SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(e) or Sec. 240.14a-12
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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[X] $125 per Exchange Act Rules 0-11(c)(ii), 14a-6(j) (1), or 14a-6(j) (2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(j) (3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j) (4) and 0-11.
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(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:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND:
CLASS A
CLASS B
INSTITUTIONAL CLASS
FIDELITY ADVISOR SHORT INTERMEDIATE TAX-EXEMPT FUND:
CLASS A
FIDELITY ADVISOR NORTH AMERICAN GOVERNMENT FUND:
CLASS A
INSTITUTIONAL CLASS
FUNDS OF
FIDELITY ADVISOR SERIES VI
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800- 522-7297
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Advisor Limited Term Tax-Exempt Fund , Fidelity
Advisor Short Intermediate Tax-Exempt Fund and Fidelity Advisor North
American Government Fund , (the funds), will be held at the office of
Fidelity Advisor Series VI (the trust), 82 Devonshire Street, Boston,
Massachusetts 02109 on June 14, 1995, at 9:00 a.m. The purpose of the
Meeting is to consider and act upon the following proposals, and to
transact such other business as may properly come before the Meeting or any
adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Coopers & Lybrand, L.L.P. as independent
accountants of the trust.
3. To amend the Declaration of Trust to provide dollar-based voting rights
for shareholders of the trust.
4. To amend the Declaration of Trust regarding shareholder notification of
appointment of Trustees.
5. To amend the Declaration of Trust to provide each fund with the ability
to invest all of its assets in another open-end investment company with
substantially the same investment objective and policies.
6. To adopt a new fundamental investment policy for Limited Term
Tax-Exempt Fund and Short Intermediate Tax-Exempt Fund to permit each
fund to invest all of its assets in another open-end investment company
with substantially the same investment objective and policies.
7. To amend the Bylaws of the Trust to require only Trustee approval of
further amendments to the bylaws.
8. To approve an amended management contract for Limited Term Tax-Exempt
Fund.
9. To approve an amended management contract for Short Intermediate
Tax-Exempt Fund.
10. To amend the Class A Distribution and Service Plan for Limited Term
Tax-Exempt Fund and Short Intermediate Tax-Exempt Fund.
11. To amend the Class B Distribution and Service Plan for Limited Term
Tax-Exempt Fund.
12. To amend Limited Term Tax-Exempt Fund's investment objective and
policies to provide greater investment latitude to seek high current
income.
13. To replace certain of Limited Term Tax-Exempt Fund's fundamental
investment policies with non-fundamental policies.
1 4 . To adopt a fundamental investment policy concerning the
tax-exempt status of distributions for Limited Term Tax-Exempt Fund .
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
15. To adopt a fundamental investment limitation concerning senior
securities for Limited Term Tax-Exempt Fund.
16. To adopt a fundamental investment limitation concerning commodities for
Limited Term Tax-Exempt Fund.
17. To amend Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning diversification.
18. To eliminate Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning short sales of securities.
19. To eliminate Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning margin purchases.
20. To amend Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning borrowing.
21. To amend Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning the underwriting of securities.
22. To amend Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning the concentration of its investments in a single
industry.
23. To amend Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning real estate.
24. To amend Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning lending.
25. To eliminate Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning investments in other investment companies.
26. To eliminate Limited Term Tax-Exempt Fund's fundamental investment
limitation concerning investments in securities of newly-formed issuers.
27. To eliminate Limited Term Tax-Exempt Fund and Short Intermediate
Tax-Exempt Fund's fundamental investment limitation concerning investing in
oil, gas, and mineral exploration programs.
2 8 . To eliminate Limited Term Tax-Exempt Fund's fundamental
investment limitation concerning purchasing securities of an issuer in
which the Trustees or directors and officers of the fund or FMR hold more
than 5% of the outstanding securities of such issuer.
The Board of Trustees has fixed the close of business on April 17, 1995 as
the record date for the determination of the shareholders of each fund
entitled to notice of, and to vote at, such Meeting and any adjournments
thereof.
By the order of the Board of Trustees,
ARTHUR S. LORING, Secretary
April 27, 1995
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 TO THE FUNDS, 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 you 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 ADVISOR LIMITED TERM TAX-EXEMPT FUND:
CLASS A
CLASS B
INSTITUTIONAL CLASS
FIDELITY ADVISOR SHORT INTERMEDIATE TAX-EXEMPT FUND:
CLASS A
FIDELITY ADVISOR NORTH AMERICAN GOVERNMENT FUND:
CLASS A
INSTITUTIONAL CLASS
JUNE 14, 1995
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
Advisor Series VI (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Advisor Limited Term Tax-Exempt Fund ,
Fidelity Advisor Short Intermediate Tax-Exempt Fund , and Fidelity
Advisor North American Government Fund (the funds) and at any
adjournments thereof (the Meeting), to be held June 14, 1995 at 9:00 a.m.
at 82 Devonshire Street, Boston, Massachusetts 02109, the principal
executive office of the trust and Fidelity Management & Research Company
(FMR), the funds' investment adviser. The purpose of the Meeting is set
forth in the accompanying Notice. The solicitation is made primarily by the
mailing of this Proxy Statement and the accompanying proxy card on or about
April 27, 1995. In order to save the funds money, FMR encourages you to
return your proxy card by June 7, 1995. Supplementary solicitations may be
made by mail, telephone, telegraph, or by personal interview by
representatives of the trust. In addition, Boston Financial Data Services
may be paid to solicit shareholders on behalf of the funds at an
anticipated cost of approximately $ 8,000 . The expenses in connection
with preparing this Proxy Statement and its enclosures and of all
solicitations will be paid by the funds. The funds will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of shares. The principal business address
of Fidelity Distributors Corporation (FDC), the funds' principal
underwriter and distribution agent, is 82 Devonshire Street, Boston,
Massachusetts 02109.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, 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 which 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. All proxies not
voted, including broker non-votes, will not be counted toward establishing
a quorum. 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.
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 proxies 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 proxies will
vote FOR the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted against the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Shares of each class of each fund in the trust issued and outstanding as
of March 31, 1995 are indicated in the following table:
Fidelity Advisor Limited Term Tax-Exempt Fund:
Class A 5,897,069
Class B 305,687
Institutional Class 1,145,367
Fidelity Advisor Short Intermediate Tax-Exempt Fund:
Class A 1,734,140
Fidelity Advisor North American Government Fund:
Class A 1
Institutional Class 1
To the knowledge of the trust, substantial (5% or more) record ownership
of the funds on March 31, 1995 was as follows: for Limited Term
Tax-Exempt - Institutional Class: Laird Norton Co., Seattle, WA (26%),
First Union National Bank, Charlotte, NC (18%), Citizens State Bank, Corpus
Christi, TX (10%), First Interstate Bank of Texas, Houston, TX (9%), South
Holland Bancorp, South Holland, IL (6%), Citizens National Bank of
Evansville, Evansville, IN (5%), for Limited Term Tax-Exempt - Class A:
Merrill Lynch Pierre, Fenner & Smith, Jacksonville, FL (9%) , for Limited
Term Tax-Exempt - Class B: Donaldson Lufkin Jeannette, Jersey City, NJ
(15%) and for Short Intermediate Tax-Exempt - Class A: David W. Dowdy,
Colleyville, TX. (5%) and, NFSC, Honolulu, HI (11%). To the knowledge of
the trust, no other shareholder owned of record or beneficially more than
5% of the outstanding shares of the funds on that date other than the
shares of North American Government Fund held by FMR or its affiliates.
FMR has advised the trust that for Proposals 1, 2, 3, 4, 5 and 7 contained
in this Proxy Statement, it will vote its shares at the Meeting FOR each
Proposal. Shareholders of record at the close of business on April 17,
1995, will be entitled to vote at the Meeting. Each such shareholder will
be entitled to one vote for each share held on that date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1994 CALL 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. APPROVAL OF PROPOSALS 2, 6, 8, 9 AND 12 THROUGH 28
REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING
SECURITIES" OF THE APPROPRIATE FUNDS. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
THE TRUST, EACH FUND OF THE TRUST, AND EACH CLASS OF EACH FUND. APPROVAL OF
PROPOSALS 4 AND 5 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE
OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF PROPOSAL
7 REQUIRES THE AFFIRMATIVE VOTE OF THE VOTE OF THE MAJORITY OF THE
OUTSTANDING SHARES OF THE TRUST. APPROVAL OF PROPOSAL 10 REQUIRES THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF
CLASS A SHAREHOLDERS. IN ORDER FOR CLASS B SHAREHOLDERS TO APPROVE PROPOSAL
10 WITH RESPECT TO CLASS B SHARES, AN AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF CLASS B SHAREHOLDERS IS REQUIRED. APPROVAL
OF PROPOSAL 11 REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF CLASS B SHAREHOLDERS .
UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), A "MAJORITY VOTE
OF THE OUTSTANDING VOTING SECURITIES'' MEANS THE AFFIRMATIVE VOTE OF THE
LESSER OF (A) 67% OR MORE OF THE SHARES PRESENT AT THE MEETING OR
REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING
SHARES 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 all class's
shares of each fund.
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PROPOSAL PROPOSAL DESCRIPTION APPLICABLE FUND(S) OR
# CLASS(ES)
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1. To elect as Trustees the 12 Limited Term Tax-Exempt
nominees presented. Short Intermediate
Tax-Exempt
North American Government
2. To ratify the selection of Limited Term Tax-Exempt
Coopers & Lybrand L.L.P. Short Intermediate
as independent Tax-Exempt
accountants of the trust. North American Government
3. To amend the Declaration Limited Term Tax-Exempt
of Trust to provide voting Fund
rights based on a Short Intermediate
shareholder's total dollar Tax-Exempt
investment, rather than on North American Government
the number of shares
owned.
4. To amend the Declaration Limited Term Tax-Exempt
of Trust to eliminate the Short Intermediate
requirement that Tax-Exempt
shareholders be notified North American Government
within three months in the
event of an appointment of
a trustee.
5. To amend the Declaration Limited Term Tax-Exempt
of Trust to clarify that the Short Intermediate
Trustees may authorize the Tax-Exempt
investment of all of a fund's North American Government
assets in another open-end
investment company with
substantially the same
investment objective and
policies.
6. To adopt a new Limited Term Tax-Exempt
fundamental investment Short Intermediate
policy for the fund that Tax-Exempt
would permit it to invest all
of its assets in another
open-end investment
company with substantially
the same investment
objective and policies.
7. To amend the By-Laws of Limited Term Tax-Exempt
the trust to allow Short Intermediate
amendments by the Tax-Exempt
Trustees without North American Government
shareholder approval.
8. To approve an amended Limited Term Tax-Exempt
management contract for
the fund that would reduce
the management fee
payable to FMR by the fund
as FMR's assets under
management increase.
9. To approve an amended Short Intermediate
management contract for Tax-Exempt
the fund that would reduce
the management fee
payable to FMR by the fund
as FMR's assets under
management increase.
10. To approve an amended Limited Term Tax-Exempt:
Distribution and Service Class A
Plan for Class A shares of Limited Term Tax-Exempt:
the fund that would remove Class B
from the 12b-1 fee Short Intermediate
calculation the exclusion of Tax-Exempt:
shares purchased 144 Class A
months prior.
11. To approve an amended Limited Term Tax-Exempt:
Distribution and Service Class B
Plan for Class B shares of
the fund that would remove
from the 12b-1 fee
calculation the exclusion of
shares purchased 144
months prior.
12. To amend the investment Limited Term Tax-Exempt
objective and policies of the
fund to provide greater
investment latitude and to
permit the fund to invest in
securities rated investment
grade or higher.
13. To replace certain Limited Term Tax-Exempt
fundamental investment
policies with
non-fundamental policies to
allow amendments without
further shareholder
approval.
1 4 . To adopt a fundamental Limited Term Tax-Exemp t
investment policy regarding
the tax-exempt status of
distributions to be
consistent with guidelines
specified by the SEC.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
15. Senior Securities To adopt Limited Term Tax-Exempt
a fundamental investment
limitation to clarify the fund
has the ability to issue
senior securities to the
extent permitted under the
1940 Act.
16. Commodities To adopt a Limited Term Tax-Exempt
fundamental investment
limitation describing the
fund's policy regarding the
purchase and sale of
commodities.
