SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the [X]
Registrant
Filed by a [ ]
Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to Sec. 240.14a-11(c) or
Sec. 240.14a-12
(Name of Registrant as
Specified In Its Charter)
Fidelity California
Municipal Trust
Name of Person(s) Filing
Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below
per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of
securities to which
transaction applies:
(2) Aggregate number of
securities to which
transaction applies:
(3) Per unit price or other
underlying value of
transaction
computed pursuant to Exchange
Act Rule 0-11:
(4) Proposed maximum aggregate
value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with
preliminary materials.
[ ] Check box if any part of the
fee is offset as provided by
Exchange Act Rule 0-11(a) (2)
and identify the filing for
which the offsetting fee was
paid previously. Identify the
previous filing by
registration statement
number, or the Form or
Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or
Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
SPARTAN CALIFORNIA MUNICIPAL INCOME FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of SPARTAN CALIFORNIA MUNICIPAL INCOME FUND:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Spartan California Municipal Income Fund (the fund), a
series of Fidelity California Municipal Trust, a single series trust
(the trust), will be held at an office of the trust, 27 State Street,
10th Floor, Boston, Massachusetts 02109 on February 16, 2000, at 11:00
a.m. The purpose of the Meeting is to consider and act upon the
following proposals, and to transact such other business as may
properly come before the Meeting or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the fund.
3. To authorize the Trustees to adopt an amended and restated
Declaration of Trust.
4. To approve an amended management contract for the fund.
5. To eliminate the fund's fundamental 80% investment policy and
adopt a comparable non-fundamental policy.
6. To modify the fund's fundamental investment objective and
eliminate certain fundamental investment policies of the fund.
7. To eliminate the fund's fundamental 20% investment policy.
The Board of Trustees has fixed the close of business on December 20,
1999 as the record date for the determination of the shareholders of
the fund entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER Secretary
December 20, 1999
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 CALIFORNIA MUNICIPAL TRUST: SPARTAN CALIFORNIA MUNICIPAL
INCOME FUND
TO BE HELD ON FEBRUARY 16, 2000
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity California Municipal Trust (the trust) to be used at the
Special Meeting of Shareholders of Spartan California Municipal Income
Fund (the fund) and at any adjournments thereof (the Meeting), to be
held on February 16, 2000 at 11:00 a.m., at 27 State Street, 10th
Floor, Boston, Massachusetts 02109, an office of the trust and
Fidelity Management & Research Company (FMR), the fund's investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about December 20,
1999. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic means or by personal interview by
representatives of the trust. [In addition, MANAGEMENT INFORMATION
SERVICES CORP. (MIS) [AND] D.F. KING & CO., INC. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $________.] The expenses in
connection with preparing this Proxy Statement and its enclosures and
of all solicitations will be paid by the fund, provided the expenses
do not exceed Spartan California Municipal Income Fund's existing
voluntary expense cap of 0.53%. Expenses exceeding the fund's
voluntary expense cap will be paid by FMR. The fund will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares. The
principal business address of Fidelity Distributors Corporation (FDC),
the fund's principal underwriter and distribution agent, is 82
Devonshire Street, Boston, Massachusetts 02109. The principal business
address of Fidelity Investments Money Management, Inc. (FIMM),
subadviser to the fund, is 1 Spartan Way, Merrimack, New Hampshire
03054.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, by the trust's receipt of a subsequent valid telephonic
vote or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The fund may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting will be paid by the fund,
provided the expenses do not exceed the fund's existing expense cap,
as described above. Expenses exceeding the fund's expense cap will be
paid by FMR. If the fund records votes by telephone, it will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted by telephone may be revoked at
any time before they are voted in the same manner that proxies voted
by mail may be revoked. D.F. King & Co., Inc. may be paid on a
per-call basis for vote-by-phone solicitations on behalf of the fund
at an anticipated cost of approximately $[______].
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
On October 31, 1999 there were [________] shares of the fund issued
and outstanding.
[As of October 31, 1999, the nominees and officers of the trust
owned, in the aggregate, less than 1% of the fund's outstanding
shares.]
[To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of the fund on October 31, 1999 was as follows:]
[FMR has advised the trust that for Proposals [____] contained in
this Proxy Statement, it will vote its shares at the Meeting FOR each
Proposal. To the knowledge of the trust, no [other] shareholder owned
of record or beneficially more than 5% of the outstanding shares of
the fund on that date.]
Shareholders of record at the close of business on December 20, 1999
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
FEBRUARY 28, 1999 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD
ENDED AUGUST 31, 1999 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
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 7 REQUIRE THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE FUND. UNDER THE INVESTMENT
COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE
LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following table summarizes the proposals applicable to the fund.
Proposal # Proposal Description Page
1. To elect as Trustees the
twelve nominees presented in
proposal 1.
2. To ratify the selection of
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to
adopt an amended and
restated Declaration of Trust.
4. To approve an amended
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase.
5. To eliminate the fund's
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
6. To modify the fund's
fundamental investment
objective and eliminate
certain fundamental
investment policies of the
fund.
7. To eliminate the fund's
fundamental 20% investment
policy.
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 California Municipal 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.
Except for Ned C. Lautenbach, all nominees named below are currently
Trustees of Fidelity California Municipal Trust and have served in
that capacity continuously since originally elected or appointed. Mr.
Lautenbach, 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 [December 1999,]
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 Messrs.
Lautenbach, Gates, McCoy and Pozen, each of the nominees is currently
a Trustee of [___] registered investment companies advised by FMR.
Messrs. Gates, McCoy and Pozen are currently Trustees of [__]
registered investment companies advised by FMR. Mr. Lautenbach is not
yet a Trustee of any registered investment company advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
<TABLE>
<CAPTION>
<S> <C> <C>
Nominee (Age) Principal Occupation ** Year of Election or Appointment
Ralph F. Cox President of RABAR 1991
Enterprises (management
consulting-engineering
(67) 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.
Phyllis Burke Davis Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice
(68) President of Corporate
Affairs of Avon Products,
Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX
Companies, Inc. (retail
stores), 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 1997
lecturer (1993). Mr. Gates
was Director of the Central
(56) 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. Johnson 3d President, is Chairman, Chief 1983
Executive Officer and a
Director of FMR Corp.; a
(69) 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 (Age) Principal Occupation ** Year of Election or Appointment
Donald J. Kirk Executive-in-Residence (1995) 1987
at Columbia University
Graduate School of Business
and a financial consultant.
(67) From 1987 to January 1995,
Mr. Kirk was a Professor at
Columbia University Graduate
School of Business. Prior to
1987, he was Chairman of the
Financial Accounting
Standards Board. Mr. Kirk
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and Valuation
Research Corp. (appraisals
and valuations, 1993-1995).
He serves as Chairman of the
Board of Directors of
National Arts Stabilization
Inc., Chairman of the Board
of Trustees of the Greenwich
Hospital Association,
Director of the Yale-New
Haven Health Services Corp.
(1998), 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).
Ned C. Lautenbach++ Partner of Clayton, Dubilier 2000
& Rice, Inc. (private equity
investment firm) since
September 1998. Mr.
(55) Lautenbach was Senior Vice
President of IBM Corporation
from 1992 until his
retirement in July 1998.
From 1993 to 1995 he was
Chairman of IBM World Trade
Corporation. He also was a
member of IBM's Corporate
Executive Committee from
1994 to July 1998. He is a
Director of PPG Industries
Inc. (glass, coating and
chemical manufacturer),
Dynatech Corporation (global
communications equipment),
Eaton Corporation (global
manufacturer of highly
engineered products) and
ChoicePoint Inc. (data
identification, retrieval,
storage, and analysis).
