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:
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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(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)
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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:
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computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
FIDELITY NEW MILLENNIUM(registered trademark) 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 , including a change
in performance adjustment benchmark, for Fidelity Growth Company
Fund.
5. To approve an amended management contract , including a change
in performance adjustment benchmark, 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
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY 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 $ 5,000 (Fidelity Growth
Company Fund), $ 3,000 (Fidelity Emerging Growth Fund), and
$ 2,000 (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 $ 6,000 ,
(Fidelity Growth Company Fund) and $ 3,000 ( Fidelity Emerging
Growth Fund ) and $ 2,000 ( Fidelity New Millennium
Fund ) .
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 212,846,097
Fidelity Emerging Growth Fund 81,801,033
Fidelity New Millennium Fund 61,135,860
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.
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 9 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.
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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 an All
amended and restated Declaration of Trust.
4. To approve an amended management Fidelity Growth
contract for the fund that would reduce the Company Fund
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%.
Proposal # Proposal Description Applicable Fund(s)
5. To approve an amended management Fidelity Emerging
contract for the fund that would reduce the Growth Fund
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 reduce Millennium Fund
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 Service All
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
concerning investment s in common stock Company Fund
and securities convertible into common
stock non-fundamental.
9. To amend the diversification limitation to All
exclude "securities of other investment
companies" from issuer diversification
limits.
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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, William O. McCoy, and Robert C. Pozen each of the
nominees is currently a Trustee of 57 registered investment companies
advised by FMR. Mr. Gates and Mr. McCoy are currently a Trustee of 54
registered investment companies advised by FMR. Mr. Pozen is currently
a Trustee of 51 registered investment companies advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, provided a quorum is
present, shall be elected.
Nominee Principal Occupation** Year of
(Age) Election or
Appointment
Ralph F. Cox President of RABAR Enterprises 1991
(66) (management consulting-engineering
industry, 1994). Prior to February 1994,
he was President of Greenhill Petroleum
Corporation (petroleum exploration and
production). Until March 1990, Mr. Cox
was President and Chief Operating Officer
of Union Pacific Resources Company
(exploration and production). He is a
Director of USA Waste Services, Inc.
(non-hazardous waste, 1993), CH2M Hill
Companies (engineering), Rio Grande, Inc.
(oil and gas production), and Daniel
Industries (petroleum measurement
equipment manufacturer). In addition, he
is a member of advisory boards of Texas
A&M University and the University of
Texas at Austin.
Nominee Principal Occupation** Year of
(Age) Election or
Appointment
Phyllis Burke Prior to her retirement in September 1991, 1992
Davis Mrs. Davis was the Senior Vice President of
(67) Corporate Affairs of Avon Products, Inc.
She is currently a Director of BellSouth
Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the
TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark
Cards, Inc. (1985-1991) and Nabisco
Brands, Inc. In addition, she is a member
of the President's Advisory Council of The
University of Vermont School of Business
Administration.
Robert M. Gates Consultant, author, and lecturer (1993). 1997
(55) Mr. Gates was Director of the Central
Intelligence Agency (CIA) from 1991-1993.
From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United
States and Deputy National Security Advisor.
Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel
engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining
and manufacturing), and TRW Inc. (original
equipment and replacement products).
Mr. Gates also is a Trustee of the Forum for
International Policy and of the Endowment
Association of the College of William and
Mary. In addition, he is a member of the
National Executive Board of the Boy Scouts
of America.
*Edward C. President, is Chairman, Chief Executive 1982
Johnson 3d Officer and a Director of FMR Corp.; a
(68) Director and Chairman of the Board and
of the Executive Committee of FMR;
Chairman and a Director of Fidelity
Investments Money Management, Inc.
(1998), Fidelity Management & Research
(U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
Nominee Principal Occupation** Year of
(Age) Election or
Appointment
E. Bradley Jones Prior to his retirement in 1984, Mr. Jones 1990
(71) was Chairman and Chief Executive Officer
of LTV Steel Company. He is a Director of
TRW Inc. (original equipment and
replacement products), Consolidated Rail
Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer
of chemical products), and he previously
served as a Director of NACCO Industries,
Inc. (mining and manufacturing,
1985-1995), Hyster-Yale Materials
Handling, Inc. (1985-1995), and
Cleveland-Cliffs Inc (mining), and as a
Trustee of First Union Real Estate
Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation,
where he has also been a member of the
Executive Committee as well as Chairman
of the Board and President, a Trustee and
member of the Executive Committee of
University School (Cleveland), and a
Trustee of Cleveland Clinic Florida.
Nominee Principal Occupation** Year of
(Age) Election or
Appointment
Donald J. Kirk Executive-in-Residence (1995) at 1987
(66) Columbia University Graduate School of
Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a
Professor at Columbia University Graduate
School of Business. Prior to 1987, he was
Chairman of the Financial Accounting
Standards Board. Mr. Kirk is a Director of
General Re Corporation (reinsurance), and
he previously served as a Director of
Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he
serves as Chairman of the Board of
Directors of National Arts Stabilization
Inc., Chairman of the Board of Trustees of
the Greenwich Hospital Association,
Director of the Yale-New Haven Health
Services Corp. (1998), a Member of the
Public Oversight Board of the American
Institute of Certified Public Accountants'
SEC Practice Section (1995), and as a
Public Governor of the National
Association of Securities Dealers, Inc.
(1996).
*Peter S. Lynch Vice Chairman and Director of FMR. Prior 1990
(55) to May 31, 1990, he was a Director of
FMR and Executive Vice President of FMR
(a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund
and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch
was also Vice President of Fidelity
Investments Corporate Services
(1991-1992). In addition, he serves as a
Trustee of Boston College, Massachusetts
Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of
New England Antiquities, and as an
Overseer of the Museum of Fine Arts of
Boston.
Nominee Principal Occupation** Year of
(Age) Election or
Appointment
William O. Vice President of Finance for the 1997
McCoy University of North Carolina (16-school
(65) system, 1995). Prior to his retirement in
December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth
Corporation (telecommunications, 1984)
and President of BellSouth Enterprises
(1986). He is currently a Director of
Liberty Corporation (holding company,
1984), Weeks Corporation of Atlanta (real
estate, 1994), Carolina Power and Light
Company (electric utility, 1996) and the
Kenan Transport Co. (1996). Previously,
he was a Director of First American
Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy
serves as a member of the Board of
Visitors for the University of North
Carolina at Chapel Hill (1994) and for the
Kenan-Flager Business School (University
of North Carolina at Chapel Hill, 1988).
Gerald C. Chairman of G.M. Management Group 1989
McDonough (strategic advisory services). Mr.
(70) McDonough is a Director of York
International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and
metal products, 1992), CUNO, Inc. (liquid
and gas filtration products, 1996), and
Associated Estates Realty Corporation (a
real estate investment trust, 1993). Mr.
McDonough served as a Director of
ACME-Cleveland Corp. (metal working,
telecommunications, and electronic
products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from
1983-1997).
Nominee Principal Occupation** Year of
(Age) Election or
Appointment
Marvin L. Mann Chairman of the Board of Lexmark 1993
(65) International, Inc. (office machines, 1991).
Prior to 1991, he held the positions of
Vice President of International Business
Machines Corporation ("IBM") and
President and General Manager of various
IBM divisions and subsidiaries. Mr. Mann
is a Director of M.A. Hanna Company
(chemicals, 1993) and Imation Corp.
(imaging and information storage, 1997).
*Robert C. Senior Vice President, is also President 1997
Pozen and a Director of FMR (1997); and
(52) President and a Director of Fidelity
Investments Money Management, Inc.
(1998), Fidelity Management & Research
(U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc.
