the form of the New Declaration of Trust. On December 18, 1997, the
Board approved several additional changes to the form of the New Declaration of
Trust, which changes have been incorporated into the form attached to this Proxy
Statement. On September 17, 1998, the Board authorized the submission of the New
Declaration of Trust to the trust's shareholders for their authorization at this
Meeting.
12
<PAGE>
The New Declaration of Trust amends the Current Declaration of Trust in a
number of significant ways. The following discussion summarizes some of the more
significant amendments to the Current Declaration of Trust effected by the New
Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER SUBSTANTIVE
AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF TRUST AND THE CURRENT
DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE NEW DECLARATION OF TRUST ITSELF, WHICH IS ATTACHED AS EXHIBIT 1
TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. Unlike the
Current Declaration of Trust, the New Declaration of Trust generally permits the
Trustees, subject to applicable Federal and state law, to reorganize or
terminate the trust or any of its series. The Current Declaration of Trust
requires shareholder approval in order to reorganize or terminate the trust or
any of its series.
Under certain circumstances, it may not be in the shareholders' interest
to require a shareholder meeting to permit the trust or a fund to reorganize
into another entity. For example, in order to reduce the cost and scope of state
regulatory constraints or to take advantage of a more favorable tax treatment
offered by another state, the Trustees may determine that it would be in the
shareholders' interests to reorganize a fund to domicile it in another state or
to change its legal form. Under the Current Declaration of Trust, the Trustees
cannot effectuate such a potentially beneficial reorganization without first
conducting a shareholder meeting and incurring the attendant costs and delays.
In contrast, the New Declaration of Trust gives the Trustees the flexibility to
reorganize the trust or any of its series and achieve potential shareholder
benefits without incurring the delay and potential costs of a proxy
solicitation. Such flexibility should help to assure that the trust and its
funds operate under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the Trustees to terminate a
fund. For example, a fund may have insufficient assets to invest effectively or
excessively high expense levels due to operational needs. Under such
circumstances, absent viable alternatives, the Trustees may determine that
terminating the fund is in the shareholders' interest and the only appropriate
course of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the fund's
liquidation and termination and, in general, will increase the costs associated
with the termination. In such a case, it may be in the shareholders' interest to
permit fund termination without incurring the costs and delays of a shareholder
meeting.
As discussed above, before allowing a trust or fund reorganization or
termination to proceed without shareholder approval, the Trustees have a
fiduciary responsibility to first determine that the proposed transaction is in
the shareholders' interest. Any exercise of the Trustees' increased authority
under the New Declaration of Trust is also subject to any applicable
requirements of the 1940 Act and Massachusetts law. Of course, in all cases, the
New Declaration of Trust would require that shareholders receive written
notification of any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority to
merge a fund with another operating mutual fund or sell all of a fund's assets
to another operating mutual fund without first seeking shareholder approval.
Under the New Declaration of Trust, shareholder approval is still required for
these transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the Declaration of
Trust without shareholder approval. Under the New Declaration of Trust,
shareholders generally have the right to vote on any amendment affecting their
right to vote, on any amendment altering the maximum number of permitted
Trustees, on any amendment affecting the New Declaration of Trust's amendment
provisions, on any amendment required by law or the trust's registration
statement, and on any matter submitted to shareholders by the Trustees. The
Current Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing amendment of
the Declaration of Trust without shareholder approval, the New Declaration of
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<PAGE>
Trust gives the Trustees the necessary authority to react quickly to future
contingencies. As mentioned above, such increased authority remains subordinate
to the Trustees' continuing fiduciary obligations to act with due care and in
the shareholders' interest.
OTHER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of Trust
modifies the Current Declaration of Trust in a number of important ways,
including the following:
1. The New Declaration of Trust modifies the Current Declaration of Trust
to allow FMR and the trust, on behalf of each fund, to amend the fund's
respective Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the SEC. In contrast, the Current
Declaration of Trust explicitly requires the vote of a majority of the
outstanding voting securities of a fund to authorize all such amendments. A
corresponding change is also proposed for the funds' Management Contracts. For
more information on this topic generally, see "Modification of Management
Contract Amendment Provisions" on page ___ for Fidelity Growth Company Fund,
page ___ for Fidelity Emerging Growth Fund, and page ___ for Fidelity New
Millennium Fund.
2. The New Declaration of Trust clarifies that the Trustees may impose
other fees (for example, purchase fees) in addition to sales charges upon
investment in a fund and clarifies that deferred sales charges and other fees
(for example, redemption fees) may be imposed upon redemption of a fund's
shares.
3. The New Declaration of Trust confirms and clarifies various existing
Trustee powers. For example, the New Declaration of Trust clarifies that the
Trustees, in addition to banks and trust companies, may employ as fund
custodians companies that are members of a national securities exchange or other
entities permitted under the 1940 Act; delegate authority to investment advisers
and other agents; adopt and offer dividend reinvestment and related plans;
operate and carry on the business of an investment company; and interpret the
investment policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of a trust
series shall have a claim on the assets of another series and further clarifies
that, by virtue of investing in a fund, a shareholder is deemed to have assented
to and agreed to be bound by the terms of the New Declaration of Trust.
5. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust, including
existing requirements that a Trustee vacancy be deemed to occur when a Trustee
is absent from his or her state of residence, that Trustee vacancies must be
filled within six calendar months, and that portfolio securities be held
pursuant to safeguards prescribed by usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust modifies the Current
Declaration of Trust to incorporate appropriate references to classes of shares.
7. Lastly, the New Declaration of Trust generally expands various 1940 Act
defined terms to encompass SEC modifications and interpretations. Specific
references to discrete sections of the 1940 Act that are contained in the New
Declaration of Trust have likewise been expanded to include SEC modifications
and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed adoption
of the New Declaration of Trust is in the best interests of the trust's
shareholders. Accordingly, the Trustees unanimously recommend that the
shareholders vote FOR the proposal to authorize them to adopt and execute the
New Declaration of Trust. If the proposal is not approved, the Current
Declaration of Trust will remain unchanged and in effect.
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<PAGE>
4. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY GROWTH COMPANY
FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has approved, and
recommends that shareholders of the fund approve, a proposal to adopt an amended
management contract with FMR (the Amended Contract) in the form attached to this
Proxy Statement as Exhibit 2. The Amended Contract modifies (i) three aspects of
the management fee that FMR receives from the fund for managing its investments
and business affairs, and (ii) one other provision of the fund's existing
management contract with FMR (the Present Contract).
CURRENT MANAGEMENT FEE. The fund's current management fee is calculated
and paid monthly, and is normally expressed as an annual percentage of the
fund's average net assets. The fee has two components: a Basic Fee and a
Performance Adjustment. The Basic Fee is an annual percentage of the fund's
average net assets for the current month. The Basic Fee rate is the sum of a
Group Fee rate, which declines as FMR's fund assets under management increase,
and a fixed individual fund fee rate of 0.30 %. The Basic Fee rate for the
fund's fiscal year ended November 30, 1997 (not including the fee amendments
discussed below) was 0.5992%.
The Performance Adjustment is a positive or negative dollar amount applied
to the Basic Fee and is based on the fund's performance and assets for the most
recent 36 months. If the fund outperforms its current comparative index, the S&P
500 Index (the Current Index), over 36 months, FMR receives a positive
Performance Adjustment, which increases the management fee. If the fund
underperforms the Current Index, FMR's management fee is reduced by a negative
Performance Adjustment. The Performance Adjustment is an annual percentage of
the fund's average net assets over the 36-month performance period. The
Performance Adjustment rate is 0.02% for each percentage point of outperformance
or underperformance, subject to a maximum rate of 0.20% if the fund outperforms
or underperforms the Current Index by ten percentage points or more over the
performance period. Under the Present Contract, FMR received negative
Performance Adjustment for the fund's fiscal year ended November 30, 1997, which
equaled {0.1236%} of the fund's average net assets for the year.
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract would (1) reduce
the Group Fee rate further if FMR's assets under management remain over $426
billion, (2) prospectively change the comparative securities index used to
calculate the fund's Performance Adjustment from the Current Index to the
Russell 3000 Growth Index (the Proposed Index), (3) modify the Performance
Adjustment calculation to round the performance of the fund and the index to the
nearest 0.01%, rather than the nearest 1.00%, and (4) allow FMR and the trust,
on behalf of the fund, to modify the Management Contract subject to the
requirements of the 1940 Act. The existing Management Contract currently
requires the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract Amendment
Provisions" on page __ for more details. The financial impact of the proposed
changes to the management fee is summarized briefly in the following paragraphs.
The changes are discussed in more detail in the remainder of the proposal.
IMPACT OF PROPOSED GROUP FEE RATE REDUCTION. At FMR's current level of
assets under management (approximately $591 billion as of September 30, 1998),
the proposed changes to the Group Fee rate reduce FMR's management fee. FMR has
already voluntarily implemented the proposed Group Fee reductions pending
shareholder approval, and the fund has paid lower management fees as a result.
For the fund's fiscal year ended November 30, 1997, the management fee using the
proposed Group Fee reductions (including the Performance Adjustment as
calculated under the Present Contract ) was 0.4743% of the Fund's average net
assets. The Group Fee reductions lowered the management fee rate by 0.0013%
compared to the rate FMR was entitled to receive under the Present Contract
0.4756%.
IMPACT OF PROPOSED CHANGE IN PERFORMANCE ADJUSTMENT INDEX . To more fully
depict the financial effect of the proposed index change, the following figures
assume, for fiscal 1997, a complete substitution of the Proposed Index's rolling
36-month historical performance for the rolling 36-month historical performance
of the Current Index. Under the terms of the Amended Contract the proposed
change in the fund's Performance Adjustment index will actually occur on a
gradual basis over the 36-month period after shareholder approval of the Amended
Contract. See "Implementation of Change in Performance Adjustment Index" on
page_____ for details.
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<PAGE>
For the fund's fiscal year ended November 30, 1997, using the rolling
36-month historical performance of the Proposed Index instead of the historical
performance of the Current Index produces a negative Performance Adjustment of
{.1239%} of the fund's average net assets for the year. Thus, for fiscal 1997,
substituting the Proposed Index's historical performance for the Current Index's
performance (and using the Present Contract's Group Fee breakpoints without the
proposed reductions and current Performance Adjustment rounding methodology)
increases the fund's management fee by $72,326 and raises the management fee
rate by 0.0007% of the fund's average net assets for the year compared to the
rate FMR was entitled to receive under the Present Contract 0.4756%.
IMPACT OF PROPOSED CHANGE IN ROUNDING METHODOLOGY. The more precise
rounding method for calculating the Performance Adjustment would have no reffect
on the management fee rate for the fiscal year ended November 30, 1997.
COMBINED EFFECT OF PROPOSED FEE CHANGES. Assuming that the proposed Group
Fee reductions, the proposed change in Performance Adjustment index and the more
precise rounding methodology for the Performance Adjustment had been in effect
during fiscal 1997, the fund's total management fee for fiscal 1997 would have
decreased by 0.0006% of the fund's average net assets for the year. The future
impact of the proposed fee changes will depend on many different factors and may
represent an increase or decrease from the management fee under the Present
Contract. The Group Fee rate reductions will either reduce the management fee or
leave it unchanged, depending on the level of FMR's assets under management. The
proposed change to the Performance Adjustment index will either increase the
management fee or reduce it, depending on the performance of the fund and the
relative performance of the Proposed Index. Lastly, the more precise performance
rounding methodology will result in a more accurate correlation of the fund's
performance and resulting management fee amount, to the Proposed Index, and may
increase or decrease the Performance Adjustment depending on whether performance
would have been rounded up or down.
PRESENT AND AMENDED CONTRACTS. FMR is the fund's investment adviser
pursuant to a management contract dated January 1, 1995, which was approved by
shareholders on December 4, 1994. (For Information on FMR, see the section
entitled "Activities and Management of FMR," on page ______.). A copy of the
Amended Contract, marked to indicate the proposed amendments, is supplied as
Exhibit [__] on page _______. Except for the material modifications discussed in
this proposal, the Amended Contract is substantially the same as the fund's
Present Contract with FMR. (For a detailed discussion of the fund's Present
Contract, refer to the section entitled "Present Management Contracts," on page
______.) If approved by shareholders, the Amended Contract will take effect on
the first day of the first month following approval and will remain in effect
through July 31, 1999 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii) the vote of
either a majority of the Trustees or a majority of the outstanding shares of the
fund. If the Amended Contract is not approved, the Present Contract will
continue in effect through July 31, 1999, and thereafter only as long as its
continuance is approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on the
aggregate net assets of all registered investment companies having management
contracts with FMR (group assets). As group assets increase, the Group Fee rate
declines. The Amended Contract would not change the Group Fee rate if group
assets are $426 billion or less. Above $426 billion in group assets, the Group
Fee rate declines under both contracts, but under the Amended Contract, it
declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets. The rate at
which the Group Fee rate declines is determined by fee "breakpoints" that
provide for lower fee rates when group assets increase. The Amended Contract
would add five new, lower breakpoints applicable when group assets are above
$426 billion as illustrated in the following table. (For an explanation of how
the Group Fee rate is used to calculate the management fee see the section
entitled "Present Management Contracts" on page _______.)
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<PAGE>
GROUP FEE RATE BREAKPOINTS
Average Group Average Group
Assets Present Assets Amended
($ billions) Contract ($ billions) Contract
------------ -------- ------------ --------
Over 390 .2700% 390-426 .2700%
426-462 .2650%
462-498 .2600%
498-534 .2550%
Over 534 .2500%
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are combined to
arrive at the Group Fee rate, see "Present Management Contracts" on page
- -----.)
EFFECTIVE GROUP FEE RATES
Group
Assets Present Amended
($ billions) Contract Contract
------------ -------- --------
150 .3371% .3371%
200 .3284% .3284%
250 .3219% .3219%
300 .3163% .3163%
350 .3113% .3113%
400 .3067% .3067%
450 .3026% .3024%
500 .2994% .2982%
550 .2967% .2942%
FMR voluntarily adopted various additional Group Fee breakpoints for group
assets over $390 billion in 1996. Although the new fee breakpoints have not been
added to the management contract pending shareholder approval, FMR has
voluntarily based its management fee on the Group Fee schedule contained in the
Amended Contract since January 1, 1996. Group assets for September 30, 1998 were
approximately $591 billion.
17
<PAGE>
CHANGE IN PERFORMANCE ADJUSTMENT INDEX.
COMPARISON OF PROPOSED AND CURRENT PERFORMANCE ADJUSTMENT INDICES. Under
the Present Contract, the fund's Performance Adjustment is based on a comparison
of the fund's performance (including expenses) to the performance of its Current
Index. If the proposal is approved, the fund will change its Performance
Adjustment index prospectively to the Proposed Index, the Russell 3000 Growth
Index. The Russell 3000 Growth Index measures the performance of the 3,000 U.S.
largest domiciled companies in market capitalization terms that are determined
by Russell to be "growth" stocks as measured by their price-to-book ratios and
forecasted growth values.
The Proposed Index conforms more closely to the fund's growth investment
strategy than the Current Index. The Current Index includes a blend of "growth"
and "value" stocks. In contrast, the Proposed Index is a style-specific index
that is designed to reflect the performance of "growth" stocks (as opposed to
"value" stocks). Similar to the Proposed Index, the fund focuses on growth
stocks and generally selects companies for their growth characteristics. In
short, the Proposed Index, with its growth orientation, is a more appropriate
performance benchmark for the fund than the Current Index.
IMPLEMENTATION OF CHANGE IN PERFORMANCE ADJUSTMENT INDEX. If the proposal
is approved, the change in the fund's Performance Adjustment index will be
implemented on a prospective basis beginning with the first day of the month
following shareholder approval. However, because the Performance Adjustment is
based on a rolling 36-month measurement period, comparisons to the Proposed
Index will not be fully implemented for 36 months after shareholder approval.
During this transition period, the fund's returns will be compared to a 36 month
blended index return that reflects the performance of the Proposed Index for the
portion of the performance period subsequent to its adoption and the performance
of Current Index for the remainder of the period. For example, the Performance
Adjustment for the first full month following shareholder approval would be
calculated by comparing the fund's performance over the 36-month performance
period to a blended index return calculated using the Current Index's
performance for the first 35 months of the performance period and the Proposed
Index's performance for the 36th month. Each month for the following 35 months,
the blended index return would reflect an additional month of the Proposed
Index's performance and one less month of the Current Index's performance. At
the conclusion of the transition period, the performance of the Current Index
would be eliminated from the Performance Adjustment calculation, and the
calculation would include only the performance of the Proposed Index.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT. Rounding Method. The annual
Performance Adjustment rate equals 0.02% for each percentage point by which the
fund outperforms or underperforms the Current Index over a 36-month performance
period. Under the Present Contract, the investment performance of both the fund
and the Current Index are rounded to the nearest full percentage point (for
example, 15.5123% is rounded to 16%.). Rounding to full percentage points
results in the Performance Adjustment rate being applied in 0.02% increments. In
comparison, under the Amended Contract, the investment performance of both the
fund and Proposed Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the difference in
investment performance. The more precise rounding method results in a more
accurate measure of the difference in investment performance and allows for the
Performance Adjustment to be applied in 0.0002% increments. This reduces the
chance of minor changes in performance resulting in significant changes to the
Performance Adjustment, and ultimately the fund's management fee.
The more precise rounding method for the Performance Adjustment would not
have changed the management fee rate for the fiscal year ended November 30,
1997.
COMPARISON OF MANAGEMENT FEES. The following table compares the fund's
management fee for the fiscal year ended November 30, 1997, under the terms of
the Present Contract (not including FMR's voluntary implementation of the Group
Fee reductions) to the management fee the fund would have incurred if the
proposed Group Fee reduction, proposed rounding methodology, and the proposed
change in Performance Adjustment index had been in effect. For this purpose, the
Performance Adjustment amounts presented for the Amended Contract for fiscal
1997 have been calculated using the rolling 36-month historical performance of
18
<PAGE>
the Proposed Index during the period. Management fees are expressed in dollars
and as percentages of the fund's average net assets for the year.
<TABLE>
<CAPTION>
Present Contract Amended Contract Difference
<S> <C> <C> <C> <C> <C> <C>
$ % $ % $ %
Basic Fee 60,972,247 0.5992 60,841,271 0.5979 {131,157} {0.0013}
Performance
Adjustment {12,579,934} {0.1236} {12,507,607} {0.1229} 73,326 0.0007
------------ -------- ------------ -------- ------ ------
Total Management
Fee 48,392,494 0.4756 48,333,664 0.4750 {58,830} {0.0006}
</TABLE>
The following table provides data concerning the fund's management fees
and expenses as a percentage of average net assets for the fiscal year ended
November 30, 1997 under the Present Contract (not including FMR's voluntary
implementation of the Group Fee reductions) and if the proposed Group Fee
reductions, the proposed rounding methodology, and the proposed change in
Performance Adjustment index had been in effect during the same period. As with
the table above, the Performance Adjustment incorporated in the management fee
expense listed for the Amended Contract has been calculated using the rolling
36-month historical performance of the Proposed Index during fiscal 1997.
The following figures are based on historical expenses adjusted to reflect
current fees of the fund and are calculated as a percentage, of the fund's
average net assets.
COMPARATIVE EXPENSE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<CAPTION>
PRESENT CONTRACT AMENDED CONTRACT
<S> <C> <C>
Management Fee 0.48% 0.47%
12b-1 None None
Other Expenses 0.24% 0.24%
Total Fund Operating Expenses 00.72% 0.71%
</TABLE>
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. In addition, the fund has entered into arrangements
with its custodian and transfer agent whereby credits realized as a result of
uninvested cash balances are used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses presented in
the table would have been 0.69% under the Present Contract and 0.68% under
the Amended Contract.
EXAMPLE: The following illustrates the expenses on a $1,000 investment
under the fees and expenses stated above, assuming (1) 5% annual return and (2)
redemption at the end of each time period.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Present Contract $ 7 $ 23 $ 40 $ 89
19
<PAGE>
Amended Contract $ 7 $ 23 $ 40 $ 88
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of the fund.
The example above should not be considered a representation of past or future
expenses of the fund. Actual expenses may vary from year to year and may be
higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the 1940 Act, as
modified or interpreted by the Securities and Exchange Commission. In contrast,
the Present Contract explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Present Contract's amendment
provisions will allow FMR and the trust, on behalf of the fund, to amend the
Management Contract without shareholder vote IF THE 1940 ACT PERMITS THEM TO DO
SO. For example, under current interpretations of Section 15 of the 1940 Act,
the Amended Contract would give FMR and the trust the ability to amend the
Management Contract to immediately reflect a management fee decrease without the
delay of having to first conduct a proxy solicitation. In short, the proposed
modification gives FMR and the trust added flexibility to amend the Management
Contract subject to 1940 Act constraints. Of course, any future amendments to
the Management Contract would require the approval of the fund's Board of
Trustees.