17. Diversification To amend Limited Term Tax-Exempt
the fundamental investment
limitation regarding
diversification that will
permit the fund to hold
more than 10% of the
voting securities of one or
more issuers.
18. Short Sales To replace the Limited Term Tax-Exempt
fundamental investment
limitation with a
non-fundamental limitation
which explicitly allows
investment in options.
19. Margin Purchases To Limited Term Tax-Exempt
replace the fundamental
investment limitation with a
similar non-fundamental
investment limitation.
20. Borrowing To amend the Limited Term Tax-Exempt
borrowing limitation to
require a reduction in
borrowing if borrowings
exceed the 33 1/3% limit for
any reason rather than
solely because of a decline
in net assets.
21. Underwriting To clarify the Limited Term Tax-Exempt
fundamental policy with
respect to underwriting.
22. Concentration To Limited Term Tax-Exempt
standardize language and
explicitly exclude
"tax-exempt obligations
issued or guaranteed by a
U.S. territory or possession
or a state or local
government, or a political
subdivision thereof" from
the limitation.
23. Real Estate To amend the Limited Term Tax-Exempt
fundamental investment
limitation concerning the
purchase and sale of real
estate.
24. Lending To clarify that the Limited Term Tax-Exempt
fund can purchase an entire
issue of debt securities .
25. Other Investment Limited Term Tax-Exempt
Companies To replace the
fundamental investment
limitation with a
non-fundamental limitation
restricting ownership of
other investment
companies.
26. Newly-Formed Issuers To Limited Term Tax-Exempt
replace the fundamental
investment limitation
restricting investments in
securities where payment of
principal and interest are
the responsibility of a
company with less than
three years' operating
history with a similar
non-fundamental limitation.
27. Oil, Gas, & Mineral Limited Term Tax-Exempt
Exploration To replace the Short Intermediate
fundamental limitation Tax-Exempt
restricting investments in
oil, gas, and mineral
exploration programs with a
similar non-fundamental
limitation.
28. Trustee Ownership To Limited Term Tax-Exempt
replace the fundamental
limitation restricting the
purchase of an issuer's
securities if a trustee,
director, or officer of the
fund or FMR hold more
than 5% of the outstanding
securities of that issuer with
a similar non-fundamental
limitation.
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1. TO ELECT A BOARD OF TRUSTEES.
Pursuant to the provisions of the Declaration of Trust of Fidelity Advisor
Series VI, the Trustees have determined that the number of Trustees shall
be fixed at twelve. It is intended that the enclosed proxy card will be
voted for the election as Trustees of the twelve nominees listed below,
unless such authority has been withheld in the proxy card.
All nominees named below are currently Trustees of Fidelity Advisor Series
VI and have served in that capacity continuously since originally elected
or appointed. Mr. Cox, Mrs. Davis, and Mr. Mann were selected by the
trust's Nominating and Administration Committee (see page ) and were
appointed to the Board in November 1991, December 1992, and October 1993,
respectively. None of the nominees is 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. Except for Peter S. Lynch, each of the nominees is
currently a Trustee or General Partner, as the case may be, of 206 other
funds advised by FMR. Mr. Lynch is currently Trustee or General Partner, as
the case may be, of 204 other funds 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.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
*J. Gary Burkhead Senior Vice President, is 1990
82 Devonshire Street President of FMR; and President
Boston, MA and a Director of FMR Texas
(53) Inc. (1989), Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
Ralph F. Cox Consultant to Western Mining 1991
200 Rivercrest Drive Corporation (1994). Prior to
Fort Worth, TX February 1994, he was
(62) President of Greenhill Petroleum
Corporation (petroleum
exploration and production,
1990). Until March 1990, Mr.
Cox was President and Chief
Operating Officer of Union
Pacific Resources Company
(exploration and production). He
is a Director of Bonneville Pacific
Corporation (independent power,
1989), Sanifill Corporation
(non-hazardous waste, 1993),
and CH2M Hill Companies
(engineering). In addition, he
served on the Board of Directors
of the Norton Company
(manufacturer of industrial
devices, 1983-1990) and
continues to serve on the Board
of Directors of the Texas State
Chamber of Commerce, and 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
P.O. Box 264 September 1991, Mrs. Davis
Bridgehampton, NY was the Senior Vice President of
(63) 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, 1990), 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.
Richard J. Flynn Financial consultant. Prior to 1990
77 Fiske Hill September 1986, Mr. Flynn was
Sturbridge, MA Vice Chairman and a Director of
(71) the Norton Company
(manufacturer of industrial
devices). He is currently a
Trustee of College of the Holy
Cross and Old Sturbridge
Village, Inc.
*Edward C. Johnson President, is Chairman, Chief 1990
3d Executive Officer and a Director
82 Devonshire Street of FMR Corp.; a Director and
Boston, MA Chairman of the Board and of
(64) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc. (1989),
Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
3881-2 Lander Road Mr. Jones was Chairman and
Chagrin Falls, OH Chief Executive Officer of LTV
(67) Steel Company. Prior to May
1990, he was a Director of
National City Corporation (a
bank holding company) and
National City Bank of Cleveland.
He is a Director of TRW Inc.
(original equipment and
replacement products),
Cleveland-Cliffs Inc (mining),
NACCO Industries, Inc. (mining
and marketing), Consolidated
Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale
Materials Handling, Inc. (1989)
and RPM Inc. (manufacturer of
chemical products, 1990). In
addition, he serves as a Trustee
of First Union Real Estate
Investments, a member of the
Board of Trustees and of the
Executive Committee of the
Cleveland Clinic Foundation, a
Trustee and a member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1990
One Harborside at Columbia University Graduate
680 Steamboat Road School of Business and a
Apartment #1-North financial consultant. From 1987
Greenwich, CT to January 1995, Mr. Kirk was a
(62) Professor at Columbia University
Graduate School of Business.
Prior to 1987, he was Chairman
of the Financial Accounting
Standards Board. Mr. Kirk is a
Director of General Re
Corporation (reinsurance) and
Valuation Research Corp.
(appraisals and valuations,
1993). In addition, he serves as
Vice Chairman of the Board of
Directors of the National Arts
Stabilization Fund, Vice
Chairman of the Board of
Trustees of the Greenwich
Hospital Association, and as a
Member of the Public Oversight
Board of the American Institute
of Certified Public Accountants'
SEC Practice Section (1995).
*Peter S. Lynch Vice Chairman and Director of 1990
82 Devonshire Street FMR (1992). Prior to his
Boston, MA retirement on May 31, 1990, he
(52) was a Director of FMR (1989)
and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
He is a Director of W.R. Grace &
Co. (chemicals, 1989) and
Morrison Knudsen Corporation
(engineering and construction).
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 (1990).
Gerald C. McDonough Chairman of G.M. Management 1990
135 Aspenwood Drive Group (strategic advisory
Cleveland, OH services). Prior to his retirement
(66) in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal
working, telecommunications
and electronic products),
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration, 1989), Commercial
Intertech Corp. (water treatment
equipment, 1992), and
Associated Estates Realty
Corporation (a real estate
investment trust, 1993).
Edward H. Malone Prior to his retirement in 1985, 1990
5601 Turtle Bay Drive Mr. Malone was Chairman,
#2104 General Electric Investment
Naples, FL Corporation and a Vice
(70) President of General Electric
Company. He is a Director of
Allegheny Power Systems, Inc.
(electric utility), General Re
Corporation (reinsurance), and
Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee
of Corporate Property Investors,
the EPS Foundation at Trinity
College, the Naples
Philharmonic Center for the Arts,
and Rensselaer Polytechnic
Institute, and he is a member of
the Advisory Boards of Butler
Capital Corporation Funds and
Warburg, Pincus Partnership
Funds.
Marvin L. Mann Chairman of the Board, 1993
55 Railroad Avenue President, and Chief Executive
Greenwhich, CT Officer of Lexmark International,
(62) Inc. (office machines, 1991).
Prior to 1991, he held 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 Infomart (marketing
services, 1991), a Trammell
Crow Co. In addition, he serves
as the Campaign Vice Chairman
of the Tri-State United Way
(1993) and is a member of the
University of Alabama
President's Cabinet (1990).
Thomas R. Williams President of The Wales Group, 1990
21st Floor Inc. (management and financial
191 Peachtree Street, advisory services). Prior to
N.E. retiring in 1987, Mr. Williams
Atlanta, GA served as Chairman of the
(66) 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 BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc. (1989), and AppleSouth,
Inc. (restaurants, 1992).
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
As of March 31, 1995 , the nominees and officers of the trust owned,
in the aggregate, less than 1% of any of the funds' outstanding shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
nine non-interested Trustees, met eleven times during the twelve months
ended November 30, 1994. 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, of 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), Cox, and Williams are
members of the Committee. This Committee oversees and monitors the
financial reporting process, including recommending to the Board the
independent accountants to be selected for the trust (see Proposal 2),
reviewing internal controls and the auditing function (both internal and
external), reviewing the qualifications of key personnel performing audit
work, and overseeing compliance procedures. During the twelve months ended
November 30, 1994, the Committee held four meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. Flynn (Chairman), McDonough, and Williams. The
Committee members confer periodically and hold meetings as required. The
Committee is charged with the duties of reviewing the composition and
compensation of the Board of Trustees, proposing additional non-interested
Trustees, monitoring the performance of legal counsel employed by the funds
and the non-interested Trustees, and acting as the administrative committee
under the Retirement Plan for non-interested Trustees. During the twelve
months ended November 30, 1994, the Committee held three 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 current trustee of each fund for his or her services as trustee
for the fiscal year ended November 30, 1994.
COMPENSATION TABLE
Aggregate Compensation from each
Fund
Trustees Limited Term Short-Intermediat
Tax-Exempt e Tax-Exempt
J. Gary Burkhead** $ 0 $ 0
Ralph F. Cox 34 3
Phyllis Burke Davis 33 3
Richard J. Flynn 41 3
E. Bradley Jones 33 3
Edward C. Johnson 3d** 0 0
Donald J. Kirk 33 3
Peter S. Lynch** 0 0
Gerald C. McDonough 34 3
Edward H. Malone 34 3
Marvin L. Mann 34 3
Thomas R. Williams 33 3
Trustees Pension or Estimated Total
Retirement Annual Benefits Compensatio
Benefits Upon n
Accrued as Part Retirement from from the
of the Fund Fund
Fund Expenses Complex* Complex*
from
the Fund
Complex*
J. Gary $ 0 $ 0 $ 0
Burkhead**
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke 5,200 52,000 122,000
Davis
Richard J. Flynn 0 52,000 154,500
E. Bradley Jones 5,200 49,400 123,500
Edward C.
0 0 0
Johnson 3d**
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch** 0 0 0
Gerald C. 5,200 52,000 125,000
McDonough
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. 5,200 52,000 126,500
Williams
* Information is as of December 31, 1994 for 206 funds in the
complex.
** Interested trustees of the funds are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested trustees, receive retirement benefits under the program.
2. TO RATIFY THE SELECTION OF COOPERS & LYBRAND, L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand,
L.L.P. has been selected as independent accountants for the trust to sign
or certify any financial statements of the trust 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 trust, 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. Coopers & Lybrand, L.L.P. has
advised the trust that it has no direct or material indirect ownership
interest in the trust.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of the trust'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 Coopers & Lybrand, L.L.P. 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 AMEND THE DECLARATION OF TRUST TO PROVIDE DOLLAR-BASED VOTING RIGHTS
FOR SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve, a proposal to amend Article VIII, Section 1 of the
Declaration of Trust. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Limited Term Tax-Exempt, Short Intermediate Tax-Exempt, and
North American Government, are funds of Fidelity Advisor Series VI, an
open-end management investment company organized as a Massachusetts
business trust. Shareholders vote on a fund-wide basis on matters that
affect a fund as a whole, such as approving changes to fundamental
investment policies or limitations, and vote on a trust-wide basis on
matters that affect the trust as a whole, such as electing trustees or
amending the Declaration of Trust. Limited Term Tax-Exempt offers three
separate classes of shares: Class A, Class B and Institutional Class. Short
Intermediate Tax-Exempt offers Class A shares. North American Government
offers two classes of shares: Class A and Institutional Class .