*Peter S. Lynch Vice Chairman and Director of 1990
FMR. Prior to May 31, 1990,
he was a Director of FMR and
(57) Executive Vice President of
FMR (a position he held
until March 31, 1991); Vice
President of Fidelity
Magellan Fund and FMR Growth
Group Leader; and Managing
Director of FMR Corp. Mr.
Lynch was also Vice
President of Fidelity
Investments Corporate
Services (1991-1992). In
addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic
Deerfield (1989) and Society
for the Preservation of New
England Antiquities, and as
an Overseer of the Museum of
Fine Arts of Boston.
William O. McCoy Vice President of Finance for 1997
the University of North
Carolina (16-school system,
(66) 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. McDonough Chairman of G.M. Management 1989
Group (strategic advisory
services). Mr. McDonough is
(71) 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.
Marvin L. Mann Chairman of the Board of 1993
Lexmark International, Inc.
(office machines, 1991).
(66) 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. Pozen Senior Vice President, is 1997
also President and a
Director of FMR (1997); and
(53) President and a Director of
Fidelity Investments Money
Management, Inc. (1998),
Fidelity Management &
Research (U.K.) Inc. (1997),
and Fidelity Management &
Research (Far East) Inc.
(1997). Previously, Mr.
Pozen served as General
Counsel, Managing Director,
and Senior Vice President of
FMR Corp.
Thomas R. Williams President of The Wales Group, 1989
Inc. (management and
financial advisory
services). Prior to retiring
(71) in 1987, Mr. Williams served
as Chairman of the Board of
First Wachovia Corporation
(bank holding company), and
Chairman and Chief Executive
Officer of The First
National Bank of Atlanta and
First Atlanta Corporation
(bank holding company). He
is currently a Director of
ConAgra, Inc. (agricultural
products), Georgia Power
Company (electric utility),
National Life Insurance
Company of Vermont, American
Software, Inc., and
AppleSouth, Inc.
(restaurants, 1992).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
++ Appointment effective on or about January 1, 2000, upon retirement
of E. Bradley Jones.
[As of October 31, 1999 the nominees, Trustees and officers of the
Trust and the fund owned, in the aggregate, less than 1% of the fund's
outstanding shares.]
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met eleven times during the twelve
months ended February 28, 1999. It is expected that the Trustees will
meet at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, 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 February 28, 1999, the
committee held [__] meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones, Mann and Williams.
The committee members confer periodically and hold meetings as
required. The committee makes nominations for independent trustees,
and for membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended February 28, 1999, 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 the fund for his
or her services for the fiscal year ended February 28, 1999, or
calendar year ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C>
COMPENSATION TABLE
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board Spartan California Municipal Fund Complex* A
Income Fund B
Edward C. Johnson 3d ** $ 0 $ 0
Abigail P. Johnson **,# $ 0 $ 0
J. Gary Burkhead ** $ 0 $ 0
Ralph F. Cox $ 441 $ 223,500
Phyllis Burke Davis $ 435 $ 220,500
Robert M. Gates $ 441 $ 223,500
E. Bradley Jones $ 438 $ 222,000
Donald J. Kirk $ 444 $ 226,500
Ned C. Lautenbach *** $ 0 $ 0
Peter S. Lynch ** $ 0 $ 0
William O. McCoy $ 441 $ 223,500
Gerald C. McDonough $ 439 $ 273,500
Marvin L. Mann $ 441 $ 220,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 441 $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the fund, Mr. Burkhead and Ms. Johnson are
compensated by FMR.
***Effective October 14, 1999, Ned C. Lautenbach serves as a Member of
the Advisory Board of the trust.
# Effective April 1, 1999, Ms. Johnson serves as a Member of the
Advisory Board of certain trusts, including Fidelity California
Municipal 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, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; William O.
McCoy, $55,039, and Thomas R. Williams, $63,433.
B Compensation figures include cash.
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.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUND.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for the fund to sign or certify any financial statements
of the fund required by any law or regulation to be certified by an
independent accountant and filed with the Securities and Exchange
Commission (SEC) or any state. Pursuant to the 1940 Act, such
selection requires the ratification of shareholders. In addition, as
required by the 1940 Act, the vote of the Trustees is subject to the
right of the fund, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such
action, to terminate such employment without penalty.
PricewaterhouseCoopers LLP has advised the fund that to the best of
its knowledge and belief, as of the record date, no
PricewaterhouseCoopers LLP professional had any direct or material
indirect ownership interest in the fund, inconsistent with the
independence standards pertaining to accountants.
The independent accountants examine annual financial statements for
the fund and provide other audit and tax-related services. In
recommending the selection of the fund's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such
services would affect the accountants' independence. Representatives
of PricewaterhouseCoopers LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if
they so desire and will be available should any matter arise requiring
their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the fund
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 fund to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will NOT result in any
changes in the fund's Trustees or officers or in the investment
policies and shareholder services described in the fund's current
prospectus.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust. On December 18, 1997 and November 18, 1999, the
Board approved several additional changes to the form of the New
Declaration of Trust, which changes have been incorporated into the
form attached to this Proxy Statement. On July 15, 1999 and November
18, 1999, the Board authorized the submission of the New Declaration
of Trust to the trust's shareholders for their authorization at this
Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES OR CLASSES.
Unlike the Current Declaration of Trust, the New Declaration of Trust
generally permits the Trustees, subject to applicable Federal and
state law, to reorganize or terminate all or a portion of the trust or
any of its series or classes. The Current Declaration of Trust
requires shareholder approval in order to reorganize or terminate the
trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit all or a portion
of the trust, a fund or class to reorganize into another entity. For
example, in order to reduce the cost and scope of state regulatory
constraints or to take advantage of a more favorable tax treatment
offered by another state, the Trustees may determine that it would be
in the shareholders' interests to reorganize a fund to domicile it in
another state or to change its legal form. Under the Current
Declaration of Trust, the Trustees cannot effectuate such a
potentially beneficial reorganization without first conducting a
shareholder meeting and incurring the attendant costs and delays. In
contrast, the New Declaration of Trust gives the Trustees the
flexibility to reorganize all or a portion of the trust or any of its
series or classes and achieve potential shareholder benefits without
incurring the delay and potential costs of a proxy solicitation. Such
flexibility should help to assure that the trust and its fund operate
under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate a fund or class. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing a trust, fund, or class
reorganization or termination to proceed without shareholder approval,
the Trustees have a fiduciary responsibility to first determine that
the proposed transaction is in the shareholders' interest. Any
exercise of the Trustees' increased authority under the New
Declaration of Trust is also subject to any applicable requirements of
the 1940 Act and Massachusetts law. Of course, in all cases, the New
Declaration of Trust would require that shareholders receive written
notification of any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund or class with another operating mutual fund or sell
all or a portion of a class's or fund's assets to another operating
mutual fund without first seeking shareholder approval. Under the New
Declaration of Trust, shareholder approval is still required for these
transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
REFERENCES TO CLASSES. The New Declaration of Trust includes explicit
references to "classes" of a fund in appropriate places throughout the
document. Classes are often a more efficient way of offering a
specific investment strategy to different types of investors without
creating separate funds for each type of investor. Each class
represents an interest in the same portfolio of securities but may be
offered with different service features, distribution arrangements or
fees. Although the Trustees are not prohibited from authorizing the
issuance of classes of shares under the Current Declaration of Trust,
the Trustees believe that it is appropriate to explicitly describe
their ability, without a vote of Shareholders, to establish new
classes of shares, to change or abolish classes existing classes of
shares, to divide an existing fund into classes of shares, and to take
any other action with respect to classes that they deem appropriate.