MATTERS CONSIDERED BY THE BOARD. The mutual funds for which the members of
the Board of Trustees serve as Trustees are referred to herein as the "Fidelity
funds." The Board of Trustees meets eleveN times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on the
appropriateness of the fund's management fees are considered at most, if not
all, of their meetings. While the full Board of Trustees or the Independent
Trustees, as appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal counsel
selected by the Independent Trustees.
The proposal to present the Amended Contract to shareholders was approved
by the Board of Trustees of the fund, including all of the Independent Trustees,
on September 17, 1998. The Board of Trustees considered and approved the
modifications to the Group Fee Rate schedule during the two month period from
November to December 1995 and the modification to the Performance Adjustment
calculation during the period from June to July 1995. The Board of Trustees
received materials relating to the Amended Contract in advance of the meeting at
which the Amended Contract was considered, and had the opportunity to ask
questions and request further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
meetings, the Trustees received materials that relate to the Amended Contract.
These materials included: (i) information on the investment performance of the
fund, a peer group of funds and an appropriate index or combination of indices,
(ii) sales and redemption data in respect of the fund, (iii) the economic
outlook and the general investment outlook in the markets in which the fund
invests, and (iv) notable changes in the fund's investments. The Board of
Trustees and the Independent Trustees also consider periodically other material
facts such as (1) FMR's results and financial condition, (2) arrangements in
respect of the distribution of the fund's shares, (3) the procedures employed to
determine the value of the fund's assets, (4) the allocation of the fund's
brokerage, if any, including allocations to brokers affiliated with FMR and the
use of "soft" commission dollars to pay fund expenses and to pay for research
and other similar services, (5) FMR's management of the relationships with the
fund's custodian and subcustodians, (6) the resources devoted to and the record
of compliance with the fund's investment policies and restrictions and with
policies on personal securities transactions and (7) the nature, cost, and
character of non-investment management services provided by FMR and its
affiliates.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information on
and analysis of (a) the overall organization of FMR, (b) the impact of
20
<PAGE>
performance adjustments to management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f) investment
performance, (g) investment management staffing, (h) the potential for achieving
further economies of scale, (i) operating expenses paid to third parties, and
(j) the information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the following summary does not detail all of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance as
well as the performance of a peer group of mutual funds, and the performance of
an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees review at least annually the background of the fund's portfolio
manager, and the fund's investment objective and discipline. The Independent
Trustees have also had discussions with senior management of FMR responsible for
investment operations, and the senior management of Fidelity's equity group.
Among other things they considered the size, education and experience of FMR's
investment staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory and
management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Present Contract and the Amended Contract and under
separate agreements covering transfer agency functions and pricing, bookkeeping
and securities lending services, if any. The Board of Trustees and the
Independent Trustees have also considered the nature and extent of FMR's
supervision of third party service providers, principally custodians and
subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered
the fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an extensive
review of FMR's methodology in allocating its costs to the management of the
fund. The Board of Trustees and the Independent Trustees have concluded that the
cost allocation methodology employed by FMR has a reasonable basis and is
appropriate in light of all of the circumstances. They considered the profits
realized by FMR in connection with the operation of the fund and whether the
amount of profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund businesses which
may benefit from or be related to the fund's business. The Board of Trustees and
the Independent Trustees also considered FMR's profit margins in comparison with
available industry data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefited from any economies of scale, and whether
there is potential for realization of any further economies of scale. The Board
of Trustees and the Independent Trustees have concluded that FMR's mutual fund
business presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and FMR in an
appropriate manner. The Independent Trustees have also concluded that the
existing group fee structure should be continued but determined that it would be
appropriate to change the group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the fund's
21
<PAGE>
shareholders for services provided by FMR and its affiliates, including fees for
services like transfer agency, fund accounting and direct shareholder services.
They also considered the allocation of fund brokerage to brokers affiliated with
FMR and the receipt of sales loads and payments under Rule 12b-1 plans in
respect of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of FMR
businesses other than its mutual fund business, including FMR's retail
brokerage, correspondent brokerage, capital markets, trust, investment advisory,
pension record keeping, credit card, insurance, publishing, real estate,
international research and investment funds, and others. The Board of Trustees
and the Independent Trustees considered the intangible benefits that accrue to
FMR and its affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that is
part of a large family of funds offering a variety of investment disciplines and
providing for a large variety of fund and shareholder services. With regard to
the proposed modification to the Present Contract's amendment provisions, the
Board of Trustees and the Independent Trustees considered the benefit to
shareholders of FMR's and the trust's increased flexibility (within 1940 Act
constraints) to amend the Management Contract without the delays and potential
costs of a proxy solicitation.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as all-important or
controlling, and the foregoing summary does not detail all of the matters
considered. Based on their evaluation of all material factors and assisted by
the advice of independent counsel, the Trustees concluded (i) that the existing
management fee structure is fair and reasonable, and (ii) that the proposed
modifications to the management fee rates, that is the reduction of the Group
Fee Rate schedule and the modifications to the performance adjustment
calculation, the adoption of the Proposed Index, and the proposed modification
to the Present Contract's amendment provisions are in the best interest of the
fund's shareholders. The Board of Trustees, including the Independent Trustees,
voted to approve the submission of the Amended Contract to shareholders of the
fund and recommends that shareholders of the fund vote FOR the Amended Contract.
5. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY
EMERGING GROWTH FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has approved, and
recommends that shareholders of the fund approve, a proposal to adopt an amended
management contract with FMR (the Amended Contract) in the form attached to this
Proxy Statement as Exhibit 3. The Amended Contract modifies (i) three aspects of
the management fee that FMR receives from the fund for managing its investments
and business affairs, and (ii) one other provision of the fund's existing
management contract with FMR (the Present Contract).
CURRENT MANAGEMENT FEE. The fund's current management fee is calculated
and paid monthly, and is normally expressed as an annual percentage of the
fund's average net assets. The fee has two components: a Basic Fee and a
Performance Adjustment. The Basic Fee is an annual percentage of the fund's
average net assets for the current month. The Basic Fee rate is the sum of a
Group Fee rate, which declines as FMR's fund assets under management increase,
and a fixed individual fund fee rate of 0.35 %. The Basic Fee rate for the
fund's fiscal year ended November 30, 1997 (not including the fee amendments
discussed below) was 0.6494%.
The Performance Adjustment is a positive or negative dollar amount applied
to the Basic Fee and is based on the fund's performance and assets for the most
recent 36 months. If the fund outperforms its current comparative index, the
Russell 2000 Index (the Current Index), over 36 months, FMR receives a positive
Performance Adjustment, which increases the management fee. If the fund
underperforms the Current Index, FMR's management fee is reduced by a negative
Performance Adjustment. The Performance Adjustment is an annual percentage of
the fund's average net assets over the 36-month performance period. The
Performance Adjustment rate is 0.02% for each percentage point of outperformance
or underperformance, subject to a maximum rate of 0.20% if the fund outperforms
or underperforms the Current Index by ten percentage points or more over the
performance period. Under the Present Contract, FMR received positive
Performance Adjustment for the fund's fiscal year ended November 30, 1997, which
equaled 0.1192 % of the funds average net assets for the year.
22
<PAGE>
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract would (1) reduce
the Group Fee rate further if FMR's assets under management remain over $426
billion, (2) PROSPECTIVELY change the comparative securities index used to
calculate the fund's Performance Adjustment from the Current Index to the
Russell Midcap Growth Index (the Proposed Index), (3) modify the Performance
Adjustment calculation to round the performance of the fund and the index to the
nearest 0.01%, rather than the nearest 1.00%, and (4) allow FMR and the trust,
on behalf of the fund, to modify the Management Contract subject to the
requirements of the 1940 Act. The existing Management Contract currently
requires the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract Amendment
Provisions" on page __ for more details. The financial impact of the proposed
changes to the management fee is summarized briefly in the following paragraphs.
The changes are discussed in more detail in the remainder of the proposal.
IMPACT OF PROPOSED GROUP FEE RATE REDUCTION. At FMR's current level of
assets under management (approximately $591 billion as of September 30, 1998),
the proposed changes to the Group Fee rate reduce FMR's management fee. FMR has
already voluntarily implemented the proposed Group Fee reductions pending
shareholder approval, and the Fund has paid lower management fees as a result.
For the fund's fiscal year ended November 30, 1997, the management fee using the
proposed Group Fee reductions (including the Performance Adjustment as
calculated under the Present Contract ) was 0.7673% of the Fund's average net
assets. The Group Fee reductions lowered the management fee rate by 0.0013%
compared to the rate FMR was entitled to receive under the Present Contract
0.7686%.
IMPACT OF PROPOSED CHANGE IN PERFORMANCE ADJUSTMENT INDEX. To more fully
depict the financial effect of the proposed index change, the following figures
assume, for fiscal 1997, a complete substitution of the Proposed Index's rolling
36-month historical performance for the rolling 36-month historical performance
of the Current Index. Under the terms of the Amended Contract, the proposed
change in the fund's Performance Adjustment index will actually occur on a
gradual basis over the 36-month period after shareholder approval of the Amended
Contract. See "Implementation of Change in Performance Adjustment Index" on
page_____ for details.
For the fund's fiscal year ended November 30, 1997, using the rolling
36-month historical performance of the Proposed Index instead of the historical
performance of the Current Index calculated using the more precise rounding
methodology produces a positive Performance Adjustment of 0.626% of the fund's
average net assets for the year. Thus, for fiscal 1997, substituting the
Proposed Index's historical performance for the Current Index's performance (and
using the Present Contract's Group Fee breakpoints without the proposed
reductions) and current Performance Adjustment rounding methodology reduces the
fund's management fee by $1,089,809 and lowers the management fee rate by
0.0571% of the fund's average net assets for the year compared to the rate FMR
was entitled to receive under the Present Contract 0.7686%. During the fund's
fiscal year ended November 30, 1997, the 36-month returns of the Present Index
were better than the Proposed Index for 9 of the 12 performance measurement
periods. Thus, for fiscal 1997, the proposed change to the Performance
Adjustment Index would have had no effect on management fees.
IMPACT OF PROPOSED CHANGE IN ROUNDING METHODOLOGY. The more precise
rounding method for calculating the Performance Adjustment would have increased
the management fee rate for the fiscal year ended November 30, 1997 by .0005% of
the fund's average net assets for the year.
COMBINED EFFECT OF PROPOSED FEE CHANGES. Assuming that the proposed Group
Fee reductions, the proposed change in Performance Adjustment index and the more
precise rounding methodology for the Performance Adjustment had been in effect
during fiscal 1997, the fund's total management fee for fiscal 1997 would have
decreased by 0.0579% of the fund's average net assets for the year. The future
impact of the proposed fee changes will depend on many different factors and may
represent an increase or decrease from the management fee under the Present
Contract. The Group Fee rate reductions will either reduce the management fee or
leave it unchanged, depending on the level of FMR's assets under management. The
proposed change to the Performance Adjustment index will either increase the
management fee or reduce it, depending on the performance of the fund and the
relative performance of the Proposed Index. Lastly, the more precise performance
rounding methodology will result in a more accurate correlation of the fund's
performance and resulting management fee amount, to the Proposed Index and may
23
<PAGE>
increase or decrease the Performance Adjustment depending on whether performance
would have been rounded up or down.
PRESENT AND AMENDED CONTRACTS. FMR is the fund's investment adviser
pursuant to a management contract dated December 1, 1994, which was approved by
shareholders on November 16, 1994. (For information on FMR, see the section
entitled "Activities and Management of FMR," on page ______.) A copy of the
Amended Contract, marked to indicate the proposed amendments, is supplied as
Exhibit 3 on page _______. Except for the material modifications discussed in
this proposal, the Amended Contract is substantially the same as the fund's
Present Contract with FMR. For a detailed discussion of the fund's Present
Contract, refer to the section entitled "Present Management Contracts," on page
______. If approved by shareholders, the Amended Contract will take effect on
the first day of the first month following approval and will remain in effect
through July 31, 1999 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii) the vote of
either a majority of the Trustees or a majority of the outstanding shares of the
fund. If the Amended Contract is not approved, the Present Contract will
continue in effect through July 31, 1999, and thereafter only as long as its
continuance is approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on the
aggregate net assets of all registered investment companies having management
contracts with FMR (group assets). As group assets increase, the Group Fee rate
declines. The Amended Contract would not change the Group Fee rate if group
assets are $426 billion or less. Above $426 billion in group assets, the Group
Fee rate declines under both contracts, but under the Amended Contract, it
declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets. The rate at
which the Group Fee rate declines is determined by fee "breakpoints" that
provide for lower fee rates when group assets increase. The Amended Contract
would add five new, lower breakpoints applicable when group assets are above
$426 billion as illustrated in the following table. (For an explanation of how
the Group Fee rate is used to calculate the management fee, see the section
entitled "Present Management Contracts" on page _______.)
GROUP FEE RATE BREAKPOINTS
Average Group Present Average Group Amended
Assets Contract Assets Contract
($ Billions) -------- ($ Billions) --------
------------ ------------
Over 390 .2700% 390-426 .2700%
426-462 .2650%
462-498 .2600%
498-534 .2550%
Over 534 .2500%
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are combined to
arrive at the Group Fee rate, see "Present Management Contracts" on page ____.)
24
<PAGE>
EFFECTIVE GROUP FEE RATES
Group Present Amended
Assets Contract Contract
($ Billions) -------- --------
-----------
150 .3371% .3371%
200 .3284% .3284%
250 .3219% .3219%
300 .3163% .3163%
350 .3113% .3113%
400 .3067% .3067%
450 .3026% .3024%
500 .2994% .2982%
550 .2967% .2942%
FMR voluntarily adopted various additional Group Fee breakpoints for group
assets over $426 billion in 1996. Although the new fee breakpoints have not been
added to the management contract pending shareholder approval, FMR has
voluntarily based its management fee on the Group Fee schedule contained in the
Amended Contract since January 1, 1996. Group assets for September 30, 1998 were
approximately $591 billion.
CHANGE IN PERFORMANCE ADJUSTMENT INDEX.
COMPARISON OF PROPOSED AND CURRENT PERFORMANCE ADJUSTMENT INDICES. Under
the Present Contract, the fund's Performance Adjustment is based on a comparison
of the fund's performance (including expenses) to the performance of its Current
Index. If the proposal is approved, the fund will change its Performance
Adjustment index prospectively to the Proposed Index, the Russell Midcap Growth
Index. The Russell MidCap Growth Index measures the performance of U.S.
domiciled companies ranked from number 201 to 1000 in market capitalization
terms that are determined by Russell to be "growth" stocks as measured by their
price-to-book ratios and forecasted growth values.
The Proposed Index conforms more closely to the fund's growth investment
strategy because Proposed Index emphasizes "growth" investment style and because
the market capitalization range of the constituent companies of the Proposed
Index correlates more closely to the universe of companies the fund considers
when it pursues its strategy. Similar to the Proposed Index, the fund focuses on
growth stocks and generally selects companies for their growth characteristics,
emphasizing rapid growth. The Current Index, which is not style-specific and
thus includes both "growth" and "value" stocks, measures the performance of
smaller capitalization companies(ranked from number 1,001 to number 3,000 in
terms of market capitalization). In short, the Proposed Index, with its growth
orientation, is a more appropriate performance benchmark for the fund than the
Current Index.
FUND NAME CHANGE AND CHANGES TO NON-FUNDAMENTAL INVESTMENT POLICIES. If
the proposal is approved, the Trustees intend to change the fund's name to
"Fidelity Aggressive Growth Fund" and modify certain of the fund's
non-fundamental investment policies (i.e., policies that can be changed without
shareholder approval).
25
<PAGE>
Under its current investment policies, the fund seeks capital appreciation by
investing in equity securities of emerging growth companies and, under normal
conditions, invests at least 65% of total assets in such securities. Emerging
growth companies are defined in the fund's prospectus as companies that are in
the developing stage of their life cycle that offer the potential for
accelerated earnings or revenue growth. The fund's prospectus further states the
FMR will focus on companies with market capitalizations of $5 billion or less,
but also specifies that emerging growth companies may be of any size. If the
change in Performance Adjustment Index is approved, the Trustees intend to
remove references to emerging growth companies and specific capitalization
ranges from the fund's policies. As a consequence, the fund's 65% investment
policy above would be eliminated. In addition, the Trustees intend to replace
the fund's market capitalization policy above with a more general policy that
focuses the fund on medium-sized companies, but preserves its ability to make
substantial investments in larger or smaller companies.
IMPLEMENTATION OF CHANGE IN PERFORMANCE ADJUSTMENT INDEX. If the proposal
is approved, the change in the fund's Performance Adjustment index will be
implemented on a prospective basis beginning with the first day of the month
following shareholder approval. However, because the Performance Adjustment is
based on a rolling 36-month measurement period, comparisons to the Proposed
Index will not be fully implemented for 36 months after shareholder approval.
During this transition period, the fund's returns will be compared to a 36 month
blended index return that reflects the performance of the Proposed Index for the
portion of the performance period subsequent to its adoption and the performance
of Current Index for the remainder of the period. For example, the Performance
Adjustment for the first full month following shareholder approval would be
calculated by comparing the fund's performance over the 36-month performance
period to a blended index return calculated using the Current Index's
performance for the first 35 months of the performance period and the Proposed
Index's performance for the 36th month. Each month for the following 35 months,
the blended index return would reflect an additional month of the Proposed
Index's performance and one less month of the Current Index's performance. At
the conclusion of the transition period, the performance of the Current Index
would be eliminated from the Performance Adjustment calculation, and the
calculation would include only the performance of the Proposed Index.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT. Rounding Method. The annual
Performance Adjustment rate equals 0.02% for each percentage point by which the
fund outperforms or underperforms the Current Index over a 36-month performance
period. Under the Present Contract, the investment performance of both the fund
and the Current Index are rounded to the nearest full percentage point (for
example, 15.5123% is rounded to 16%.). Rounding to full percentage points
results in the Performance Adjustment rate being applied in 0.02% increments. In
comparison, under the Amended Contract, the investment performance of both the
fund and Proposed Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the difference in
investment performance. The more precise rounding method results in a more
accurate measure of the difference in investment performance and allows for the
Performance Adjustment to be applied in 0.0002% increments. This reduces the
chance of minor changes in performance resulting in significant changes to the
Performance Adjustment, and ultimately the fund's management fee.
During fiscal 1997, using the more precise rounding methodology, the
impact on the annual performance fee rate would have been a 0.0005% increase in
the management fee as a percentage of the fund's average net assets for the
year.
COMPARISON OF MANAGEMENT FEES. The following table compares the fund's
management fee for the fiscal year ended November 30, 1997, under the terms of
the Present Contract (not including FMR's voluntary implementation of the Group
Fee reductions) to the management fee the fund would have incurred if the
proposed Group Fee reduction, proposed rounding methodology, and the proposed
change in Performance Adjustment index had been in effect. For this purpose, the
Performance Adjustment amounts presented for the Amended Contract for fiscal
1997 have been calculated using the rolling 36-month historical performance of
the Proposed Index during the period. Management fees are expressed in dollars
and as percentages of the fund's average net assets for the year.
26
<PAGE>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 12,384,046 .6494 12,359,562 .6481 {24,484} {.0013}
Performance
Adjustment 2,273,821 .1192 1,193,670 .0626 {1,080,151} {0.0566}
---------- ----- --------- ----- ----------- -------
Total
Management
Fee 14,657,867 .7686 13,553,232 .7107 {1,104,635} {.0579}
The following table provides data concerning the fund's management fees
and expenses as a percentage of average net assets for the fiscal year ended
November 30, 1997 under the Present Contract (not including FMR's voluntary
implementation of the Group Fee reductions) and if the proposed Group Fee
reductions, the proposed rounding methodology, and the proposed change in
Performance Adjustment index had been in effect during the same period. As with
the table above, the Performance Adjustment incorporated in the management fee
expense listed for the Amended Contract has been calculated using the rolling
36-month historical performance of the Proposed Index during fiscal 1997.
The following figures are based on historical expenses adjusted to reflect
current fees of the fund and are calculated as a percentage, of the fund's
average net assets.
COMPARATIVE EXPENSE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
PRESENT CONTRACT AMENDED CONTRACT
Management Fee 0.71% 0.77%
12b-1 Fee None None
Other Expenses 0.32% 0.32%
Total Fund Operating Expenses 1.03% 1.09%
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. In addition, the fund has entered into arrangements
with its custodian and transfer agent whereby credits realized as a result of
uninvested cash balances are used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses presented in
the table would have been 0.99% under the Present Contract and 1.05% under the
Amended Contract.
Example: The following illustrates the expenses on a $1,000 investment
under the fees and expenses stated above, assuming (1) 5% annual return and (2)
redemption at the end of each time period.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Present Contract $11 $33 $57 $126
Amended Contract $11 $35 $60 $133
27
<PAGE>
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of the fund.