Shareholders of a class vote separately on matters concerning only that
class, such as amendments to the Distribution and Service Plan. Currently,
under the Declaration of Trust, each share is entitled to one vote,
regardless of the relative value of the shares in the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights as required by the 1940 Act. In the case where a
trust has several series or funds, such as Fidelity Advisor Series VI,
voting rights may have become disproportionate since the net asset value
per share (NAV) of the separate funds or classes diverge over time. The
Staff of the SEC has issued a "no-action" letter permitting a trust to seek
shareholder approval of a dollar-based voting system. The proposed
amendment will comply with the conditions stated in the no-action letter.
REASON FOR THE PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights than the one-share, one-vote system
currently in effect for certain votes. The voting power of shareholders
would be commensurate with the value of the shareholders' dollar investment
in a fund rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The table below
shows a hypothetical example of this.
Fund Net Asset Valu e $1,000
investment in
terms
of share s
A $ 10.00 100.000
B $ 7.57 132.100
C $ 10.93 91.491
D $ 1.00 1,000.000
For example, Fund D shareholders would have ten times the
voting power of Fund A shareholders because a $1,000 investment in
Fund D would buy ten times as many shares as a $1,000
investment in Fund A . Accordingly, a one share, one-vote system may
provide certain shareholders with a disproportionate ability to affect the
vote relative to shareholders of other funds in the trust. If dollar-based
voting had been in effect, each shareholder would have had 1,000 voting
shares. Their voting power would be proportionate to their economic
interest, which FMR believes is a more equitable result, and is the result
in a typical corporation where each voting share generally has an equal
market price.
On matters requiring trust-wide votes where all funds are required to
vote, shareholders who own shares with a lower NAV than other funds in the
trust would be giving other shareholders in the trust more voting "power"
than they currently have. On matters affecting only one fund or class of
the fund, only shareholders of that fund or class vote on the issue. In
this instance, under both the current Declaration of Trust and an amended
Declaration of Trust, all shareholders of the class would have the same
voting rights, since the NAV is the same for all shares in a single class.
AMENDMENT TO THE DECLARATION OF TRUST. Article VIII, Section I determines
the method of calculating voting rights for all shareholder votes for a
fund. If approved, Article VIII, Section I will be amended as follows
(material to be added is underlined and material to be
deleted is [bracketed]):
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section I. The Shareholders shall have power to vote... On any matter
submitted to a vote of the Shareholders, all shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects only the interests of one
or more Series, then only the Shareholders of such Series shall be entitled
to vote thereon. [Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote.] [[ A Shareholder of
each Series 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, 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 Trust to be taken by Shareholders.
CONCLUSION. If approved, the amendment will be implemented on the
effective date of the next prospectus. The Trustees believe the proposed
amendment will benefit the trust, by bringing greater equality in voting
rights among all shareholders of the trust. The Trustees recommend that
shareholders vote FOR the proposed amendment to the Declaration of Trust.
If the amendment is not approved, the Declaration of Trust will remain
unchanged.
4. TO AMEND THE DECLARATION OF TRUST REGARDING SHAREHOLDER NOTIFICATION OF
APPOINTMENT OF TRUSTEES.
The trust's Declaration of Trust provides that in the case of a vacancy on
the Board of Trustees, the remaining Trustees shall fill the vacancy by
appointing a person they, in their discretion see fit, consistent with the
limitations of the 1940 Act. Section 16 of the 1940 Act states that a
vacancy may be filled by the Trustees, if after filling the vacancy, at
least two-thirds of the Trustees then holding office were elected by the
outstanding shareholders of the trust. It also states that if at any time
less than 50% of the Trustees were elected by shareholders, a shareholder
meeting must be called within 60 days for the purposes of electing Trustees
to fill the existing vacancies.
Article IV, Section 4 of the Declaration of Trust currently requires that
within three months of a Trustee appointment, notification of such be
mailed to each shareholder of the trust. Trustees also may appoint a
Trustee in anticipation of a current Trustee's retirement or resignation,
or in the event of an increase in the number of Trustees. An appointment in
this case currently requires shareholder notification within three months
of the appointment under the current Declaration of Trust.
Subject to shareholder approval, the Trustees intend to eliminate the
notification requirement from the trust's Declaration of Trust. The
language to be deleted from the Declaration of Trust is [bracketed].
ARTICLE IV
THE TRUSTEES
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. [Within three months of such appointment
the Trustees shall cause notice of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the trust.] An
appointment of a Trustee may be made by the Trustees then in office [and
notice thereof mailed to Shareholders as aforesaid] in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16 (a) of
the 1940 Act.
Notifying a trust's shareholders in the event of an appointment of a
Trustee is not required by any federal or state law. Such notification to
all shareholders of a trust would be costly to the funds of the trust. If
the proposal is approved, shareholders will be notified of Trustee
appointments in the next financial report for the funds. Other than
eliminating the notification requirement, this proposal does not amend any
other aspect of Trustee resignation or appointment.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the Declaration of Trust's shareholder notification
requirement in the event of an appointment of a Trustee is in the best
interests of the trust's shareholders. The Trustees recommend voting FOR
the proposed amendment. If the proposal is approved, the amendment will
become effective immediately upon shareholder approval. If the proposal is
not approved, the Declaration of Trust's current section entitled
"Resignation and Appointment of Trustees" will remain unchanged.
5. TO AMEND THE DECLARATION OF TRUST TO PROVIDE EACH FUND WITH THE ABILITY
TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
each fund approve, a proposal to amend Article V, Section 1 of the
Declaration of Trust to clarify that the Trustees may authorize the
investment of all of a fund's assets in another open-end investment
company with substantially the same investment objective and policies
("Pooled Fund Structure"). The purpose of the Pooled Fund Structure is to
achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures. In order
to implement a Pooled Fund Structure, both the Declaration of Trust and
each fund's investment policies must permit the structure. Currently, each
fund's investment policies do not allow for such investments. Proposal 6 on
page seeks shareholder approval to adopt a fundamental investment policy
to permit investment in another open-end investment company. Proposal
5 , which amends the Declaration of Trust, clarifies the Board's ability
to implement the Pooled Fund Structure if the fund's investment policies
permit it.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled investment, or "master" fund. For
example, an institutional equity fund with a high initial minimum
investment amount for large investors might pool its investments with a
retail equity fund designed for investors with lower minimums. This
structure allows several feeder funds with substantially the same objective
but different distribution and servicing features to combine their
investments and manage them as one master pool instead of managing them
separately. The feeder funds combine their investments by investing all of
their assets in one master pooled fund which would be organized as an
open-end management investment company (mutual fund). (Each feeder fund
invested in a single master pooled fund retains its own characteristics,
but is able to achieve operational efficiencies through investing together
with the other feeder funds in the Pooled Fund Structure.) The current
Declaration of Trust does not specifically provide the Trustees the ability
to authorize the Pooled Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take maximum advantage of potential
efficiencies. While neither FMR nor the Trustees has determined that the
fund should invest in a Pooled Fund, the Trustees believe it could be in
the best interest of the fund to adopt such a structure at a future date.
If this proposal is approved, the Declaration of Trust amendment would
provide the Trustees with the power to authorize the fund to invest all of
its assets in a single open-end investment company. The Trustees will
authorize such a transaction only if a Pooled Fund Structure is permitted
under the fund's investment policies (see Proposal 6), if they determine
that a Pooled Fund Structure is in the best interest of the fund, and if,
upon advice of counsel, they determine that the investment will not have
material adverse tax consequences to the fund or its shareholders. The
Trustees will specifically consider the impact, if any, on fees paid by the
fund as a result of adopting a Pooled Fund Structure. Although the current
Declaration of Trust does not contain any explicit prohibition against
implementing a Pooled Fund Structure, the specific authority is being
sought in the event the Trustees deem it appropriate to adopt a Pooled Fund
Structure in the future.
AMENDMENT TO THE DECLARATION OF TRUST. If the proposal is approved,
Article V, Section 1 of the Declaration of Trust will be amended as
follows: (material to be added is underlined ):
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have the power and authority:
[[ (t) Notwithstanding any other provision hereof, to invest all of
the assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company; "]]
CONCLUSION. The Trustees believe the proposed amendment will benefit each
fund by providing the Trustees with the flexibility to adopt a Pooled Fund
Structure in the future if permitted by the fund's investment policies and
if the Trustees determine it to be in the best interest of the fund. The
Trustees recommend that shareholders vote FOR the proposed amendment to the
Declaration of Trust. If approved, the amendment to the Declaration of
Trust will be implemented on the effective date of the next prospectus. If
the proposal is not approved, Article V, Section 1 of the Declaration of
Trust will remain unchanged.
6. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR LIMITED TERM TAX-EXEMPT
AND SHORT INTERMEDIATE TAX-EXEMPT TO PERMIT EACH FUND TO INVEST ALL
OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH SUBSTANTIALLY THE
SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
each fund approve, the adoption of a new fundamental investment policy that
would permit Limited Term Tax-Exempt and Short Intermediate Tax-Exempt each
to invest all of its assets in another open-end investment company with
substantially the same investment objective and policies ("Pooled Fund
Structure"). The purpose of pooling would be to achieve operational
efficiencies by consolidating portfolio management while maintaining
different distribution and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled "master" fund. In order to implement
a Pooled Fund Structure, an amendment to the Declaration of Trust is
required, as is the adoption of a new fundamental investment policy.
Proposal 5 proposes to amend the Declaration of Trust, and if approved,
would allow the Trustees to authorize the conversion to a Pooled Fund
Structure when permitted by each fund's policies. This proposal would add a
fundamental policy for each fund that permits a Pooled Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that the fund
should invest in a master fund, the Trustees believe it could be in the
best interests of each fund to adopt such a structure at a future date.
At present, certain of each fund's fundamental investment policies and
limitations would prevent each fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit each fund's assets to be invested in a single Pooled Fund,
without a further vote of shareholders, if the Trustees determine that
action to be in the best interests of the fund and its shareholders.
Approval of Proposal 5 provides the Trustees with explicit authority to
approve a Pooled Fund Structure. If shareholders approve this proposal,
certain fundamental and non-fundamental policies and limitations of each
fund that currently prohibit investment in shares of one investment company
would be modified to permit the investment in a Pooled Fund. These policies
include the fund's limitations on investing more than 25% of total assets
in one issuer or more than 25% of total assets in one industry, and on
acting as an underwriter.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Pooled Fund
Structure would facilitate the introduction of new Fidelity mutual funds,
increasing the investment options available to shareholders.
Each fund's method of operation and shareholder services would not be
materially affected by its investment in a Pooled Fund, except that the
assets would be managed as part of a larger pool. Were either fund to
invest all of its assets in a Pooled Fund, it would hold only a single
investment security, and the Pooled Fund would directly invest in
individual securities pursuant to its investment objective. The Pooled Fund
would be managed by FMR or an affiliate, such as FMR Texas Inc., in the
case of a money market fund. The Trustees would retain the right to
withdraw a fund's investments from a Pooled Fund at any time and would do
so if the Pooled Fund's investment objective and policies were no longer
appropriate for the fund. The fund would then resume investing directly in
individual securities as it does currently. Whenever a fund is asked to
vote at a shareholder meeting of the Pooled Fund, the fund will hold a
meeting of its shareholders if required by applicable law or the fund's
policies to vote on the matters to be considered at the Pooled Fund
shareholder meeting. The fund will cast its votes at the Pooled Fund
meeting in the same proportion as the fund's shareholders voted at theirs.
The fund would otherwise continue its normal operations.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing a fund's
assets in a Pooled Fund only if they determine that pooling is in the best
interests of the fund and if, upon advice of counsel, they determine that
the investment will not have material adverse tax consequences to the fund
or its shareholders. In determining whether to invest in a Pooled Fund, the
Trustees will consider, among other things, the opportunity to reduce costs
and to achieve operational efficiencies. The Trustees will not authorize
investment in a Pooled Fund if doing so would materially increase costs
(including fees) to shareholders.
FMR intends to seek federal and state regulatory approval in order to
allow the Fidelity funds to invest in Pooled Funds. There is, of course, no
assurance that all necessary regulatory approvals will be obtained, or that
cost reductions or increased efficiencies will be achieved.