(1997). Previously, Mr. Pozen served as
General Counsel, Managing Director, and
Senior Vice President of FMR Corp.
Thomas R. President of The Wales Group, Inc. 1989
Williams (management and financial advisory
(70) services). Prior to retiring in 1987, Mr.
Williams served as Chairman of the Board
of First Wachovia Corporation (bank
holding company), and Chairman and
Chief Executive Officer of The First
National Bank of Atlanta and First Atlanta
Corporation (bank holding company). He
is currently a Director of ConAgra, Inc.
(agricultural products), Georgia Power
Company (electric utility), National Life
Insurance Company of Vermont, American
Software, Inc., and AppleSouth, Inc.
(restaurants, 1992).
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of 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 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.
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.
COMPENSATION TABLE
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Trustees and Members Aggregate Aggregate Aggregate Total
of the Advisory Board Compensati Compensati Compensati Compensati
on from on from on from on from the
Fidelity Fidelity Fidelity
Growth Emerging New Fund
Company Growth Millennium Complex*A
FundB,C,E FundB,D,E FundB
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 funds 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.
# 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 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.
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 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.
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 three aspects of the management fee that
FMR receives from the fund for managing its investments and business
affairs and 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 0.3 0 %. 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 a 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 CONTRACT AMENDMENT S. 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 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
(t he 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 proposed change in the Performance Adjustment Index will not
directly affect the Fund's investment policies which permit FMR to use
a variety of strategies in managing the fund. However, it will change
the benchmark used to determine a portion of FMR's management fee. To
the extent that a fund's performance benchmark represents its
"neutral" investment position (or its universe), a benchmark change
could change the fund's investment characteristics. If the proposal is
approved, the fund will move from a broad based benchmark for
performance comparisons to a narrower benchmark focused exclusively on
growth stocks and FMR's compensation would be based on whether the
fund outperformed the narrower growth stock benchmark rather than the
broad universe represented by the S&P 500.
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 of 0.4756% that FMR
was entitled to receive under the Present Contract .
IMPACT OF PROPOSED CHANGE IN PERFORMANCE ADJUSTMEN T. The
impact of the proposed index change will depend on the fund's future
performance relative to the Proposed Index. However, the past
performance of the Proposed Index and the fund can be used to show
what the impact would have been on management fees for fiscal 1997 if
the Proposed Index had been the fund's Performance Adjustment index.
For this purpose, the performance of the Proposed Index is substituted
for the performance of the Current Index for the rolling 36-month
performance periods ended during the fiscal year. 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.
During the fund's fiscal year ended November 30, 1997, the
36-month returns of the fund trailed the Current Index by more than
ten percentage points at each of the 12 performance calculation
periods, resulting in maximum negative performance adjustments. On a
fiscal year basis, the negative Performance Adjustments totaled
0.1236% of the fund's average net assets for the year. Substituting
the historical returns of the Proposed Index provides similar results
with maximum negative performance adjustments for 11 of the 12
performance calculation periods. On a fiscal year basis, the negative
Performance Adjustments using the Proposed Index would have totaled
0.1229% of the fund's average net assets. Thus, for fiscal 1997, if
the Proposed Index had been the fund's Performance Adjustment Index,
the fund's management fees would have been $72,327 higher, or 0.0007%
higher as a percentage of the fund's average net assets for the year,
compared to the rate FMR was entitled to receive under the Present
Contract.
The more precise rounding method for calculating the Performance
Adjustment using the rolling 36-month historical performance of the
Current Index would have no material effect on the management fee rate
for the fiscal year ended November 30, 1997.
COMBINED EFFECT OF PROPOSED FEE CHANGE S. T he proposed
Group Fee reductions, the proposed change in Performance Adjustment
index and the more precise rounding methodology for the Performance
Adjustment , if in effect throughout fiscal 1997, would have lowered
the management fee by 0.0006% of the fund's average net assets
compared to the terms of the current contract. 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 c alcu lation of the
fund's performance relative 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 CONTRACT S. 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 2 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, 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 RAT E. 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 $426 billion as illustrated in
the following table. (For an explanation of how the Group Fee rate is
used to calculate the management fee see the section entitled "Present
Management Contracts" on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
Average Group Present Contract Average Group Amended Contract
Assets Assets
($ billions) ($ billions)
Over 390 .2700% 390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contracts" on page .)
EFFECTIVE GROUP FEE RATES
Group Net Assets Present Contract Amended 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 . 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 is
designed to measure the performance of "growth" stocks (those with
higher price-to-book ratios and higher forecasted growth values). The
Proposed Index includes those companies within the 3,000 largest U.S.
companies (ranked by market capitalization) whose stocks are
considered growth stocks according to these criteria.
In contrast to the Proposed Index, the Current Index (the S&P 500)
is designed as a broad measure of the performance of the overall U.S.
stock market and thus includes both "growth" and "value" stocks. By
focusing more narrowly on the performance of growth stocks, the
Proposed Index conforms more closely to the fund's strategy of
investing in stocks with above-average growth potential than the
Current Index. Thus the Proposed Index, with its focus on growth
stocks, is a more appropriate performance benchmark for the fund's
growth stock strategy than the broader universe measured by the
Current Index.
The two benchmarks have performed differently in the past, as
illustrated by the chart below.
Comparison of Current and Proposed Performance Adjustment Indexes
Calendar Year Total Returns
Percentage (%)
Row: 1, Col: 1, Value: 16.61
Row: 1, Col: 2, Value: 12.0
Row: 2, Col: 1, Value: 31.69
Row: 2, Col: 2, Value: 34.68
Row: 3, Col: 1, Value: -3.1
Row: 3, Col: 2, Value: -1.31
Row: 4, Col: 1, Value: 30.47
Row: 4, Col: 2, Value: 41.65
Row: 5, Col: 1, Value: 7.619999999999999
Row: 5, Col: 2, Value: 5.22
Row: 6, Col: 1, Value: 10.08
Row: 6, Col: 2, Value: 3.69
Row: 7, Col: 1, Value: 1.32
Row: 7, Col: 2, Value: 2.2
Row: 8, Col: 1, Value: 37.58
Row: 8, Col: 2, Value: 36.57
Row: 9, Col: 1, Value: 22.96
Row: 9, Col: 2, Value: 21.88
Row: 10, Col: 1, Value: 33.36
Row: 10, Col: 2, Value: 28.74
Row: 11, Col: 1, Value: 14.63
Row: 11, Col: 2, Value: 15.08
(large solid box) Current (S&P 500)
Index
(LARGE SOLID BOX) Proposed (Russell
3000 Growth)
Index
* 1998 RETURNS ARE THROUGH OCTOBER 31, 1998
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998*
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 the 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 60,972,42 7 0.5992 60,841,27 1 0.5979 (131,15 6 ) (0.0013)
Performance (12,579,93 4 ) (0.1236) (12,507,607) (0.1229) 72,32 7 0.0007
Adjustment
Total 48,392,493 0.4756 48,333,66 4 0.4750 (58,8 29 ) (0.0006)
Management
Fee
</TABLE>
The following table provides data concerning the fund's management
fees and expenses as a percentage of average net assets for the fiscal
year ended 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 0.48% 0.4 8 %
12b-1 Fee None None
Other Expenses 0.24% 0.24%
Total Fund Operating Expenses 0.72% 0.7 2 %
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
total fund operating expenses . Including these reductions, the
total operating expenses presented in the table would have been 0.69%
under the Present Contract and 0.6 9 % 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
Amended Contract $ 7 $ 23 $ 40 $ 8 9
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 continue to 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 ,
including the replacement of the Current Index with the Proposed
Index, 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 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 it would be appropriate to change the group fee
structure as proposed herein. The Independent Trustees also
considered factors bearing on the choice of the fund's Performance
Adjustment Index including the nature of securities included in such
index and the nature of securities held and permitted to be held by
the fund.