INVESTMENT IN OTHER INVESTMENT COMPANIES. The New Declaration of Trust
clarifies that the Trustees may authorize the investment of a portion
of the fund's assets in one or more open-end investment companies
(Subportfolio Fund Structure). The current Declaration of Trust
explicitly allows the Trustees to authorize the fund to invest all of
its assets in a single open-end investment company but does not
specifically provide the Trustees with the ability to invest a portion
of its assets in one or more investment companies (Fund-of-Funds
Structure). In a Fund-of-Funds Structure, each fund retains its own
characteristics, but is able to achieve operational efficiencies by
consolidating portfolio management with some or all of its assets with
other funds. The purpose of the Fund-of-Funds Structure is to achieve
operational efficiencies by consolidating portfolio management for a
portion of the fund's assets with other funds which invest a portion
of their assets similarly. For example, three different funds with
different allocations among stocks, bonds and money market investments
but similar investment policies within each asset class might each
invest in the same stock, bond and money market funds. The structure
allows multiple funds with similar investment policies for a portion
of their assets to consolidate portfolio management in a single pool
for their assets which are managed similarly. FMR and the Board of
Trustees continually review methods of structuring mutual funds to
take advantage of potential efficiencies. While neither FMR nor the
Trustees have determined that a Subportfolio Fund Structure is
appropriate at this time, the Trustees believe it could be in the best
interests of the fund to adopt such a structure at a future date. If
approved, the New Declaration of Trust would provide the Trustees with
the power to authorize the fund to invest all or a portion of its
assets in one or more open-end investment companies. The Trustees will
authorize such a transaction only if a Subportfolio Fund Structure is
permitted under the fund's investment policies, if they determine that
a Subportfolio Fund Structure is in the best interest of the fund. The
Trustees will specifically consider the impact, if any, on fees paid
by the fund as a result of adopting a Subportfolio Fund Structure and
the tax consequences to the fund and its shareholders.
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 the fund, to amend the
fund's Management Contract subject to the provisions of Section 15 of
the 1940 Act, as modified or interpreted by the SEC. In contrast, the
Current Declaration of Trust explicitly requires the vote of a
majority of the outstanding voting securities of a fund to authorize
all such amendments. A corresponding change is also proposed for the
fund's Management Contract. For more information on this topic
generally, see "Modification of Management Contract Amendment
Provisions" on page [--].
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. 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 THE FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies the management fee that FMR
receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. In addition, the Amended
Contract allows FMR and the trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (Present Contract) currently requires
the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page [__] for more details. THE AMENDED
CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER
THAN, THE FEE PAYABLE UNDER THE PRESENT CONTRACT. (For information on
FMR, see the section entitled "Activities and Management of FMR" on
page [__].)
PROPOSED AMENDMENT(S) TO THE PRESENT MANAGEMENT CONTRACT. A copy of
the Amended Contract, marked to indicate the proposed amendment(s), is
supplied as Exhibit 2 on page [__]. Except for the modifications
discussed above, it is substantially identical to the Present
Contract. (For a detailed discussion of the fund's Present Contract,
refer to the section entitled "Present Management Contract" beginning
on page [__].) If approved by shareholders, the Amended Contract will
take effect on March 1, 2000 (or, if later, the first day of the first
month following approval) and will remain in effect through June 30,
2000 and thereafter, but only as long as its continuance is approved
at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii)
the vote of either a majority of the Trustees or by the vote of a
majority of the outstanding shares of the fund. If the Amended
Contract is not approved, the Present Contract will continue in effect
through June 30, 2000, and thereafter only as long as its continuance
is approved at least annually as above.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $156 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $156 billion or less. Above $156 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contact, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on August 1, 1994, January 1, 1996, and August 1, 1999.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract revises the current fee
breakpoints for assets under FMR's management above $156 billion and
adds fifteen new fee breakpoints for assets under FMR's management
above $336 billion as illustrated in the following table. (For an
explanation of how the Group Fee Rate is used to calculate the
management fee, see the section entitled "Present Management Contract"
beginning on page [__].)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACTS AMENDED CONTRACTS
Average Group Assets ($ Present Contract* Average Group Assets ($ Amended Contract
billions) billions)
120 - 174 .1450% 120 - 156 .1450%
174 - 228 .1400% 156 - 192 .1400%
228 - 282 .1375% 192 - 228 .1350%
282 - 336 .1350% 228 - 264 .1300%
Over 336 .1325% 264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
516 - 587 .1100%
587 - 646 .1080%
646 - 711 .1060%
711 - 782 .1040%
782 - 860 .1020%
860 - 946 .1000%
946 - 1,041 .0980%
1,041 - 1,145 .0960%
1,145 - 1,260 .0940%
Over 1,260 .0920%
</TABLE>
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Assets ($ billions) Present Contract* Amended Contract
150 .1736% .1736%
200 .1658% .1652%
250 .1604% .1587%
300 .1565% .1536%
350 .1533% .1494%
400 .1507% .1459%
450 .1487% .1427%
500 .1471% .1399%
550 .1457% .1372%
600 .1446% .1349%
650 .1437% .1328%
700 .1429% .1309%
750 .1422% .1291%
800 .1416% .1275%
850 .1411% .1260%
900 .1406% .1246%
950 .1402% .1233%
1,000 .1398% .1220%
1,050 .1394% .1209%
1,100 .1391% .1197%
1,150 .1388% .1187%
1,200 .1386% .1177%
1,250 .1383% .1167%
1,300 .1381% .1158%
1,350 .1379% .1149%
1,400 .1377% .1141%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994, January 1, 1996, and August 1,
1999.
Average assets under FMR's management for September 1999 were
approximately $764 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended September 1999,
average assets under management by FMR were approximately $764
billion. The fund's management fee rate under the Amended Contract,
for the month ended September, 1999, would have been 0.3796%, compared
to 0.3920% under the Present Contract. The management fee rate remains
the same under both the Present Contract and the Amended Contract
until assets under FMR's management exceed $156 billion, at which
point the management fee rate under the Amended Contract begins to
decline relative to the Present Contract.
The following chart compares the fund's management fee as calculated
under the terms of the Present Contract for fiscal year ended February
28, 1999 to the management fee the fund would have incurred if the
Amended Contract had been in effect. Management fees are expressed in
dollars and as percentages of the fund's average net assets for the
year.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$ 5,047,000 $ 4,914,000 (2.64)%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994, January 1, 1996, and August 1,
1999.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended
September 30, 1999 to the management fee the fund would have incurred
if the Amended Contract had been in effect. Management fees are
expressed in dollars and as percentages of the fund's average net
assets for the year.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$ 5,218,000 $ 5,063,000 (2.97)%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994, January 1, 1996, and August 1,
1999.
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 July 15 and October 14, 1999. The Board of
Trustees considered and approved the modifications to the Group Fee
Rate schedule during the two month periods from September to October
1999, June to July 1994, and November to December 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 specifically relating
to the Amended Contract. These materials included (i) information on
the investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption
data in respect of the fund, and (iii) the economic outlook and the
general investment outlook in the markets in which the fund invests.
The Board of Trustees and the Independent Trustees also consider
periodically other material facts such as (1) FMR's results and
financial condition, (2) arrangements in respect of the distribution
of the fund's shares, (3) the procedures employed to determine the
value of the fund's assets, (4) the allocation of the fund's
brokerage, if any, including allocations to brokers affiliated with
FMR, (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 choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) 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 the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees review at least annually the background of the fund's
portfolio manager and the fund's investment objective and discipline.