The example above should not be considered a representation of past or future
expenses of the fund. Actual expenses may vary from year to year and may be
higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the 1940 Act, as
modified or interpreted by the Securities and Exchange Commission. In contrast,
the Present Contract explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Present Contract's amendment
provisions will allow FMR and the trust, on behalf of the fund, to amend the
Management Contract without shareholder vote IF THE 1940 ACT PERMITS THEM TO DO
SO. For example, under current interpretations of Section 15 of the 1940 Act,
the Amended Contract would give FMR and the trust the ability to amend the
Management Contract to immediately reflect a management fee decrease without the
delay of having to first conduct a proxy solicitation. In short, the proposed
modification gives FMR and the trust added flexibility to amend the Management
Contract subject to 1940 Act constraints. Of course, any future amendments to
the Management Contract would require the approval of the fund's Board of
Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of Trustees
meets eleven times a year. The Board of Trustees, including the Independent
Trustees, believe that matters bearing on the appropriateness of the fund's
management fees are considered at most, if not all, of their meetings. While the
full Board of Trustees or the Independent Trustees, as appropriate, act on all
major matters, a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through committees.
The Independent Trustees meet frequently in executive session and are advised by
independent legal counsel selected by the Independent Trustees.
The proposal to present the Amended Contract to shareholders was approved
by the Board of Trustees of the fund, including all of the Independent Trustees,
on September 17, 1998. The Board of Trustees considered and approved the
modifications to the Group Fee Rate schedule during the two month period from
November to December 1995 and the modification to the Performance Adjustment
calculation during the period from June to July 1995. The Board of Trustees
received materials relating to the Amended Contract in advance of the meeting at
which the Amended Contract was considered, and had the opportunity to ask
questions and request further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
meetings, the Trustees received materials that relate to the Amended Contract.
These materials included: (i) information on the investment performance of the
fund, a peer group of funds and an appropriate index or combination of indices,
(ii) sales and redemption data in respect of the fund, (iii) the economic
outlook and the general investment outlook in the markets in which the fund
invests, and (iv) notable changes in the fund's investments. The Board of
Trustees and the Independent Trustees also consider periodically other material
facts such as (1) FMR's results and financial condition, (2) arrangements in
respect of the distribution of the fund's shares, (3) the procedures employed to
determine the value of the fund's assets, (4) the allocation of the fund's
brokerage, if any, including allocations to brokers affiliated with FMR and the
use of "soft" commission dollars to pay fund expenses and to pay for research
and other similar services, (5) FMR's management of the relationships with the
fund's custodian and subcustodians, (6) the resources devoted to and the record
of compliance with the fund's investment policies and restrictions and with
policies on personal securities transactions and (7) the nature, cost, and
character of non-investment management services provided by FMR and its
affiliates.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information on
and analysis of (a) the overall organization of FMR, (b) the impact of
performance adjustments to management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f) investment
performance, (g) investment management staffing, (h) the potential for achieving
28
<PAGE>
further economies of scale, (i) operating expenses paid to third parties, and
(j) the information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the following summary does not detail all of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance as
well as the performance of a peer group of mutual funds, and the performance of
an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees review at least annually the background of the fund's portfolio
manager, and the fund's investment objective and discipline. The Independent
Trustees have also had discussions with senior management of FMR responsible for
investment operations, and the senior management of Fidelity's equity group.
Among other things they considered the size, education and experience of FMR's
investment staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory and
management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Present Contract and the Amended Contract and under
separate agreements covering transfer agency functions and pricing, bookkeeping
and securities lending services, if any. The Board of Trustees and the
Independent Trustees have also considered the nature and extent of FMR's
supervision of third party service providers, principally custodians and
subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered
the fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an extensive
review of FMR's methodology in allocating its costs to the management of the
fund. The Board of Trustees and the Independent Trustees have concluded that the
cost allocation methodology employed by FMR has a reasonable basis and is
appropriate in light of all of the circumstances. They considered the profits
realized by FMR in connection with the operation of the fund and whether the
amount of profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund businesses which
may benefit from or be related to the fund's business. The Board of Trustees and
the Independent Trustees also considered FMR's profit margins in comparison with
available industry data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefited from any economies of scale, and whether
there is potential for realization of any further economies of scale. The Board
of Trustees and the Independent Trustees have concluded that FMR's mutual fund
business presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and FMR in an
appropriate manner. The Independent Trustees have also concluded that the
existing group fee structure should be continued but determined that it would be
appropriate to change the group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the fund's
shareholders for services provided by FMR and its affiliates, including fees for
29
<PAGE>
services like transfer agency, fund accounting and direct shareholder services.
They also considered the allocation of fund brokerage to brokers affiliated with
FMR and the receipt of sales loads and payments under Rule 12b-1 plans in
respect of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of FMR
businesses other than its mutual fund business, including FMR's retail
brokerage, correspondent brokerage, capital markets, trust, investment advisory,
pension record keeping, credit card, insurance, publishing, real estate,
international research and investment funds, and others. The Board of Trustees
and the Independent Trustees considered the intangible benefits that accrue to
FMR and its affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that is
part of a large family of funds offering a variety of investment disciplines and
providing for a large variety of fund and shareholder services. With regard to
the proposed modification to the Present Contract's amendment provisions, the
Board of Trustees and the Independent Trustees considered the benefit to
shareholders of FMR's and the trust's increased flexibility (within 1940 Act
constraints) to amend the Management Contract without the delays and potential
costs of a proxy solicitation.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as all-important or
controlling, and the foregoing summary does not detail all of the matters
considered. Based on their evaluation of all material factors and assisted by
the advice of independent counsel, the Trustees concluded (i) that the existing
management fee structure is fair and reasonable, and (ii) that the proposed
modifications to the management fee rates, that is the reduction of the Group
Fee Rate schedule and the modifications to the performance adjustment
calculation, the adoption of the Proposed Index, and the proposed modification
to the Present Contract's amendment provisions are in the best interest of the
fund's shareholders The Board of Trustees, including the Independent Trustees,
voted to approve the submission of the Amended Contract to shareholders of the
fund and recommends that shareholders of the fund vote FOR the Amended Contract.
6. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY NEW MILLENNIUM
FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has approved, and
recommends that shareholders of the fund approve, a proposal to adopt an amended
management contract with FMR (the Amended Contract) in the form attached to this
Proxy Statement as Exhibit 4. The Amended Contract modifies several aspects of
the management fee that FMR receives from the fund for managing its investments
and business affairs. In addition, the Amended Contract allows FMR and the
Trust, on behalf of the fund, to modify the Management Contract subject to the
requirements of the 1940 Act. The existing Management Contract currently
requires the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract Amendment
Provisions" on page __ for more details. (For information on FMR, see the
section entitled "Activities and Management of FMR," on page ___.)
CURRENT MANAGEMENT FEE. The management fee is calculated and paid monthly,
and is normally expressed as an annual percentage of the fund's average net
assets. The fee has two components: a Basic Fee and a Performance Adjustment.
The Basic Fee is an annual percentage of the fund's average net assets for the
current month. The Basic Fee rate is the sum of a Group Fee rate, which declines
as FMR's fund assets under management increase, and a fixed individual fund fee
rate of 0.35%. The Basic Fee rate for the fund's fiscal year November 30, 1997
(not including the fee amendments discussed below) was 0.6487%.
The Performance Adjustment is a positive or negative dollar amount based
on the fund's performance and assets for the most recent 36 months. If the fund
outperforms the S&P 500 (the Index) over 36 months, FMR receives a positive
Performance Adjustment, and if the fund underperforms the Index, the management
fee is reduced by a negative Performance Adjustment. The Performance Adjustment
is an annual percentage of the fund's average net assets over the 36-month
performance period. The Performance Adjustment rate is 0.02% for each percentage
point of outperformance or underperformance, subject to a maximum of 0.20% if
the fund outperforms or underperforms the Index by more than ten percentage
points. Performance of the fund and the Index are rounded to the nearest whole
percentage point for purposes of the calculation.
30
<PAGE>
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract would (1) reduce
the Group Fee rate further if FMR's assets under management remain over $426
billion, (2) modify the Performance Adjustment calculation to round the
performance of the fund and the Index to the nearest 0.01%, rather than the
nearest 1.00%, and (3) allow FMR and the Trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act. The
existing Management Contract currently requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments. See
"Modification of Management Contract Amendment Provisions" on page __ for more
details.
IMPACT OF GROUP FEE RATE REDUCTION. At FMR's current level of assets under
management (approximately $591 billion as of September 30, 1998), the changes to
the Group Fee rate reduce the management fee. FMR has voluntarily implemented
the Group Fee reductions pending shareholder approval, and the Fund has paid
lower management fees as a result. For the fund's fiscal year ended November 30,
1997, the management fee using the proposed Group Fee reductions (including the
Performance Adjustment, as presently calculated) was 0.7364% of the Fund's
average net assets. The Group Fee reductions lowered the management fee rate by
0.0013% compared to the rate FMR was entitled to receive under the Present
Contract 0.7377%.
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding method
for the Performance Adjustment would have increased/decreased the management fee
rate for the fiscal year November 30, 1997 by 0.001% of the Fund's average net
assets for the year.
COMBINED EFFECT OF FEE CHANGES. In the fiscal year ended November 30,
1997, the Group Fee reductions and the changes to the Performance Adjustment
would have resulted in a 0.0012% reduction in the total management fee. The
future impact will depend on many different factors, and may represent an
increase or decrease from the management fee under the Present Contract. The
Group Fee rate reductions will either reduce the management fee or leave it
unchanged, depending on the level of FMR's assets under management. Calculating
performance to the nearest 0.01% may increase or decrease the Performance
Adjustment, depending on whether performance would have been rounded up or down.
A copy of the Amended Contract, marked to indicate the proposed
amendments, is supplied as Exhibit 4 on page ____. Except for the modifications
discussed above, the Amended Contract is substantially identical to the fund's
Present Contract with FMR. (For a detailed discussion of the fund's Present
Contract, refer to the section entitled "Present Management Contracts," on page
____.) If approved by shareholders, the Amended Contract will take effect on the
first day of the first month following approval and will remain in effect
through July 31, 1999 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii) the vote of
either a majority of the Trustees or a majority of the outstanding shares of the
fund. If the Amended Contract is not approved, the Present Contract will
continue in effect through July 31, 1999, and thereafter only as long as its
continuance is approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on the
aggregate net assets of all registered investment companies having management
contracts with FMR (group assets). As group assets increase, the Group Fee rate
declines. The Amended Contract would not change the Group Fee rate if group
assets are $426 billion or less. Above $426 billion in group assets, the Group
Fee rate declines under both contracts, but under the Amended Contract, it
declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets. The rate at
which the Group Fee rate declines is determined by fee "breakpoints" that
provide for lower fee rates when group assets increase. The Amended Contract
would add five new, lower breakpoints applicable when group assets are above
$426 billion as illustrated in the following table. (For an explanation of how
the Group Fee rate is used to calculate the management fee see the section
entitled "Present Management Contracts" on page ____.)
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<PAGE>
GROUP FEE RATE BREAKPOINTS
Average Group Present Group Amended
Assets Contract Assets Contract
($ Billions) -------- ($ Billions) --------
------------ ------------
Over 390 .2700% 390-426 .2700%
426-462 .2650%
462-498 .2600%
498-534 .2550%
Over 534 .2500%
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are combined to
arrive at the Group Fee rate, see "Present Management Contracts" on page ___.)
EFFECTIVE GROUP FEE RATES
Group Present Amended
Assets Contract Contract
($ Billions)
150 .3371% .3371%
200 .3284% .3284%
250 .3219% .3219%
300 .3163% .3163%
350 .3113% .3113%
400 .3067% .3067%
450 .3026% .3024%
500 .2994% .2982%
550 .2967% .2942%
FMR voluntarily adopted various additional Group Fee breakpoints for group
assets over $390 billion in 1996. Although the new fee breakpoints have not been
added to the management contract pending shareholder approval, FMR has
voluntarily based its management fee on the Group Fee schedule contained in the
Amended Contract since January 1, 1996. Group assets for September 30, 1998 were
approximately $391 billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT - ROUNDING METHOD. The annual
Performance Adjustment rate equals 0.02% for each percentage point by which the
fund outperforms or underperforms the Index over a 36-month performance period.
Under the Present Contract, the investment performance of both the fund and the
32
<PAGE>
Index are rounded to the nearest full percentage point (for example, 15.5123% is
rounded to 16%.) Rounding to full percentage points results in the Performance
Adjustment rate being applied in 0.02% increments. In comparison, under the
Amended Contract, the investment performance of both the fund and Index are
rounded to the nearest 0.01% (using the prior example, 15.5123% is rounded to
15.51%) prior to calculating the difference in investment performance. The more
precise rounding method results in a more accurate measure of the difference in
investment performance and allows for the Performance Adjustment to be applied
in 0.0002% increments. This reduces the chance of minor changes in performance
resulting in significant changes to the Performance Adjustment, and ultimately
the fund's management fee.
COMPARISON OF MANAGEMENT FEES. The following table compares the fund's
management fee as calculated under the terms of the Present Contract (not
including FMR's voluntary implementation of the Group Fee reductions) for fiscal
1997 to the management fee the fund would have incurred if the Amended Contract
had been in effect. Management fees are expressed in dollars and as percentages
of the fund's average net assets for the year.
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 9,326,746 .6487 9,307,556 .6473 {19,190} {.0013}
Performance
Adjustment 1,280,137 .0890 1,281,179 .0891 1,042 .0001
--------- ----- --------- ----- ----- -----
Total
Management
Fee 10,606,883 .7377 10,588,735 .7364 18,148 {.0012}
The following table provides data concerning the fund's management fees
and expenses as a percentage of average net assets for the fiscal year ended
November 30, 1997 under the Present Contract (not including FMR's voluntary
implementation of the Group Fee reductions) and if the Amended Contract had been
in effect during the same period.
The following figures are based on historical expenses adjusted to reflect
current fees of the fund and are calculated as a percentage of average net
assets.
COMPARATIVE FEE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
PRESENT AMENDED
CONTRACT CONTRACT
Management Fee 0.74% 0.74%
12 b-1 Fee None None
Other Expenses .25% 0.25
---- ----
Total Fund Operating
Expenses .99% .99%
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. The fund has entered into arrangements with its
custodian and transfer agent whereby credits realized as a result of uninvested
cash balances are used to reduce custodian and transfer agent expenses.
Including these reductions, the total operating expenses presented in the table
would have been 0.94% under the Present Contract and 0.94% under the Amended
Contract.
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<PAGE>
EXAMPLE: The following illustrates the expenses on a $1,000 investment
under the fees and expenses stated above, assuming (1) 5% annual return and (2)
redemption at the end of each time period and (3) payment of the fund's 3.00%
sales charge:
1-YEAR 3-YEARS 5-YEARS 10-YEARS
------ ------- ------- --------
Present Contract $ 40 $ 61 $ 83 $ 148
Amended Contract $ 40 $ 61 $83 $ 148
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of the fund.
The example above should not be considered a representation of past or future
expenses of the fund. Actual expenses may vary from year to year and may be
higher or lower than those shown above.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the Trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the 1940 Act, as
modified or interpreted by the Securities and Exchange Commission. In contrast,
the Present Contract explicitly requires the vote of a majority of the
outstanding voting securities of the fund to authorize all amendments.
Generally, the proposed modification to the Present Contract's amendment
provisions will allow FMR and the Trust, on behalf of the fund, to amend the
Management Contract without shareholder vote IF THE 1940 ACT PERMITS THEM TO DO
SO. For example, under current interpretations of Section 15 of the 1940 Act,
the Amended Contract would give FMR and the Trust the ability to amend the
Management Contract to immediately reflect a management fee decrease without the
delay of having to first conduct a proxy solicitation. In short, the proposed
modification gives FMR and the Trust added flexibility to amend the Management
Contract subject to 1940 Act constraints. Of course, any future amendments to
the Management Contract would require the approval of the fund's Board of
Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of Trustees
meets eleven times a year. The Board of Trustees, including the Independent
Trustees, believe that matters bearing on the appropriateness of the fund's
management fees are considered at most, if not all, of their meetings. While the
full Board of Trustees or the Independent Trustees, as appropriate, act on all
major matters, a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through committees.
The Independent Trustees meet frequently in executive session and are advised by
independent legal counsel selected by the Independent Trustees.
The proposal to present the Amended Contract to shareholders was approved
by the Board of Trustees of the fund, including all of the Independent Trustees,
on September 17, 1998. The Board of Trustees considered and approved the
modifications to the Group Fee Rate schedule during the two month period from
November to December 1995, and the modifications to the Performance Adjustment
calculation during the period from June to July 1995. The Board of Trustees
received materials relating to the Amended Contract in advance of the meeting at
which the Amended Contract was considered, and had the opportunity to ask
questions and request further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings, the Trustees received materials specifically relating to the
Amended Contract. These materials included: (i) information on the investment
performance of the fund, a peer group of funds and an appropriate index or
combination of indices, (ii) sales and redemption data in respect of the fund,
(iii) the economic outlook and the general investment outlook in the markets in
which the fund invests, and (iv) notable changes in the fund's investments. The
Board of Trustees and the Independent Trustees also consider periodically other
material facts such as (1) FMR's results and financial condition, (2)
34
<PAGE>
arrangements in respect of the distribution of the fund's shares, (3) the
procedures employed to determine the value of the fund's assets, (4) the
allocation of the fund's brokerage, if any, including allocations to brokers
affiliated with FMR and the use of "soft" commission dollars to pay fund
expenses and to pay for research and other similar services, (5) FMR's
management of the relationships with the fund's custodian and subcustodians, (6)
the resources devoted to and the record of compliance with the fund's investment
policies and restrictions and with policies on personal securities transactions
and (7) the nature, cost, and character of non-investment management services
provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information on
and analysis of (a) the overall organization of FMR, (b) the impact of
performance adjustments to management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f) investment
performance, (g) investment management staffing, (h) the potential for achieving
further economies of scale, (i) operating expenses paid to third parties, and
(j) the information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the following summary does not detail all of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance as
well as the performance of a peer group of mutual funds, and the performance of
an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees review at least annually the background of the fund's portfolio
manager, and the fund's investment objective and discipline. The Independent
Trustees have also had discussions with senior management of FMR responsible for
investment operations, and the senior management of Fidelity's equity group.
Among other things they considered the size, education and experience of FMR's
investment staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory and
management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Present Contract and the Amended Contract and under
separate agreements covering transfer agency functions and pricing, bookkeeping
and securities lending services, if any. The Board of Trustees and the
Independent Trustees have also considered the nature and extent of FMR's
supervision of third party service providers, principally custodians and
subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered
the fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an extensive
review of FMR's methodology in allocating its costs to the management of the
fund. The Board of Trustees and the Independent Trustees have concluded that the
cost allocation methodology employed by FMR has a reasonable basis and is
appropriate in light of all of the circumstances. They considered the profits
realized by FMR in connection with the operation of the fund and whether the
amount of profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund businesses which
may benefit from or be related to the fund's business. The Board of Trustees and
the Independent Trustees also considered FMR's profit margins in comparison with
available industry data, both accounting for and ignoring marketing expenses.
35
<PAGE>
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefited from any economies of scale, and whether
there is potential for realization of any further economies of scale. The Board
of Trustees and the Independent Trustees have concluded that FMR's mutual fund
business presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and FMR in an
appropriate manner. The Independent Trustees have also concluded that the
existing group fee structure should be continued but determined that it would be
appropriate to change the group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the fund's
shareholders for services provided by FMR and its affiliates, including fees for
services like transfer agency, fund accounting and direct shareholder services.
They also considered the allocation of fund brokerage to brokers affiliated with
FMR and the receipt of sales loads and payments under Rule 12b-1 plans in
respect of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of FMR
businesses other than its mutual fund business, including FMR's retail
brokerage, correspondent brokerage, capital markets, trust, investment advisory,
pension record keeping, credit card, insurance, publishing, real estate,
international research and investment funds, and others. The Board of Trustees
and the Independent Trustees considered the intangible benefits that accrue to
FMR and its affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that is
part of a large family of funds offering a variety of investment disciplines and
providing for a large variety of fund and shareholder services. With regard to
the proposed modification to the Present Contract's amendment provisions, the
Board of Trustees and the Independent Trustees considered the benefit to
shareholders of FMR's and the trust's increased flexibility (within 1940 Act
constraints) to amend the Management Contract without the delays and potential
costs of a proxy solicitation.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as all-important or
controlling, and the foregoing summary does not detail all of the matters
considered. Based on their evaluation of all material factors and assisted by
the advice of independent counsel, the Trustees concluded (i) that the existing
management fee structure is fair and reasonable and (ii) that the proposed
modifications to the management fee rates, that is the reduction of the Group
Fee Rate schedule and the modifications to the performance adjustment
calculation, and the proposed modification to the Present Contract's amendment
provisions, are in the best interest of the fund's shareholders. The Board of
Trustees, including the Independent Trustees, voted to approve the submission of
the Amended Contract to shareholders of the fund and recommends that
shareholders of the fund vote FOR the Amended Contract.