FMR may benefit from the use of a Pooled Fund if overall assets are
increased (since FMR's fees are based on assets). Also, FMR's expenses of
providing investment and other services to each fund may be reduced. If a
fund's investment in a Pooled Fund were to reduce FMR's expenses
materially, the Trustees would consider whether a reduction in FMR's
management fee would be appropriate if and when a Pooled Fund Structure is
implemented.
PROPOSED FUNDAMENTAL POLICY. To allow each fund to invest in a Pooled Fund
at a future date, the Trustees recommend that each fund adopt the following
fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research
Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for each fund:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees recommends that shareholders vote to
adopt a new fundamental policy that would permit each fund, subject to
future review by the Board of Trustees as described above, to invest all of
its assets in an open-end investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund. If
the proposal is adopted, the amendments will be implemented on the
effective date of the next prospectus. If the proposal is not adopted, each
fund's current fundamental investment policies will remain unchanged with
respect to potential investment in Pooled Funds.
7. TO AMEND THE BYLAWS OF THE TRUST TO REQUIRE ONLY TRUSTEE APPROVAL FOR
FURTHER AMENDMENTS TO THE BYLAWS.
The Board of Trustees has approved for submission to shareholders of the
trust, a proposal to amend the Bylaws of the trust to allow the Trustees to
approve any future amendments to the Bylaws without seeking shareholder
approval. Currently, shareholder approval is required to amend the trust's
Bylaws.
In the past, certain state securities (Blue Sky) authorities required that
various operational and investment restrictions be included in a charter or
Bylaw provision amendable only by shareholder vote. No Blue Sky authorities
currently have such a requirement. The Trustees believe that the funds will
be able to respond to changing conditions more rapidly, and without the
expense to the funds of a special shareholder meeting, if the Trustees have
the power to amend the Bylaws without shareholder approval. If the
shareholders vote in favor of this proposal, the Trustees intend to amend
those provisions of the Bylaws indicated below.
Current Article X of the trust's Bylaws allows amendments to the Bylaws by
majority vote of the Trustees, provided, however, that any amendment which
changes or affects the provisions of Articles VII, X, or XII must be
approved by vote of a majority of the outstanding shares of the Trust
entitled to vote. The proposed amendment to Article X eliminates the
requirement for a shareholder vote to amend Articles VII, X, and XII.
Current Article VII contains provisions which are to be included in any
contract between the trust and a custodian, provisions governing
termination of custodian agreements and the appointment of successors or
custodians, and provisions governing sub-custodian arrangements. The 1940
Act, and the rules and regulations thereunder, impose various requirements
with respect to custodians for registered investment companies. These
requirements apply to the trust regardless of whether they are set forth in
the Bylaws. The Trustees believe that it would be in the best interests of
the trust and its shareholders for the Trustees to have the authority to
amend or delete any provisions in the trust's custodian contracts as they
deem necessary, consistent with the 1940 Act, in order to maintain maximum
flexibility in the operation of the funds.
Current Article XII requires that the Trustees, at least semiannually,
submit to shareholders a written financial report of the transactions of
the funds, including financial statements which must be certified by
independent public accountants, at least annually. These requirements
currently are contained in rules promulgated under the 1940 Act and,
therefore, permit the Trustees to furnish more limited financial statements
if such rules are modified, or if permitted by order of the SEC.
If approved by shareholders of the trust, Article X of the Bylaws will be
amended as indicated below. Material to be deleted is indicated in
[brackets].
ARTICLE X
Amendments
These Bylaws may be amended at any meeting of the Trustees of the Trust by
a majority vote [; provided, however, that any amendment which changes or
affects the provisions of Article VII, Article X, or Article XII shall be
approved by vote of a majority of the outstanding shares of the Trust
entitled to vote].
CONCLUSION. The Trustees believe the proposed amendment will benefit the
trust by allowing the Trustees the flexibility to amend the Bylaws in
response to, or in anticipation of, statutory and/or regulatory changes
affecting the trust's contractual arrangements with its custodians, without
the expense to the funds of a special shareholder meeting. The Trustees
recommend that shareholders vote FOR the proposed amendment to the
provisions of the Bylaws of the trust. If approved, the amendment to the
provisions of the Bylaws of the trust will be implemented immediately. If
the proposal is not approved, Article X of the Bylaws of trust will remain
unchanged.
8. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR LIMITED TERM TAX-EXEMPT
FUND.
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, a proposal to amend the fund's management contract with
FMR (the Amended Contract). The proposal would modify the management fee
that FMR receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. THE AMENDED CONTRACT WILL RESULT IN
A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE UNDER
THE PRESENT MANAGEMENT CONTRACT (THE PRESENT CONTRACT). (For information on
FMR, see the section entitled "Activities and Management of FMR" on page .)
PROPOSED AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment, is supplied as
Exhibit 1 on page . Except for the amendment to the
management fee and the addition of item 1(c) which discusses FMR's ability
to use broker-dealers on behalf of the fund, as discussed in this proposal,
the Amended Contract 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 July 1,
1995 (or, if later, the first day of the first month following approval)
and will remain in effect through June 30, 1996 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 those
Trustees who are not "interested persons" of the trust or FMR 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,
1996, and thereafter subject to continuation by the fund's Board of
Trustees.
The management fee is an annual percentage of the fund's average net
assets, calculated and paid monthly. The percentage is the sum of two
components: a group fee rate, which varies according to FMR's assets under
management, and a fixed individual fund fee rate. The proposal would modify
the group fee rate by providing for lower fee rates if FMR's assets under
management remain above $120 billion.
MODIFICATION TO GROUP FEE RATE. The group fee rate varies based on the
aggregate net assets of all registered investment companies having
management contracts with FMR. As group net assets increase, the group fee
rate declines. The Amended Contract would not change the group fee
calculation for group net assets of $120 billion or less. Above $120
billion in group net assets, the effective annual group fee rate declines
under both contracts, but under the Amended Contract , it declines
faster . Group fee rates that are lower than those contained in the
fund's Present Contract were voluntarily implemented by FMR on January 1,
1992, November 1, 1993, and August 1, 1994.
The group fee rate is calculated according to a graduated fee schedule
providing for different rates for different levels of group net assets. The
rate at which the fee declines is determined by fee "breakpoints" that
provide for lower fee rates when assets increase. The Amended Contract
would add 8 new fee breakpoints for group asset levels above $120 billion
as illustrated in the following table. (For an explanation of how these
breakpoints are factored into the fee calculation, see the section entitled
"Present Management Contract" beginning on page .)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Average Group
Assets Present Assets Amended
($ billions) Contract* ($ billions) Contract
84 - 120 .1500% 84-120 .1500%
120 - 156 .1500% 120-156 .1450%
156 - 192 .1500% 156-192 .1400%
192 - 228 .1500% 192-228 .1350%
228 - 264 .1500% 228-264 .1300%
264 - 300 .1500% 264-300 .1275%
300 - 336 .1500% 300-336 .1250%
336 - 372 .1500% 336-372 .1225%
Over 372 .1500% Over 372 .1200%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net
Assets Present Amended
($ billions) Contract* Contract
150 .1746% .1736%
200 .1685% .1652%
250 .1648% .1587%
300 .1623% .1536%
350 .1605% .1494%
400 .1592% .1459%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, and August 1, 1994.
Average group net assets for March 1995 were approximately $ 288
billion.
The fund's annual individual fund fee rate is 0.25%. The sum of the group
fee rate and the individual fund fee rate is referred to as a fund's
management fee rate. One-twelfth (1/12) of this annual fee rate is applied
to the fund's average net assets for the current month, resulting in a
dollar amount which is the management fee for that month.
COMPARISON OF MANAGEMENT FEE S. For March 1995 average group net
assets of $ 288 billion, the fund's management fee rate under the
Amended Contract would have been .4047 %, compared to .4128 %
under the Present Contract. The management fee rate will remain the same
under both the Present Contract and the Amended Contract until group net
assets exceed $120 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 under the
terms of the Present Contract for the fiscal period ended November
30, 1994 to the fees the fund would have incurred if the Amended
Contract had been in effect :
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$ 289,819 $ 285,286 .0064 %
* Does not reflect voluntary adoption of extended group fee rate schedules.
TRANSACTIONS WITH BROKERS-DEALERS. The fund may execute portfolio
transactions with broker-dealers who provide research and execution
services to the fund or other accounts over which FMR or its affiliates
exercise investment discretion. The selection of such broker-dealers is
generally made by FMR (consistent with best execution considerations) in
accordance with a ranking of broker-dealers determined periodically by
FMR's investment staff based upon the quality of research and execution
services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund and to its other clients, and conversely, such
research provided by broker-dealers who execute transaction orders on
behalf of other FMR clients may be useful to FMR in carrying out its
obligations to the fund. The receipt of such research has not reduced FMR's
normal independent research activities; however, it enables FMR to avoid
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
The fund has already been authorized by the Board of Trustees, consistent
with the federal securities laws and the rules and regulations of the SEC,
to place portfolio transactions through broker-dealers who are affiliated
with FMR and through broker-dealers who provide research. The Amended
Contract expressly recognizes this authority.
MATTERS CONSIDERED BY THE BOARD OF TRUSTEES. The Amended Contract was
approved by the Board of Trustees of the Fund, including all of the
Trustees who are not interested persons of FMR (the "Independent Trustees")
on July 14 , 1994. The mutual funds for which the Members of the
board of Trustees serve 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 consideration of management contracts of the Fidelity Funds, including
the Amended Contract, took place over a four-month period from April to
July 1994. The Board of Trustees received materials relating to the Amended
Contract substantially in advance of the meeting at which the Amended
Contract was considered, and had the opportunity to ask questions and
request further information in connection with such consideration.
Information Received By the Independent Trustees. In connection with their
monthly meetings , Trustees receive materials specifically relating
to the consideration of the Amended Contract. These materials include: (i)
information on the investment performance of the f und, a peer group
of funds and an appropriate index or combination of indices , (ii)
sales and redemption data in respect of the fund, (iii) the economic
outlook and the general investment outlook in the markets in which the fund
invests, and (iv) notable changes in the fund's investments. The Board of
Trustees and the Independent Trustees also consider periodically matters
such as (1) FMR's financial condition, (2) arrangements in respect of the
distribution of the fund's shares, (3) the procedures employed to determine
the value of the fund's assets, (4) the allocation of the fund's
brokerage (if any) , including allocations to brokers affiliated with
FMR and use of "soft" commission dollars to pay f und expenses and to
pay for research and other similar services , (5) FMR's management of
the relationships with the fund's custodian and subcustodians, and (6) the
resources devoted to and the record of compliance with investment policies
and restrictions and with policies on personal securities transactions.
During the period April through July 1994, in response to questions raised
by the Independent Trustees, additional information was furnished by FMR
including, among other items, information on and analysis of (a) the
overall organization of FMR, (b) the impact of performance adjustments to
management fees, (c) the choice of performance indices and benchmarks, (d)
the composition of peer groups of funds, (e) transfer agency and
bookkeeping fees paid to affiliates of FMR, (f) investment performance, (g)
investment management staffing, (h) the potential for achieving further
economies of scale, (i) operating expenses paid to third parties, and (j)
the information furnished to investors, including the f und's
shareholders.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contract include the
following:
Investment Compliance and Performance. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR's Personnel and Methods. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, the fund's investment objective and discipline. The
Independent Trustees have also had discussions with the 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 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 business 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
t he 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 to certain of the Fidelity
Funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
Other Benefits to Shareholders. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION, ACTION OF THE BOARD OF TRUSTEES AND RECOMMENDED
SHAREHOLDER ACTION. In considering the Amended Contract the Board of
Trustees and the Independent Trustees did not identify any single factor as
all-important or controlling, and the foregoing summary does not detail all
of the matters considered. Based on its evaluation of all material factors
and assisted by the advice of independent counsel, the Board of Trustees
concluded (i) that the existing management fee structure was fair and
reasonable and (ii) that the proposed reduction in the group fee structure
was in the best interest of the fund's shareholders. The Board of Trustees
and 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.
9. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR SHORT INTERMEDIATE
TAX-EXEMPT FUND.