The Independent Trustees have also had discussions with senior
management of FMR responsible for investment operations and the senior
management of Fidelity's fixed income group. Among other things they
considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of
the management of the Fidelity funds, whether the Fidelity funds
(including the fund) have appropriately benefitted from any economies
of scale, and whether there is potential for realization of any
further economies of scale. The Board of Trustees and the Independent
Trustees have concluded that FMR's mutual fund business presents some
limited opportunities to realize economies of scale and that these
economies are being shared between fund shareholders and FMR in an
appropriate manner. The Independent Trustees have also concluded that
the existing group fee structure should be continued but determined
that it would be appropriate to change the group fee structure as
proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with the fund.
CONCLUSION. 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
structure, that is the reduction of the Group Fee Rate schedule 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. If approved, the Amended Contract will take effect on the
first day of the first month following shareholder approval.
5. TO ELIMINATE THE FUND'S FUNDAMENTAL 80% INVESTMENT POLICY AND ADOPT
A COMPARABLE NON-FUNDAMENTAL POLICY.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 80% investment policy and adopt a comparable
non-fundamental policy. If shareholders approve this proposal, the
Trustees intend to eliminate the fund's fundamental 80% investment
policy and adopt a non-fundamental policy that uses an 80% "asset
test", which is standard for other Fidelity municipal bond funds,
rather than an "income test". Fundamental policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed without shareholder approval. The elimination
of the current fundamental policy and the adoption of the proposed
non-fundamental policy is not expected to materially effect the way
the fund is managed.
The current fundamental 80% investment policy for the fund is as
follows:
"The fund will normally invest so that at least 80% of its income
distributions are exempt from federal and California state personal
income taxes."
If the proposal to eliminate the current fundamental policy is
approved, the Trustees intend to adopt the following non-fundamental
policy:
"The fund normally invests at least 80% of its assets in municipal
securities whose interest is exempt from federal and California
personal income taxes."
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 80% investment policy and adopting the proposed
non-fundamental policy will allow the Trustees to modify the fund's
80% policy, as necessary, to comply with the SEC's "name test rule"
(Name Test Rule), if and when it is adopted, without having to incur
the potential costs and delays of conducting a shareholder meeting.
The SEC proposed the Name Test Rule in February 1997. The Name Test
Rule governs the use of mutual fund names and, if and when eventually
adopted by the SEC, may apply to the fund. If a definitive version of
the rule is ultimately adopted, the fund's 80% policy may require
modification to comply with the requirements of the definitive rule.
Briefly stated, eliminating the fund's fundamental 80% investment
policy and adopting the proposed non-fundamental policy will give the
Trustees the flexibility to comply more quickly with the definitive
Name Test Rule, if and when adopted.
In addition, because the proposed asset-based test can be efficiently
monitored, adopting an asset-based 80% investment policy limit may
facilitate the fund's compliance efforts.
As noted above, fundamental investment policies can be changed or
eliminated only with shareholder approval, while non-fundamental
policies can be changed or eliminated without shareholder approval.
Changes in non-fundamental policies are still subject, however, to the
supervision of the Board of Trustees. Therefore, any future changes to
the fund's proposed non-fundamental 80% policy, while not requiring
shareholder approval, would require approval of the Board.
In sum, it is not expected that approval of the proposal will have a
material effect on the way the fund is currently managed. Rather,
approval of the proposal will provide the Trustees with additional
flexibility to respond to future regulatory changes and developments
in the marketplace.
CONCLUSION. The Board of Trustees believes that eliminating the
fund's fundamental 80% investment policy and adopting the proposed
non-fundamental 80% investment policy will benefit the fund and its
shareholders. The Trustees recommend voting FOR the proposal. Upon
shareholder approval, the changes will become effective when the
fund's disclosure is revised to reflect them. If the proposal is not
approved by the shareholders of the fund, the fund's current
fundamental 80% policy will remain unchanged.
6. TO MODIFY THE FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE AND ELIMINATE
CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND.
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal that would modify the
fund's fundamental investment objective and eliminate certain of its
fundamental investment policies. The proposal is intended to allow the
fund to communicate more clearly its investment objective and
strategies by standardizing its investment disclosure in a manner
consistent with other Fidelity funds with similar investment
disciplines. The modifications to the fund's investment objective and
the elimination of the investment policies are not expected to
materially affect the way the fund is managed.
The fund's investment objective and certain fundamental investment
policies currently read as follows:
"Spartan California Municipal Income Fund seeks as high a level of
current income, exempt from federal and California state personal
income tax, available from investing primarily in municipal securities
judged by FMR to be of investment-grade quality. The fund may invest
up to one-third of its assets in lower-quality bonds, but may not
purchase bonds that are judged by FMR to be equivalent quality to
those rated lower than B."
Because the fund's investment objective and foregoing policies are
fundamental, they cannot be modified or eliminated without shareholder
approval.
If the proposal is approved, the fund's fundamental investment
objective would read as follows (additional language is ((underlined))
and deleted language is [bracketed]):
"Spartan California Municipal Income Fund seeks ((a)) [as] high [a]
level of current income, exempt from federal and California [state]
personal income ((taxes)) [tax] [, available from investing primarily
in municipal securities judged by FMR to be of investment-grade
quality. The fund may invest up to one-third of its assets in
lower-quality bonds, but may not purchase bonds that are judged by FMR
to be equivalent quality to those rated lower than B]."
DISCUSSION OF PROPOSED MODIFICATION. Modifying the fund's investment
objective will allow the fund to communicate more clearly its
investment objective to shareholders. Eliminating the foregoing
fundamental policies will allow the fund to communicate more clearly
its investment strategies to shareholders by standardizing its
investment disclosure in a manner consistent with other Fidelity funds
with similar investment disciplines.
If the proposal is approved, the fund will continue to rely on its
existing, more restrictive non-fundamental policy of investing in
investment-grade securities. The fund does not currently invest, or
intend to invest, in securities rated below investment-grade. As noted
above, fundamental policies can be changed or eliminated only with
shareholder approval, while non-fundamental policies can be changed or
eliminated without shareholder approval. Changes in non-fundamental
policies, however, are still subject to the supervision of the Board
of Trustees.
Modifying the fund's fundamental investment objective and eliminating
the fundamental investment policies as described above will have no
material effect on the way the fund is managed.
CONCLUSION. The Board of Trustees has concluded that modifying the
fund's investment objective and eliminating certain fundamental
investment policies regarding investment in investment-grade debt
securities and securities rated below investment-grade will benefit
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. If approved by shareholders, the changes will become
effective when disclosure is revised to reflect them. If the proposal
is not approved by shareholders of the fund, the fund's current
fundamental investment objective and policies will remain in effect.
7. TO ELIMINATE THE FUND'S FUNDAMENTAL 20% INVESTMENT POLICY
The Board of Trustees has approved, and recommends that the
shareholders of the fund approve, a proposal to eliminate the fund's
fundamental 20% investment policy. Eliminating this policy will allow
the fund to standardize its investment policies in a manner consistent
with other Fidelity state municipal bond funds.
The current fundamental 20% investment policy for the fund is as
follows:
"During periods when FMR believes that California municipals that
meet the fund's standard are not available, the fund may invest up to
20% of its assets, or temporarily invest more than 20% of its assets,
in obligations that are only federally tax-exempt."
If the proposal is approved, the fund's fundamental 20% investment
policy would be eliminated. Because the policy is fundamental, it
cannot be eliminated without shareholder approval.
DISCUSSION OF PROPOSED MODIFICATION. Eliminating the fund's
fundamental 20% investment policy will allow the fund to invest during
normal market conditions in securities whose interest is not exempt
from California personal income tax, including shares of non-publicly
offered money market or short-term bond funds managed by FMR or an
affiliate of FMR. Providing the fund with additional flexibility to
invest in securities whose interest is not exempt from California
personal income tax is consistent with the standard policy for other
Fidelity state municipal bond funds. Eliminating the fundamental 20%
investment policy will not affect the fund's investment objective of
seeking a high level of current income, exempt from federal and
California state personal income taxes.