7. TO APPROVE A DISTRIBUTION AND SERVICE PLAN PURSUANT TO RULE 12B-1 FOR
FIDELITY GROWTH COMPANY FUND, FIDELITY EMERGING GROWTH FUND, AND FIDELITY
NEW MILLENNIUM FUND.
The Board of Trustees has approved, and recommends that shareholders of
Fidelity Growth Company Fund, Fidelity Emerging Growth Fund, and Fidelity New
Millennium Fund approve a Distribution and Service Plan (the Plan) for each
fund. A copy of the form of Plan is attached to this Proxy Statement as Exhibit
5.
THE PLAN. The Plan was approved by the Board as provided for by Rule 12b-1
(the Rule) promulgated by the Securities and Exchange Commission (SEC) under the
1940 Act. The Rule provides that, an investment company (e.g., a mutual fund)
acting as a distributor of its shares must do so pursuant to a written Plan
"describing all material aspects of the proposed financing of distribution."
Under the Rule, an investment company is deemed to be acting as a distributor of
its shares if it engages "directly or indirectly in financing any activity which
is primarily intended to result in the sale of shares issued by such company,
including, but not necessarily limited to, advertising, compensation of
underwriters, dealers, and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature."
36
<PAGE>
The Plan is designed to avoid legal uncertainties which may arise from the
ambiguity of the phrase "primarily intended to result in the sale of shares" and
from the term "indirectly" as used in the Rule. The SEC has neither approved nor
disapproved the Plan.
The Plan contemplates that all expenses relating to the distribution of
fund shares shall be paid for by FMR, or Fidelity Distributors Corporation
(FDC), a wholly owned subsidiary of FMR Corp., out of past profits and other
resources, including management fees paid by a fund to FMR. The Plan also
recognizes that FMR, either directly or through FDC, may make payments from
these sources to securities dealers and to other third parties who engage in the
sale of fund shares or who render shareholder services. The Plan provides that,
to the extent that the fund's payment of management fees to FMR might be
considered to constitute the "indirect" financing of activities "primarily
intended to result in the sale of shares," such payment is expressly authorized.
THE PLAN DOES NOT AUTHORIZE PAYMENTS BY THE FUND OTHER THAN THOSE THAT ARE TO BE
MADE TO FMR UNDER ITS MANAGEMENT CONTRACT.
The fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plan. No
preference for the instruments of such depository institutions will be shown in
the selection of investments.
Although the Plan contemplates that FMR and FDC may engage in various
distribution activities, it does not require them to perform any specific type
of distribution activity or to incur any specific level of expense for such
activities.
The Plan contains a number of provisions relating to reporting obligations
and to its amendment and termination as required by the Rule. If approved by
shareholders, the Plan will continue in effect as long as its continuance is
specifically approved at least annually by a majority of the Board of Trustees,
including a majority of the Trustees who are not "interested persons" of the
trust and who have no direct or indirect financial interest in the operation of
the Plan or any agreement related to the Plan (the non-interested Trustees),
cast in person at a meeting called for the purpose of voting on the Plan. The
Plan may be amended at any time by the Trustees, except that it may not be
amended to authorize direct payments by the fund to finance any activity
primarily intended to result in the sale of shares issued by the fund or to
increase materially the amount spent by the fund for distribution without the
approval of a majority of the outstanding shares of the fund and the Trustees.
In addition, any amendment of the fund's Management Contract to increase the
amount paid by the fund to FMR shall be effective only upon approval by vote of
a majority of the outstanding voting securities of the fund. All material
amendments to the Plan also must be approved by a majority of the non-interested
Trustees. The Plan, and any agreements related to the Plan, may be terminated at
any time by a vote of the majority of the non-interested Trustees or by a vote
of the majority of the outstanding shares of the fund. The Plan requires that
the Trustees receive, at least quarterly, a written report as to the amounts
expended during the quarter by FMR, or FDC, in connection with financing any
activity primarily intended to result in the sale of shares issued by the fund,
and the purposes for which such expenditures were made. As required by the Rule,
while the Plan is in effect, the selection and nomination of those Trustees who
are not "interested persons" shall be committed to the discretion of the
non-interested Trustees then in office.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of the
Plan, the Board considered a variety of factors and was advised by counsel who
are not counsel to FMR or FDC. The Trustees believe that the fees paid by the
fund to FMR under the Management Contract, are fair and reasonable, that the
services provided thereunder are necessary and appropriate for the fund and its
shareholders, and that the fund does not indirectly finance the distribution of
its shares in contravention of the Rule. Nonetheless, the Trustees concluded
that adoption of the Plan would avoid legal uncertainties which might arise as a
result of what they and FMR believes to be potentially subjective and ambiguous
language contained in the Rule and in public releases issued by the SEC in
connection with the proposal and adoption of the Rule (SEC Releases). The
Trustees believe that the adoption of the Plan is advisable to minimize such
legal uncertainties and to provide other benefits to the fund and its
shareholders.
The Trustees noted that the fund's Plan does not involve any direct payment
by the fund to finance any activity primarily intended to result in the sale of
shares issued by the fund, and that any amendment of the fund's Management
Contract with FMR to increase the amount paid by the fund thereunder would
require approval of both the Trustees and the fund's shareholders. The Trustees
37
<PAGE>
also considered the factors suggested in the SEC Releases including: the need
for independent counsel or experts to assist the Trustees in reaching a
determination; the nature and causes of the problems and circumstances which
made consideration of a Plan appropriate; the way in which a Plan would resolve
or alleviate the problems, including the nature and approximate amount of the
expenditures contemplated by the Plan; the merits of possible alternatives to
the Plan; the interrelationship between the Plan and the activities of FMR in
financing the distribution of the fund's shares; the possible benefits of the
Plan to FMR and its affiliates relative to those expected to accrue to the fund;
and consequently the effects of the Plan on existing shareholders.
The reduction in legal uncertainties arising from the potentially
subjective and ambiguous language that appears in the Rule and in the SEC
Releases enables the Trustees, in connection with their review of the fund's
Management Contract with FMR, to consider the full range of services provided by
FMR and FDC, including services which may be related to the distribution of the
fund's shares. In addition, the Board of Trustees considered alternatives to the
Plan, including direct payments by the fund to FDC and/or third parties and the
implementation of a sales load. The Trustees believe it is appropriate to ensure
that FMR and FDC have the flexibility to direct their distribution activities in
a manner consistent with prevailing market conditions by using, subject to
approval of the Trustees, their resources, including the current management fee,
to make payments to third parties. To the extent that FMR has greater
flexibility under the Plan, additional sales of the fund's shares may result.
The Trustees believe that this flexibility has the potential to benefit the fund
by reducing the possibility that the fund would experience net redemptions,
which might require the liquidation of portfolio securities in amounts and at
times that could be disadvantageous for investment purposes. Of course, there
can be no assurance that these events will occur.
The Board of Trustees recognized that a greater level of fund assets
benefits FMR by increasing its management fee revenues. The Board noted the high
quality of investment management services and the expansion of, and many
innovations in, investor services that have been provided by FMR over the years.
The Board believes that revenues received by FMR contribute to its continuing
ability to attract and retain a high caliber of investment and other personnel
and to develop and implement new systems for providing services and information
to shareholders. The Board considers this ability to be an important benefit to
the fund and its shareholders.
CONCLUSION. For the reasons stated above, the members of the Board of
Trustees unanimously concluded in the exercise of their business judgment and in
light of their fiduciary duties under state law and the 1940 Act that there is a
reasonable likelihood that the Plan will benefit the fund and its shareholders.
The Trustees recommend that shareholders of each fund vote FOR approval of the
Plan. With respect to each fund, if the Plan is not approved, the Board and FMR
will consider alternative means of obtaining the services that are to be
provided under the Plan.
8. TO MAKE FIDELITY GROWTH COMPANY FUND'S FUNDAMENTAL POLICY CONCERNING
INVESTMENTS IN COMMON STOCK AND SECURITIES CONVERTIBLE INTO COMMON STOCK
NON-FUNDAMENTAL.
The Board of Trustees has approved, and recommends that the shareholders
of the fund approve, a proposal that would make the fund's current fundamental
policy concerning investments in common stock and securities convertible into
common stock non-fundamental. Fundamental policies can be changed or eliminated
only with shareholder approval, while non-fundamental policies may be changed
without shareholder approval. It is anticipated that making these policies
non-fundamental will have no material impact on the way the fund is managed, its
investment performance, or the securities or instruments in which the fund
invests.
Specifically, the Trustees propose to make the following current
fundamental investment policy concerning investments in common stock and
securities convertible into common stock non-fundamental:
"[The fund] will seek to do so [seek capital appreciation] primarily by
investments in the common stock and securities convertible into common
stock of companies that in FMR's judgment are experiencing or have the
potential to experience above-average growth characteristics." (Bracketed
language is provided for clarity and is not proposed to be changed.)
38
<PAGE>
If shareholders approve this proposal, the Trustees intend to adopt unchanged
the fund's previously fundamental policy as a new non-fundamental policy of the
fund.
DISCUSSION OF PROPOSED MODIFICATION. By making the policy non-fundamental,
the fund will be able to more clearly communicate its investment strategy in
conformity with the requirements of newly revised Form N-1A (the form used by
open-end investment companies, like the fund, to register under the 1940 Act and
the Securities Act of 1933). Revised Form N-1A requires concise, understandable
descriptions of investment objectives and policies. In addition, making the
investment policy above non-fundamental will allow the Trustees the flexibility
to modify these policies, as necessary, in response to regulatory and other
developments, such as the SEC's proposed "name test rule" (Name Test Rule),
without having to incur the potential costs and delays of conducting a
shareholder meeting. The SEC first proposed the Name Test Rule in February 1997.
The Name Test Rule governs the use of mutual fund names and, when eventually
adopted by the SEC, may apply to the fund. When a definitive version of the rule
is ultimately adopted, the foregoing investment policy may require modification
to comply with the requirements of the definitive rule. Briefly stated, approval
of the proposal will give the Trustees the flexibility to comply more quickly
with the definitive Name Test Rule.
Approval of the proposal will not alter the fund's fundamental investment
objective requiring it to seek capital appreciation. As mentioned above, it is
anticipated that approval of the proposal will not materially affect the manner
in which the fund is managed, its investment performance or the securities, or
instruments in which the fund invests.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR the
proposal. Upon shareholder approval, the proposed non-fundamental policy will
become effective when the fund's disclosure is revised to reflect the change. If
the proposal is not approved by the shareholders of the fund, the fund's current
fundamental policy will remain unchanged and in effect.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposal 9 is to revise the fund's investment
limitations to conform to limitations which are standard for similar types of
funds managed by FMR. The Board of Trustees asked FMR to analyze the various
fundamental and non-fundamental investment limitations of the Fidelity funds,
and, where practical and appropriate to a fund's investment objective and
policies, propose to shareholders adoption of standard fundamental limitations
and elimination of certain other fundamental limitations. Generally, when
fundamental limitations are eliminated, Fidelity's standard non-fundamental
limitations replace them. By making these limitations non-fundamental, The Board
of Trustees may amend a limitation as they deem appropriate, without seeking
shareholder approval. The Board of Trustees would amend the limitations to
respond, for instance, to developments in the marketplace, or changes in federal
or state law. The costs of shareholder meetings called for these purposes are
generally borne by a fund and its shareholders.
It is not anticipated that this proposal will substantially affect the way
a fund is currently managed. However, FMR is presenting it to you for your
approval because FMR believes that increased standardization will help to
promote operational efficiencies and facilitate monitoring of compliance with
fundamental and non-fundamental limitations. Although adoption of a new or
revised limitation is not likely to have any impact on the current investment
techniques employed by a fund, it will contribute to the overall objectives of
standardization.
9. TO AMEND FIDELITY GROWTH COMPANY FUND'S, FIDELITY EMERGING GROWTH FUND'S,
AND FIDELITY NEW MILLENNIUM FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER INVESTMENT
COMPANIES FROM THE LIMITATION.
The current fundamental investment limitation concerning diversification
for Fidelity Growth Company Fund and Fidelity New Millennium Fund is as follows:
39
<PAGE>
"The fund may not, with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of the fund's total
assets would be invested in the securities of that issuer, or (b) the fund
would hold more than 10% of the outstanding voting securities of that
issuer."
Fidelity Emerging Growth Fund's current fundamental investment limitation
concerning diversification is as follows:
"The fund may not, with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the funds
total assets would be invested in the securities of that issuer, or (b)
the fund would hold more than 10% of the outstanding voting securities of
that issuer."
The Trustees recommend that shareholders of each fund vote to replace each
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing diversification:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, OR
SECURITIES OF OTHER INVESTMENT COMPANIES) if, as a result, (a) more than
5% of the fund's total assets would be invested in the securities of that
issuer, or (b) the fund would hold more than 10% of the outstanding voting
securities of that issuer."
The percentage limits in the proposed fundamental limitation concerning
diversification are the percentage limitations imposed by the 1940 Act for
diversified investment companies. The amended fundamental diversification
limitation makes one change from the current limitation, subject to applicable
1940 Act requirements it would permit each fund to invest without limit in the
securities of other investment companies. Pursuant to an order of exemption
granted by the SEC, each fund may invest up to 25% of total assets in
non-publicly offered money market or short-term bond funds (the Central Funds)
managed by FMR or an affiliate of FMR. The Central Funds do not currently pay
investment advisory, management, or transfer agent fees, but do pay minimal fees
for services, such as custodian, auditor, and Independent Trustees fees. FMR
anticipates that making use of the Central Funds will benefit each fund by
enhancing the efficiency of cash management and by providing increased
short-term investment opportunities. If the proposal is approved, the Central
Funds are expected to serve as a principal option for cash investment for each
fund.
If this proposal is approved, the amended fundamental diversification
limitations cannot be changed without the approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit each fund and its shareholders. The Trustees recommend
voting FOR the proposal. The amended fundamental diversification limitation,
upon shareholder approval, will become effective when the disclosure is revised
to reflect the changes. If the proposal is not approved by the shareholders of a
fund, that fund's current fundamental diversification limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the contrary
will be voted on such matters in accordance with the judgment of the persons
therein designated.
40
<PAGE>
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees, net
assets, and total expenses of funds with investment objectives similar to
Fidelity Growth Company Fund, Fidelity Emerging Growth Fund, and Fidelity New
Millennium Fund and advised by FMR is contained in the Table of Average Net
Assets and Expense Ratios in Exhibit __ beginning on page __.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including the
custodian banks for certain of the funds advised by FMR. Those transactions that
have occurred to date have included mortgages and personal and general business
loans. In the judgment of FMR, the terms and conditions of those transactions
were not influenced by existing or potential custodial or other fund
relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board and
of the Executive Committee; Robert C. Pozen, President; and Peter S. Lynch, Vice
Chairman. Each of the Directors is also a Trustee of the trust. Messrs. Johnson
3d, Pozen, J. Gary Burkhead, John H. Costello, Eric D. Roiter, Richard A.
Silver, Leonard M. Rush, Robert A. Lawrence, Fred L. Henning, Jr., Boyce Greer,
Abigail Johnson, Richard A. Spillane Jr., Dwight D. Churchill, Steven S. Wymer,
Neal P. Miller, and Erin Sullivan are currently officers of the trust and
officers or employees of FMR or FMR Corp. With the exception of Mr. Costello,
all of these persons hold or have options to acquire stock of FMR Corp. The
principal business address of each of the Directors of FMR is 82 Devonshire
Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on October
31, 1972. Members of Mr. Edward C. Johnson 3d's family are the predominant
owners of a class of shares of common stock, representing approximately 49% of
the voting power of FMR Corp., and, therefore, under the 1940 Act may be deemed
to form a controlling group with respect to FMR Corp.
During the period December 31, 1996 through September 30, 1998, no
transactions were entered into by Trustees and nominees as Trustee of the trust
involving more than 1% of the voting common, non-voting common and equivalent
stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed in
1986 to provide research and investment advice with respect to companies based
outside the United States for certain funds for which FMR acts as investment
adviser. FMR may also grant the sub-advisers investment management authority as
well as authority to buy and sell securities for certain of the funds for which
it acts as investment adviser, if FMR believes it would be beneficial to a fund.
Funds with investment objectives similar to Fidelity Growth Company Fund,
Fidelity Emerging Growth Fund, and Fidelity New Millennium Fund managed by FMR
with respect to which FMR currently has sub-advisory agreements with either FMR
U.K. or FMR Far East, and the net assets of each of these funds, are indicated
in the Table of Average Net Assets and Expense Ratios in Exhibit __ beginning on
page __.
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d also is President and a
Trustee of the trust and other funds advised by FMR; Chairman and a Director of
Fidelity Investments Money Management, Inc. (FIMM); Chairman, Chief Executive
Officer, President, and a Director of FMR Corp., and a Director and Chairman of
the Board and of the Executive Committee of FMR. In addition, Mr. Pozen is
Senior Vice President and a Trustee of the trust and of other funds advised by
FMR; President and a Director of FMR; and President and a Director of FIMM. Each
of the Directors is a stock holder of FMR Corp. The principal business address
of the Directors is 82 Devonshire Street, Boston, Massachusetts 02109.
41
<PAGE>
PRESENT 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. Services
provided by affiliates of FMR will continue under the proposed management
contracts described in proposals 4, 5, and 6.
In addition to the management fee payable to FMR, each fund pays transfer
agent and pricing and bookkeeping fees to Fidelity Service Company, Inc. (FSC),
an affiliate of FMR, its transfer, dividend disbursing, and shareholder
servicing agent. Although each fund's current management contract provides that
each fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to shareholders, the
trust, on behalf of each fund has entered into a revised transfer agent
agreement with FSC, pursuant to which FSC bears the costs of providing these
services to existing shareholders. Other expenses paid by each fund include
interest, taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by each fund for fiscal
1997 are shown in the table below.
TRANSFER AGENCY AND PRICING AND BOOKKEEPING FEES
Growth Company Fund $ 22,941,000
Emerging Growth Fund $ 5,761,000
New Millennium Fund $ 3,315,000
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. Each distribution agreement calls for FDC to use all
reasonable efforts, consistent with its other business, to secure purchasers for
shares of each fund, which are continuously offered. Growth Company Fund's
shares are offered at net asset value per share. Promotional and administrative
expenses in connection with the offer and sale of shares are paid by FMR.
Sales charge revenues paid to FDC for fiscal 1997 are shown in the table below.
42
<PAGE>
SALES CHARGE REVENUE PAID TO FDC
Growth Company Fund* $ 0
Emerging Growth Fund $ 815,000
New Millennium Fund $ 1,585,000
* FDC voluntarily waived Growth Company's 3% sales charge from January
1, 1995 through December 31, 1996. On January 1, 1997, Growth Company's sales
charge was eliminated.
For the services of FMR under the management contract, each fund pays FMR
a monthly management fee which has two components: a basic fee, which is the sum
of a group fee rate and an individual fund fee rate, and a performance
adjustment based on a comparison of Fidelity Growth Company Fund's and Fidelity
New Millennium Fund's performance to that of the Standard & Poor's 500 Index
(S&P 500) and a comparison of Fidelity Emerging Growth Fund's performance to
that of the Russell 2000 Index (Russell 2000).
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate schedule
shown below on the left. The schedule below on the right shows the effective
annual group fee rate at various asset levels, which is the result of
cumulatively applying the annualized rates on the left. For example, the
effective annual fee rate at $543 billion of group net assets - the approximate
level for November 1997 - was 0.2947%, which is the weighted average of the
respective fee rates for each level of group net assets up to $__ billion.