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, 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 three aspects of the management fee that
FMR receives from the fund for managing its investments and business
affairs, and one other provision of the fund's existing management
contract with FMR (the Present Contract). If the proposal is
approved, the fund's name would be changed to Fidelity Aggressive
Growth Fund.
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 a positive Performance
Adjustment for the fund's fiscal year ended November 30, 1997, which
equaled 0.1192% of the fund's average net assets for the year.
PROPOSED MANAGEMENT CONTRACT 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
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 (t he 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.
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).
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.
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 ADJUSTMEN T. The impact of
the proposed index change will depend on the fund's future performance
relative to the Proposed Index. However, the past performance of the
Proposed Index and the fund can be used to show what the impact would
have been on management fees for fiscal 1997 if the Proposed Index had
been the fund's Performance Adjustment index. For this purpose, the
performance of the Proposed Index was substituted for the performance
of the Current Index for the rolling 36-month performance periods
ended during the fiscal year. 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.
If the Proposed Index had been in effect for the fund's fiscal year
ended November 30, 1997, the Performance Adjustment (and fees paid to
FMR) would have been lower. Substituting the Proposed Index's
historical performance for the performance of the Current Index
produces a positive Performance Adjustment of 0.0626% of the fund's
average net assets for the year (using the more precise rounding
methodology). This compares to the positive Performance Adjustment of
0.1192% calculated using the Current Index. Thus, if the Proposed
Index had been the fund's Performance Adjustment index during fiscal
1997, the fund's management fees would have been $1,089,809 lower or
0.0571% lower as a percentage of the fund's average net assets for the
year compared to the rate FMR was entitled to receive under the
Present Contract.
The more precise rounding method for calculating the Performance
Adjustment would have increased the management fee by $9,658
for the fiscal year ended November 30, 1997 or .0005% higher as a
percentage of the fund's average net assets for the year.
COMBINED EFFECT OF PROPOSED FEE CHANGES. T he proposed Group
Fee reductions, the proposed change in Performance Adjustment index
and the more precise rounding methodology for the Performance
Adjustment , if in effect throughout fiscal 1997, would have lowered
the management fee by 0.0579% of the fund's average net assets
compared to the terms of the current contract. 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 calcu lation of the
fund's performance relative 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 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, 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 $426 billion as illustrated in
the following table. (For an explanation of how the Group Fee rate is
used to calculate the management fee, see the section entitled
"Present Management Contracts" on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Group Fee Rate Breakpoints
Average Group Present Contract Average Group Amended Contract
Assets Assets
($ billions) ($ billions)
Over 390 .2700% 390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contracts" on page .)
EFFECTIVE ANNUAL GROUP FEE RATES
GROUP ASSETS PRESENT CONTRACT AMENDED 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 . 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 is
designed to measure the performance of "growth" stocks (those with
higher price-to-book ratios and higher forecasted growth values). The
Proposed Index includes those companies within the 800 U.S. companies
ranked number 201 to 1,000 in market capitalization terms whose stocks
are considered growth stocks according to these criteria.
In contrast to the Proposed Index, the Current Index (the Russell
2000) is designed as a measure of the performance of U.S. small
capitalization companies (those ranked from 1,001 to 3,000 in terms of
market capitalization). As of June 30, 1998, the Russell 2000 included
companies with market capitalization between $221.9 million and $1.4
billion while the Russell MidCap Growth included market capitalization
between $1.4 billion and $10.3 billion. The Russell 2000 is also
designed to reflect the Small Cap Market sector as a whole and thus
includes both "growth" and "value" stocks. By focusing more narrowly
on the performance of growth stocks, the Proposed Index conforms more
closely to the fund's focus on stocks that offer the potential for
accelerated growth than the Current Index. The Proposed Index also
focuses on mid-cap securities, rather than the small-cap securities
making up the Current Index, recognizing that companies with high
growth characteristics are not necessarily exclusively small-cap. Thus
the Proposed Index, with its focus on growth stocks of medium sized
companies, is a more appropriate performance benchmark for the fund's
growth stock strategy than the universe measured by the Current
Index.
The two benchmarks have performed differently in the past, as
illustrated by the following chart.
Comparison of Current and Proposed Performance Adjustment Indexes
Calendar Year Total Returns
Percentage (%)
Row: 1, Col: 1, Value: 25.02
Row: 1, Col: 2, Value: 12.93
Row: 2, Col: 1, Value: 16.28
Row: 2, Col: 2, Value: 31.48
Row: 3, Col: 1, Value: -19.51
Row: 3, Col: 2, Value: -5.13
Row: 4, Col: 1, Value: 46.05
Row: 4, Col: 2, Value: 47.03
Row: 5, Col: 1, Value: 18.41
Row: 5, Col: 2, Value: 8.709999999999999
Row: 6, Col: 1, Value: 18.91
Row: 6, Col: 2, Value: 11.19
Row: 7, Col: 1, Value: -1.82
Row: 7, Col: 2, Value: -2.16
Row: 8, Col: 1, Value: 28.44
Row: 8, Col: 2, Value: 33.98
Row: 9, Col: 1, Value: 16.49
Row: 9, Col: 2, Value: 17.48
Row: 10, Col: 1, Value: 22.36
Row: 10, Col: 2, Value: 22.54
Row: 11, Col: 1, Value: -12.79
Row: 11, Col: 2, Value: 0.05000000000000001
(large solid box) Current (Russell
2000) Index
(LARGE SOLID BOX) Proposed (Russell
MidCap Growth)
Index
* 1998 RETURNS ARE THROUGH OCTOBER 31, 1998
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998*
IMPLEMENTATION OF CHANGE IN PERFORMANCE ADJUSTMENT INDE X.
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 the 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PRESENT CONTRACT AMENDED CONTRACT DIFFERENCE
$ % $ % $ %
BASIC FEE 12,384,046 .6494 12,359,56 2 .6481 (24,48 4 ) (.0013)
PERFORMANCE 2,273,821 .1192 1,193,670 .0626 (1,080,151) (.0566)
ADJUSTMENT
TOTAL 14,657,867 .7686 13,553,23 2 .7107 (1,104,63 5 ) (.0579)
MANAGEMENT
FEE
</TABLE>
The following table provides data concerning the fund's management
fees and expenses as a percentage of average net assets for the fiscal
year ended 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>
<S> <C> <C>
Present Contract Amended Contract
Management Fee 0.77% 0.71%
12b-1 Fee None None
Other Expenses 0.32% 0.32%
Total Fund Operating Expenses 1.09% 1.03%
</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
total fund operating expenses . Including these reductions, the
total operating expenses presented in the table would have been
1.05 % under the Present Contract and 0.99 % 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 $ 1 1 $ 35 $ 60 $ 133
Amended Contract $ 11 $ 33 $ 57 $ 126
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 continue to 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 ,
including the replacement of the Current Index with the Proposed
Index, 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 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 it would be appropriate to change the group fee
structure as proposed herein. The Independent Trustees also
considered factors bearing on the choice of the fund's Performance
Adjustment Index including the nature of securities included in such
index and the nature of securities held and permitted to be held by
the fund.
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, 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 0.648 6 %.
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. Under the Present Contract, FMR received positive
Performance Adjustment for the fund's fiscal year ended November 30,
1997, which equaled 0.0890% 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) 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 0.736 3 % of
the fund's average net assets. The Group Fee reductions lowered the
management fee rate by 0.00 13 % compared to the rate FMR was
entitled to receive under the Present Contract , 0.737 6 %.