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, a proposal to amend the fund's management contract with
FMR (the Amended Contract). The Proposal would modify the management fee
that FMR receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. THE AMENDED CONTRACT WILL RESULT IN
A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE UNDER
THE PRESENT MANAGEMENT CONTRACT (THE PRESENT CONTRACT). (For information on
FMR, see the section entitled "Activities and Management of FMR" on page ).
PROPOSED AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment, is supplied as
Exhibit 2 on page . Except for the amendment to the
management fee the Amended Contract 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 July 1, 1995 (or if later, the first day of the first month
following approval) and will remain in effect through June 30, 1996 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 those Trustees who are not "interested persons"
of the trust or FMR 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, 1996, and thereafter subject to continuation by the
fund's Board of Trustees.
The management fee is an annual percentage of the fund's average net
assets, calculated and paid monthly. The percentage is the sum of two
components: a group fee rate, which varies according to FMR's assets under
management, and a fixed individual fund fee rate. The proposal would modify
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 on the
aggregate net assets of all registered investment companies having
management contracts with FMR. As group net assets increase, the group fee
rate declines. The Amended Contract would not change the group fee
calculation for group net assets of $156 billion or less. Above $156
billion in group net assets, the effective annual group fee rate declines
under both contracts, but under the Amended Contract, it declines faster.
Group fee rates that are lower than those contained in the fund's Present
Contract were voluntarily implemented by FMR on August 1, 1994.
The group fee rate is calculated according to a graduated fee schedule
providing for different rates for different levels of group net assets. The
rate at which the fee declines is determined by fee "breakpoints" that
provide for lower fee rates when assets increase. The Amended Contract
would add 7 new breakpoints for group asset levels above $156 billion as
illustrated in the following table. (For an explanation of how these
breakpoints are factored into the fee calculation, see the section entitled
"Present Management Contract" beginning on page .)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Average Group
Assets Present Assets Amended
($ billions) Contract* ($ billions) Contract
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%
Over 372 .1200%
The result at various levels of group net assets as illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net
Assets Present Amended
($ billions) Contract* Contract
150 .1736% .1736%
200 .1658% .1652%
250 .1604% .1587%
300 .1565% .1536%
350 .1533% .1494%
400 .1507% .1459%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on August 1, 1994.
Average group net assets for March 1995 were approximately $ 288
billion.
The fund's annual individual fund fee rate is 0.25%. The sum of the group
fee rate and the individual fund fee rate is referred to as a fund's
management fee rate. One-twelfth (1/12) of this annual fee rate is applied
to the fund's average net assets for the current month, resulting in a
dollar amount which is the management fee for that month.
COMPARISON OF MANAGEMENT FEES. For March 1995 average group net assets of
$ 288 billion, the fund's management fee rate under the Amended
Contract would have been .4047 %, compared to .4073 % under the
Present Contract. The management fee rate will remain the same under both
the Present Contract and the Amended Contract until group net assets 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 under the terms of the Present
Contract for the fiscal period ended November 30, 1994 to the
fees the fund would have incurred if the Amended Contract had been
in effect:
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$ 31,225 $ 31,063 .0015 %
* Does not reflect voluntary adoption of extended group fee rate schedules.
MATTERS CONSIDERED BY THE BOARD OF TRUSTEES. The Amended Contract was
approved by the Board of Trustees of the fund, including all of the
Trustees who are not interested persons of FMR (the "Independent Trustees")
on July 1 4 , 1994. The mutual funds for which the Members of the
board of Trustees serve 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 consideration of management contracts of the Fidelity Funds, including
the Amended Contract, took place over a four-month period from April to
July 1994. The Board of Trustees received materials relating to the Amended
Contract substantially in advance of the meeting at which the Amended
Contract was considered, and had the opportunity to ask questions and
request further information in connection with such consideration.
Information Received By the Independent Trustees. In connection with their
monthly meetings , Trustees receive materials specifically relating
to the consideration of the Amended Contract. These materials include: (i)
information on the investment performance of the fund, a peer group of
funds and an appropriate index or combination of indices, (ii) sales and
redemption data in respect of the fund, (iii) the economic outlook and the
general investment outlook in the markets in which the fund invests, and
(iv) notable changes in the fund's investments. The Board of Trustees and
the Independent Trustees also consider periodically matters such as (1)
FMR's financial condition, (2) arrangements in respect of the distribution
of the fund's shares, (3) the procedures employed to determine the value of
the fund's assets, (4) the allocation of the fund's brokerage (if
any) , including allocations to brokers affiliated with FMR and use of
"soft" commission dollars to pay fund expenses and to pay for research and
other similar services , (5) FMR's management of the relationships
with the fund's custodian and subcustodians, and (6) the resources devoted
to and the record of compliance with investment policies and restrictions
and with policies on personal securities transactions.
During the period April through July 1994, in response to questions raised
by the Independent Trustees, additional information was furnished by FMR
including, among other items, information on and analysis of (a) the
overall organization of FMR, (b) the impact of performance adjustments to
management fees, (c) the choice of performance indices and benchmarks, (d)
the composition of peer groups of funds, (e) transfer agency and
bookkeeping fees paid to affiliates of FMR, (f) investment performance, (g)
investment management staffing, (h) the potential for achieving further
economies of scale, (i) operating expenses paid to third parties, and (j)
the information furnished to investors, including the fund's shareholders.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contract include the
following:
Investment Compliance and Performance. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR's Personnel and Methods. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, the fund's investment objective and discipline. The
Independent Trustees have also had discussions with the 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 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 business 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
t he 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 to certain of the Fidelity
Funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
Other Benefits to Shareholders. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION, ACTION OF THE BOARD OF TRUSTEES AND RECOMMENDED SHAREHOLDER
ACTION. In considering the Amended Contract the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the foregoing summary does not detail all of the matters
considered. Based on its evaluation of all material factors and assisted by
the advice of independent counsel, the Board of Trustees concluded (i) that
the existing management fee structure was fair and reasonable and (ii) that
the proposed reduction in the group fee structure was in the best interest
of the f und's shareholders. The Board of Trustees and 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.
10. TO AMEND THE CLASS A DISTRIBUTION AND SERVICE PLAN OF LIMITED TERM
TAX-EXEMPT FUND AND SHORT INTERMEDIATE TAX-EXEMPT FUND.
The Board of Trustees has approved, and recommends that shareholders
approve, an amended Distribution and Service Plan for Class A shares (the
Amended Class A Plan). Rule 12b-1 (the Rule) under the 1940 Act provides
that in order for a mutual fund to act as a distributor of its shares, a
written plan "describing all material aspects of the proposed financing of
distribution" must be adopted by the fund.
Both Class A and Class B shareholders of Limited Term Tax-Exempt and Class
A shareholders of Short Intermediate Tax-Exempt are being asked to approve
the Amended Class A Plan. Class B shares convert automatically to Class A
shares of the same fund after a maximum holding period of 6 years. Due to
this conversion feature, and in accordance with the Rule and new
Rule 18f-3 under the 1940 Act, Class B shareholders must approve any
material changes to the Class A Distribution and Service Plan to the extent
that it applies to Class B share holders because Class B shares
automatically convert to Class A shares after six years. FMR anticipates
the Board of Trustees may, separately and before the date of the Meeting,
amend the Class A Distribution and Service Plan to expressly set forth the
right of Class B shareholders to vote on material changes to the Class A
Distribution and Service Plan applicable to Class B shareholders. However,
that amendment is not the subject of this proposal and has not yet been
considered by the Board of Trustees.
T he Amended Class A Plan is attached to this Proxy Statement as
Exhibit 3 and 4 .
THE CURRENT CLASS A PLAN. The current Class A Plan (the Current Class A
Plan) was adopted on July 16, 1992 (Limited Term Tax-Exempt) and
January 18, 1994 (Short Intermediate Tax-Exempt) . Under the
Current Class A Plan, Class A of each fund may pay FDC a fee at an annual
rate of up to 0.40% of its average daily net assets. The determination of
daily net assets is made at the close of business each day throughout the
month, but the net assets for purposes of calculating the fee exclude
assets attributable to shares purchased more than 144 months (12 years)
prior to such date. Class A shares begin accruing time upon initial
purchase into Class A. Class B shares, if converted into Class A shares,
begin accruing time under the Current Class A Plan as of their initial
purchase into Class B. The Trustees have approved a distribution fee for
Class A at an annual rate of 0.25% (Limited Term Tax-Exempt) and 0.15%
(Short Intermediate Tax-Exempt) of average net assets. For the fiscal
period ended November 30, 1994, Class A shares paid $138,512 (Limited Term
Tax-Exempt) and $11,446 (Short Intermediate Tax-Exempt) in distribution
fees to FDC, which amounted to 0 .25% (Limited Term Tax-Exempt) and
0 .15% (annualized) (Short Intermediate Tax-Exempt) of Class A's
average net assets. FDC may pay all or a portion of such fee to securities
dealers or other investment professionals as distribution or service fees.
To the extent the fee is not paid to investment professionals, FDC may use
the fee for its expenses incurred in the distribution of Class A shares.
For the fiscal period ended November 30, 1994, FDC paid, on behalf
of Class A shares , $0 (Limited Term Tax-Exempt) and $33
(Short Intermediate Tax-Exempt), in distribution fees to National
Financial Services Corp. (NFSC), an affiliate of FMR Corp. NFSC passed 100%
of these fees to investment professionals. FDC and NFSC are both
subsidiaries of FMR Corp. Through ownership of voting common stock and the
execution of a shareholders' voting agreement, Edward C. Johnson 3d,
Johnson family members, and various trusts for the benefit of the Johnson
family form a controlling group with respect to FMR Corp.
The Current Class A Plan also provides that to the extent that each fund's
payment of management fees to FMR might be considered to constitute
"indirect" financing of activities "primarily intended to result in the
sale of shares," such payment is expressly authorized.
Although the Plan specifies that FMR and FDC may engage in various
distribution activities, it does not require them to perform any specific
type of distribution activity or to incur any specific level of expense for
such activities. FDC may retain any excess.
THE AMENDED CLASS A PLAN. The Amended Class A Plan is identical to the
Current Class A Plan, except that shares held more than 144 months would no
longer be excluded when calculating the amount of the distribution and
service fee.
When the Fidelity Advisor funds were first introduced in the mid-1980s,
the National Association of Securities Dealers, Inc. (NASD) Rules of Fair
Practice set a limit on the amount of front-end sales charges which a fund
could impose. However, no similar limit existed for 12b-1 fees. The
144-month limitation was an effort by FDC and the Board of Trustees to
protect shareholders against payment on a given amount of assets over an
indefinite period of time. The 144-month period was intended to result in a
limit on total distribution charges (front-end sales charges plus 12b-1
fees) comparable to the front-end sales charge limit then imposed by the
NASD.
In July 1993, the NASD amended its Rules of Fair Practice to establish a
combined limit on mutual fund sales charges and 12b-1 fees. Like the
144-month limitation, the NASD Rule restricts a mutual fund's total payment
of 12b-1 fees. Under the NASD Rule, a mutual fund is subject to a limit on
aggregate payments of 7.25% of total new gross sales (6.25% if a service
fee is also imposed), plus interest. When the limit is reached, no further
sales charges may be paid by the mutual fund to the distributor, and no
further payments under the 12b-1 plan can be made, until the mutual fund
has further gross sales that result in an increased limit.
The NASD Rule has become the industry standard for restricting
distribution charges. Regardless of whether the proposal is approved, each
class is, and will continue to be, subject to the NASD Rule. The NASD Rule
addresses concerns similar to these which the 144-month
limitation was intended to address. However, the NASD Rule
and the 144-month limitation address these concerns in different
ways . For example, using reasonable sales, redemption and performance
assumptions, there is a considerable likelihood that many mutual funds may
never reach the limit imposed by the NASD Rule, because the limit is
constantly increased by additional gross sales. To the extent that this is
true, if Limited Term Tax-Exempt Fund - Class A or Short Intermediate
Tax-Exempt Fund - Class A contain assets older than 144 months
each will pay more in 12b-1 fees if the proposal is approved than they
would pay under the Current Class A Plan.