On January 1, 1996, FMR voluntarily modified the breakpoints in the group
fee rate schedule. The revised group fee rate schedule, depicted below, provides
for lower management fee rates as FMR's assets under management increase.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
------ ---- ------ --------
0 - $3 billion .5200% $0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
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<PAGE>
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
The individual fund fee rate for each of Fidelity Emerging Growth Fund and
Fidelity New Millennium Fund is 0.35%. The individual fund fee rate for Fidelity
Growth Company Fund is 0.30%. Based on the average group net assets of the funds
advised by FMR for November 1997 each fund's annual basic fee rate would be as
follows:
<TABLE>
<CAPTION>
GROUP FEE RATE INDIVIDUAL FUND FEE BASIC FEE RATE
-------------- RATE
----
<S> <C> <C> <C>
Emerging Growth 0.2947% + .35% = 0.6447%
Growth Company 0.2947% + .30% = 0.5947%
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<PAGE>
New Millennium 0.2947% + .35% = 0.6447%
</TABLE>
One-twelfth of this annual basic fee rate is applied to each fund's net
assets averaged for the most recent month, giving a dollar amount, which is the
fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each fund is
subject to upward or downward adjustment, depending upon whether, and to what
extent, the fund's investment performance for the performance period exceeds, or
is exceeded by, the record of the S&P 500 for Fidelity Growth Company Fund and
Fidelity New Millennium Fund and the Russell 2000 for Fidelity Emerging Growth
Fund over the same period. (The S&P 500 and the Russell 2000 will be referred to
herein individually as "the Index."). The performance period consists of the
most recent month plus the previous 35 months. Each percentage point of
difference, calculated to the nearest 1.00% (up to a maximum difference of
+/-10.00 ) is multiplied by a performance adjustment rate of 0.02%. Thus, the
maximum annualized adjustment rate is +/-0.20%. This performance comparison is
made at the end of each month. One twelfth (1/12) of this rate is then applied
to each fund's average net assets for the entire performance period, giving a
dollar amount which will be added to (or subtracted from) the basic fee.
Each fund's performance is calculated based on change in net asset value
(NAV). For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by each fund are treated as if reinvested in
fund shares at the NAV as of the record date for payment. The record of the
Index is based on change in value and is adjusted for any cash distributions
from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on each fund's
performance compared to the investment record of the Index, the controlling
factor is not whether the fund's performance is up or down per se, but whether
it is up or down more or less than the record of its Index. Moreover, the
comparative investment performance of the funds is based solely on the relevant
performance period without regard to the cumulative performance over a longer or
shorter period of time.
For fiscal 1997, the following table shows the amount that each fund paid
to FMR for its services as investment adviser (these fees include the basic fee
and the performance adjustment); each fund's management fee as a percentage of
the fund's average net assets; and the amount of each fund's performance
adjustment.
<TABLE>
<CAPTION>
MANAGEMENT FEE AS A
PERCENT OF THE FUND'S PERFORMANCE
MANAGEMENT FEE AVERAGE NET ASSETS ADJUSTMENT
<S> <C> <C> <C>
Emerging Growth $ 14,633,303 0.7673% $ 2,273,821
Growth Company $ 48,261,337 0.4743% ${12,579,934}
New Millennium $ 10,587,694 0.7364% $ 1,280,137
</TABLE>
FMR may, from time to time, agree to reimburse all or a portion of each
fund's total operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be repaid
for these expense reimbursements in the amount that expenses fall below the
limit prior to the end of the fiscal year.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in each fund's
management contract.
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FMR may place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (Japan), LLC (FBSJ), indirect
subsidiaries of FMR Corp., if the commissions are fair, reasonable, and
comparable to commissions charged by non-affiliated, qualified brokerage firms
for similar services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage Services
(FBS), an indirect subsidiary of FMR Corp.
The brokerage commissions paid by each fund to NFSC and FBS for fiscal
1997 are listed in the following table:
<TABLE>
<CAPTION>
Brokerage Commissions
PAID TO NFSC BROKERAGE COMMISSIONS PAID TO FBS
<S> <C> <C>
Emerging Growth $ 648,000 $ 0
Growth Company $ 2,254,000 $ 7,000
New Millennium $ 211,000 $ 3,000
</TABLE>
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of the
Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of [ ], whether other
persons are beneficial owners of shares for which proxies are being solicited
and, if so, the number of copies of the Proxy Statement and Annual Reports you
wish to receive in order to supply copies to the beneficial owners of the
respective shares.
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EXHIBIT 1
FORM OF AMENDED AND RESTATED DECLARATION OF TRUST
[DATED JANUARY 19, 1995]
The language to be added to the current Declaration of Trust is
UNDERLINED, and the language to be deleted is set forth in [brackets]. Headings
that were underlined in the trust's current Declaration of Trust remain
underlined in this Exhibit.
AMENDED AND RESTATED DECLARATION OF TRUST, made [January 19, 1995]
_______, 1998 by each of the Trustees whose signature is affixed hereto (the
"Trustees").
WHEREAS, the Trustees desire to amend and restate this Declaration of
Trust for the sole purpose of supplementing the Declaration of Trust to
incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on October 12, 1982 by Edward C.
Johnson, 3d. Caleb Loring, Jr. and Frank Nesvet, in order to establish a trust
fund for the investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in trust under
this Amended and Restated Declaration of Trust as herein set forth below.
-------------------------------------------------
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "Fidelity Mt. Vernon Street
Trust."
DEFINITIONS
SECTION 2. Wherever used herein, unless otherwise required by the context
or specifically provided:
(a) The [T]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] modified by or interpreted by any
applicable order or orders of the Commission or any rules or regulations adopted
or interpretative releases of the Commission thereunder;
(b) "Bylaws" shall mean the bylaws of the Trust, if any, as amended from
time to time;
(c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;
(d) "Declaration of Trust" means this Amended and Restated Declaration of
Trust, as further amended or restated, from time to time;
[(c)](e) "Net Asset Value" means the net asset value of each Series of the
Trust or Class thereof determined in the manner provided in Article X, Section
3;
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[(d)](f) "Shareholder" means a record owner of Shares of the Trust;
[(f)](g) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of the Trust or each series shall be
divided from time to time, [and includes] including such Class or Classes of
Shares as the Trustees may from time to time create and establish and including
fractions of [s]Shares as well as whole [s]Shares as consistent with the
requirements of Federal and/or [other] state securities laws; [and]
(h) "Series" refers to any series of Shares of the Trust established in
accordance with the provisions of Article III[.];
[(b)](i) [The] "Trust" refers to Fidelity Mt. Vernon Street Trust and
reference to the Trust, when applicable to one or more Series of the Trust,
shall refer to any such Series;
[(e)](j) [The] "Trustees" refer to the individual trustees in their
capacity as trustees hereunder of the Trust and their successor or successors
for the time being in office as such trustee or trustees; and
[(g)](k) [The] "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of managed
investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into such
transferable Shares of one or more separate and distinct Series or Classes of
Series as the Trustees shall, from time to time, create and establish. The
number of authorized Shares of each Series, and Class thereof, is unlimited.
[and each] each Share shall be without par value and shall be fully paid and
nonassessable. The Trustees shall have full power and authority, in their sole
discretion, and without obtaining any prior authorization or vote of the
Shareholders of any Series or Class of the Trust (a) to create and establish
(and to change in any manner) Shares or any Series or Classes thereof with such
preferences, voting powers, rights, and privileges as the Trustees may, from
time to time, determine[,]; (b) to divide or combine the Shares or any Series or
Classes thereof into a greater or lesser number[,]; (c) to classify or
reclassify any issued Shares into one or more Series or Classes of Shares[,];
(d) to abolish any one or more Series or Classes of Shares[,]; and (e) to take
such other action with respect to the Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES AND CLASSES
SECTION 2. The establishment of any Series or Class thereof shall be
effective upon the adoption of a resolution by a majority of the then trustees
setting forth such establishment and designation and the relative rights and
preferences of the shares of such Series or Class. At any time that there are no
shares outstanding of any particular Series or Class previously established and
designated, the trustees may by a majority vote abolish [that] such Series or
Class and the establishment and designation thereof.
OWNERSHIP OF SHARES
SECTION 3. The ownership of Shares shall be recorded in the books of the
Trust or a transfer or similar agent. The Trustees may make such rules as they
consider appropriate for the transfer of Shares and similar matters. The record
books of the Trust as kept by the trust or by any transfer or similar agent, as
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the case may be, shall be conclusive as to who are the holders of Shares and as
to the number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
SECTION 4. The Trustees shall accept investments in the Trust from such
persons and on such terms as they may, from time to time, authorize. Such
investments may be in the form of cash, [or] securities, or other property in
which the appropriate Series is authorized to invest, valued as provided in
Article X, Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding, and the amount received by the Trustees
on account of the contribution shall be treated as an asset of the Trust.
Subsequent investments in the Trust shall be credited to each Shareholder's
account in the form of full Shares at the Net Asset Value per Share next
determined after the investment is received; provided, however, that the
Trustees may, in their sole discretion[,] (a) impose a sales charge or other fee
upon investments in the Trust or Series or any Classes thereof, and (b) issue
fractional Shares.
[ASSETS AND LIABILITIES OF SERIES]
ASSETS AND LIABILITIES OF SERIES AND CLASSES
SECTION 5. All consideration received by the Trust for the issue or sale
of Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange, or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" that Series. In addition, any assets,
income, earnings, profits, and proceeds thereof, funds, or payments [which] that
are not readily identifiable as belonging to any particular Series or Class,
shall be allocated by the Trustees between and among one or more of the Series
or Classes in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes[,] and shall be referred
to as assets belonging to that Series or Class. The assets belonging to a
particular Series shall be so recorded upon the books of the Trust[,] or of its
agent or agents and shall be held by the Trustees in [T]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, except that liabilities and expenses may, in the
Trustees' discretion, be allocated solely to a particular class and, in which
case, shall be borne by that Class. Any general liabilities, expenses, costs,
charges, or reserves of the Trust [which] that are not readily identifiable as
belonging to any particular Series or Class shall be allocated and charged by
the Trustees between or among any one or more of the series or classes in such
manner as the trustees, in their sole discretion, deem fair and equitable[,] and
shall be referred to as "liabilities belonging to" that Series or Class. Each
such allocation shall be conclusive and binding upon the shareholders of all
series or classes for all purposes. Any creditor of any series may look only to
the assets of that series to satisfy such creditor's debt. No Shareholder or
former Shareholder of any Series shall have a claim on or any right to any
assets allocated or belonging to any other Series.
NO PREEMPTIVE RIGHTS
SECTION 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
SECTION 7. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every shareholder by virtue of having become
a shareholder shall be held to have expressly assented and agreed to be bound by
the terms hereof. No Shareholder of the Trust and of each Series shall be
personally liable for the debts, liabilities, obligations, and expenses incurred
by, contracted for, or otherwise existing with respect to, the Trust or by or on
behalf of any Series. The Trustees shall have no power to bind any shareholder
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personally or to call upon any [s]Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may, at any
time, personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract, or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust or to a Series shall
include a recitation limiting the obligation represented thereby to the Trust or
to one or more Series and its or their assets (but the omission of such a
recitation shall not operate to bind any shareholder or Trustee).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
SECTION 1. The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to carry out
that responsibility.
[ELECTION: INITIAL TRUSTEES]
INITIAL TRUSTEES; ELECTION
SECTION 2. The initial Trustees shall be at least three individuals who
shall affix their signatures hereto. On a date fixed by the Trustees, the
Shareholders shall elect not less than three Trustees. A Trustee shall not be
required to be a Shareholder of the Trust. [The initial Trustees shall be Edward
C. Johnson 3d, Caleb Loring, Jr. and Frank Nesvet and such other individuals as
the Board of Trustees shall appoint pursuant to Section 4 of the Article IV.]
TERM OF OFFICE OF TRUSTEES
SECTION 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a) that any
Trustee may resign his trust by written instrument signed by him and delivered
to the other Trustees, which shall take effect upon such delivery or upon such
later date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by at least two-thirds (2/3) of the number of
Trustees prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be retired or
who has become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) a Trustee may be removed at any [S]special [M]meeting of
the Trust by a vote of two-thirds (2/3) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation, retirement, or
removal [, incapacity, or inability] of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number of the TrusteeS, or for any
other reason, exist, the remaining Trustees shall fill such vacancy by
appointing such other person as they in their discretion shall see fit
consistent with the limitations under the [Investment Company Act of] 1940 Act.
Such appointment shall be evidenced by a written instrument signed by a majority
of the Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. An appointment of a Trustee may be made by
the Trustees then in office in anticipation of a vacancy to occur by reason of
retirement, resignation, or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation, or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this [t]Trust,
the [t]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 foregoing power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act, as modified by or interpreted by
any applicable order or orders of the Commission or any rules or regulations
adopted or interpretative releases of the Commission.
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<PAGE>
[TEMPORARY ABSENCE OF TRUSTEE]
TEMPORARY ABSENCE OF TRUSTEES
SECTION 5. Any Trustee may, by power of attorney, delegate his power for a
period not exceeding six (6) months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
SECTION 6. The number of Trustees, not less than three (3) nor more than
twelve (12), serving hereunder at any time shall be determined by the Trustees
themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee [is absent from the Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or] is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers hereunder and
the certificate of the other Trustees of such vacancy[,] or incapacity[,] shall
be conclusive[, provided, however, that no vacancy shall remain unfilled for a
period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall not operate
to annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee hereunder
by the Trustees or any successor Trustees. All of the assets of the Trust shall
at all times be considered as vested in the Trustees. No Shareholder shall be
deemed to have a severable ownership in any individual asset of the Trust or any
right of partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees, in all instances, shall act as principals[,] and
are and shall be free from the control of the Shareholders. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider necessary or
appropriate in connection with the management of the Trust. Except as otherwise
provided herein or in the 1940 Act, [T]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] that they, in their [uncontrolled] discretion, shall deem
proper to accomplish the purpose of this Trust. Subject to any applicable
limitation in [the] this Declaration of Trust or the Bylaws of the Trust, if
any, the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested[,] without, in any event, being bound or limited by
any present or future law or custom in regard to investments by Trustees, and to
sell, exchange, lend, pledge, mortgage, hypothecate, write options on, and lease
any or all of the assets of the Trust.
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(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) to employ [a] one or more banks, [or] trust [company] companies,
companies that are members of a national securities exchange, or other entities
permitted under the 1940 act, as modified by or interpreted by any applicable
order or orders of the Commission or any rules or regulations adopted or
interpretative releases of the Commission thereunder, as custodians of any
assets of the trust subject to any conditions set forth in this declaration of
trust or in the bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or both.
(f) To provide for the distribution of interests of the Trust either
through a [p]Principal [u]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] investment adviser, manager, custodian, [or]
underwriter, or other agent or independent contractor.
(i) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,] with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered, or other negotiable form; or either in its own
name or in the name of a custodian or a nominee or nominees[, subject in either
case to proper safeguards according to the usual practice of Massachusetts Trust
companies or investment companies].
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III and to establish Classes of such
Series having relative rights, powers, and duties as the Trustees may provide
consistent with applicable laws.
(n) To allocate assets, liabilities, and expenses of the Trust to a
particular Series or Class, as appropriate, or to apportion the same between or
among two or more Series or Classes, as appropriate, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series as provided for in
Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including, but not limited to,
claims for taxes.
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(q) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided for.
(r) To borrow money, and to pledge, mortgage, or hypothecate the assets of
the Trust, subject to the applicable requirements of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any Shareholders
whose investment is less than such minimum upon giving notice to such
Shareholder.
(t) To operate as and carry on the business of an investment company and
to exercise all the powers necessary and appropriate to the conduct of such
operations.
(u) To interpret the investment policies, practices or limitations of any
Series.
(v) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
[(t)](w) Notwithstanding any other provision hereof, to invest all of the
assets of any Series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest or
interests in such investment company.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the trustees. Any action by one or
more of the trustees in their capacity as such hereunder shall be deemed an
action on behalf of the trust or the applicable series and not an action in an
individual capacity.
The trustees shall not be limited to investing in obligations maturing
before the possible termination of the trust or any Series or Class thereof.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the application
of any payments made or property transferred to the Trustees or upon their
order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 2. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares to the same extent as if he were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be issued and
sold Shares to and buy such Shares from any such person of any firm or company
in which he is interested, subject only to the general limitations herein
contained as to the sale and purchase of such Shares; and all subject to any
restrictions which may be contained in the Bylaws, if any.
ACTION BY THE TRUSTEES
SECTION 3. Except as otherwise provided herein or in the 1940 Act, [T]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 at which [of] the
Trustees are present in person. At any meeting of the Trustees, a majority of
the Trustees shall constitute a quorum. Meetings of the Trustees may be called
orally or in writing by the Chairman of the Trustees or by any two other
Trustees. Notice of the time, date, and place of all meetings of the Trustees
shall be given by the party calling the meeting to each Trustee by telephone,
telefax, [or] telegram, or other electro-mechanical means sent to his home or
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business address at least twenty-four (24) hours in advance of the meeting or by
written notice mailed to his home or business address at least seventy-two (72)
hours in advance of the meeting. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to any
one of their number their authority to approve particular matters or take
particular actions on behalf of the Trust. Written consents or waivers of
trustees may be executed in one or more counterparts. Execution of a written
consent or waiver and delivery thereof to the trust may be accomplished by
telefax or other electro-mechanical means.
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees may appoint one of their number to be Chairman of
the Board of Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by the
Trustees and the administration of the Trust, and may be the chief executive,
financial and accounting officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets belonging to
the appropriate Series for their expenses and disbursements, including, without
limitation, fees and expenses of Trustees who are not Interested Persons of the
Trust[,]; interest expense, taxes, fees and commissions of every kind[,];
expenses of pricing Trust portfolio securities[,]; expenses of issue, repurchase
and redemption of shares including expenses attributable to a program of
periodic repurchases or redemptions, expenses of registering and qualifying the
Trust and its Shares under Federal and [S]state laws and regulations[,]; charges
of custodians, transfer agents, and registrars[,]; expenses of preparing and
setting up in type [P]prospectuses and [S]statements of [A]additional
[I]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 and from time to time, enter into an investment advisory or
management contract(s) with respect to the Trust or any Series thereof whereby
the other party(ies) to such contract(s) shall undertake to furnish the Trustees
such management, investment advisory, statistical, and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions, as the Trustees may, in their discretion, determine.
Notwithstanding any provisions of this Declaration of Trust, the Trustees may
authorize the investment adviser(s) (subject to such general or specific
instructions as the Trustees may from time to time adopt) to effect purchases,
sales or exchanges of portfolio securities and other investment instruments of
the Trust on behalf of the Trustees or may authorize any officer, agent, or
Trustee to effect such purchases, sales, or exchanges pursuant to
recommendations of the investment adviser (and all without further action by the
Trustees). Any such purchases, sales, and exchanges shall be deemed to have been
authorized by all of the Trustees.
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The Trustees may, subject to applicable requirements of the 1940 Act, as
modified by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the Commission
thereunder, including those relating to shareholder approval, authorize the
investment adviser to employ one or more sub-advisers from time to time to
perform such of the acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the investment adviser and
sub-adviser.
PRINCIPAL UNDERWRITER
SECTION 2. The Trustees may in their discretion from time to time enter
into [a] an exclusive or non-exclusive contract(s) on behalf of the trust or any
Series or Class thereof providing for the sale of the Shares, whereby the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as may be prescribed in the
Bylaws, if any, and such further terms and conditions as the Trustees may, in
their discretion, determine not inconsistent with the provisions of this Article
VII[,] or of the Bylaws, if any[;]. [and] [s]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 and from time to time,
enter into one or more [a] transfer agency and Shareholder service contracts
whereby the other party shall undertake to furnish the Trustees with transfer
agency and Shareholder services. [The] Such contracts shall be on such terms and
conditions as the Trustees may, in their discretion, determine not inconsistent
with the provisions of this Declaration of Trust or of the Bylaws, if any. Such
services may be provided by one or more entities.
PARTIES TO CONTRACT
SECTION 4. Any contract of the character described in Sections 1, 2 and 3
of this Article VII or in Article IX hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article VII
or the Bylaws, if any. The same person (including a firm, corporation,
partnership, trust, or association) may be the other party to contracts entered
into pursuant to Sections 1, 2 and 3 above or Article IX, and any individual may
be financially interested or otherwise affiliated with persons who are parties
to any or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
SECTION 5. Any contract entered into pursuant to Sections 1 and 2 of this
Article VII shall be consistent with and subject to the requirements of Section
15 of the 1940 Act, as modified by or interpreted by any applicable order or
orders of the Commission or any rules or regulations adopted or interpretative
releases of the Commission ([including any amendments thereof] or other
applicable act of congress hereafter enacted), with respect to its continuance
in effect, its amendment, its termination, and the method of authorization and
approval of such contract or renewal thereof[, and no amendment to any contract,
entered into pursuant to Section 1 shall be effective unless assented to by a
Majority Shareholder Vote].