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding
method for the Performance Adjustment would have increased the
management fee rate for the fiscal year November 30, 1997 by
0.00 0 1% of the Fund's average net assets for the year.
COMBINED EFFECT OF FEE CHANGES. For the fiscal year ended
November 30, 1997, the Group Fee reductions and the changes to the
Performance Adjustment would have resulted in a 0.001 2 %
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 $426 billion as illustrated in
the following table. (For an explanation of how the Group Fee rate is
used to calculate the management fee see the section entitled "Present
Management Contracts" on page .)
GROUP FEE RATE BREAKPOINTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Group Present Contract Average Group Amended Contract
Assets Assets
($ billions) ($ billions)
Over 390 .2700% 390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contracts" on page .)
EFFECTIVE GROUP FEE RATES
Group Assets Present Contract Amended 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
$ 5 91 billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT - ROUNDING METHOD. The annual
Performance Adjustment rate equals 0.02% for each percentage point by
which the fund outperforms or underperforms the Index over a 36-month
performance period. Under the Present Contract, the investment
performance of both the fund and the Index are rounded to the nearest
full percentage point (for example, 15.5123% is rounded to 16%.)
Rounding to full percentage points results in the Performance
Adjustment rate being applied in 0.02% increments. In comparison,
under the Amended Contract, the investment performance of both the
fund and Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the
difference in investment performance. The more precise rounding method
results in a more accurate measure of the difference in investment
performance and allows for the Performance Adjustment to be applied in
0.0002% increments. This reduces the chance of minor changes in
performance resulting in significant changes to the Performance
Adjustment, and ultimately the fund's management fee.
COMPARISON OF MANAGEMENT FEES. The following table compares the
fund's management fee as calculated under the terms of the Present
Contract (not including FMR's voluntary implementation of the Group
Fee reductions) for fiscal 1997 to the management fee the fund would
have incurred if the Amended Contract had been in effect. Management
fees are expressed in dollars and as percentages of the fund's average
net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 9,326,746 .6486 9,307,556 .6473 (19,1 90 ) (.001 3 )
Performance 1,280,137 .0890 1,281,179 .0891 1,042 .0001
Adjustment
Total 10,606,883 .7376 10,588,735 .7364 ( 18, 148) (.001 2 )
Management Fee
</TABLE>
The following table provides data concerning the fund's management
fees and expenses as a percentage of average net assets for the fiscal
year ended 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 Contract Amended Contract
Management Fee 0.74% 0.74%
12 b-1 Fee None None
Other Expenses 0 .25% 0.25
Total Fund Operating Expenses 0 .99% 0 .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 total fund
operating 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.
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) arrangements in respect of the distribution of the
fund's shares, (3) the procedures employed to determine the value of
the fund's assets, (4) the allocation of the fund's brokerage, if any,
including allocations to brokers affiliated with FMR and the use of
"soft" commission dollars to pay fund expenses and to pay for research
and other similar services, (5) FMR's management of the relationships
with the fund's custodian and subcustodians, (6) the resources devoted
to and the record of compliance with the fund's investment policies
and restrictions and with policies on personal securities transactions
and (7) the nature, cost, and character of non-investment management
services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the impact of performance adjustments to management fees, (c)
the choice of performance indices and benchmarks, (d) the composition
of peer groups of funds, (e) transfer agency and bookkeeping fees paid
to affiliates of FMR, (f) investment performance, (g) investment
management staffing, (h) the potential for achieving further economies
of scale, (i) operating expenses paid to third parties, and (j) the
information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all of the matters considered. Matters considered by the Board
of Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of the
fund's portfolio manager, and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations, and
the senior management of Fidelity's equity group. Among other things
they considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately 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 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, 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.''
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 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.)
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.
CONCLUSIO N. 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 each fund's
investment limitation to conform to a limitation which
is 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.
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:
"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.
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 6 beginning on page .
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; and Peter
S. Lynch, Vice Chairman. Each of the Directors is also a Trustee of
the trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H.
Costello, Eric D. Roiter, Richard A. Silver, Leonard M. Rush, Robert
A. Lawrence, Abigail Johnson, Richard A. Spillane Jr., 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 6 beginning on page .
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d 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.
PRESENT MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other
services. Under its management contract with each fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of each fund in accordance with its
investment objective, policies, and limitations. FMR also provides
each fund with all necessary office facilities and personnel for
servicing each fund's investments, compensates all officers of each
fund 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.
T ransfer Agent 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.
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
December 1, 199 6 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 S&P 500 and a comparison of Fidelity Emerging Growth Fund's
performance to that of the 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 $543
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .5200% $0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
</TABLE>
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>
<S> <C> <C> <C> <C> <C>
Group Fee Individual Basic Fee
Rate Fund Fee Rate Rate
Growth Company 0.2947% + 0.30% = 0.5947%
Emerging Growth 0.2947% + 0 .35% = 0.6447%
New Millennium 0.2947% + 0 .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>
<S> <C> <C> <C>
Management Fee Management Fee Performance
as a Percent of Adjustment
the Fund's
Average Net
Assets
Growth Company $ 48,261,000 0.4743% $ (12,580,000)
Emerging Growth $ 14,63 4 , 000 0.7673% $ 2,27 4 , 000
New Millennium $ 10,58 8 , 000 0.736 3 % $ 1,280, 000
</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.
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:
Brokerage Commissions Brokerage Commissions
Paid to NFSC Paid to FBS
Growth Company $ 2,254,000 $ 7,000
Emerging Growth $ 648,000 $ 0
New Millennium $ 211,000 $ 3,000
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company,
Inc., P.O. Box 789, Boston Massachusetts 02102 , whether other
persons are beneficial owners of shares for which proxies are being
solicited and, if so, the number of copies of the Proxy Statement and
Annual Reports you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
EXHIBIT 1
For purposes of the SEC filing underlined language to be added to the
current Declaration of Trust is set forth in [[double brackets]].
[[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;
[(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 thereo]]f 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 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
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.]]
[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.
(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.
(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 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.
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].
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 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
SECTION 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act [as from time to time
amended], pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities[,]; provided that all
such deposits shall be subject to withdrawal only upon the order of
the Trust [[or its custodian, subcustodians, or other authorized
agents.]]
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees.
(b) The Trustees shall have the power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series,[[ or Classes thereof]], at the election of each Shareholder of
that Series.
[[The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.]]
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute [[a stock dividend]]
pro rata among the Shareholders of a particular Series,[[ or Class
thereof,]] as of the record date of that Series [[or Class]] fixed as
provided in [[Article XII,]] Section 3[hereof a "stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series [[or Class of a Series]] desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may, from time to time, authorize, requesting that the
Series purchase the Shares in accordance with this Section 2; and the
Shareholder so requesting shall be entitled to require the Series to
purchase, and the Series or the principal underwriter of the Series
shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash [[or
property]] from the assets of that Series, and payment for such Shares
[[less any applicable deferred sales charges and/or fees]] shall be
made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which
the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. ''The term "Net Asset Value" of any Series or Class shall
mean that amount by which the assets of that Series[,] or Class exceed
its liabilities, all as determined by or under the direction of the
Trustees. Such value per Share shall be determined separately for each
Series or Class of Shares and shall be determined on such days and at
such times as the Trustees may determine. Such determination shall be
made with respect to securities for which market quotations are
readily available, at the market value of such securities; and with
respect to other securities and assets, at the fair value as
determined in good faith by the Trustees, provided, however, that the
Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940
Act and the rules, regulations, and interpretations thereof
promulgated or issued by the Commission or insofar as permitted by any
[O]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 X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee, or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
[INDEMNIFICATION]
INDEMNIFICATION OF COVERED PERSONS
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit, or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office; or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]Interested [p]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.