If approved by shareholders, the Amended Class A Plan will continue in
effect as long as its continuance is specifically approved at least
annually by a majority of the Board of Trustees, including a majority of
the Trustees who are not "interested persons" of the trust and who have no
direct or indirect financial interest in the operation of the Plan or any
agreement related to the Plan (the non-interested Trustees), cast in person
at a meeting called for the purpose of voting on the Plan.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of the
Amended Class A Plan, the Trustees considered a variety of factors and were
advised by counsel who are not counsel to FMR or FDC. Implementation of the
Amended Class A Plan should assist in attracting investment professionals
for the sale of shares and thus increase each fund's asset base, which in
turn may prove beneficial to each fund and its shareholders by spreading
fixed costs over a larger asset base and making additional monies available
for investing. Positive cash flow affords portfolio management greater
ability to diversify investments and minimizes the need to sell securities
to meet redemptions. In addition, since Class A and B are dependent
primarily on investment professionals for sales of their shares, the
ongoing payment to investment professionals who have sold shares (by
reallowance of the distribution fee) should provide incentives to offer
better and continuous services to current shareholders. Investment
professionals also allow investors access to investment alternatives to
which they might otherwise not have been exposed.
The Board recognizes that a higher level of fund assets benefits FMR by
increasing its management fee revenues. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and retain
a high caliber of investment and other personnel and to develop and
implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to each
fund.
CONCLUSION. The Board of Trustees recommends that Limited Term Tax-Exempt
Class A and Class B shareholders, and Short Intermediate Tax-Exempt Class A
shareholders vote FOR approval of the amendment to the Class A Distribution
and Service Plan. If Class A shareholders approve the Amended Class A Plan,
it will be effective as to shares purchased into Class A irrespective of
whether the Class B shareholders approve the amendment. If so approved, the
Amended Class A Plan will become effective the first day of the month
following shareholder approval. If the Amended Class A Plan is not approved
by Class A shareholders, the Current Class A Plan will remain in effect
unchanged for shares purchased into Class A. The effect of approval or
disapproval of the Amended Class A Plan by Class B shareholders will depend
upon the approval or disapproval of the proposed amendment to the Class B
Distribution and Service Plan by Class B shareholders (see Proposal 11) .
11. TO AMEND THE CLASS B DISTRIBUTION AND SERVICE PLAN OF LIMITED TERM
TAX-EXEMPT.
The Board of Trustees has approved, and recommends that Class B
shareholders approve, an amended Distribution and Service Plan for Class B
shares (the Amended Class B Plan). Rule 12b-1 (the Rule) under the 1940 Act
provides that in order for a mutual fund to act as a distributor of its
shares, a written plan "describing all material aspects of the proposed
financing of distribution" must be adopted by the fund.
In addition, Class B shareholders are being asked to approve the Amended
Class A Plan (see Proposal 10).
A copy of the Amended Class B Plan is attached to this Proxy Statement as
Exhibit 5 .
THE CURRENT CLASS B PLAN. The current Class B Plan (Current Class B Plan)
was adopted on February 17, 1994 . Under the Current Class B Plan,
Class B may pay FDC a fee at an annual rate of up to 0.75% of its average
daily net assets. The determination of daily net assets is made at the
close of business each day throughout the month, but the net assets for
purposes of calculating the fee exclude assets attributable to shares
purchased more than 144 months (12 years) prior to such date. Class B
shares, if converted into Class A shares, begin accruing time from the
initial purchase into Class B. Pursuant to the Current Class B Plan for the
fund, Class B pays FDC a distribution fee at an annual rate of 0.75% of its
average net assets. Class B also pays FDC a service fee at an annual rate
of 0.25% of its average net assets with which FDC compensates investment
professionals for personal service and/or the maintenance of shareholder
accounts. For the fiscal period ended November 30, 1994, the Class B
shares of the fund paid $3,858 in distribution and service fees to
FDC, which amounted to 1.00% (annualized) of the fund's average net assets.
FDC may pay all or a portion of such fee to securities dealers or other
investment professionals as distribution or service fees. To the extent the
fee is not paid to investment professionals, FDC may use the fee for its
expenses incurred in the distribution of Class B shares. For the fiscal
period ended November 30, 1994, FDC paid, on behalf of Class B
shares of the fund, $0 in distribution and service fees to NFSC, an
affiliate of FMR Corp. FDC and NFSC are both subsidiaries of FMR
Corp. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp.
The Current Class B Plan also provides that to the extent that the fund's
payment of management fees to FMR might be considered to constitute
"indirect" financing of activities "primarily intended to result in the
sale of shares," such payment is expressly authorized. FDC may use
any excess as it chooses.
Although the Current Class B Plan specifies that FMR and FDC may engage in
various distribution activities, it does not require them to perform any
specific type of distribution activity or to incur any specific level of
expense for such activities.
THE AMENDED CLASS B PLAN. The Amended Class B Plan is identical to the
Current Class B Plan except that shares held more than 144 months would no
longer be excluded when calculating the amount of the distribution and
service fee.
When the Fidelity Advisor funds were first introduced in the mid 1980s,
the NASD Rules of Fair Practice set a limit on the amount of
front-end sales charges which a fund could impose. However, no similar
limit existed for 12b-1 fees. The 144-month limitation was an effort by FDC
and the Board of Trustees to protect shareholders against payment on a
given amount of assets over an indefinite period of time. The 144-month
period was intended to result in a limit on total distribution charges
(front-end sales charges plus 12b-1 fees) comparable to the front-end sales
charge limit then imposed by the NASD. Since Class B shares convert
automatically to Class A shares after a maximum holding period of 6 years,
the 144-month limitation was included in the Current Class B Plan to allow
the 144 month period to begin accruing upon purchase into Class B
shares.
In July 1993, the NASD amended its Rules of Fair Practice to establish a
combined limit on mutual fund sales charges and 12b-1 fees. Like the
144-month limitation, the NASD Rule restricts a mutual fund's total payment
of 12b-1 fees. Under the NASD Rule, a mutual fund is subject to a limit on
aggregate payments of 7.25% of total new gross sales (6.25% if a service
fee is also imposed), plus interest. When the limit is reached, no further
sales charges may be paid by the mutual fund to the distributor, and no
further payments under the 12b-1 plan can be made, until the mutual fund
has further gross sales that result in an increased limit.
The NASD Rule has become the industry standard for restricting
distribution charges. Regardless of whether the proposal is approved, each
class is, and will continue to be, subject to the NASD Rule. The NASD Rule
addresses similar concerns which the 144-month limitation was intended to
address. However, the limitations of the NASD Rule are calculated
differently than those of the 144-month limitation. For example, using
reasonable sales, redemption and performance assumptions, there is a
considerable likelihood that many mutual funds may never reach the limit
imposed by the NASD Rule, because the limit is constantly increased by
additional gross sales. To the extent that this is true, if Limited Term
Tax-Exempt Fund - Class B contain s assets older than 144
month s, it will pay more in 12b-1 fees if the proposal is approved
than it would pay under the Current Class B Plan.
If approved by shareholders, the Amended Class B Plan will continue in
effect as long as its continuance is specifically approved at least
annually by a majority of the Board of Trustees, including a majority of
the Trustees who are not "interested persons" of the trust and who have no
direct or indirect financial interest in the operation of the Plan or any
agreement related to the Plan (the non-interested Trustees), cast in person
at a meeting called for the purpose of voting on the Plan.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of the
Amended Class B Plan, the trustees considered a variety of factors and were
advised by counsel who are not counsel to FMR or FDC. Implementation of the
Amended Class B Plan should assist in attracting investment professionals
for the sale of shares and thus increase the fund's asset base, which in
turn may prove beneficial to the fund and its shareholders by spreading
fixed costs over a larger asset base and making additional monies available
for investing. Positive cash flow affords portfolio management a greater
ability to diversify investments and minimizes the need to sell securities
to meet redemptions. In addition, since Class B is dependent primarily on
investment professionals for sales of its shares, the ongoing payment to
investment professionals who have sold shares (by reallowance of the
distribution fee) should provide incentives to offer better and continuous
services to current shareholders. Investment professionals also allow
investors access to investment alternatives to which they might otherwise
not have been exposed.
The Board recognizes that a greater level of fund assets benefits FMR by
increasing its management fee revenues. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and retain
a high caliber of investment and other personnel and to develop and
implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to the
fund.
CONCLUSION. The Board of Trustees recommends that shareholders vote FOR
approval of the amendment to the Class B Distribution and Service Plan. If
Class B shareholders approve both the Amended Class A Plan (see Proposal
10) and the Amended Class B Plan, the amended Plans will become effective
the first day of the month following shareholder approval. If Class B
shareholders do not approve the Amended Class B Plan, the Current Class B
Plan will remain in effect unchanged. If Class B shareholders approve the
Amended Class B Plan, but do not approve the Amended Class A Plan (see
Proposal 10), the Amended Class B Plan will become effective on the first
day of the month following shareholder approval and the Current Class A
Plan will remain unchanged for shares purchased into Class B. In this
event, the 144-month period would commence for Class B shares at the time
they convert to Class A shares.
12. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S INVESTMENT OBJECTIVE AND
POLICIES TO PROVIDE GREATER INVESTMENT LATITUDE TO SEEK HIGH CURRENT
INCOME.
The Board of Trustees has approved, and recommends that the shareholders
of the fund approve, proposed amendments to the fund's investment objective
and policies, which would (1) eliminate the fundamental credit
quality policy, which currently limits investments to municipal securities
rated high-quality or upper-medium quality, from the investment
objective, (2) eliminate the current fundamental policy which limits
the fund's investments in rated and unrated municipal obligations, and (3)
adopt a non-fundamental policy limiting investments to municipal securities
rated investment grade or higher. The main purpose of the proposal is to
provide the fund with a broader range of securities from which to choose in
seeking high current income.
Currently, Limited Term Tax-Exempt Fund's investment objective is to seek
the highest level of income exempt from federal income taxes that can be
obtained consistent with the preservation of capital, from a diversified
portfolio of high quality or upper-medium quality municipal obligations.
The Trustees recommend eliminating the fundamental credit quality policy
from the investment objective and adopt the following revised
fundamental investment objective:
"The fund seeks the highest level of income exempt from federal taxes that
can be obtained consistent with the preservation of capital."
In addition, FMR currently performs its own credit analysis on
securities purchased by the fund, and as a fundamental policy the fund may
currently invest up to 20% of its total assets in municipal obligations
which are unrated by Moody's Investors Service, Inc. (Moody's) and Standard
and Poor's Corporation (S&P) but judged by FMR to meet the fund's quality
standards. Further, as a non-fundamental policy, the fund currently limits
its investments in debt securities to those of A- quality or above.
The fund's standards for high quality and upper-medium quality obligations
are essentially the same as those described by Moody's in rating municipal
securities within its three highest ratings of Aaa, Aa, and A and as those
described by S&P in rating such obligations within its three highest
ratings of AAA, AA, or A.
In conjunction with the proposed change to the fund's investment
objective, the Trustees recommend eliminating (1) the current
fundamental policy permitting the fund to invest up to 20% of its total
assets in municipal obligations which are unrated by Moody's and S&P but
judged by FMR to meet the fund's quality standards , and (2) the current
non-fundamental policy to limit investments in debt securities to those of
A- quality or above.
The Trustees propose that shareholders adopt the following non-fundamental
policy which is meant to address the rating parameters within which the
fund will invest: "Purchase of a debt security is consistent with the
fund's debt quality policy if it is rated at or above the stated level by
Moody's or rated in the equivalent categories by S&P, or is unrated but
judged to be of equivalent quality by FMR. The fund currently intends to
limit its investments in debt securities to those of Baa - quality and
above, and currently intends to limit its investments in debt securities
rated Baa to 25% of its assets." The proposed non-fundamental policy will
increase the fund's potential exposure to credit risk. Obligations rated
Baa/BBB may possess speculative characteristics and may be more sensitive
to economic changes and changes in the financial condition of issuers.
Unrated debt securities are not necessarily of lower quality and may have
higher yields than rated debt securities, but the market for rated debt
securities is usually broader.
Changes in non-fundamental investment policies can be made without
shareholder approval but are subject to the supervision of the Board of
Trustees, and to appropriate disclosure to fund shareholders and
prospective investors.