CONCLUSION. The Board of Trustees has concluded that eliminating the
fund's fundamental 20% investment policy will benefit the fund and the
fund's shareholders. The Trustees recommend voting FOR the proposal.
Upon shareholder approval, the change will become effective when the
fund's disclosure is revised to reflect it. If the proposal is not
approved by the shareholders of the fund, the fund's current
fundamental 20% investment policy will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees and average net assets of funds with investment objectives
similar to Spartan California Municipal Income Fund and advised by FMR
is contained in the Table of Average Net Assets and Expense Ratios in
Exhibit 3 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; Abigail P. Johnson, Senior Vice
President; Robert C. Pozen, President; and Peter S. Lynch, Vice
Chairman. Each of the Directors is also a Trustee of the trust, except
Ms. Johnson. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H.
Costello, Matthew N. Karstetter, Eric D. Roiter, Thomas D. Maher,
Thomas Simpson, Richard A. Silver, Fred L. Henning, Jr., Dwight D.
Churchill, and Ms. Christine J. Thompson are currently officers of the
trust and officers or employees of FMR or FMR Corp. With the exception
of Mr. Costello and Mr. Karstetter, 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 March 1, 1998 through October 31, 1999, [the
following transactions/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 FIMM
FIMM is a wholly owned subsidiary of FMR formed in 1997 to provide
portfolio management services to certain Fidelity funds and investment
advice with respect to fixed-income instruments.
Funds with investment objectives similar to Spartan California
Municipal Income Fund for which FMR has entered into a sub-advisory
agreement with FIMM, and the net assets of each of these funds, are
indicated in the Table of Average Net Assets and Expense Ratios in
Exhibit 3 beginning on page [__].
The Directors of FIMM are Edward C. Johnson 3d, Chairman, and Robert
C. Pozen, President. Mr. Johnson 3d also is President and a Trustee of
the trust and of other funds advised by FMR; Chairman, Chief Executive
Officer, President, and a Director of FMR Corp.; Chairman of the Board
and of the Executive Committee of FMR; a Director of FMR; and Chairman
and Director of Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
and Fidelity Management & Research (Far East) Inc. (FMR Far East). In
addition, Mr. Pozen is Senior Vice President and a Trustee of the
trust and of other funds advised by FMR; a Director of FMR Corp.;
Director of FMR; and President and Director of FMR U.K. and FMR Far
East. Each of the Directors is a stockholder of FMR Corp. The
principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other
services. Under its management contract with the fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the fund in accordance with its
investment objective, policies, and limitations. FMR also provides the
fund with all necessary office facilities and personnel for servicing
the fund's investments, compensates all officers of the fund and all
Trustees who are "interested persons" of the trust or of FMR, and all
personnel of the fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal and state laws;
developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 4.
In addition to the management fee payable to FMR, the fund reimburses
Citibank, N.A. (Citibank) for its services as the fund's custodian,
transfer agent, and service agent. Previously, the fund reimbursed
UMB, Bank n.a (UMB) as the fund's custodian, transfer agent, and
service agent. Prior to June 21, 1999, UMB acted as the fund's
custodian, transfer agent, and service agent. Although the fund's
current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust, on behalf of the fund has entered into a revised transfer agent
agreement with Citibank, pursuant to which Citibank bears the costs of
providing these services to existing shareholders. Other expenses paid
by the fund include interest, taxes, brokerage commissions, and the
fund's proportionate share of insurance premiums and Investment
Company Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify the
trust's officers and Trustees with respect to litigation.
Effective June 21, 1999, Citibank has entered into a sub-agreement
with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, under
the terms of which FSC performs the processing activities associated
with providing transfer agency, dividend disbursing and shareholder
servicing functions for the fund. (Prior to June 21, 1999, UMB had a
sub-agreement with FSC.) Under both sub-agreements, FSC bears the
expense of typesetting, printing and mailing prospectuses, statements
of additional information and all other reports, notices, and
statements to shareholders, except proxy statements. FSC also pays all
out-of-pocket expenses associated with transfer agent services.
Citibank did not pay any fees to FSC on behalf of the fund for the
fiscal year ended February 28,1999.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered at net asset value per share.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
FMR is the fund's manager pursuant to a management contract dated
March 1, 1994, which was approved by shareholders on February 16,
1994.
For the services of FMR under the management contract, the fund pays
FMR a monthly management fee which has two components: a group fee
rate and an individual fund fee rate.
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 $707 billion of group net assets - the approximate level for
February 1999 - was 0.1312%, which is the weighted average of the
respective fee rates for each level of group net assets up to $707
billion.
On August 1, 1999, January 1, 1996, and August 1, 1994, 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>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .3700% $1 billion .3700%
3 - 6 .3400 50 .2188
6 - 9 .3100 100 .1869
9 - 12 .2800 150 .1736
12 - 15 .2500 200 .1652
15 - 18 .2200 250 .1587
18 - 21 .2000 300 .1536
21 - 24 .1900 350 .1494
24 - 30 .1800 400 .1459
30 - 36 .1750 450 .1427
36 - 42 .1700 500 .1399
42 - 48 .1650 550 .1372
48 - 66 .1600 600 .1349
66 - 84 .1550 650 .1328
84 - 120 .1500 700 .1309
120 - 156 .1450 750 .1291
156 - 192 .1400 800 .1275
192 - 228 .1350 850 .1260
228 - 264 .1300 900 .1246
264 - 300 .1275 950 .1233
300 - 336 .1250 1,000 .1220
336 - 372 .1225 1,050 .1209
372 - 408 .1200 1,100 .1197
408 - 444 .1175 1,150 .1187
444 - 480 .1150 1,200 .1177
480 - 516 .1125 1,250 .1167
516 - 587 .1100 1,300 .1158
587 - 646 .1080 1,350 .1149
646 - 711 .1060 1,400 .1141
711 - 782 .1040
782 - 860 .1020
860 - 946 .1000
946 - 1,041 .0980
1,041 - 1,145 .0960
1,145 - 1,260 .0940
Over 1,260 .0920
</TABLE>
The fund's individual fund fee rate is 0.25%. Based on the average
group net assets of the funds advised by FMR for February 1999, the
fund's annual management fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
0.1312% + 0.25% = 0.3812%
One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
During fiscal 1999, FMR received $4,914,000 for its services as
investment adviser to the fund. This fee was equivalent to 0.38% of
the average net assets of the fund.
FMR may, from time to time, agree to reimburse all or a portion of
the 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.
FMR has voluntarily agreed, subject to revision or termination, to
reimburse the fund to the extent that its total operating expenses, as
a percentage of its respective average net assets exceed 0.53%.
SUB-ADVISORY AGREEMENTS
FMR has entered into a sub-advisory agreement with FIMM pursuant to
which FIMM has primary responsibility for providing portfolio
investment management services to the fund. Under the sub-advisory
agreement, dated January 1, 1999, FMR pays FIMM fees equal to 50% of
the management fee payable to FMR under its management contract with
the fund. The fees paid to FIMM are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to
time. For the fiscal year ended February 28, 1999, no fees were paid
by FMR to FIMM on behalf of Spartan California Municipal Income Fund.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the fund by FMR pursuant to authority contained in
the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) an indirect subsidiary of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services.
During fiscal 1999, the fund paid no brokerage commissions to
affiliated brokers.
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, MA 02109], whether other persons are beneficial
owners of shares for which proxies are being solicited and, if so, the
number of copies of the Proxy Statement and Annual Reports you wish to
receive in order to supply copies to the beneficial owners of the
respective shares.