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]
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 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.]]
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.]]
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
EXHIBIT 1
For purposes of the SEC filing underlined language to be added to
the current Declaration of Trust is set forth in [[double
brackets]].
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.
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. [[Except as otherwise provided in
sub-paragraph (e) of this paragraph 3,]] t he 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:
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]
390 - 426 .2700
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: [[Except as otherwise provided
in sub-paragraph (e) of this paragraph 3, ]]t he Performance
Adjustment Rate is 0.02% for each percentage point [[ (the
performance of the Portfolio and the Index each being calculated to
the nearest 0.01%)]] 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 ]
consists 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) For the 35 month period commencing on __________, 199_ (the
Commencement Date) (such period hereafter referred to as the
Transition Period), the Performance Adjustment Rate shall be
calculated by comparing the Portfolio's investment performance against
the blended investment records of the Index and the S&P Composite
Index of 500 Stocks (the index used to calculate the Portfolio's
Performance Adjustment prior to the Commencement Date (the Prior
Index)), such calculation being performed as follows:
For the first month of the Transition Period, the Performance
Adjustment Rate shall be calculated by comparing the Portfolio's
investment performance over the 36 month performance period against a
blended index investment record that reflects the investment record of
the Prior Index for the first 35 months of the performance period and
the investment record of the Index for the 36th month of the
performance period. For each subsequent month of the Transition
Period, the Performance Adjustment Rate shall be calculated by
comparing the Portfolio's investment performance over the 36 month
performance period against a blended index investment record that
reflects one additional month of the Index's performance and one less
month of the Prior Index's performance. This calculation methodology
shall continue until the expiration of the Transition Period, at which
time the investment record of the Prior Index shall be eliminated from
the Performance Adjustment calculation, and the calculation shall
include only the investment record of the Index.]]
[(e)] (f) 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 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.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 2
For purposes of the SEC filing underlined language to be added to
the current Declaration of Trust is set forth in [[double
brackets]].
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.
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. [[Except as otherwise provided in
sub-paragraph (e) of this paragraph 3,]] 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 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:
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]
390 - 426 .2700
426 - 462 .2650
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: [[Except as otherwise provided in
sub-paragraph (e) of this paragraph 3]], 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 0.01%)]] 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 s 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) For the 35 month period commencing on __________, 199_ (the
Commencement Date) (such period hereafter referred to as the
Transition Period), the Performance Adjustment Rate shall be
calculated by comparing the Portfolio's investment performance against
the blended investment records of the Index and the Russell 2000 Index
(the index used to calculate the Portfolio's Performance Adjustment
prior to the Commencement Date (the Prior Index)), such calculation
being performed as follows:
For the first month of the Transition Period, the Performance
Adjustment Rate shall be calculated by comparing the Portfolio's
investment performance over the 36 month performance period against a
blended index investment record that reflects the investment record of
the Prior Index for the first 35 months of the performance period and
the investment record of the Index for the 36th month of the
performance period. For each subsequent month of the Transition
Period, the Performance Adjustment Rate shall be calculated by
comparing the Portfolio's investment performance over the 36 month
performance period against a blended index investment record that
reflects one additional month of the Index's performance and one less
month of the Prior Index's performance. This calculation methodology
shall continue until the expiration of the Transition Period, at which
time the investment record of the Prior Index shall be eliminated from
the Performance Adjustment calculation, and the calculation shall
include only the investment record of the Index.]]
(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 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.
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.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
For purposes of the SEC filing underlined language to be added to
the current Declaration of Trust is set forth in [[double
brackets]].
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.
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:
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]
390 - 426 .2700
426 - 462 .2650
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 0.01%)]] 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 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.
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.
[SIGNATURE LINES OMITTED]
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.
7. This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Trustees or by a
vote of a majority of the outstanding voting securities of the
Portfolio.
8. During the existence of this Plan, the Fund shall require the
Adviser and/or Distributor to provide the Fund, for review by the
Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of
shares of the Portfolio (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures
were made.
9. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any
specific level of expenses for activities primarily intended to result
in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set
forth in the Fund's Declaration of Trust or other organizational
document, any obligations assumed by the Portfolio pursuant to this
Plan and any agreements related to this Plan shall be limited in all
cases to the Portfolio and its assets, and shall not constitute
obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
EXHIBIT 6
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
(A)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
GROWTH
Advisor Korea Fund, Inc. ((psi)) 9/30/97 $ 49.9 1.00%
Destiny I ((pound)) 9/30/97 5,260.4 0.36
Destiny II ((pound)) 9/30/97 3,074.7 0.50
Advisor International Capital
Appreciation: (rex-all)) **
Class A ((hollow diamond)) 10/31/98 0.5 0.75 ((bold italic B))
Class T ((hollow diamond)) 10/31/98 6.0 0.75 ((bold italic B))
Class B ((hollow diamond)) 10/31/98 2.0 0.75 ((bold italic B))
Class C ((hollow diamond)) 10/31/98 1.1 0.75 ((bold italic B))