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ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The shareholders shall have power to vote [(i)](a) for the
election of Trustees as provided in Article IV, Section 2[, (ii)]; (b) for the
removal of Trustees as provided in Article IV, Section 3(d)[, (iii)]; (c) with
respect to any investment advisory or management contract as provided in Article
VII, Sections 1 and 5[, (iv)]; (d) with respect to any termination, merger,
consolidation, reorganization, or sale of assets of the Trust or any of its
Series or Classes as provided in Article XII, Section 4; (e) with respect to the
amendment of this Declaration of Trust as provided in Article XII, Section 7[,
(v)]; (f) to the same extent as the shareholders of a Massachusetts business
corporation, as to whether or not a court action, proceeding or claim should be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, provided, however, that a Shareholder of a particular
Series shall not be entitled to bring any derivative or class action on behalf
of any other Series of the Trust[,]; and [(vi)](g) with respect to such
additional matters relating to the trust as may be required or authorized by
law, by this Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the trust with the [Securities and Exchange] Commission [(the
"Commission")] or any [S]state, as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all [s]Shares shall
be voted by individual Series, except as provided in the following sentence and
except [(i)](a) when required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual Series; and [(ii)](b) when the Trustees have
determined that the matter affects only the interests of one or more Series,
then only the Shareholders of such Series shall be entitled to vote thereon. The
Trustees may also determine that a matter affects only the interests of one or
more Classes of a Series, in which case, any such matter shall be voted on by
such Class or Classes. [Each whole share] A Shareholder of each Series or Class
thereof shall be entitled to one vote for each dollar of net asset value (number
of shares owned times net asset value per share) of such series or class thereof
[as to] on any matter on which [it] such Shareholder is entitled to vote, and
each fractional dollar [share] amount shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. Until Shares are issued,
the Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws of the
Trust, if any, to be taken by Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other place
as the Trustees may designate. Special meetings of the Shareholders of any
Series may be called by the Trustees and shall be called by the Trustees upon
the written request of Shareholders owning at least one-tenth (1/10) of the
outstanding Shares entitled to vote. Whenever ten or more Shareholders meeting
the qualifications set forth in Section 16(c) of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission, [the same may
be amended from time to time,] seek the opportunity of furnishing materials to
the other Shareholders with a view to obtaining signatures on such a request for
a meeting, the Trustees shall comply with the provisions of said Section 16(c)
with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials to such
Shareholders of record. Shareholders shall be entitled to at least fifteen (15)
days' notice of any meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or of this Declaration of Trust permits
or requires that holders of any Series or Class shall vote as a Series or Class
then a majority of the aggregate number of Shares of that Series or Class
entitled to vote shall be necessary to constitute a quorum for the transaction
of business by that Series or Class. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a reasonable
time after the date set for the original meeting, without the necessity of
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further notice. Except when a larger vote is required by applicable law or by
any provision of this Declaration of Trust or the Bylaws, if any, a majority of
the Shares voted in person or by proxy shall decide any questions and a
plurality shall elect a Trustee, provided that where any provision of law or of
this Declaration of Trust permits or requires that the holders of any Series or
Class shall vote as a Series or Class, then a majority of the Shares of that
Series or Class voted on the matter shall decide that matter insofar as that
Series or Class is concerned. Shareholders may act by unanimous written consent.
Actions taken by a Series or Class may be consented to unanimously in writing by
shareholders of that Series or Class.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank, [or] a company
that is a member of a national securities exchange, trust company, or other
entity permitted under the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or regulations adopted
or interpretative releases of the Commission thereunder, having capital,
surplus, and undivided profits of at least two million dollars ($2,000,000), or
such other amount [or such other entity] as shall be allowed by the
[c]Commission or by the 1940 Act, as custodian with authority as its agent, but
subject to such restrictions, limitations and other requirements, if any, as may
be contained in the Bylaws of the Trust, if any:
(1) to hold the securities owned by the Trust and deliver the same upon
written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the
Trust and the custodian, if such procedures have been authorized in
writing by the Trust;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees
may direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical and
accounting services; and
(2) to compute, if authorized to do so [by the Trustees], the Net Asset
Value of any Series or Class thereof in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian. [If so directed
by a Majority Shareholder Vote, the custodian shall deliver and pay
over all property of the Trust held by it as specified in such
vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, [or] a company that is a member
of a national securities exchange, trust company [organized under the laws of
the United States or one of the states thereof and] , or other entity permitted
under the 1940 act, as modified by or interpreted by any applicable order or
orders of the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder, having capital, surplus, and undivided
profits of at least two million dollars ($2,000,000), or such other [person]
amount as [may] shall be [permitted] allowed by the Commission[, or otherwise in
accordance with] or by the 1940 Act [as from time to time amended].
[CENTRAL CERTIFICATE SYSTEM]
CENTRAL DEPOSITORY SYSTEM
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SECTION 2. Subject to such rules, regulations and orders as the Commission
may adopt, the Trustees may direct the custodian to deposit all or any part of
the securities owned by the Trust in a system for the central handling of
securities established by a national securities exchange or a national
securities association registered with the Commission under the Securities
Exchange Act of 1934[,] or such other person as may be permitted by the
Commission[,] or otherwise in accordance with the 1940 Act [as from time to time
amended], pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical delivery of such
securities[,]; provided that all such deposits shall be subject to withdrawal
only upon the order of the Trust or its custodian, subcustodians, or other
authorized agents.
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees shall have the power, to the fullest extent permitted by
the laws of Massachusetts, at any time to declare and cause to be paid dividends
on Shares of a particular Series, from the assets belonging to that Series,
which dividends, at the election of the Trustees, may be paid daily or otherwise
pursuant to a standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, and may be payable in Shares of that
Series, or classes thereof, at the election of each Shareholder of that Series.
The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as the trustees
shall deem appropriate.
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute a stock dividend pro rata among
the Shareholders of a particular Series, or Class thereof, as of the record date
of that Series or Class fixed as provided in Article XII, Section 3[hereof a
"stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular Series
or Class of a Series desires to dispose of his Shares, he may deposit at the
office of the transfer agent or other authorized agent of that Series a written
request or such other form of request as the Trustees may, from time to time,
authorize, requesting that the Series purchase the Shares in accordance with
this Section 2; and the Shareholder so requesting shall be entitled to require
the Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value thereof
(as described in Section 3 hereof). The Series shall make payment for any such
Shares to be redeemed, as aforesaid, in cash or property from the assets of that
Series, and payment for such Shares less any applicable deferred sales charges
and/or fees shall be made by the Series or the principal underwriter of the
Series to the Shareholder of record within seven (7) days after the date upon
which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series or Class shall mean
that amount by which the assets of that Series[,] or Class exceed its
liabilities, all as determined by or under the direction of the Trustees. Such
value per Share shall be determined separately for each Series or Class of
Shares and shall be determined on such days and at such times as the Trustees
may determine. Such determination shall be made with respect to securities for
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which market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the fair value
as determined in good faith by the Trustees, provided, however, that the
Trustees, without Shareholder approval, may alter the method of appraising
portfolio securities insofar as permitted under the 1940 Act and the rules,
regulations, and interpretations thereof promulgated or issued by the Commission
or insofar as permitted by any [O]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 [par] per Share last determined to be determined
again in a similar manner and may fix the time when such redetermined value
shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act. Such
suspension shall take effect at such time as the Trustees shall specify, but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end. In the
case of a suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the Net Asset
Value per Share existing after the termination of the suspension. In the event
that any Series is divided into Classes, the provisions of this Section, to the
extent applicable as determined in the discretion of the Trustees and consistent
with applicable law, may be equally applied to each such Class.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have acted
under the reasonable belief that their actions are in the best interest of the
Trust, the Trustees shall not be responsible for or liable in any event for
neglect or wrongdoing of them or any officer, agent, employee, or investment
adviser of the Trust, but nothing contained herein shall protect any Trustee
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
[INDEMNIFICATION]
INDEMNIFICATION OF COVERED PERSONS
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent
permitted by law against liability and against all expenses
reasonably incurred or paid by him in connection with any claim,
action, suit, or proceeding in which he becomes involved as a party
or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the
settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
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(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office; or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]Interested [p]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 [p]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](i) such Covered Person
shall have provided appropriate security for such undertaking[, (b)]; (ii)
the Trust is insured against losses arising out of any such advance
payments; or [(c)](iii) either a majority of the Trustees who are neither
interested persons of the Trust nor parties to the matter, or independent
legal counsel in a written opinion, shall have determined, based upon a
review of readily available facts (as opposed to a trial-type inquiry or
full investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section 2.
[SHAREHOLDERS]
INDEMNIFICATION OF SHAREHOLDERS
SECTION 3. In case any Shareholder or former Shareholder of any Series of
the Trust shall be held to be personally liable solely by reason of his being or
having been a Shareholder and not because of his acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators, or other legal representatives or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled out
of the assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The Series
shall, upon request by the Shareholder, assume the defense of any claim made
against the Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
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ARTICLE XII
MISCELLANEOUS
[TRUST NOT A PARTNERSHIP]
TRUST NOT A PARTNERSHIP, ETC.
SECTION 1. It is hereby expressly declared that a trust [and not
partnership] is created hereby and not a partnership, joint stock association,
corporation, bailment, or any form of a legal relationship other than a trust.
No Trustee hereunder shall have any power to personally bind either the Trust's
officers or any Shareholder. All persons extending credit to, contracting with,
or having any claim against the Trust or the Trustees shall look only to the
assets of the appropriate Series for payment under such credit, contract, or
claim; and neither the Shareholders nor the Trustees, nor any of their agents,
whether past, present, or future, shall be personally liable therefor. Nothing
in this Declaration of Trust shall protect a Trustee against any liability to
which the Trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION 2. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances then
prevailing, shall be binding upon everyone interested. Subject to the provisions
of Section 1 of this Article XII and to Article XI, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1 of this
Article XII and to Article XI, shall be under no liability for any act or
[O]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 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, as a record
date for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividend,
or to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend, or to receive such allotment or
rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any Shares on the books of the Trust after any such record date
fixed or aforesaid.
[TERMINATION OF TRUST]
DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.
SECTION 4.1. DURATION. [(a) This] The Trust shall continue without
limitation of time, but subject to the provisions of [sub-section (b) of] this
[Section 4] Article XII.
[(b) Subject to a Majority Shareholder Vote of each Series affected by the
matter or, if applicable, to a Majority Shareholder Vote of the Trust, the
Trustees may]
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SECTION 4.2. TERMINATION OF THE TRUST, A SERIES OR A CLASS. (a) Subject to
applicable federal and state law, the Trust or any Series or Class thereof may
be terminated (i) by Majority Shareholder Vote of the Trust, each Series
affected, or each Class affected, as the case may be; or (ii) without the vote
or consent of Shareholders by a majority of the Trustees either at a meeting or
by written consent. The Trustees shall provide written notice to the affected
Shareholders of a termination effected under clause (ii) above. Upon the
termination of the Trust or the Series or Class,
(i) the Trust or the Series or Class shall carry on no business except for
the purpose of winding up its affairs;
[(i) sell and convey the assets of the Trust or any affected Series to
another trust, partnership, association or corporation organized under the laws
of any state which is a diversified open-end management investment company as
defined in the 1940 Act, for adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or any affected Series, and which may include shares
of beneficial interest or stock of such trust, partnership, association or
corporation; or]
(ii) The Trustees shall proceed to wind up the affairs of the Trust or the
Series or Class, and all of the powers of the Trustees under this Declaration of
Trust shall continue until the affairs of the Trust shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust or the
Series or Class thereof; collect its assets; sell, convey, assign, exchange,
transfer, or otherwise dispose of all or any part of the remaining Trust
property or Trust property allocated or belonging to such Series or Class to one
or more persons at public or private sale for consideration that may consist in
whole or in part of cash, securities, or other property of any kind; discharge
or pay its liabilities; and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange, transfer, or
other disposition of all or substantially all the Trust property or Trust
property allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with section
4.3 below; and
[(ii) at any time sell and convert into money all of the assets of the
Trust or any effected Series.]
[Upon making provision for the payment of all such liabilities in either
(i) or (ii), by such assumption or otherwise, the Trustees shall distribute the
remaining proceeds or assets (as the case may be) ratably among the holders of
the Shares of the Trust or any affected Series then outstanding.]
[(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.]
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust property or the remaining property of the
terminated Series or Class, in cash or in kind or partly each, among the
shareholders of the trust or the series or class according to their respective
rights; and
(b) After termination of the Trust or the Series or Class and distribution
to the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Secretary of the
Commonwealth of Massachusetts, as appropriate, an instrument in writing setting
forth the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties with respect to the Trust or
the Terminated Series or Class, and the rights and interests of all shareholders
of the Trust or the terminated Series or Class shall thereupon cease.
SECTION 4.3. Merger, Consolidation, and Sale of Assets. Subject to
applicable Federal and state law and except as otherwise provided in Section 4.4
below, the Trust or any Series thereof may merge or consolidate with any other
corporation, association, trust, or other organization or may sell, lease, or
exchange all or substantially all of the Trust property or trust property
allocated or belonging to such series, including its good will, upon such terms
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and conditions and for such consideration when and as authorized at any meeting
of shareholders called for such purpose by a Majority Shareholder Vote of the
Trust or affected Series, as the case may be. Any such merger, consolidation,
sale, lease, or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to Massachusetts law.
SECTION 4.4. Incorporation; Reorganization. Subject to applicable federal
and state law, the Trustees may without the vote or consent of Shareholders
cause to be organized or assist in organizing a corporation or corporations
under the laws of any jurisdiction or any other trust, partnership, limited
liability company, association, or other organization to take over all of the
Trust property or the Trust property allocated or belonging to such Series or to
carry on any business in which the trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the Trust
property allocated or belonging to such Series to any such corporation, trust,
limited liability company, partnership, association, or organization in exchange
for the shares or securities thereof or otherwise, and to lend money to,
subscribe for the shares or securities of, and enter into any contracts with any
such corporation, trust, partnership, limited liability company, association, or
organization, or any corporation, partnership, limited liability company, trust,
association, or organization in which the trust or such series holds or is about
to acquire shares or any other interest. Subject to applicable federal and state
law, the Trustees may also cause a merger or consolidation between the Trust or
any successor thereto and any such corporation, trust, partnership, limited
liability company, association, or other organization. Nothing contained herein
shall be construed as requiring approval of shareholders for the Trustees to
organize or assist in organizing one or more corporations, trusts, partnerships,
limited liability companies, associations, or other organizations and selling,
conveying, or transferring the trust property or a portion of the trust property
to such organization or entities; provided, however, that the Trustees shall
provide written notice to the affected Shareholders of any transaction whereby,
pursuant to this Section 4.4, the trust or any series thereof sells, conveys, or
transfers substantially all of its assets to another entity or merges or
consolidates with another entity.
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION 5. The original or a copy of this instrument and of each
[d]Declaration of [t]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 [d]Declaration of [t]Trust shall be filed by
the Trustees with the Secretary of [t]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 [d]Declarations of [t]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 [d]Declaration of
[t]Trust. In this instrument or in any such supplemental [d]Declaration of
[t]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 [d]Declaration of [t]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 [t]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, and the absence of a specific
reference herein to any such power, privilege, or action shall not imply that
the Trust may not exercise such power or privilege or take such actions.
63
<PAGE>
AMENDMENTS
SECTION 7. [If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable law
or this Declaration of Trust in any particular case,] except as specifically
provided herein, the Trustees [shall] may, without shareholder vote, amend or
otherwise supplement this [instrument,] Declaration of Trust by making an
amendment, a [d]Declaration of [t]Trust supplemental hereto[, which thereafter
shall form apart hereof, except that an amendment which shall affect the
Shareholders of one or more Series but not the Shareholders of all outstanding
Series shall be authorized by vote of the Shareholders holding a majority of the
Shares entitled to vote of each Series affected and no vote of Shareholders of a
Series not affected shall be required. Amendments having the purpose of changing
the name of the Trust or of supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote. Copies of
the supplemental declaration of trust shall be filed as specified in Section 5
of this Article XII.] or an amended and restated Declaration of Trust.
Shareholders shall have the right to vote (a) on any amendment that would affect
their right to vote granted in Section 1 of Article VIII; (b) on any amendment
that would alter the maximum number of Trustees permitted under Section 6 of
Article IV; (c) on any amendment to this Section 7; (d) on any amendment as may
be required by law or by the trust's registration statement filed with the
Commission; and (e) on any amendment submitted to them by the Trustees. Any
amendment required or permitted to be submitted to Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more Series or
Classes shall be authorized by vote of the Shareholders of each Series or Class
affected and no vote of SHareholders of a Series or Class not affected shall be
required. Notwithstanding anything else herein, any amendment to Article XI
shall not limit the rights to indemnification or insurance provided therein with
respect to action or omission of Covered Persons prior to such amendment.
FISCAL YEAR
SECTION 8. The fiscal year of the Trust shall end on a specified date as
set forth in the Bylaws, IF ANY, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
USE OF THE WORD "FIDELITY"
SECTION 9. Fidelity Management & Research Company ("FMR") has consented to
the use by any Series of the Trust of the identifying word "Fidelity" in the
name of any Series of the Trust at some future date. Such consent is conditioned
upon the employment of FMR or a subsidiary or affiliate thereof as investment
adviser of each Series of the Trust. As between the Trust and itself, FMR
controls the use of the name of the Trust insofar as such name contains the
identifying word "Fidelity." FMR may from time to time use the identifying word
"Fidelity" in other connections and for other purposes, including, without
limitation, in the names of other investment companies, corporations, or
businesses [which] that it may manage, advise, sponsor or own or in which it may
have a financial interest. FMR may require the Trust or any Series thereof to
cease using the identifying word "Fidelity" in the name of the Trust or any
Series thereof if the Trust or any Series thereof ceases to employ FMR or a
subsidiary or affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
SECTION 10. (A) The provisions of this Declaration of Trust are severable,
and, if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code or with other applicable laws
and regulations, the conflicting provision shall be deemed never to have
constituted a part of this Declaration of Trust; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of this declaration trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration of trust in any jurisdiction.
64
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this 19th day] as of [January, 1995.] The
date set forth above.
[SIGNATURE LINES OMITTED]
65
<PAGE>
EXHIBIT 2
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY MT. VERNON STREET TRUST:
FIDELITY GROWTH COMPANY FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION] Amendment made as of this [1st] __ day of _____ [January
1995] 19__, by and between Fidelity Mt. Vernon Street Trust, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity Growth Company
Fund (hereinafter called the "Portfolio"), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser") as set
forth in its entirety below.
Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
[January 31, 1990] January 1, 1995, to a modification of said Contract in the
manner set forth below. The [Modified] Amended Management Contract shall when
executed by duly authorized officers of the Fund and the Adviser, take effect on
the later of [December 1, 1994] ___________or the first day of the month
following approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision of the
Fund's Board of Trustees, direct the investments of the Portfolio in accordance
with the investment objective, policies and limitations as provided in the
Portfolio's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also furnish for
the use of the Portfolio office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Portfolio; and
shall pay the salaries and fees of all officers of the Fund, of all Trustees of
the Fund who are "interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell, lend
and otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Portfolio. The investment policies and all other
actions of the Portfolio are and shall at all times be subject to the control
and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and administrative services
necessary for the operation of the Fund. The Adviser shall, subject to the
supervision of the Board of Trustees, perform various services for the
Portfolio, including but not limited to: (i) providing the Portfolio with office
space, equipment and facilities (which may be its own) for maintaining its
organization; (ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder reports;
(iv) conducting shareholder relations; (v) maintaining the Fund's existence and
its records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal and
state law; and (vii) investigating the development of and developing and
implementing, if appropriate, management and shareholder services designed to
enhance the value or convenience of the Portfolio as an investment vehicle.
66
<PAGE>
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time to
time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees. The Adviser
shall, subject to review by the Board of Trustees, furnish such other services
as the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated with
the Adviser. The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of the
Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and stockholders of the Adviser are or
may be or become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a monthly
management fee, payable monthly as soon as practicable after the last day of
each month, composed of a Basic Fee and a Performance Adjustment. The
Performance Adjustment is added to or subtracted from the Basic Fee depending on
whether the Portfolio experienced better or worse performance than the [S&P
Composite Index of 500 Stocks] Russell 3000 Growth Index (the "Index"). The
Performance Adjustment is not cumulative. An increased fee will result even
though the performance of the Portfolio over some period of time shorter than
the performance period has been behind that of the Index, and, conversely, a
reduction in the fee will be made for a month even though the performance of the
Portfolio over some period of time shorter than the performance period has been
ahead of that of the Index. The Basic Fee and the Performance Adjustment will be
computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the nearest
millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in the
manner set forth in the fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day throughout
the month. The Group Fee Rate shall be determined on a cumulative basis pursuant
to the following schedule:
67
<PAGE>
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
[Over 390] .2700
----
390 - 426
--- ---
68
<PAGE>
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
426 - 462 .2650
--- --- -----
462 - 498 .2600
--- --- -----
498 - 534 .2550
--- --- -----
OVER - 534 .2500
---- --- -----
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate
shall be .30%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner set forth
in the Fund's Declaration of Trust or other organizational document) determined
as of the close of business on each business day throughout the month. The
resulting dollar amount comprises the Basic Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is 0.02%
for each percentage point (the performance of the Portfolio and the Index each
being calculated to the nearest .01%) that the Portfolio's investment
performance for the performance period was better or worse than the record of
the Index as then constituted. The maximum performance adjustment rate is 0.20%.