EXHIBIT 1
((FORM OF)) AMENDED AND RESTATED DECLARATION OF TRUST
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
Amended and Restated Declaration of Trust remain underlined in this
Exhibit.
AMENDED AND RESTATED DECLARATION OF TRUST, made [March 17, 1994]
______, ((2000 )) 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 April 28, 1983 by Edward
C. Johnson, Caleb Loring, Jr., and Frank Nesvet in order to establish
a trust fund for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in
[T]((t))rust under this ((Amended and Restated)) Declaration of Trust
as herein set forth below.
_________________________________________________
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "Fidelity California
Municipal Trust."
DEFINITIONS
SECTION 2. Wherever used [hererin] ((herein,)) unless otherwise
required by the context or specifically provided:
(a) The [T]((t))erms "Affiliated Person((,))"[,] "Assignment((,))"[,]
"Commission((,))"[,] "Interested Person((,))"[,] "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable), and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
[amended from time to time] ((modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder));
(((b) "Bylaws" shall mean the bylaws of the Trust, if any, as amended
from time to time));
[(b)] (((c))) [The "Trust"] (("Class")) refers to "Fidelity
California Municipal Trust" and reference to the Trust, when
applicable to one or more Series of the Trust, shall refer to any such
Series] ((the class of Shares of a Series of the Trust established in
accordance with the provisions of Article III));
(d) (("Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)] (((e))) "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
[(d)] (((f))) "Shareholder" means a record owner of Shares of the
Trust;
[(f)] (((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of ((the Trust
or)) each Series shall be divided from time to time, ((including such
Class or Classes of Shares as the Trustees may from time to time
create and establish)) and [includes] ((including)) fractions of
[s]((S))hares as well as whole [s]((S))hares ((as)) consistent with
the requirements of Federal and/or [other] state securities laws;
[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 California Municipal
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] [e]((E))ach
Share shall be without par value and shall be fully paid and
nonassessable. The Trustees shall have full power and authority, in
their sole discretion((,)) and without obtaining any prior
authorization or vote of the Shareholders ((of any Series or Class))
of the Trust (((a))) to create and establish (and to change in any
manner) Shares ((or any Series or Classes thereof)) with such
preferences, voting powers, rights((,)) and privileges as the Trustees
may((,)) from time to time((,)) determine[,] ((; (b))) to divide or
combine the Shares ((or any Series or Classes thereof)) into a greater
or lesser number[,] ((; (c))) to classify or reclassify any issued
Shares into one or more Series ((or Classes)) of Shares[,] ((; (d)))
to abolish any one or more Series ((or Classes)) of Shares[,]((;))
and (((e))) to take such other action with respect to the Shares as
the Trustees may deem desirable.
[ESTABLISHMENT OF SERIES]
((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 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.
[LIMITATION OF PERSONAL LIABILITY]
((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]((S))hareholder 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 3rd, 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]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds (((2/3))) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
SECTION 4. In case of the declination, death, resignation,
retirement, or removal [, incapacity, or inability] of any of the
Trustees, ((or)) in case a vacancy shall, by reason of an increase in
number[,] ((of the Trustees,)) or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the [Investment Company Act of] 1940 ((Act)). Such
appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by recording in the records of
the Trust, whereupon the appointment shall take effect. An
appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement,
resignation((,)) or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only
at or after the effective date of said retirement, resignation, or
increase in number of Trustees. As soon as any Trustee so appointed
shall have accepted this [t]((T))rust, the [t]((T))rust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The ((foregoing)) power of appointment is
subject to the provisions of Section 16(a) of the 1940 Act((,)) ((as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission)).
[TEMPORARY ABSENCE OF 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 [, absence] or incapacity[,] shall
be conclusive [, provided, however, that no vacancy shall remain
unfilled for a period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created [P]((p))ursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust ((or
Series)).
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1. The Trustees, in all instances, shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [T]((t))he Trustees shall not in
any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which] ((that)) they, in their
[uncontrolled] discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the] ((this))
Declaration of Trust or the Bylaws of the Trust, ((if any,)) the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,)) being
bound or limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a] ((one or more)) bank((s,)) [or] trust [company]
((companies, companies that are members of a national securities
exchange, or other entities permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) as 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]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent] ((investment adviser,
manager,)) custodian((,)) [or] underwriter((,)) ((or other agent or
independent contractor)).
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4[(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees [, subject in either case to proper safeguards according
to the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article III ((and to
establish Classes of such Series having relative rights, powers, and
duties as the Trustees may provide consistent with applicable laws)).
(n) To allocate assets, liabilities((,)) and expenses of the Trust
to a particular Series[,] ((or Class, as appropriate,)) or to
apportion the same between or among two or more Series[,] ((or
Classes, as appropriate,)) provided that any liabilities or expenses
incurred by a particular Series ((or Class)) shall be payable solely
out of the assets belonging to that Series as provided for in Article
III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including, but not
limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money, and to pledge, mortgage((,)) [and] ((or))
hypothecate the assets of the Trust, subject to ((the)) applicable
[limitations] ((requirements)) of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(t) ((To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.
(u) To interpret the investment policies, practices or limitations of
any Series.
(v) To issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article III and Article X, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, or the
particular Series of the Trust, with respect to which such Shares are
issued.))
[(t)] (((w))) Notwithstanding any other provision hereof, to invest
all ((or a portion)) of the assets of any Series in [a single] ((one
or more)) open-end investment compan((ies))[y], including investment
by means of transfer of such assets in exchange for an interest or
interests in such investment company ((or companies or by any other
method approved by the Trustees)).
(((x) In general to carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any purpose or
the attainment of any object or the furtherance of any power
hereinbefore set forth, either alone or in association with others,
and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes,
objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the general powers of the Trustees.
Any action by one or more of the Trustees in their capacity as such
hereunder shall be deemed an action on behalf of the Trust or the
applicable Series and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws((, if any)).
ACTION BY THE TRUSTEES
SECTION 3. ((Except as otherwise provided herein or in the 1940
Act,)) [T]((t))he Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of] ((at which)) the
Trustees ((are present in person)). At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date((,))
and place of all meetings of the Trustees shall be given by the party
calling the meeting to each Trustee by telephone((,)) [or]
((telefax,)) 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]((s))tate laws and regulations[,]((;)) charges of custodians,
transfer agents, and registrars[,]((;)) expenses of preparing and
setting up in type [P]((p))rospectuses and [S]((s))tatements of
[A]((a))dditional [I]((i))nformation[,]((;)) expenses of printing and
distributing prospectuses sent to existing Shareholders[,]((;))
auditing and legal expenses[,]((;)) reports to Shareholders[,]((;))
expenses of meetings of Shareholders and proxy solicitations
therefor[,]((;)) 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 applicable requirements of the 1940 Act, as
modified by or interpreted by any applicable order of theCommision or
any rules or regulations adopted or interpretative releases of the
Commision thereunder)) [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]
((S))uch 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 [a] ((one or more)) transfer agency and
Shareholder service [contract] ((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,
Section((s)) 1[, (iv)] ((and 5;)) (((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
Commission or any state, as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all
[s]((S))hares shall be voted by individual Series, except ((as
provided in the following sentence and except)) [(i)] (((a))) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and [(ii)] (((b))) when the Trustees have
determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to
vote thereon. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes.)) A
Shareholder of each 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
)) on any matter on which such Shareholder is entitled to vote, and
each fractional dollar amount shall be entitled to a proportionate
fractional vote[)]. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law,
this Declaration of Trust or any Bylaws of the Trust((, if any,)) to
be taken by Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as
specified in Section 2 of Article IV at the principal office of the
Trust or such other place as the Trustees may designate. Special
meetings of the Shareholders of any Series may be called by the
Trustees and shall be called by the Trustees upon the written request
of Shareholders owning at least one-tenth (((1/10))) of the
outstanding Shares entitled to vote. Whenever ten or more Shareholders
meeting the qualifications set forth in Section 16(c) of the 1940 Act,
[as the same may be amended from time to time,] ((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,)) seek the opportunity of furnishing materials to the
other Shareholders with a view to obtaining signatures on such a
request for a meeting, the Trustees shall comply with the provisions
of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the
mailing of such materials to such Shareholders of record. Shareholders
shall be entitled to at least fifteen (((15))) days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class)) shall vote as a Series ((or Class)) then a
majority of the aggregate number of Shares of that Series ((or Class))
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series ((or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or)) by any
provision of this Declaration of Trust or the Bylaws, ((if any,)) a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class)) shall vote as a
Series ((or Class)), then a majority of the Shares of that Series ((or
Class)) voted on the matter shall decide that matter insofar as that
Series ((or Class)) is concerned. ((Shareholders may act by unanimous
written consent. Actions taken by a Series or Class may be consented
to unanimously in writing by Shareholders of that Series or Class)).