Institutional Class ((hollow diamond)) 10/31/98 5.1 0.75 ((bold italic B))
Advisor Emerging Asia Fund, 10/31/97 130.4 1.16
Inc. ((psi))
Advisor Overseas: ((epslon))
Class A 10/31/97 2.6 0.81
Class T 10/31/97 1,112.8 0.81
Class B 10/31/97 29.0 0.81
Class C ((hollow diamond)) 10/31/98** 4.9 0.81
Institutional Class 10/31/97 30.4 0.81
Canada ((epslon)) 10/31/97 127.5 0.39
Capital Appreciation ((pound)) 10/31/97 1,773.3 0.41
Disciplined Equity ((pound)) 10/31/97 2,212.1 0.44
Diversified International ((epslon)) 10/31/97 1,106.3 0.83
Emerging Markets ((epslon)) 10/31/97 1,049.2 0.75
Europe ((epslon)) 10/31/97 874.8 0.78
Europe Capital Appreciation ((epslon)) 10/31/97 335.4 0.65
France ((epslon)) 10/31/97 6.3 0.00*
Germany ((epslon)) 10/31/97 11.9 0.48*
Hong Kong and China ((rex-all)) 10/31/97 217.5 0.75
International Value ((rex-all)) 10/31/97 305.5 0.85
Japan ((rex-all)) 10/31/97 295.1 0.93
Japan Small Companies ((rex-all)) 10/31/97 94.1 0.75
Latin America ((epslon)) 10/31/97 868.0 0.75
Nordic ((epslon))** 10/31/97 68.5 0.75
Overseas ((epslon)) 10/31/97 3,574.3 0.84
Pacific Basin ((rex-all)) 10/31/97 347.5 0.70
Southeast Asia ((rex-all)) 10/31/97 584.7 0.76
Stock Selector ((pound)) 10/31/97 1,738.2 0.47
TechnoQuant Growth** 10/31/97 $ 63.4 0.59%(dagger)
United Kingdom ((epslon)) 10/31/97 5.1 0.00*
Value ((pound)) 10/31/97 7,464.9 0.46
Worldwide ((epslon)) 10/31/97 1,067.5 0.75
Advisor Equity Growth: ((pound))
Class A 11/30/97 14.6 0.60
Class T 11/30/97 3,860.7 0.60
Class B 11/30/97 31.7 0.60
Class C 11/30/97 0.5 0.60
Institutional Class 11/30/97 1,154.7 0.60
Advisor Growth Opportunities:((pound))
Class A 11/30/97 136.1 0.52(dagger)
Class T 11/30/97 20,087.8 0.52(dagger)
Class B 11/30/97 395.4 0.52(dagger)
Class C 11/30/97 2.9 0.52(dagger)
Institutional Class 11/30/97 384.3 0.52(dagger)
Advisor Large Cap: ((pound))
Class A 11/30/97 1.5 0.60
Class T 11/30/97 35.8 0.60
Class B 11/30/97 16.1 0.60
Class C ((sunburst)) 11/30/97 0.0 0.60
Institutional Class 11/30/97 7.7 0.60
Advisor Mid Cap: ((pound))
Class A 11/30/97 2.6 0.60
Class T 11/30/97 266.9 0.60
Class B 11/30/97 43.5 0.60
Class C 11/30/97 0.1 0.60
Institutional Class 11/30/97 52.0 0.60
Advisor Small Cap: ((pound))(#)**
Class A ((hollow diamond)) 11/30/98 1.4 0.74 ((bold italic B))
Class T ((hollow diamond)) 11/30/98 9.1 0.74 ((bold italic B))
Class B ((hollow diamond)) 11/30/98 2.6 0.74 ((bold italic B))
Class C ((hollow diamond)) 11/30/98 2.9 0.74 ((bold italic B))
Institutional Class ((hollow diamond)) 11/30/98 4.4 0.74 ((bold italic B))
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)
Advisor Strategic
Opportunities: ((pound))
Class A 11/30/97 $ 1.1 0.40(dagger)%
Class T 11/30/97 494.6 0.40(dagger)
Class B 11/30/97 99.5 0.40(dagger)
Initial Class 11/30/97 20.5 0.40(dagger)
Institutional Class 11/30/97 5.9 0.40(dagger)
Advisor TechnoQuant
Growth: ((pound))
Class A 11/30/97 4.1 0.60
Class T 11/30/97 13.0 0.60
Class B 11/30/97 6.4 0.60
Class C ((sunburst)) 11/30/97 0.0 0.60
Institutional Class 11/30/97 1.3 0.60
Emerging Growth ((pound)) 11/30/97 1,907.1 0.77
Growth Company ((pound)) 11/30/97 10,175.2 0.47
New Millennium ((pound)) 11/30/97 1,437.9 0.74
Retirement Growth ((pound)) 11/30/97 4,042.6 0.41
Contrafund ((pound)) 12/31/97 27,817.1 0.48
Trend ((pound)) 12/31/97 1,442.4 0.42
Variable Insurance Products:
Growth
Initial Class 12/31/97 6,937.2 0.60
Service Class 12/31/97 0.6 0.60
Overseas ((epslon))
Initial Class 12/31/97 1,917.4 0.75
Service Class 12/31/97 0.3 0.75
Variable Insurance Products II:
Contrafund ((pound))
Initial Class 12/31/97 3,294.9 0.60
Service Class 12/31/97 1.4 0.60
Variable Insurance Products III:
Growth Opportunities ((pound))
Initial Class 12/31/97 703.1 0.60
Service Class 12/31/97 0.7 0.60
Select Portfolios:
Air Transportation ((pound)) 2/28/98 62.7 0.60
American Gold 2/28/98 279.5 0.60
Automotive ((pound)) 2/28/98 62.2 0.59
Biotechnology ((pound)) 2/28/98 577.4 0.60
Select Portfolios (continued):
Brokerage and Investment 2/28/98 $ 416.4 0.60%
Management ((pound))
Business Services and 2/28/99** 53.8 0.60 ((bold italic B))
Outsourcing ((pound))
Chemicals ((pound)) 2/28/98 83.4 0.60
Computers ((pound)) 2/28/98 658.0 0.60
Construction and 2/28/98 26.0 0.60
Housing ((pound))
Consumer Industries ((pound)) 2/28/98 26.5 0.61
Cyclical Industries ((pound)) 2/28/98 3.6 0.00*
Defense and Aerospace ((pound)) 2/28/98 63.9 0.60
Developing 2/28/98 238.7 0.60
Communications ((pound))
Electronics ((pound)) 2/28/98 2,374.6 0.60
Energy ((pound)) 2/28/98 191.3 0.59
Energy Service ((pound)) 2/28/98 964.1 0.59
Environmental Services ((pound)) 2/28/98 27.8 0.60
Financial Services ((pound)) 2/28/98 468.5 0.60
Food and Agriculture ((pound)) 2/28/98 247.0 0.60
Health Care ((pound)) 2/28/98 1,590.8 0.60
Home Finance ((pound)) 2/28/98 1,334.7 0.60
Industrial Equipment ((pound)) 2/28/98 60.1 0.60
Industrial Materials ((pound)) 2/28/98 29.9 0.60
Insurance ((pound)) 2/28/98 110.4 0.60
Leisure ((pound)) 2/28/98 142.1 0.60
Medical Delivery ((pound)) 2/28/98 159.1 0.60
Medical Equipment and 2/28/99** 11.9 0.60 ((bold italic B))
Systems ((pound))
Multimedia ((pound)) 2/28/98 59.1 0.60
Natural Gas ((pound)) 2/28/98 82.3 0.59
Natural Resources ((pound)) 2/28/98 6.4 0.00*
Paper and Forest 2/28/98 24.2 0.60
Products ((pound))
Precious Metals and 2/28/98 194.7 0.60
Minerals ((pound))
Regional Banks ((pound)) 2/28/98 1,035.6 0.60
Retailing ((pound)) 2/28/98 152.9 0.60
Software and Computer 2/28/98 434.9 0.60
Services ((pound))
Technology ((pound)) 2/28/98 552.2 0.60
Telecommunications ((pound)) 2/28/98 413.4 0.60
Select Portfolios (continued)
Transportation ((pound)) 2/28/98 $ 57.4 0.59%
Utilities Growth ((pound)) 2/28/98 273.5 0.60
Magellan ((pound)) 3/31/98 61,521.2 0.43
Large Cap Stock ((pound)) 4/30/98 133.9 0.45
Mid Cap Stock ((pound)) 4/30/98 1,579.2 0.60
Small Cap Selector ((pound)) 4/30/98 727.3 0.67
Small Cap Stock ((pound))** 4/30/98 383.2 0.35*(dagger)
Contrafund II ((pound)) 6/30/98 226.3 0.59
Fidelity Fifty ((pound)) 6/30/98 180.5 0.43
Advisor Focus Funds:
Consumer Industries: ((pound))
Class A 7/31/98 1.3 0.59
Class T 7/31/98 10.7 0.59
Class B 7/31/98 2.2 0.59
Class C 7/31/98 0.5 0.59
Institutional Class 7/31/98 2.7 0.59
Cyclical Industries: ((pound))
Class A 7/31/98 0.4 0.59
Class T 7/31/98 2.7 0.59
Class B 7/31/98 0.5 0.59
Class C 7/31/98 0.1 0.59
Institutional Class 7/31/98 1.5 0.59
Financial Services: ((pound))
Class A 7/31/98 12.6 0.59
Class T 7/31/98 82.7 0.59
Class B 7/31/98 30.1 0.59
Class C 7/31/98 8.3 0.59
Institutional Class 7/31/98 3.9 0.59
Health Care: ((pound))
Class A 7/31/98 10.5 0.59
Class T 7/31/98 79.2 0.59
Class B 7/31/98 22.1 0.59
Class C 7/31/98 6.5 0.59
Institutional Class 7/31/98 7.1 0.59
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)
Advisor Focus Funds (continued)
Natural Resources: ((pound))
Class A 7/31/98 $ 6.9 0.59%
Class T 7/31/98 499.5 0.59
Class B 7/31/98 54.7 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 6.2 0.59
Technology: ((pound))
Class A 7/31/98 11.7 0.59
Class T 7/31/98 76.3 0.59
Class B 7/31/98 17.6 0.59
Class C 7/31/98 3.0 0.59
Institutional Class 7/31/98 5.2 0.59
Utilities Growth: ((pound))
Class A 7/31/98 1.4 0.59
Class T 7/31/98 13.9 0.59
Class B 7/31/98 5.9 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 3.7 0.59
Blue Chip Growth ((pound)) 7/31/98 14,487.5 0.47
Dividend Growth ((pound)) 7/31/98 5,316.4 0.65
Low-Priced Stock ((pound)) 7/31/98 10,834.5 0.74
OTC Portfolio ((pound)) 7/31/98 4,213.9 0.50
Export and Multinational 8/31/98 468.9 0.59
Fund ((pound))
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of August 31, 1998, if fiscal year end figures are not yet
available.