The performance period will commence with the first day of the first full
month following the Portfolio's commencement of operations. During the first
eleven months of the performance period for the Portfolio, there will be no
performance adjustment. Starting with the twelfth month of the performance
period, the performance adjustment will take effect. Following the twelfth month
a new month will be added to the performance period until the performance period
equals 36 months. Thereafter the performance period will consist of the current
month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing (i)
the opening net asset value of one share of the Portfolio on the first business
day of the performance period with (ii) the closing net asset value of one share
of the Portfolio as of the last business day of such period. In computing the
investment performance of the Portfolio and the investment record of the Index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of investment
income on the part of the Portfolio, and all cash distributions of the
securities included in the Index, will be treated as reinvested in accordance
with Rule 205-1 or any other applicable rules under the Investment Advisers Act
of 1940, as the same from time to time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration of Trust
or other organizational document) determined as of the close of business on each
business day throughout the month and the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of the number
of business days during which it is in effect for that month. The Basic Fee Rate
will be computed on the basis of and applied to net assets averaged over that
month ending on the last business day on which this Contract is in effect. The
amount of this Performance Adjustment to the Basic Fee will be computed on the
basis of and applied to net assets averaged over the 36-month period ending on
the last business day on which this Contract is in effect provided that if this
Contract has been in effect less than 36 months, the computation will be made on
the basis of the period of time during which it has been in effect.
69
<PAGE>
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Fund's Trustees other than those who are "interested
persons" of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Contract, interfere, in a material manner, with the
Adviser's ability to meet all of its obligations with respect to rendering
services to the Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, [1995]
2000 and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the Trustees of
the Fund or by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the portfolio] subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the "Commission") or
any rules or regulations adopted by, or interpretative releases of, the
Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the Fund
who are not parties to the Contract or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
with respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically in the
event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or other
organizational document and agrees that the obligations assumed by the Fund
pursuant to this Contract shall be limited in all cases to the Portfolio and its
assets, and the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser understands
that the rights and obligations of any Portfolio under the Declaration of Trust
70
<PAGE>
or other organizational document are separate and distinct from those of any and
all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as hereafter
amended, and subject to such orders as may be granted by the Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and their
respective seals to be hereunto affixed, all as of the date written above.
FIDELITY MT. VERNON STREET TRUST
on behalf of Fidelity Growth Company Fund
By
-----------------------------------------
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By
-----------------------------------------
President
71
<PAGE>
EXHIBIT 3
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY MT. VERNON STREET TRUST:
FIDELITY EMERGING GROWTH FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION] Amendment made AS OF this [1st] __ day of _____ [December
1994] 19__, by and between Fidelity Mt. Vernon Street Trust, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity Emerging Growth
Fund (hereinafter called the "Portfolio"), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser") as set
forth in its entirety below.
Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
[April 1, 1992] December 1, 1994, to a modification of said Contract in the
manner set forth below. The [Modified] Amended Management Contract shall when
executed by duly authorized officers of the Fund and the Adviser, take effect on
the later of [December 1, 1994] or the first day of the month following
approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision of the
Fund's Board of Trustees, direct the investments of the Portfolio in accordance
with the investment objective, policies and limitations as provided in the
Portfolio's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also furnish for
the use of the Portfolio office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Portfolio; and
shall pay the salaries and fees of all officers of the Fund, of all Trustees of
the Fund who are "interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell, lend
and otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Portfolio. The investment policies and all other
actions of the Portfolio are and shall at all times be subject to the control
and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and administrative services
necessary for the operation of the Fund. The Adviser shall, subject to the
supervision of the Board of Trustees, perform various services for the
Portfolio, including but not limited to: (i) providing the Portfolio with office
space, equipment and facilities (which may be its own) for maintaining its
organization; (ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder reports;
(iv) conducting shareholder relations; (v) maintaining the Fund's existence and
its records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal and
state law; and (vii) investigating the development of and developing and
implementing, if appropriate, management and shareholder services designed to
enhance the value or convenience of the Portfolio as an investment vehicle.
72
<PAGE>
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time to
time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees. The Adviser
shall, subject to review by the Board of Trustees, furnish such other services
as the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated with
the Adviser. The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of the
Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and stockholders of the Adviser are or
may be or become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a monthly
management fee, payable monthly as soon as practicable after the last day of
each month, composed of a Basic Fee and a Performance Adjustment. The
Performance Adjustment is added to or subtracted from the Basic Fee depending on
whether the Portfolio experienced better or worse performance than the [Russell
2000 Index of small capitalization stocks] Russell Mid Cap Index (the "Index").
The Performance Adjustment is not cumulative. An increased fee will result even
though the performance of the Portfolio over some period of time shorter than
the performance period has been behind that of the Index, and, conversely, a
reduction in the fee will be made for a month even though the performance of the
Portfolio over some period of time shorter than the performance period has been
ahead of that of the Index. The Basic Fee and the Performance Adjustment will be
computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the nearest
millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in the
manner set forth in the fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day throughout
the month. The Group Fee Rate shall be determined on a cumulative basis pursuant
to the following schedule:
73
<PAGE>
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
[Over 390 .2700
390 - 426
426 - 462 .2650
--- --- -----
74
<PAGE>
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
462 - 498 .2600
--- --- -----
498 - 534 .2550
--- --- -----
OVER - 534 .2500
---- --- -----
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate
shall be .35%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner set forth
in the Fund's Declaration of Trust or other organizational document) determined
as of the close of business on each business day throughout the month. The
resulting dollar amount comprises the Basic Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is
0.02% for each percentage point (the performance of the Portfolio and the Index
each being calculated to the nearest .01%) that the Portfolio's investment
performance for the performance period was better or worse than the record of
the Index as then constituted. The maximum performance adjustment rate is 0.20%.
The performance period will commence with the first day of the first full
month following the Portfolio's commencement of operations. During the first
eleven months of the performance period for the Portfolio, there will be no
performance adjustment. Starting with the twelfth month of the performance
period, the performance adjustment will take effect. Following the twelfth month
a new month will be added to the performance period until the performance period
equals 36 months. Thereafter the performance period will consist of the current
month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing (i)
the opening net asset value of one share of the Portfolio on the first business
day of the performance period with (ii) the closing net asset value of one share
of the Portfolio as of the last business day of such period. In computing the
investment performance of the Portfolio and the investment record of the Index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of investment
income on the part of the Portfolio, and all cash distributions of the
securities included in the Index, will be treated as reinvested in accordance
with Rule 205-1 or any other applicable rules under the Investment Advisers Act
of 1940, as the same from time to time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration of Trust
or other organizational document) determined as of the close of business on each
business day throughout the month and the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of the number
of business days during which it is in effect for that month. The Basic Fee Rate
will be computed on the basis of and applied to net assets averaged over that
month ending on the last business day on which this Contract is in effect. The
amount of this Performance Adjustment to the Basic Fee will be computed on the
basis of and applied to net assets averaged over the 36-month period ending on
the last business day on which this Contract is in effect provided that if this
Contract has been in effect less than 36 months, the computation will be made on
the basis of the period of time during which it has been in effect.
4. It is understood that the Portfolio will pay all its expenses, 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
75
<PAGE>
persons" of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Contract, interfere, in a material manner, with the
Adviser's ability to meet all of its obligations with respect to rendering
services to the Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, [1995]
2000 and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the Trustees of
the Fund or by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the "Commission") or
any rules or regulations adopted by, or interpretative releases of, the
Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the Fund
who are not parties to the Contract or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
with respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically in the
event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or other
organizational document and agrees that the obligations assumed by the Fund
pursuant to this Contract shall be limited in all cases to the Portfolio and its
assets, and the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser understands
that the rights and obligations of any Portfolio under the Declaration of Trust
or other organizational document are separate and distinct from those of any and
all other Portfolios.
76
<PAGE>
8. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as hereafter
amended, and subject to such orders as may be granted by the [Securities and
Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and their
respective seals to be hereunto affixed, all as of the date written above.
FIDELITY MT. VERNON STREET TRUST
on behalf of Fidelity Emerging Growth Fund
By
-----------------------------------------
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By
-----------------------------------------
President
77
<PAGE>
EXHIBIT 4
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY MT. VERNON STREET TRUST:
FIDELITY NEW MILLENNIUM FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION] Amendment made as of this [1st] __ day of _____ [December
1994] 19__, by and between Fidelity Mt. Vernon Street Trust, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity New Millennium
Fund (hereinafter called the "Portfolio"), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser") as set
forth in its entirety below.
Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
[September 17, 1992] December 1, 1994, to a modification of said Contract in the
manner set forth below. The [Modified] Amended Management Contract shall when
executed by duly authorized officers of the Fund and the Adviser, take effect on
the later of [December 1, 1994] ___________ or the first day of the month
following approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision of the
Fund's Board of Trustees, direct the investments of the Portfolio in accordance
with the investment objective, policies and limitations as provided in the
Portfolio's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also furnish for
the use of the Portfolio office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Portfolio; and
shall pay the salaries and fees of all officers of the [Portfolio] fund, of all
Trustees of the Fund who are "interested persons" of the fund or of the Adviser
and of all personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is authorized, in
its discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies and
all other actions of the Portfolio are and shall at all times be subject to the
control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and administrative services
necessary for the operation of the Fund. The Adviser shall, subject to the
supervision of the Board of Trustees, perform various services for the
Portfolio, including but not limited to: (i) providing the Portfolio with office
space, equipment and facilities (which may be its own) for maintaining its
organization; (ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder reports;
(iv) conducting shareholder relations; (v) maintaining the Fund's existence and
its records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal and
state law; and (vii) investigating the development of and developing and
implementing, if appropriate, management and shareholder services designed to
enhance the value or convenience of the Portfolio as an investment vehicle.
78
<PAGE>
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time to
time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees. The Adviser
shall, subject to review by the Board of Trustees, furnish such other services
as the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated with
the Adviser. The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of the
Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and stockholders of the Adviser are or
may be or become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a monthly
management fee, payable monthly as soon as practicable after the last day of
each month, composed of a Basic Fee and a Performance Adjustment. The
Performance Adjustment is added to or subtracted from the Basic Fee depending on
whether the Portfolio experienced better or worse performance than the S&P
Composite Index of 500 Stocks (the "Index"). The Performance Adjustment is not
cumulative. An increased fee will result even though the performance of the
Portfolio over some period of time shorter than the performance period has been
behind that of the Index, and, conversely, a reduction in the fee will be made
for a month even though the performance of the Portfolio over some period of
time shorter than the performance period has been ahead of that of the Index.
The Basic Fee and the Performance Adjustment will be computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the nearest
millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in the
manner set forth in the fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day throughout
the month. The Group Fee Rate shall be determined on a cumulative basis pursuant
to the following schedule:
79
<PAGE>
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
[Over 390 .2700
390 - 426
426 - 462 .2650
--- --- -----
80
<PAGE>
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
462 - 498 .2600
--- --- -----
498 - 534 .2550
--- --- -----
OVER - 534 .2500
---- --- -----
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate
shall be .35%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner set forth
in the Fund's Declaration of Trust or other organizational document) determined
as of the close of business on each business day throughout the month. The
resulting dollar amount comprises the Basic Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is
0.02% for each percentage point (the performance of the Portfolio and the Index
each being calculated to the nearest .01%) that the portfolio's investment
performance for the performance period was better or worse than the record of
the Index as then constituted. The maximum performance adjustment rate is 0.20%.
The performance period will commence with the first day of the first
full month following the Portfolio's commencement of operations. During the
first eleven months of the performance period for the Portfolio, there will be
no performance adjustment. Starting with the twelfth month of the performance
period, the performance adjustment will take effect. Following the twelfth month
a new month will be added to the performance period until the performance period
equals 36 months. Thereafter the performance period will consist of the current
month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing
(i) the opening net asset value of one share of the Portfolio on the first
business day of the performance period with (ii) the closing net asset value of
one share of the Portfolio as of the last business day of such period. In
computing the investment performance of the Portfolio and the investment record
of the Index, distributions of realized capital gains, the value of capital
gains taxes per share paid or payable on undistributed realized long-term
capital gains accumulated to the end of such period and dividends paid out of
investment income on the part of the Portfolio, and all cash distributions of
the securities included in the Index, will be treated as reinvested in
accordance with Rule 205-1 or any other applicable rules under the Investment
Advisers Act of 1940, as the same from time to time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration of Trust
or other organizational document) determined as of the close of business on each
business day throughout the month and the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of the number
of business days during which it is in effect for that month. The Basic Fee Rate
will be computed on the basis of and applied to net assets averaged over that
month ending on the last business day on which this Contract is in effect. The
amount of this Performance Adjustment to the Basic Fee will be computed on the
basis of and applied to net assets averaged over the 36-month period ending on
the last business day on which this Contract is in effect provided that if this
Contract has been in effect less than 36 months, the computation will be made on
the basis of the period of time during which it has been in effect.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
81
<PAGE>
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Fund's Trustees other than those who are "interested
persons" of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Contract, interfere, in a material manner, with the
Adviser's ability to meet all of its obligations with respect to rendering
services to the Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until July 31, [1995]
2000 and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the Trustees of
the Fund or by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the "Commission") or
any rules or regulations adopted by, or interpretative releases of, the
Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the Fund
who are not parties to the Contract or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
with respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically in the
event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation
of shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by the
Fund pursuant to this Contract shall be limited in all cases to the Portfolio
and its assets, and the Adviser shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Portfolio or any
other Portfolios of the Fund. In addition, the Adviser shall not seek
satisfaction of any such obligations from the Trustees or any individual
Trustee. The Adviser understands that the rights and obligations of any
Portfolio under the Declaration of Trust or other organizational document are
separate and distinct from those of any and all other Portfolios.
82
<PAGE>
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving effect to
the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as hereafter
amended, and subject to such orders as may be granted by the [Securities and
Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MT. VERNON STREET TRUST
on behalf of Fidelity New Millennium Fund
By
----------------------------------
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH
COMPANY
By
----------------------------------
President
83
<PAGE>
EXHIBIT 5
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY MT. VERNON STREET TRUST: [FUND NAME]
1. This Distribution and Service Plan (the "Plan"), when effective
in accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of [Fund Name] (the
"Portfolio"), a series of shares of Fidelity Mt.
Vernon Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with
respect to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement, the
Distributor pays the expenses of printing and distributing any prospectuses,
reports and other literature used by the Distributor, advertising, and other
promotional activities in connection with the offering of shares of the
Portfolio for sale to the public. It is recognized that the Adviser may use its
management fee revenues as well as past profits or its resources from any other
source, to make payment to the Distributor with respect to any expenses incurred
in connection with the distribution of Portfolio shares, including the
activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to
the approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder support
services, including but not limited to providing office space, equipment and
telephone facilities, answering routine inquiries regarding the Portfolio,
processing shareholder transactions and providing such other shareholder
services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this
Plan to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to the
Adviser. To the extent that any payments made by the Portfolio to the Adviser,
including payment of management fees, should be deemed to be indirect financing
of any activity primarily intended to result in the sale of shares of the
Portfolio within the context of Rule 12b-1 under the Act, then such payments
shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of
at least a "majority of the outstanding voting securities of the Portfolio" (as
defined in the Act), the plan having been approved by] a vote of a majority of
the Trustees of the Fund, including a majority of Trustees who are not
"interested persons" of the Fund (as defined in the Act) and who have no direct
or indirect financial interest in the operation of this Plan or in any
agreements related to this Plan (the "Independent Trustees"), cast in person at
a meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided,
remain in effect from the date specified above until April 30, 2000 and from
year to year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund, including
a majority of the Independent Trustees, cast in person at a meeting called for
the purpose of voting on this Plan. This Plan may be amended at any time by the
Board of Trustees, provided that (a) any amendment to authorize direct payments
by the Portfolio to finance any activity primarily intended to result in the
sale of shares of the Portfolio, to increase materially the amount spent by the
Portfolio for distribution, or any amendment of the Management Contract to
increase the amount to be paid by the Portfolio thereunder shall be effective
only upon approval by a vote of a majority of the outstanding voting securities
of the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence in
this paragraph.
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<PAGE>
7. This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the
Adviser and/or Distributor to provide the Fund, for review by the Fund's Board
of Trustees, and the Trustees shall review, at least quarterly, a written report
of the amounts expended in connection with financing any activity primarily
intended to result in the sale of shares of the Portfolio (making estimates of
such costs where necessary or desirable) and the purposes for which such
expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set
forth in the Fund's Declaration of Trust or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any agreements
related to this Plan shall be limited in all cases to the Portfolio and its
assets, and shall not constitute obligations of any other series of shares of
the Fund.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
85
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TABLE WILL BE UPDATED IN A SUBSEQUENT FILING
<TABLE>
<CAPTION>
EXHIBIT 6
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<S> <C> <C> <C>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS PAID
TO FMR (C)
GROWTH
Advisor Focus Funds:
Consumer Industries: (o)**
Class A 7/31/97 $ 0.7 0.60%?
Class T 7/31/97 3.9 0.60?
Class B 7/31/97 0.3 0.60?
Class C (Z) 7/31/98 0.3 0.60?
Institutional Class 7/31/97 1.1 0.60?
Cyclical Industries: (o)**
Class A 7/31/97 0.2 0.60?
Class T 7/31/97 1.1 0.60?
Class B 7/31/97 0.1 0.60?
Class C (Z)* 7/31/98 0.0 0.60?
Institutional Class 7/31/97 4.1 0.60?
Financial Services: (o)**
Class A 7/31/97 2.9 0.60?
Class T 7/31/97 22.0 0.60?
Class B 7/31/97 3.3 0.60?
Class C (Z) 7/31/98 5.3 0.60?
Institutional Class 7/31/97 2.2 0.60?
Health Care: (o)**
Class A 7/31/97 2.9 0.60?
Class T 7/31/97 22.5 0.60?
Class B 7/31/97 2.4 0.60?
Class C (Z) 7/31/98 3.9 0.60?
Institutional Class 7/31/97 2.7 0.60?
Natural Resources: (o)**
Class A 7/31/97 4.5 0.60?
Class T 7/31/97 634.0 0.60?
Class B 7/31/97 49.4 0.60?
Class C (Z) 7/31/98 1.1 0.60?
Institutional Class 7/31/97 10.8 0.60?
Technology: (o)**
Class A 7/31/97 3.6 0.60?
Class T 7/31/97 25.8 0.60?
<PAGE>
Class B 7/31/97 2.2 0.60?
Class C (Z) 7/31/98 2.1 0.60?
Institutional Class 7/31/97 1.6 0.60?
Utilities Growth: (o)**
Class A 7/31/97 0.4 0.60?
Class T 7/31/97 3.8 0.60?
Class B 7/31/97 0.8 0.60?
Class C (Z) 7/31/98 1.2 0.60?
Institutional Class 7/31/97 1.8 0.60?
Blue Chip Growth (o) 7/31/97 10,047.1 0.51
Low-Priced Stock (o) 7/31/97 6,107.7 0.76
OTC Portfolio (o) 7/31/97 3,330.0 0.56
Export and Multinational Fund (o) 8/31/97 415.7 0.60
Advisor Korea Fund, Inc. ((PHI)) 9/30/97 49.9 1.00
2
<PAGE>
Destiny I (o) 9/30/97 $ 5,260.4 0.36%
Destiny II (o) 9/30/97 3,074.7 0.50
Advisor Emerging Asia Fund, Inc. ((PHI)) 10/31/97 130.4 1.16
Advisor Overseas: ((SIGMA))
Class A 10/31/97 2.6 0.81
Class T 10/31/97 1,112.8 0.81
Class B 10/31/97 29.0 0.81
Class C (Z) 10/31/98** 6.4 0.81
Institutional Class 10/31/97 30.4 0.81
Canada ((SIGMA)) 10/31/97 127.5 0.39
Capital Appreciation (o) 10/31/97 1,773.3 0.41
Disciplined Equity (o) 10/31/97 2,212.1 0.44
Diversified International ((SIGMA)) 10/31/97 1,106.3 0.83
Emerging Markets ((SIGMA)) 10/31/97 1,049.2 0.75
Europe ((SIGMA)) 10/31/97 874.8 0.78
Europe Capital Appreciation ((SIGMA)) 10/31/97 335.4 0.65
France ((SIGMA)) 10/31/97 6.3 0.00*
Germany ((SIGMA)) 10/31/97 11.9 0.48*
Hong Kong and China (m) 10/31/97 217.5 0.75
International Value (m) 10/31/97 305.5 0.85
Japan (m) 10/31/97 295.1 0.93
Japan Small Companies (m) 10/31/97 94.1 0.75
Latin America ((SIGMA)) 10/31/97 868.0 0.75
Nordic ((SIGMA))** 10/31/97 68.5 0.75
Overseas ((SIGMA)) 10/31/97 3,574.3 0.84
Pacific Basin (m) 10/31/97 347.5 0.70
Southeast Asia (m) 10/31/97 584.7 0.76
Stock Selector (o) 10/31/97 1,738.2 0.47
TechnoQuant Growth** 10/31/97 63.4 0.59?