CONCLUSION. The Board of Trustees has considered this proposal and
believes that the amendment to the fund's fundamental investment objective
and policies would allow the fund to invest in investment-grade
instruments, thereby providing greater latitude to seek high current
income. The Trustees recommend that shareholders vote FOR the proposed
changes to the fund's investment objective and policies. If approved by
shareholders, the amendments will be effective immediately. If the proposal
is not approved by shareholders, the current investment objective and
policies will remain in effect and unchanged.
13. TO REPLACE CERTAIN OF LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL
POLICIES WITH NON-FUNDAMENTAL POLICIES.
The Board of Trustees has approved a proposal for shareholder
consideration that would restate certain of the fundamental policies of
Limited Term Tax-Exempt Fund as non-fundamental policies. Fundamental
policies may be changed only with shareholder approval. Typically, a
material change to a non-fundamental investment policy would require
approval by the Board of Trustees.
The fund's investment policies are construed in accordance with the 1940
Act, which provides that an investment company must state certain of its
investment policies as being fundamental. Unless otherwise noted in the
fund's Prospectus and Statement of Additional Information, all of its
investment policies are currently fundamental. This strict formulation is
not a requirement of the 1940 Act.
The Trustees recognize that mutual funds operate in an increasingly
dynamic and competitive environment and that the fund and its shareholders
may benefit if FMR is given the flexibility to modify the fund's investment
policies, subject to SEC regulation, without the delay and expense to the
fund of arranging shareholder meetings. The Trustees recommend restating
those of the fund's fundamental investment policies, which are not required
to be fundamental, as non-fundamental investment policies that are designed
to provide the fund with the greatest flexibility to pursue its investment
objective under current federal law.
The following currently are fundamental investment policies of Limited
Term Tax-Exempt Fund, which are proposed to be restated as non-fundamental
policies.
"The fund maintains a dollar-weighted average maturity of 10 years or
less."
"Under normal conditions, at least 80% of the fund's assets will be
invested in obligations having remaining maturities of 15 years or less."
In a separate but related proposal, shareholders are being asked to
approve amendments to the fund's fundamental objective and debt rating
policies. (See Proposal 12.)
CONCLUSION. The Board of Trustees has considered this proposal and
believes that replacing the fund's policies with identical non-fundamental
policies is in the best interests of the fund and its shareholders. The
Trustees recommend that shareholders vote FOR the proposed change to the
fund's investment policies. If approved by shareholders, the amendments
will be implemented on the effective date of the next prospectus. If the
proposal is not approved by shareholders, the current fundamental
investment policies will remain in effect and unchanged.
1 4 . TO ADOPT A FUNDAMENTAL INVESTMENT POLICY CONCERNING THE
TAX-EXEMPT STATUS OF DISTRIBUTIONS FOR LIMITED TERM TAX-EXEMPT FUND .
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, a proposal to adopt a fundamental
investment policy concerning the tax-exempt status of its
distributions. Fundamental investment policies may only be changed with
shareholder approval.
Currently, the fund maintains a non-fundamental investment policy
of investing so that 80% or more of its net assets will be invested in
securities whose interest is free from federal income tax. The Trustees
recommend replacing this current non-fundamental investment policy with the
following fundamental investment policy:
"Under normal conditions, the fund will invest so that 80% or
more of its net assets will be invested in securities whose interest
is free from federal income tax."
This policy is consistent with the guidelines specified by the SEC for
tax-exempt funds that invest primarily in municipal securities and
whose names suggest that their distributions will be exempt from federal
income taxes. The fund typically invests so that 100% of its net assets
will be invested in securities whose interest is free from federal income
tax.
CONCLUSION. The Board of Trustees has considered this proposal and
believes that adopting a fundamental investment policy concerning
the tax-exempt status of the fund's distributions is in the best interest
of the fund and its shareholders. The trustees recommend that shareholders
vote FOR the proposed chang e to the fund's investment policy. If
shareholders approve this proposal, the fundamental policy set forth above
will be implemented on the effective date of the next prospectus. If
shareholders do not approve this proposal, the fund's current
non- fundamental investment policy will remain unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 1 5 through 2 8 is to revise
several of Limited Term Tax-Exempt Fund and Short Intermediate Tax-Exempt
Fund's investment limitations to conform to limitations which are the
standard for similar types of funds managed by FMR. The Board of Trustees
asked FMR to analyze the various fundamental and non-fundamental investment
limitations of the Fidelity funds, and, where practical and appropriate to
a fund's investment objective and policies, propose to shareholders
adoption of standard fundamental limitations and elimination of certain
other fundamental limitations. Generally, when fundamental limitations are
eliminated, Fidelity's standard non-fundamental limitations replace them.
By making these limitations non-fundamental, the Board of Trustees may
amend limitations as they deem appropriate, without seeking shareholder
vote. The Board of Trustees would amend these limitations to respond, for
instance, to developments in the marketplace, or changes in federal or
state law. The costs of shareholder meetings if called for these purposes
are generally borne by the fund and its shareholders.
It is not anticipated that these proposals will substantially affect the
way Limited Term Tax-Exempt Fund and Short Intermediate Tax-Exempt Fund are
currently managed. However, FMR is presenting them to you for your approval
because FMR believes that increased standardization will help to promote
operational efficiencies and facilitate monitoring of compliance with
fundamental and non-fundamental investment limitations. Although adoption
of the new or revised limitations is not likely to have any impact on the
current investment techniques employed by each fund, it will contribute to
the overall objectives of standardization.
15. TO ADOPT A FUNDAMENTAL INVESTMENT LIMITATION CONCERNING SENIOR
SECURITIES FOR LIMITED TERM TAX-EXEMPT FUND.
Limited Term Tax-Exempt currently does not have a fundamental limitation
concerning senior securities. The trustees recommend that shareholders vote
to add the following fundamental investment limitation governing the
issuance of senior securities:
"The fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940."
The primary purpose of the proposal is to add a fundamental senior
securities limitation that is expected to become the standard for all funds
managed by FMR. (See "Adoption of Standardized Investment Limitations" on
page .) If the proposal is approved, the new fundamental senior securities
limitation cannot be changed without a future vote of the fund's
shareholders. Adoption of the proposed limitation on senior securities is
not expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests. However, the proposed limitation clarifies that the fund may issue
senior securities to the extent permitted under the 1940 Act. Although the
definition of a "senior security" involves complex statutory and regulatory
concepts, a senior security is generally thought of as an obligation of a
fund which has a claim to the fund's assets or earnings that takes
precedence over the claims of the fund's shareholders. The 1940 Act
generally prohibits mutual funds from issuing senior securities; however,
mutual funds are permitted to engage in certain types of transactions that
might be considered "senior securities" as long as certain conditions are
satisfied. For example, a transaction which obligates a fund to pay money
at a future date (e.g., the purchase of securities to be settled on a date
that is further away than the normal settlement period) may be considered a
"senior security." A mutual fund, however, is permitted to enter into this
type of transaction if it maintains a segregated account containing liquid
securities in an amount equal to its obligation to pay cash for the
securities at a future date. The fund utilizes transactions that might be
considered "senior securities" only in accordance with applicable
regulatory requirements under the 1940 Act.
CONCLUSION. The Board of Trustees recommends voting FOR the addition of
the proposed investment limitation. If approved by shareholders, the new
fundamental limitation will be implemented on the effective date of the
next prospectus. If the proposal is not approved, the fund will not adopt a
senior security limitation.
16. TO ADOPT A FUNDAMENTAL INVESTMENT LIMITATION CONCERNING COMMODITIES FOR
LIMITED TERM TAX-EXEMPT FUND.
Currently, the fund does not have a fundamental limitation describing its
policy regarding the purchase and sale of commodities. Pursuant to Section
8(b) of the 1940 Act, a mutual fund must state its policy relating to,
among other things, the purchase and sale of commodities. In general, the
fund does not anticipate any future investment activity with respect to
physical commodities, but pursuant to securities regulations, must adopt a
stated policy.
The following proposed fundamental investment limitation concerning the
purchase or sale of commodities is the standard for all funds managed by
FMR and has been recommended by the Board of Trustees:
"The fund may not purchase or sell physical commodities unless acquired as
a result of ownership of securities or other instruments (but this shall
not prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed by
physical commodities)."
The proposed fundamental policy conforms to a limitation that is expected
to become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) The proposed limitation
does not permit the fund to acquire physical commodities directly, but
would permit the fund to invest in securities and other instruments backed
by commodities and to sell commodities acquired as a result of ownership of
other investments. In addition, the proposed limitation would not apply to
options and futures contracts on physical commodities.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
adopt a fundamental investment limitation concerning commodities. The
proposed limitation, upon shareholder approval, will be implemented on the
effective date of the next prospectus. If the proposal is not approved, the
fund will continue its current practice of not purchasing or selling
commodities, but will remain without a fundamental investment investment
limitation regarding commodities.
17. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING DIVERSIFICATION.
Limited Term Tax-Exempt Fund's current fundamental limitation concerning
diversification states:
"The fund may not purchase the securities of any issuer (except the U.S.
government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
(a) more than 5% of its total assets would be invested in the securities of
that issuer; provided, however, that up to 25% of its total assets may be
invested without regard to such 5% limitation (as used in this Prospectus,
the entity which has the ultimate responsibility for the payment of
interest and principal on a particular security will be treated as its
issuer); and (b) the fund would hold more than 10% of the outstanding
voting securities of such issuer."
Subject to shareholder approval, the Trustees intend to replace this
fundamental limitation, with the following fundamental investment
limitation concerning diversification:
"The fund may not, with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, (a) more than 5% of its total assets
would be invested in the securities of that issuer, or (b) the fund would
hold more than 10% of the outstanding voting securities of that issuer."
Because this fund invests mainly in debt securities, FMR does not
currently expect that the proposal will materially affect the way the fund
is managed . Nonetheless the proposed limitation will permit the fund
to hold more than 10% of the voting securities of one or more issuers.
Subject to certain statutory exceptions for securities of the U.S.
government and its agencies and instrumentalities, this increased
investment flexibility will be confined to 25% of the fund's total assets.
The current 10% limitation applicable to purchases of voting securities of
a single issuer will remain in effect with respect to 75% of the fund's
total assets.
State securities regulations (Blue Sky regulations) at one time prohibited
a fund from registering shares for sale if the fund intended to hold more
than 10% of the voting securities of a single issuer. The fund has a
fundamental restriction that incorporates this Blue Sky restriction.
Because the Blue Sky regulations regarding this limitation ha ve been
eliminated, shareholder approval is sought to permit the fund to hold a
higher proportion of voting securities of a single issuer. In addition, the
proposed limitation is expected to become the standard for all fund s
managed by FMR. (see "Adoption of Standardized Investment Limitations" on
page .) The standard more closely tracks the language of the
diversification limitation required under the 1940 Act.
If the proposal is approved, the new fundamental diversification
limitation could not be changed without a future vote of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. If approved by
shareholders, the amended limitation will be implemented on the effective
date of the next prospectus. If the proposal is not approved, the fund's
current fundamental diversification limitation will remain unchanged.
18. TO ELIMINATE LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING SHORT SALES OF SECURITIES.
The fund's current fundamental limitation on selling securities short
states:
"The fund may not make short sales of securities; provided, however, that
the fund may purchase or sell futures contracts."
The Trustees of the fund recommend that shareholders vote to eliminate the
above fundamental investment limitation. If the proposal is approved, the
Trustees intend to replace the current fundamental limitation with a
non-fundamental limitation that could be changed without a vote of
shareholders. The proposed non-fundamental limitation is set forth below,
with a brief analysis of the substantive differences between it and the
current limitation.
"The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short."
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. In
an investment technique known as a short sale "against the box," an
investor sells securities short while owning or having the right to obtain
securities equivalent in kind and amount. The investor could have the right
to obtain equivalent securities, for example, through its ownership of
warrants, options, or convertible bonds. The proposed non-fundamental
limitation would clarify that transactions in futures contracts and options
are not deemed to constitute selling securities short.
Certain state regulations currently prohibit mutual funds from entering
into any short sales, other than short sales against the box. The fund does
not currently anticipate entering into any short sales, including short
sales against the box. If the proposal is approved, however, the Board of
Trustees would be able to change the proposed non-fundamental limitation in
the future, without a vote of shareholders, if state regulations were to
change to permit other types of short sales, or if waivers from existing
requirements were available, subject to appropriate disclosure to
investors.