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 1. The Trustees shall at all times employ a bank((,)) ((a
company that is a member of a national securities exchange,)) [or]
trust company, ((or other entity permitted under the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) having capital, surplus((,))
and undivided profits of at least two million dollars
($2,000,000)((,)) ((or such other amount as shall be allowed by the
Commission or by the 1940 Act,)) as custodian with authority as its
agent, but subject to such restrictions, limitations 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 ((, a company that is a member of a
national securities exchange,)) [or] 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((,)) [and] 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]
((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 dividend of stock
or other property)) pro rata among the Shareholders of a particular
Series, ((or Class thereof,)) as of the record date of that Series
((or Class)) fixed as provided in ((Article XII,)) Section 3 [hereof a
"stock dividend"].
REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees))
shall be made by the Series or the principal underwriter of the Series
to the Shareholder of record within seven (7) days after the date upon
which the request is effective.
[DETERMINATION OF NET ASSET VALUE]
((DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS))
SECTION 3. The term "Net Asset Value" of any Series ((or Class))
shall mean that amount by which the assets of that Series[,] ((or
Class)) exceed its liabilities, all as determined by or under the
direction of the Trustees. Such value per Share shall be determined
separately for each Series ((or Class)) of Shares and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities
for which market quotations are readily available, at the market value
of such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees,
provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations((,)) and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any [O]((o))rder of the Commission applicable
to the Series. The Trustees may delegate any of its powers and duties
under this Section 3 with respect to appraisal of assets and
liabilities. At any time((,)) the Trustees may cause the value [par]
((per)) Share last determined to be determined again in ((a)) similar
manner and may fix the time when such redetermined value shall become
effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
[INDEMNIFICATION]
((INDEMNIFICATION OF COVERED PERSONS))
SECTION 2.
(a) Subject to the exceptions and limitations contained in Section
[(B)] (((b))) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]((I))nterested [p]((P))ersons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [p]((P))aragraph (a) of this Section 2 may be paid by the
applicable Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the applicable Series if
it is ultimately determined that he is not entitled to indemnification
under this Section 2; provided, however, that either [(a)] (((i)))
such Covered Person shall have provided appropriate security for such
undertaking; [(b)] (((ii))) the Trust is insured against losses
arising out of any such advance payments((;)) or [(c)] (((iii)))
either a majority of the Trustees who are neither interested persons
of the Trust nor parties to the matter, or independent legal counsel
in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section 2.
[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 ((is created
hereby)) and not a partnership [is created hereby]((,)) ((joint stock
association, corporation, bailment, or any form of a legal
relationship other than a trust)). No Trustee hereunder shall have any
power to [bind] 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.
[TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY]
((TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY))
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation
((of)) this Declaration of Trust, and subject to the provisions of
Section 1 of this Article XII and to Article XI, shall be under no
liability for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
[TERMINATION OF TRUST]
((DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.))
((SECTION 4.1. DURATION.)) [This] ((The)) Trust shall continue
without limitation of time((,)) but subject to the provisions of
[sub-section (b) of this Section 4] ((this Article XII)).
[(b)] [Subject to a Majority Shareholder Vote of each Series
affected by the matter or, if applicable, to a Majority Shareholder
Vote of the Trust, the Trustees may]
[(i) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or]
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
[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.]
((SECTION 4.2. TERMINATION OF THE TRUST, A SERIES OR A CLASS. (a)
Subject to applicable Federal and state law, the Trust or any Series
or Class thereof may be terminated (i) by Majority Shareholder Vote of
the Trust, each Series affected, or each Class affected, as the case
may be; or (ii) without the vote or consent of Shareholders by a
majority of the Trustees either at a meeting or by written consent.
The Trustees shall provide written notice to the affected Shareholders
of a termination effected under clause (ii) above. Upon the
termination of the Trust or the Series or Class,
(i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the Trust
or the Series or Class, and all of the powers of the Trustees under
this Declaration of Trust shall continue until the affairs of the
Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below; and
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights; and
(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, if
required, 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 oe Class thereof may merge
or consolidate with any other corporation, association, trust, or
other organization or may sell, lease, or exchange all or a portion of
the Trust property or Trust property allocated or belonging to such
Series or Class, including its good will, upon such terms and
conditions and for such consideration when and as authorized at any
meeting of Shareholders called for such purpose by a Majority
Shareholder Vote of the Trust or affected Series or Class, as the case
may be. Such transactions may be effected through share-for-share
exchanges, transfers or sale of assets, shareholder in-kind
redemptions and purchases, exchange offers, or any other method
approved by the Trustees.
SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all or a portion of the Trust property
or all or a portion of the Trust property allocated or belonging to
such Series or Class or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell, convey
and transfer the Trust property or the Trust property allocated or
belonging to such Series or Class to any such corporation, trust,
limited liability company, partnership, association, or organization
in exchange for the shares or securities thereof or otherwise, and to
lend money to, subscribe for the shares or securities of, and enter
into any contracts with any such corporation, trust, partnership,
limited liability company, association, or organization, or any
corporation, partnership, limited liability company, trust,
association, or organization in which the Trust or such Series holds
or is about to acquire shares or any other interest. Subject to
applicable Federal and state law, the Trustees may also cause a merger
or consolidation between the Trust or any successor thereto or any
Series or Class thereof and any such corporation, trust, partnership,
limited liability company, association, or other organization.
Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series or Class thereof sells, conveys, or transfers
all or a portion of its assets to another entity or merges or
consolidates with another entity. Such transactions may be effected
through share-for-share exchanges, transfers or sale of assets,
shareholder in-kind redemptions and purchases, exchange offers, or any
other method approved by the Trustees.))
FILING OF COPIES, REFERENCES, AND HEADINGS
SECTION 5. The original or a copy of this instrument and of each
[d]((D))eclaration of [t]((T))rust supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each supplemental
[d]((D))eclaration of [t]((T))rust shall be filed by the Trustees with
the Secretary of [t]((T))he Commonwealth of Massachusetts and the
Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer or Trustee of the Trust
as to whether or not any such supplemental [d]((D))eclarations of
[t]((T))rust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this instrument or of any such supplemental
[d]((D))eclaration of [t]((T))rust. In this instrument or in any such
supplemental [d]((D))eclaration of [t]((T))rust, references to this
instrument and all expressions like "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as amended or
affected by any such supplemental [d]((D))eclaration of [t]((T))rust.