(b) Average net assets are computed on the basis of average net assets
of each fund at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from FMR pursuant to voluntary or state expense limitations. Funds so
affected are indicated by an (*). The ratio for certain multi-class
funds is presented gross of expense reductions.
(dagger) Annualized
((sunburst)) Average net assets for the period shown were less than
$100,000
** Less than a complete fiscal year
((bold italic B)) Based on estimated expenses for the first year
((rex-all)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: Fidelity
Management & Research (U.K.) Inc. (FMR U.K.), Fidelity Management &
Research (Far East) Inc. (FMR Far East), Fidelity Investments Japan
Ltd. (FIJ), Fidelity International Investment Advisors (FIIA), and
Fidelity International Investment Advisors (U.K.) Limited (FIIA (U.K.)
L), with respect to the fund.
((epslon)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR
Far East, FIIA, and FIIA (U.K.) L, with respect to the fund.
((pound)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect
to the fund.
((psi)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FIIA and FIJ, with respect to the fund.
((hollow diamond)) The ratio of net advisory fees to average net
assets paid to FMR represents the amount as of the prior fiscal year
end. Updated ratios will be presented for each class of shares of the
fund when the next fiscal year end figures are available.
(#) Average net assets and ratio of net advisory fees is as of
September 10, 1998 (commencement of operations).
VERN-pxs-1198 CUSIP #316200203/FUND #324
1.709786.100 CUSIP #316020104/FUND #025
CUSIP #316200302/FUND #300
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY 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, Gerald C. McDonough, 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)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees specified below as [ ]FOR all [ ] 1.
Trustees: (01) Ralph F. Cox, (02) Phyllis Burke nominees listed WITHHOLD
Davis, (03) Robert M. Gates, (04) Edward C. (except as marked to authority to
Johnson 3d, (05) Bradley Jones, (06) Donald J. the contrary below). vote for all
Kirk, (07) Peter S. Lynch, (08) William O. McCoy , nominees.
(09) Gerald C. McDonough, (10) Marvin L. Mann,
(11) Robert C. Pozen, and (12) Thomas R.
Williams (INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE THE
NAME(S) OF THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
LLP as independent accountants of the 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 [ ] AGAINST [ ] ABSTAIN [ ] 4.
including a change in performance adjustment
benchmark, for Fidelity Growth Company Fund .
7. To approve a Distribution and Service Plan pursuant FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
to Rule 12b-1 for Fidelity Growth Company Fund.
8. To make the fund's fundamental policy concerning FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
investments in common stock and securiti es
convertible into common stock non-fundamental.
9. To amend Fidelity Growth Company Fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
fundamental investment limitation concerning
diversification to exclude securities of other
investment companies from the limitation.
</TABLE>
VERN PXC 1198
cusip
#316200104 #025H
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING .
- ----------------------------------------------------------------------
FIDELITY 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, Gerald C. McDonough, 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)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees specified below as [ ]FOR all [ ] 1.
Trustees: (01) Ralph F. Cox, (02) Phyllis Burke nominees listed WITHHOLD
Davis, (03) Robert M. Gates, (04) Edward C. (except as marked to authority to
Johnson 3d, (05) Bradley Jones, (06) Donald J. the contrary below). vote for all
Kirk, (07) Peter S. Lynch, (08) William O. McCoy , nominees.
(09) Gerald C. McDonough, (10) Marvin L. Mann,
(11) Robert C. Pozen, and (12) Thomas R.
Williams (INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE THE
NAME(S) OF THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
_____________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
LLP as independent accountants of the 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 [ ] AGAINST [ ] ABSTAIN [ ] 5.
including a change in performance adjustment
benchmark, for the Fidelity Emerging Growth Fund.
7. To approve a Distribution and Service Plan pursuant FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
to Rule 12b-1 for Fidelity Emerging Growth Fund.
9. To amend Fidelity Emerging Growth Fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
fundamental investment limitation concerning
diversification to exclude "securities of other
investment companies" from. the limitation.
</TABLE>
VERN PXC 1198 cusip #316200203
#324H
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ----------------------------------------------------------------------
FIDELITY 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, Gerald C. McDonough, 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)
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees specified below as [ ]FOR all [ ] 1.
Trustees: (01) Ralph F. Cox, (02) Phyllis Burke nominees listed WITHHOLD
Davis, (03) Robert M. Gates, (04) Edward C. (except as marked to authority to
Johnson 3d, (05) Bradley Jones, (06) Donald J. the contrary below). vote for all
Kirk, (07) Peter S. Lynch, (08) William O. McCoy , nominees.
(09) Gerald C. McDonough, (10) Marvin L. Mann,
(11) Robert C. Pozen, and (12) Thomas R.
Williams (INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE THE
NAME(S) OF THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of PricewaterhouseCoopers FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
LLP as independent accountants of the 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.
Fidelity New Millennium Fund.
7. To approve a Distribution and Service Plan pursuant FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
to Rule 12b-1 for Fidelity New Millennium Fund.
9. To amend Fidelity New Millennium Fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
fundamental investment limitation concerning
diversification to exclude "securities of other
investment companies" from. the limitation.
</TABLE>
VERN PXC 1198 cusip #316200302
#300H
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
FIDELITY NEW MILLENNIUM(Registered trademark) FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
the Fidelity funds mentioned above will be held in January 1999. The
purpose of the meeting is to vote on several important proposals that
affect the funds and your investment in them. As a shareholder, you
have the opportunity to voice your opinion on the matters that affect
your fund(s). This package contains information about the proposals
and the materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card(s). PLEASE VOTE AND RETURN YOUR CARD(S) PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees believe these proposals are in the best
interest of shareholders. They recommend that you vote for each
proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of the proposals is described in greater detail in
the enclosed proxy statement.
VOTING IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To cast
your vote, simply complete the proxy card(s) enclosed in this package.
Be sure to sign the card(s) before mailing it in the postage-paid
envelope.
If you have any questions before you vote, please call Fidelity at
1-800-544-8888. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important information to help you understand and vote on the proposals
Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposals to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You may be asked to vote on the following proposals:
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, including a change in
performance adjustment benchmark, for Fidelity Growth Company Fund.
5. To approve an amended management contract, including a change in
performance adjustment benchmark, 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.
WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of each fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of shareholders, including approving policy changes such as
those proposed in the proxy statement. In addition, the Trustees
review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to the
funds.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. They also
sign or certify any financial statements of the funds that are
required by law to be independently certified and filed with the
Securities and Exchange Commission (SEC).
WHY ARE THE FUNDS PROPOSING TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST? (PROPOSAL 3)
The new Declaration of Trust is a more modern form of trust instrument
for a Massachusetts business trust. It gives the Trustees more
flexibility, and, subject to the applicable requirements of federal
and state law, broader authority to act. This increased flexibility
may allow the Trustees to react more quickly to changes in competitive
and regulatory conditions.