United Kingdom ((SIGMA)) 10/31/97 5.1 0.00*
Value (o) 10/31/97 7,464.9 0.46
Worldwide ((SIGMA)) 10/31/97 1,067.5 0.75
Advisor Equity Growth: (o)
Class A 11/30/97 14.6 0.60
Class T 11/30/97 3,860.7 0.60
Class B 11/30/97 31.7 0.60
Class C 11/30/97 0.5 0.60
Institutional Class 11/30/97 1,154.7 0.60
Advisor Growth Opportunities: (o)
Class A 11/30/97 136.1 0.52?
Class T 11/30/97 20,087.8 0.52?
Class B 11/30/97 395.4 0.52?
Class C 11/30/97 2.9 0.52?
3
<PAGE>
Institutional Class 11/30/97 384.3 0.52?
Advisor Large Cap: (o)
Class A 11/30/97 1.5 0.60
Class T 11/30/97 35.8 0.60
Class B 11/30/97 16.1 0.60
Class C* 11/30/97 0.0 0.60
Institutional Class 11/30/97 7.7 0.60
Advisor Mid Cap: (o)
Class A 11/30/97 2.6 0.60
Class T 11/30/97 266.9 0.60
4
<PAGE>
Advisor Mid Cap: (o) (continued)
Class B 11/30/97 $ 43.5 0.60%
Class C 11/30/97 0.1 0.60
Institutional Class 11/30/97 52.0 0.60
Advisor Strategic Opportunities: (o)
Class A 11/30/97 1.1 0.40?
Class T 11/30/97 494.6 0.40?
Class B 11/30/97 99.5 0.40?
Institutional Class 11/30/97 5.9 0.40?
Initial Class 11/30/97 20.5 0.40?
Advisor TechnoQuant Growth: (o)
Class A 11/30/97 4.1 0.60
Class T 11/30/97 13.0 0.60
Class B 11/30/97 6.4 0.60
Class C* 11/30/97 0.0 0.60
Institutional Class 11/30/97 1.3 0.60
Emerging Growth (o) 11/30/97 1,907.1 0.77
Growth Company (o) 11/30/97 10,175.2 0.47
New Millennium (o) 11/30/97 1,437.9 0.74
Retirement Growth (o) 11/30/97 4,042.6 0.41
Congress Street 12/31/97 86.8 0.45
Contrafund (o) 12/31/97 27,817.1 0.48
Exchange 12/31/97 291.8 0.54
Trend (o) 12/31/97 1,442.4 0.42
Variable Insurance Products:
Growth
Initial Class 12/31/97 6,937.2 0.60
Service Class 12/31/97 0.6 0.60
Overseas ((SIGMA))
Initial Class 12/31/97 1,917.4 0.75
Service Class 12/31/97 0.3 0.75
Variable Insurance Products II:
Asset Manager: Growth (o)
Initial Class 12/31/97 389.5 0.60
Service Class* 12/31/97 0.0 0.60
Contrafund (o)
Initial Class 12/31/97 3,294.9 0.60
Service Class 12/31/97 1.4 0.60
5
<PAGE>
Variable Insurance Products III:
Growth Opportunities (o)
Initial Class 12/31/97 703.1 0.60
Service Class 12/31/97 0.7 0.60
Select Portfolios:
Air Transportation (o) 2/28/98 62.7 0.60
American Gold 2/28/98 279.5 0.60
Automotive (o) 2/28/98 62.2 0.59
Biotechnology (o) 2/28/98 577.4 0.60
Brokerage and Investment Management (o) 2/28/98 416.4 0.60
Business Services and Outsourcing (o) 2/28/98 7.1 0.60((beta))
Chemicals (o) 2/28/98 83.4 0.60
Computers (o) 2/28/98 658.0 0.60
Construction and Housing (o) 2/28/98 26.0 0.60
Consumer Industries (o) 2/28/98 26.5 0.61
Cyclical Industries (o) 2/28/98 3.6 0.00*
Select Portfolios: (continued)
Defense and Aerospace (o) 2/28/98 $ 63.9 0.60%
Developing Communications (o) 2/28/98 238.7 0.60
Electronics (o) 2/28/98 2,374.6 0.60
Energy (o) 2/28/98 191.3 0.59
Energy Service (o) 2/28/98 964.1 0.59
Environmental Services (o) 2/28/98 27.8 0.60
Financial Services (o) 2/28/98 468.5 0.60
Food and Agriculture (o) 2/28/98 247.0 0.60
Health Care (o) 2/28/98 1,590.8 0.60
Home Finance (o) 2/28/98 1,334.7 0.60
Industrial Equipment (o) 2/28/98 60.1 0.60
Industrial Materials (o) 2/28/98 29.9 0.60
Insurance (o) 2/28/98 110.4 0.60
Leisure (o) 2/28/98 142.1 0.60
Medical Delivery (o) 2/28/98 159.1 0.60
Medical Equipment and Systems (o)(Z) 2/28/99** 6.9 0.60((beta))
Multimedia (o) 2/28/98 59.1 0.60
Natural Gas (o) 2/28/98 82.3 0.59
Natural Resources (o) 2/28/98 6.4 0.00*
Paper and Forest Products (o) 2/28/98 24.2 0.60
Precious Metals and Minerals (o) 2/28/98 194.7 0.60
Regional Banks (o) 2/28/98 1,035.6 0.60
Retailing (o) 2/28/98 152.9 0.60
Software and Computer Services (o) 2/28/98 434.9 0.60
Technology (o) 2/28/98 552.2 0.60
Telecommunications (o) 2/28/98 413.4 0.60
Transportation (o) 2/28/98 57.4 0.59
<PAGE>
Utilities Growth (o) 2/28/98 273.5 0.60
Magellan (o) 3/31/98 61,521.2 0.43
Large Cap Stock (o) 4/30/98 133.9 0.45
Mid Cap Stock (o) 4/30/98 1,579.2 0.60
Small Cap Stock (o)** 4/30/98 383.2 0.35*?
Small Cap Stock Selector (o) 4/30/98 727.3 0.67
Contrafund II (o) 6/30/98 226.3 0.59
Fidelity Fifty (o) 6/30/98 180.5 0.43
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or as of
June 30, 1998, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of each
fund at the close of business on each business day throughout its fiscal
period.
(c) Reflects reductions for any expense reimbursement paid by or due from FMR
pursuant to voluntary or state expense limitations. Funds so affected are
indicated by an (*). The ratio for certain multi-class funds is presented
gross of expense reductions.
? Annualized
* Average net assets for the period shown were less than $100,000
** Less than a complete fiscal year
(B) Based on estimated expenses
(m) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: Fidelity Management & Research
(U.K.) Inc. (FMR U.K.), Fidelity Management & Research (Far East) Inc. (FMR
Far East), Fidelity Investments Japan Ltd. (FIJ), Fidelity International
Investment Advisors (FIIA), and Fidelity International Investment Advisors
(U.K.) Limited (FIIA (U.K.) L), with respect to the fund.
((SIGMA)) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: FMR U.K., FMR Far East, FIIA, and
FIIA (U.K.) L, with respect to the fund.
(o) Fidelity Management & Research Company has entered into sub-advisory
agreements with FMR U.K. and FMR Far East, with respect to the fund.
((PHI)) Fidelity Management & Research Company has entered into sub-advisory
agreements with FIIA and FIJ, with respect to the fund.
(Z) The ratio of net advisory fees to average net assets paid to FMR represents
the amount as of the prior fiscal year end. Updated ratios will be
presented for each class of shares of the fund when the next fiscal year
end figures are available.
7
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
OR
For faster, more convenient voting
use the phone
(SEE _______________ FOR COMPLETE INSTRUCTIONS.)
VOTE BY PHONE: Call toll-free _____________________
***YOUR PERSONAL CONTROL NUMBER: __________***
Your prompt response will save your fund the expense of additional mailings.
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C. Johnson
3d, Robert M. Gates and Eric D. Roiter, or any one or more of them, attorneys,
with full power of substitution, to vote all shares of FIDELITY MT. VERNON
STREET TRUST: FIDELITY GROWTH COMPANY FUND which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on January 13, 1999 at 9:00
a.m. and at any adjournments thereof. All powers may be exercised by a majority
of said proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals described in
the Proxy Statement as specified on the reverse side. Receipt of the Notice of
the Meeting and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date ____________________________, 199_
---------------------------------------
---------------------------------------
Signature(s)(Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316200104/fund #025
<PAGE>
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- -----------------------------------------------------------
1. To elect the twelve nominees [ ] FOR all nominees [ ] 1.
specified below as Trustees: listed (except as WITHHOLD
Ralph F. Cox, Phyllis Burke marked to the contrary authority to vote
Davis, Robert M. Gates, Edward below). for all
C. Johnson 3d, E. Bradley nominees.
Jones, Donald J. Kirk, Peter S.
Lynch, William O. McCoy, Gerald
C. McDonough, Marvin L. Mann,
Robert C. Pozen, and Thomas R.
Williams
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE NOMINEE(S)
ON THE LINE BELOW.)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers FOR[ ] AGAINST[ ] ABSTAIN [ ] 2.
LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and FOR[ ] AGAINST[ ] ABSTAIN [ ] 3.
restated Declaration of Trust.
4. To approve an amended management contract ] ] AGAINST [ ] ABSTAIN [ ] 4.
for the fund that would reduce the management fee
payable to FMR by the fund as FMR's assets under
management increase and would change the
comparative securities index used for calculating
the fund's management fee performance adjustment.
7. To approve a Distribution and Service Plan for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund which describes all material aspects of the
proposed financing for the distribution of fund
shares.
8. To make the fund's fundamental policy concerning FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
investment in common stock and securities
convertible into common stock non-fundamental.
9. To amend the fund's diversification limitation to FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
exclude "securities of other investment companies"
from issuer diversification limits.
</TABLE>
GCF PXC 1198 cusip # 316200104/fund# 025
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
OR
For faster, more convenient voting
use the phone
(SEE _______________ FOR COMPLETE INSTRUCTIONS.)
VOTE BY PHONE: Call toll-free _____________________
***YOUR PERSONAL CONTROL NUMBER: __________***
Your prompt response will save your fund the expense of additional mailings.
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Robert M. Gates, and Eric D. Roiter, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of FIDELITY
MT. VERNON STREET TRUST as indicated above which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on January 13, 1999, at
9:00 a.m. and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt of
the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date ____________________________, 199_
---------------------------------------
---------------------------------------
Signature(s)(Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(025, 324, 300 HH)
<PAGE>
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
1. To elect the twelve nominees [ ] FOR all nominees [ ] 1.
specified below as Trustees: listed (except as WITHHOLD
Ralph F. Cox, Phyllis Burke marked to the contrary authority to vote
Davis, Robert M. Gates, Edward below). for all
C. Johnson 3d, E. Bradley nominees.
Jones, Donald J. Kirk, Peter S.
Lynch, William O. McCoy, Gerald
C. McDonough, Marvin L. Mann,
Robert C. Pozen, and Thomas R.
Williams (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S),
WRITE THE NAME(S) OF THE
NOMINEE(S) ON THE LINE BELOW.)
- -------------------------------------------------------------------------------------
2. To ratify the selection of PricewaterhouseCoopers FOR [ ] AGAINST [ ] ABSTAIN 2.
LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and FOR [ ] AGAINST [ ] ABSTAIN 3.
restated Declaration of Trust.
4. To approve an amended management contract for FOR [ ] AGAINST [ ] ABSTAIN 4.
the fund that would reduce the management fee
payable to FMR by the fund as FMR's assets
under management increase and would change the
comparative securities index used for calculating
the fund's management fee performance adjustment.
7. To approve a Distribution and Service Plan for FOR [ ] AGAINST [ ] ABSTAIN 7.
the fund which describes all material aspects
of the proposed financing for the distribution
of fund shares.
8. To make the fund's fundamental policy concerning FOR [ ] AGAINST [ ] ABSTAIN 8.
investment in common stock and securities
convertible into common stock non-fundamental.
9. To amend the fund's diversification limitation to FOR [ ] AGAINST [ ] ABSTAIN 9.
exclude "securities of other investment companies"
from issuer diversification limits.
</TABLE>
VERN PXC 1198 cusip #316200104 #025H
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
OR
For faster, more convenient voting
use the phone
(SEE _______________ FOR COMPLETE INSTRUCTIONS.)
VOTE BY PHONE: Call toll-free _____________________
***YOUR PERSONAL CONTROL NUMBER: __________***
Your prompt response will save your fund the expense of additional mailings.
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
FIDELITY MT. VERNON STREET TRUST: FIDELITY EMERGING GROWTH FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Robert M. Gates and Eric D. Roiter, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of FIDELITY
MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the fund to be held
at the office of the trust at 82 Devonshire St., Boston, MA 02109, on January
13, 1999 at 9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or acting
or, if only one votes and acts, then by that one. This Proxy shall be voted on
the proposals described in the Proxy Statement as specified on the reverse side.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date_____________________________, 199_
---------------------------------------
---------------------------------------
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316200203/fund #324
<PAGE>
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------------
1. To elect the twelve nominees [ ] FOR all nominees [ ] 1.
specified below as Trustees: listed (except as WITHHOLD
Ralph F. Cox, Phyllis Burke marked to the contrary authority to vote
Davis, Robert M. Gates, Edward below). for all
C. Johnson 3d, E. Bradley nominees.
Jones, Donald J. Kirk, Peter S.
Lynch, William O. McCoy, Gerald
C. McDonough, Marvin L. Mann,
Robert C. Pozen, and Thomas R.
Williams
(INSTRUCTION:TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
WRITE THE NAME(S)OF THE NOMINEE(S) ON
THE LINE BELOW.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and restated Declaration of Trust.
5. To approve an amended management contract FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
for the fund that would reduce the management
fee payable to FMR by the fund as FMR's
assets under management increase and would
change the comparative securities index used
for calculating the fund's management fee
performance adjustment.
7. To approve a Distribution and Service Plan for FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
the fund which describes all material aspects
of the proposed financing for the distribution
of fund shares.
9. To amend the fund's diversification limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
to exclude "securities of other investment
companies" from issuer diversification limits.
</TABLE>
FEG PXC 1198 cusip # 316200203/fund# 324
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
OR
For faster, more convenient voting
use the phone
(SEE _______________ FOR COMPLETE INSTRUCTIONS.)
VOTE BY PHONE: Call toll-free _____________________
***YOUR PERSONAL CONTROL NUMBER: __________***
Your prompt response will save your fund the expense of additional mailings.
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
FIDELITY MT. VERNON STREET TRUST: FIDELITY EMERGING GROWTH FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Robert M. Gates, and Eric D. Roiter, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of FIDELITY
MT. VERNON STREET TRUST as indicated above which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on January 13, 1999, at
9:00 a.m. and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt of
the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date ____________________________, 199_
---------------------------------------
---------------------------------------
Signature(s)(Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(025, 324, 300 HH)
<PAGE>
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To elect the twelve nominees specified [ ] FOR all nominees [ ] 1.
below as Trustees: Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. marked to the contrary authority
Johnson 3d, E. Bradley Jones, Donald J. below). to vote for
Kirk, Peter S. Lynch, William O. McCoy, all nominees.
Gerald C. McDonough, Marvin L. Mann,
Robert C. Pozen, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S)OF THE NOMINEE(S)ON THE LINE
BELOW.)
- --------------------------------------------------------------------------------
2. To ratify the selection of PricewaterhouseCoopers FOR[ ] AGAINST[ ] ABSTAIN[ ] 2.
LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and FOR[ ] AGAINST[ ] ABSTAIN[ ] 3.
restated Declaration of Trust.
5. To approve an amended management contract for the FOR[ ] AGAINST[ ] ABSTAIN[ ] 5.
fund that would reduce the management fee
payable to FMR by the fund as FMR's assets
under management increase and would change the
comparative securities index used for calculating
calculating the fund's management fee performance
adjustment.
7. To approve a Distribution and Service Plan for FOR[ ] AGAINST[ ] ABSTAIN[ ] 7.
the fund which describes all material aspects
of the proposed financing for the distribution
of fund shares.
9. To amend the fund's diversification limitation to FOR[ ] AGAINST[ ] ABSTAIN [ ] 9.
exclude "securities of other investment companies"
from issuer diversification limits.
</TABLE>
VERN PXC 1198 cusip #316200203 #324H
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
OR
For faster, more convenient voting
use the phone
(SEE _______________ FOR COMPLETE INSTRUCTIONS.)
VOTE BY PHONE: Call toll-free _____________________
***YOUR PERSONAL CONTROL NUMBER: __________***
Your prompt response will save your fund the expense of additional mailings.
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
FIDELITY MT. VERNON STREET TRUST: FIDELITY NEW MILLENNIUM FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Robert M. Gates and Eric D. Roiter, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of FIDELITY
MT. VERNON STREET TRUST: FIDELITY NEW MILLENNIUM FUND which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the fund to be held
at the office of the trust at 82 Devonshire St., Boston, MA 02109, on January
13, 1999 at 9:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or acting
or, if only one votes and acts, then by that one. This Proxy shall be voted on
the proposals described in the Proxy Statement as specified on the reverse side.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date_____________________________, 199_
---------------------------------------
---------------------------------------
Signature(s)(Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316200302/fund #300
<PAGE>
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To elect the twelve nominees specified [ ]FOR all nominees [ ] 1.
below as Trustees: Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke listed authority Davis, Robert M. marked to the authority to vote
Gates, Edward C. Johnson 3d, E. Bradley contrary below). for all
Jones, Donald J. Kirk, Peter S. Lynch, nominees.
William O. McCoy, Gerald C. McDonough,
Marvin L. Mann, Robert C. Pozen, and
Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE NOMINEE(S) ON THE LINE
BELOW.)
- --------------------------------------------------------------------------------
2. To ratify the selection of PricewaterhouseCoopers FOR[ ] AGAINST[ ] ABSTAIN[ ] 2.
LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended and FOR[ ] AGAINST[ ] ABSTAIN[ ] 3.
restated Declaration of Trust.
6. To approve an amended management contract for FOR[ ] AGAINST[ ] ABSTAIN[ ] 6.
management contract for the fund that would
reduce the management fee payable to FMR by the
fund as FMR's assets under management increase.
7. To approve a Distribution and Service Plan for the FOR[ ] AGAINST[ ] ABSTAIN[ ] 7.
fund which describes all material aspects of
the proposed financing for the distribution of
fund shares.
9. To amend the fund's diversification limitation FOR[ ] AGAINST[ ] ABSTAIN[ ] 9.
to exclude "securities of other investment
companies" from issuer diversification limits.
</TABLE>
NMFX PXC 1198 cusip # 316200302/fund# 300
<PAGE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
OR
For faster, more convenient voting
use the phone
(SEE _______________ FOR COMPLETE INSTRUCTIONS.)
VOTE BY PHONE: Call toll-free _____________________
***YOUR PERSONAL CONTROL NUMBER: __________***
Your prompt response will save your fund the expense of additional mailings.
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
FIDELITY MT. VERNON STREET TRUST: FIDELITY NEW MILLENNIUM FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Robert M. Gates, and Eric D. Roiter, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of FIDELITY
MT. VERNON STREET TRUST as indicated above which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on January 13, 1999, at
9:00 a.m. and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt of
the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name
appears on this Proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the person's
title.
Date ____________________________, 199_
---------------------------------------
---------------------------------------
Signature(s)(Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
(025, 324, 300 HH)
<PAGE>
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. To elect the twelve nominees specified [ ]FOR all nominees [ ] 1.
below as Trustees: Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. marked to the authority to
Johnson 3d, E. Bradley Jones, Donald J. contrary below). vote for all
Kirk, Peter S. Lynch, William O. McCoy, nominees.
Gerald C. McDonough, Marvin L. Mann,
Robert C. Pozen, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S),
WRITE THE NAME(S) OF THE NOMINEE(S) ON
THE LINE BELOW.)
- --------------------------------------------------------------------------------
2. To ratify the selection of PricewaterhouseCoopers FOR[ ] AGAINST[ ] ABSTAIN[ ] 2.
LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an amended FOR[ ] AGAINST[ ] ABSTAIN[ ] 3.
and restated Declaration of Trust.
6. To approve an amended management contract for FOR[ ] AGAINST[ ] ABSTAIN[ ] 6.
the fund that would reduce the management fee
payable to FMR by the fund as FMR's assets under
management increase.
7. To approve a Distribution and Service Plan for the FOR[ ] AGAINST[ ] ABSTAIN[ ] 7.
fund which describes all material aspects
of the proposed financing for the distribution
of fund shares.
9. To amend the fund's diversification limitation to FOR[ ] AGAINST[ ] ABSTAIN[ ] 9.
exclude "securities of other investment companies"
from issuer diversification limits.
</TABLE>
VERN PXC 1198 cusip #316200302 #300H