Headings are placed herein for convenience of reference only and in
case of any conflict, the text of this instrument, rather than the
headings, shall control. This instrument may be executed in any number
of counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 6. The [t]((T))rust set forth in this instrument is made in
[t]((T))he Commonwealth of Massachusetts, and it is created under and
is to be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust ((, and the absence of a specific
reference herein to any such power, privilege, or action shall not
imply that the Trust may not exercise such power or privilege or take
such actions)).
AMENDMENTS
Section 7. [If authorized by votes of] ((Except as specifically
provided herein,)) the Trustees [and] ((may, without shareholder vote,
amend or otherwise supplement this Declaration of Trust by making an
amendment,)) a [Majority Shareholder Vote,] ((Declaration of Trust
supplemental hereto)) or [by] ((an amended and restated Declaration of
Trust. Shareholders shall have the right to vote (a) on)) any
[larger] ((amendment that would affect their right to)) vote [which]
((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 [applicable] law or [this
Declaration of Trust in] ((by the Trust's registration statement filed
with the Commission; and (e) on)) any [particular case,] ((amendment
submitted to them by the Trustees. Any amendment required or
permitted to be submitted to Shareholders that, as)) the Trustees
[shall amend or otherwise supplement this instrument, by making a
declaration of trust supplemental hereto, which thereafter shall form
a part hereof, except that an amendment which] ((determine,)) shall
affect the Shareholders of one or more Series [but not the
Shareholders of all outstanding Series] ((or Classes)) shall be
authorized by vote of the Shareholders [holding a majority of the
Shares entitled to vote] of each Series ((or Class)) affected and no
vote [of Shareholders] of ((shareholders of)) a Series ((or Class))
not affected shall be required. [Amendments having the purpose of
changing the name of the Trust or of supplying] ((Notwithstanding
anything else herein,)) any [omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein] ((amendment to Article XI)) shall not [require
authorization by Shareholder vote. Copies of] ((limit)) the
[supplemental declaration] ((rights to indemnification or insurance
provided therein with respect to action or omission)) of [trust shall
be filed as specified in Section 5 of this Article XII]. ((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 17th day of March, 1994]
((as of the date set forth above)).
[SIGNATURE LINES OMITTED]
EXHIBIT 2
((UNDERLINED)) LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
((FORM OF))
MANAGEMENT CONTRACT
between
FIDELITY CALIFORNIA MUNICIPAL TRUST
[FIDELITY] ((SPARTAN)) CALIFORNIA [TAX-FREE HIGH YIELD PORTFOLIO]
((MUNICIPAL INCOME FUND))
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION made] ((AGREEMENT AMENDED and RESTATED as of)) this
[1st day of March, 1994] __ day of ________ ((2000)), by and between
Fidelity California Municipal 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 California
Tax-Free High Yield Portfolio] ((its single existing series of shares
of beneficial interest)) (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser") ((as set forth in its entirety
below)).
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract [modified] ((dated ((March 1, 1994))[November 1,
1989] 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 [March 1, 1994] ((_____, 2000)) 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 Group Fee
[Rate] and an Individual Fund [fee rate] ((Fee)).
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the [charter of each
investment company] ((fund's Declaration of Trust or other
organizational document))) determined as of the close of business on
each business day throughout the month. The Group Fee Rate shall be
determined on a cumulative basis pursuant to the following schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
[120] - [174] [.1450]
[174] - [228] [.1400]
[228] - [282] [.1375]
[282] - [336] [.1350]
[Over] - [336] [.1325]
((120 - 156 .1450))
((156 - 192 .1400))
((192 - 228 .1350))
((228 - 264 .1300))
((264 - 300 .1275))
((300 - 336 .1250))
((336 - 372 .1225))
((372 - 408 .1200))
((408 - 444 .1175))
((444 - 480 .1150))
((480 - 516 .1125))
((516 - 587 .1100))
((587 - 646 .1080))
((646 - 711 .1060))
((711 - 782 .1040))
((782 - 860 .1020))
((860 - 946 .1000))
((946 - 1,041 .0980))
((1,041 - 1,145 .0960))
((1,145 - 1,260 .0940))
((Over 1,260 .0920))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.25%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
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.
(((c) 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, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.))
4. It is understood that the Portfolio will pay all its expenses,
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 June
30, [1994] ((20__)) 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
[TO BE UPDATED]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
MUNICIPAL INCOME (D)
Spartan Arizona Municipal 8/31/98 $ 21.5 0.55%
Income
Spartan Maryland Municipal 8/31/98 40.5 0.55
Income
Spartan Short-Intermediate 8/31/98 691.8 0.55
Municipal Income
Advisor Intermediate
Municipal Income (x)
Class A 10/31/98 0.8 0.38
Class T 10/31/98 53.1 0.38
Class B 10/31/98 8.4 0.38
Class C 10/31/98 0.5 0.38
Institutional Class 10/31/98 6.1 0.38
Advisor Municipal Income (x)
Class A 10/31/98 5.1 0.39
Class T 10/31/98 383.4 0.39
Class B 10/31/98 47.1 0.39
Class C 10/31/98 3.0 0.39
Institutional Class 10/31/98 2.7 0.39
Spartan Connecticut Municipal 11/30/98 356.2 0.55
Income
Spartan Florida Municipal 11/30/98 431.3 0.55
Income
Spartan Municipal Income 11/30/98 2,937.2 0.38
Spartan New Jersey Municipal 11/30/98 373.9 0.55
Income
Spartan Intermediate 12/31/98 1,128.0 0.35
Municipal Income
Spartan Michigan Municipal 12/31/98 465.2 0.38(z)
Income
Spartan Minnesota Municipal 12/31/98 303.0 0.35(z)
Income
Spartan Ohio Municipal Income 12/31/98 390.7 0.38(z)
Spartan Pennsylvania 12/31/98 265.8 0.55
Municipal Income
Spartan Massachusetts 1/31/99 1,299.6 0.38
Municipal Income
Spartan New York Municipal 1/31/99 1,144.6 0.38(z)
Income
Spartan California Municipal 2/28/99 1,280.7 0.38
Income
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of July 31, 1999, if fiscal year end figures are not available.
(b) Average net assets are computed on the basis of average net assets
of each fund or class at the close of business on each business day
throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from FMR pursuant to voluntary or state expense limitations. Funds so
affected are indicated by an (z). For multiple class funds, the ratio
of net advisory fees to average net assets is presented gross of
reductions for certain classes, for presentation purposes. Funds so
affected are indicated by (x).
(d) FMR has entered into sub-advisory agreements with Fidelity
Investments Money Management, Inc. (FIMM) with respect to the fund.
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 CALIFORNIA MUNICIPAL TRUST: SPARTAN CALIFORNIA MUNICIPAL
INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoints Edward C.
Johnson 3d, Eric D. Roiter and [Third Agent], or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY CALIFORNIA MUNICIPAL TRUST: SPARTAN CALIFORNIA MUNICIPAL
INCOME FUND which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the fund to be held at the office of the
trust at 27 State Street, 10th Floor, Boston, MA 02109, on February
16, 2000 at 11:00 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 ___________________________________
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316061209/fund# 091
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 nominees [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
Ralph F. Cox, Phyllis Burke contrary below).
Davis, Robert M. Gates,
Edward C. Johnson 3d, Donald
J. Kirk, Ned C. Lautenbach,
Peter S. Lynch, William O.
McCoy, Gerald C. McDonough,
Marvin L. Mann, Robert C.
Pozen, Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of
Trust.
4. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
management contract for the
fund.
5. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fundamental 80% investment
policy and adopt a
comparable non-fundamental
policy.
6. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fundamental investment
policies regarding
investments in debt
securities of below
investment-grade quality.
7. To eliminate the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fundamental 20% investment
policy.
CMS-PXC-1299 cusip # 316061209/fund# 091