Adoption of the new Declaration of Trust will not alter the Trustees'
existing fiduciary obligations to act in the best interests of the
funds' shareholders. Before utilizing any new flexibility that the
new Declaration of Trust may afford, the Trustees must first consider
the shareholders' interests and act in accordance with such interests.
The new Declaration of Trust amends the current Declaration of Trust
in a number of significant ways. Please review the proxy statement
for specific details.
WHY IS EACH FUND PROPOSING AN AMENDED MANAGEMENT CONTRACT? (PROPOSALS
4, 5, AND 6)
The amended management contract provides for lower management fees to
be paid to Fidelity Management & Research Company (FMR) when FMR's
assets under management exceed certain levels, and provides for a more
precise calculation of the performance adjustment (rounding to more
decimal places). Each fund's amended management contract also allows
FMR and the trust, on behalf of each fund, to modify the funds'
management contracts subject to the requirements of the Investment
Company Act of 1940.
In addition, the amended management contracts for Fidelity Growth
Company Fund and Fidelity Emerging Growth Fund (Proposals 4 and 5)
change the benchmarks used to calculate each fund's performance
adjustments. The performance adjustments provide that FMRs management
fee may be increased or decreased based on each fund's performance
relative to a market benchmark.
WHY ARE FIDELITY GROWTH COMPANY FUND AND FIDELITY EMERGING GROWTH FUND
PROPOSING TO CHANGE THEIR PERFORMANCE ADJUSTMENT BENCHMARKS?
(PROPOSALS 4 & 5)
Fidelity Growth Company Fund currently uses the S&P 500 (Current
Index) as its benchmark to calculate its performance adjustment. If
the proposal is approved, the fund will change its benchmark to the
Russell 3000 Growth Index (Proposed Index). The Proposed Index, is
designed to measure the performance of "growth" stocks (those with
higher price-to-book ratios and higher forecasted growth values). The
Proposed Index includes those companies within the 3,000 largest U.S.
companies (ranked by market capitalization) whose stocks are
considered growth stocks according to these criteria. The Proposed
Index, with its focus on growth stocks, is a more appropriate
performance benchmark for the fund's growth stock strategy than the
Current Index, which is designed as a measure of the performance of
the overall U.S. stock market and thus includes both "growth" and
"value" stocks.
Fidelity Emerging Growth Fund currently uses the Russell 2000 Index
(Current Index), an index of small cap stocks, as its benchmark to
calculate its performance adjustment. If the proposal is approved,
the fund will change its benchmark to the Russell MidCap Growth Index
(Proposed Index). The Proposed Index is designed to measure the
performance of medium-sized "growth" stocks (those with higher
price-to-book ratios and higher forecasted growth values). The
Proposed Index includes those companies among the 800 U.S. companies
ranked number 201 to 1,000 in market capitalization terms whose stocks
are considered growth stocks according to these criteria. The
Proposed Index emphasizes the "growth" investment style while the
Current Index includes both "growth" and "value" stocks. The Proposed
Index also focuses on mid-cap stocks, rather than the small-cap stocks
making up the Current Index, recognizing that companies with high
growth characteristics are not necessarily exclusively small
capitalization companies. The Proposed Index, with its focus on
growth stocks of medium sized companies is a more appropriate
performance benchmark for the fund's growth stock strategy than the
Current Index.
WOULD APPROVAL OF THE AMENDED MANAGEMENT CONTRACTS FOR FIDELITY GROWTH
COMPANY FUND AND FIDELITY EMERGING GROWTH FUND CHANGE THE PORTFOLIO
MANAGERS' STRATEGIES FOR THESE FUNDS? (PROPOSAL 4 & 5)
No. Both funds are currently pursuing strategies focusing on growth
stocks, and FMR anticipates that they would continue to do so if the
proposals are approved.
WOULD APPROVAL OF THE AMENDED MANAGEMENT CONTRACTS FOR FIDELITY GROWTH
COMPANY FUND AND FIDELITY EMERGING GROWTH FUND INVOLVE CHANGES TO THE
FUNDS' INVESTMENT POLICIES OR GUIDELINES? (PROPOSAL 4 & 5)
The proposal would not change any investment policies for Fidelity
Growth Company Fund. For Fidelity Emerging Growth Fund, approval
would result in changes to the fund's investment policies as well as a
change in its name.
Fidelity Emerging Growth Fund's prospectus currently defines emerging
growth companies as those that are in the development stage of their
lifecycle, and that offer the potential for accelerated earnings or
revenue growth. It also states that the fund will focus on companies
with market capitalizations of $5 billion or less, but that emerging
growth companies may be of any size. If the proposal is approved, the
references to emerging growth companies and specific market
capitalization figures will be replaced by a more general investment
policy, focusing the fund on medium sized companies while preserving
the ability to make substantial investments in smaller or larger
companies. In addition, the fund's name would be changed to Fidelity
Aggressive Growth Fund if the proposal is approved.
WHAT IS A DISTRIBUTION AND SERVICE PLAN, AND WHY ARE FIDELITY GROWTH
COMPANY FUND, FIDELITY EMERGING GROWTH FUND, AND FIDELITY NEW
MILLENNIUM FUND PROPOSING TO ADOPT ONE? (PROPOSAL 7)
The Distribution and Service Plan (the Plan) was approved by the
Board of Trustees as provided for by Rule 12b-1 (the Rule) of the
Investment Company Act of 1940. The Rule provides that a mutual fund
acting as a distributor of its shares must do so according to a
written Plan describing all material aspects of the proposed financing
of distribution. The Plan is designed to avoid legal uncertainties
which may arise from ambiguities within the Rule.
The Plan dictates that all expenses relating to the distribution of
fund shares shall be paid for by FMR, or Fidelity Distributors
Corporation (FDC), a wholly owned subsidiary of FMR, out of past
profits and other resources including management fees paid by a fund
to FMR. The Plan does not authorize payments by the fund other than
those that are to be made to FMR under its management contract.
WHAT IS THE BENEFIT OF MAKING FIDELITY GROWTH COMPANY FUND'S CURRENT
FUNDAMENTAL POLICY CONCERNING INVESTMENTS IN COMMON STOCK AND
SECURITIES CONVERTIBLE INTO COMMON STOCK NON-FUNDAMENTAL? (PROPOSAL 8)
The primary purpose of the proposal is to revise the fund's investment
limitations to conform to limitations which are standard for similar
types of funds managed by FMR. By making the fund's fundamental
(cannot be changed without shareholder approval) policy concerning
investments in common stock and securities convertible into common
stock non-fundamental (future changes to the policy would only require
approval by the Board of Trustees, not shareholders), the fund will
also be able to comply with the recently revised SEC requirements for
concise, understandable descriptions of investment objectives and
policies.
In addition, by making this fundamental policy non-fundamental, the
Trustees will be able to react more quickly, if necessary, when the
SEC adopts a definitive version of its proposed name test rule (Name
Test Rule) without the delay and expense of a shareholder meeting.
The Name Test Rule governs the use of mutual fund names and, when
eventually adopted by the SEC, may apply to the fund. It is not known
what the final rule will require. It is anticipated that the approval
of the proposal will not materially affect the manner in which the
fund is managed, its investment performance, or the securities or
instruments in which the fund invests.
WHAT IS THE BENEFIT OF AMENDING 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?
(PROPOSAL 9)
This proposal would permit the funds, subject to the requirements of
the Investment Company Act of 1940, to invest without limit in the
securities of other investment companies. As a result of an exemption
granted by the SEC, the funds may invest up to 25% of its total assets
in non-publicly offered money market and short-term bond funds (the
Central Funds) managed by FMR or an affiliate of FMR. 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.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has unanimously approved all of the
proposals and recommends that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of a fund on the record date. The record date is
November 16, 1998.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call Fidelity at 1-800-544-8888.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