Elimination of the fund's fundamental limitation on short selling is
unlikely to affect the fund's investment techniques at this time. The Board
of Trustees believes that efforts to standardize the fund's investment
limitations will facilitate FMR's investment compliance efforts (see
"Adoption of Standardized Investment Limitations" on page ) and are in the
best interests of the shareholders.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental investment limitation regarding short
sales of securities. If approved by shareholders, the proposed
non-fundamental limitation will be implemented on the effective date of the
next prospectus. If the proposal is not approved the fund's current
limitation will remain unchanged.
19. TO ELIMINATE LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING MARGIN PURCHASES.
The fund's current fundamental limitation concerning purchasing securities
on margin is as follows:
"The fund may not purchase any securities on margin, except for such
short-term credits as are necessary for the clearance of transactions,
provided, however, that the fund may make initial and variation margin
payments in connection with purchases or sales of futures contracts or of
options on futures contracts."
The Trustees recommend that shareholders vote to eliminate the above
fundamental investment limitation. If the proposal is approved, the
Trustees intend to adopt a substantially identical non-fundamental
limitation for the fund that could be changed without a vote of
shareholders.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the
borrower places with a broker as collateral against the loan. The fund's
current fundamental limitation prohibits the fund from purchasing
securities on margin, except to obtain short-term credits as may be
necessary for the clearance of transactions and for initial and variation
margin payments made in connection with the purchase and sale of futures
contracts and options on futures contracts. With these exceptions, mutual
funds are prohibited from entering into most types of margin purchases by
applicable SEC policies. The proposed non-fundamental limitation includes
these exceptions.
If the proposal is approved by shareholders, the Trustees intend to adopt
the following non-fundamental investment limitation, which would prohibit
margin purchases except as permitted under the conditions referred to
above:
"The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin."
Although elimination of the fund's fundamental limitation on margin
purchases is unlikely to affect the fund's investment techniques at this
time, in the event of a change in federal regulatory requirements, the fund
may alter its investment practices in the future. The Board of Trustees
believes that efforts to standardize investment limitations will facilitate
FMR's investment compliance efforts (see "Adoption of Standardized
Investment Limitations" on page ) and are in the best interests of
shareholders.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's investment limitation regarding margin purchases. If
approved by shareholders, the proposed non-fundamental limitation will be
implemented on the effective date of the next prospectus. If the proposal
is not approved, the fund's current limitation will remain unchanged.
20. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING BORROWING.
The fund's current fundamental limitation concerning borrowing states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount exceeding 33 1/3% of the value of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed 33 1/3% of the fund's total assets by reason
of a decline in the net assets will be (within 3 days) reduced to the
extent necessary to comply with the 33 1/3% limitation (the fund will not
purchase securities for investment while borrowings equal to 5% or more of
its total assets are outstanding)."
Subject to shareholder approval, the Trustees intend to replace the fund's
current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
the standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page .) If the proposal is approved, the amended
fundamental borrowing limitation cannot be changed without a future vote of
shareholders.
Adoption of the proposed limitation concerning borrowing is not expected
to affect the way in which the fund is managed, its investment performance,
or the securities or instruments in which it invests. However, the proposal
would clarify several points. First, under the proposed limitation, the
fund must reduce borrowings that come to exceed 33 1/3% of its total assets
for any reason. While under the current limitation, the fund must reduce
borrowings that come to exceed 33 1/3% of total assets only when there is a
decline in net assets. Second, the proposed limitation specifically defines
"three days" to exclude Sundays and holidays, while the fund's current
limitation simply states three days.
In addition, one policy currently contained in the fundamental
limit will be replaced with the following similar non-fundamental limit.
"The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of the fundamental investment limitation). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
The proposed non-fundamental limit would state the fund's policy of not
purchasing a security while borrowings representing more than 5% of total
assets are outstanding . I f the proposal is approved, the statement
in the fund's present fundamental limitation that "(the fund will not
purchase securities for investment while borrowings equal to 5% or more of
its total assets are outstanding)" will be eliminated, but will be
reflected in the new non-fundamental limitation as referenced above.
Non-fundamental limits can be changed by the Board of Trustees without a
shareholder vote.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. Accordingly, the Trustees recommend that
shareholders of the fund vote FOR the proposed amendment. The amended
limitation, upon shareholder approval, will be implemented on the effective
date of the next prospectus. If the proposal is not approved, the
fund's current limitation will remain unchanged.
21. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE UNDERWRITING OF SECURITIES.
The fund's current fundamental limitation concerning underwriting states:
"The fund may not underwrite any issue of securities, except to the extent
that the purchase of municipal bonds in accordance with the fund's
investment objective, policies, and limitations, either directly from the
issuer, or from an underwriter for an issuer, may be deemed to be
underwriting."
Subject to shareholder approval, the Trustees intend to replace this
limitation with the following fundamental limitation governing
underwriting:
"The fund may not underwrite securities issued by others, except to the
extent that the fund may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of restricted securities."
The primary purpose of the proposed amendment is to clarify that the fund
is not prohibited from selling restricted securities if, as a result of
such sale, the fund is considered an underwriter under federal securities
laws. The proposal also serves to conform the fund's fundamental investment
limitation concerning underwriting to a limitation which is expected to
become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) If the proposal is
approved, the new limitation may not be changed without a future vote of
shareholders.
The proposed limitation would also broaden the exception within the
current limitation by eliminating the specific reference to municipal
bonds. However, since the fund, pursuant to its investment objective, seeks
to provide investors with income exempt from federal income tax, FMR
regards it as unlikely under present federal tax laws that the fund will
use the broader authority to purchase any securities other than municipal
securities and certain derivatives thereof. But, by eliminating the
reference to bonds, the revised limitation would eliminate any suggestions
that the exemption does not apply to notes or other instruments.
Adoption of the proposed limitation concerning underwriting is not
expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. Accordingly, the Trustees recommend that
shareholders of the fund vote FOR the proposed amendment. The amended
limitation, upon shareholder approval, will be implemented on the effective
date of the next prospectus. If the proposal is not approved the fund's
current limitation will remain unchanged.
22. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE CONCENTRATION OF ITS INVESTMENTS IN A SINGLE
INDUSTRY.
The fund's current fundamental investment limitation concerning the
concentration of its investments within a single industry states:
"The fund may not purchase the securities of any issuer (except the United
States government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States) if, as a
result, more than 25% of the fund's total assets would be invested in
industrial development bonds whose issuers are in any one industry."
Subject to shareholder approval, the Trustees of the fund intend to
replace this fundamental investment limitation with the following amended
fundamental investment limitation governing concentration:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities, or tax-exempt obligations issued or
guaranteed by a U.S. territory or possession or a state or local
government, or a political subdivision of any of the foregoing) if, as a
result, more than 25% of the fund's total assets would be invested in the
securities of companies whose principal business activities are in the same
industry."
The primary purpose of the proposal is to revise the fund's fundamental
concentration limitation to conform to a limitation which is expected to
become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) If the proposal is
approved, the new fundamental concentration limitation could not
change without a future vote of shareholders.
In addition, the fund will adopt the following non-fundamental policy:
"The fund does not currently intend to invest more than 25% of its
total assets in industrial revenue bonds related to a single industry."
The proposed limitation s differ in several respects
from the existing fundamental limitation. First, the proposed fundamental
limitation explicitly excludes tax-exempt obligations issued or guaranteed
by a U.S. territory or possession or a state or local government, or a
political subdivision thereof. Second , the proposed limitation would
clarify that it applies not to issuers in any one industry, but only to
those issuers whose principal business activities are in the
same industry. This may permit the fund to increase its exposure to certain
industries beyond the current limitations.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. The Trustees recommend voting FOR the
proposed amendment. The new limitation, upon shareholder approval, will be
implemented on the effective date of the next prospectus. If the proposal
is not approved, the fund's current fundamental investment limitation will
remain unchanged.
23. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING REAL ESTATE.
The fund's current fundamental investment limitation concerning real
estate states:
"The fund may not purchase or sell real estate, but this shall not prevent
the fund from investing in bonds or other obligations secured by real
estate or interests therein."
Subject to shareholder approval, the Trustees intend to replace
this fundamental investment limitation with the following amended
fundamental investment limitation governing purchases and sales of real
estate:
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is authorized to invest and to conform the
fund's fundamental real estate limitation to a limitation which is expected
to become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) If the proposal is
approved, the new fundamental real estate limitation may not be changed
without a future vote of shareholders.
Adoption of the proposed limitation concerning real estate is not expected
to significantly affect the way in which the fund is managed, or the
way in which securities or instruments are selected for the fund. However,
to the extent that the fund invests to a greater extent in real estate
related securities, it will be subject to the risks of the real estate
market. This industry is sensitive to factors such as changes in real
estate values and property taxes, overbuilding, variation in rental income,
and interest rates. Performance could also be affected by the structure,
cash flow, and management skill of real estate companies.
The fund does not expect to acquire real estate. However, the proposed
limitation would clarify several points. First, the proposed limitation
would make it explicit that the fund may acquire a security or other
instrument that is secured by a mortgage or other right to foreclose on
real estate, in the event of a default. Second, the proposed limitation
would clarify the fact that the fund may invest without limitation in
securities issued or guaranteed by companies engaged in acquiring,
constructing, financing, developing, or operating real estate projects
(e.g., securities of issuers that develop various industrial, commercial,
or residential real estate projects such as factories, office buildings, or
apartments). Any investments in these securities or other instruments are,
of course, subject to the fund's investment objective and policies and to
other limitations regarding diversification and concentration in particular
industries. Also, the proposed limitation specifically permits the fund to
sell real estate acquired as a result of ownership of securities or other
instruments. However, in light of the types of securities in which the fund
regularly invests, FMR considers this to be a remote possibility.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. The Trustees recommend voting FOR the
proposed amendment. The new limitation, upon shareholder approval, will be
implemented on the effective date of the next prospectus. If the proposal
is not approved, the fund's current fundamental investment limitation will
remain unchanged.
24. TO AMEND LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING LENDING.
The fund's current fundamental investment limitation concerning lending
states :
"The fund may not make loans, except (a) by the purchase of a portion of
an issue of debt securities in accordance with its investment objective,
policies and limitations, and (b) by engaging in repurchase agreements."
Subject to shareholder approval, the Trustees intend to replace the
limitation with the following fundamental investment limitation governing
lending:
"The fund may not lend any security or make any other loan if, as a
result, more than 33 1/3% of its total assets would be lent to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements."
The primary purpose of this proposal is to revise the fund's fundamental
lending limitation to conform to a limitation expected to become the
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page ). If the proposal is approved, the new
fundamental lending limitation cannot be changed without a vote of
shareholders.
Adoption of the proposed limitation on lending is not expected to affect
the way in which the fund is managed, the investment performance of the
fund, or the securities or instruments in which the fund invests. However,
the proposed limitation provides specific authority for the fund to
acquire the entire portion of an issue of debt securities. Ordinarily, if a
fund purchases an entire portion of an issue of debt securities, there may
be greater risks of illiquidity and unavailability of public information if
the issuer has no other issue of securities outstanding, and it may be more
difficult to obtain pricing information to be used in establishing the
fund's daily share price.
As income earned from loans is generally subject to federal tax, the fund
has no current intention of making loans, other than through the purchase
of debt securities. The fund currently has a non-fundamental limit that
restricts the fund from engaging in repurchase agreements and making loans
other than by purchasing debt securities.
The Trustees may change non-fundamental limitations in response to
regulatory, market, legal or other developments without further approval by
shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend that shareholders of the fund vote FOR the proposed amendment.
The adopted limitation, upon shareholder approval, will be implemented on
the effective date of the next prospectus. If the proposal is not approved
by shareholders of the fund, the fund's current limitation will remain
unchanged.
25. TO ELIMINATE LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INVESTMENTS IN OTHER INVESTMENT COMPANIES.
The fund's current fundamental investment limitation concerning investment
in other investment companies states:
"The fund may not purchase the securities of other investment companies or
investment trusts."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental limitation. If the proposal is approved, the Trustees
intend to replace the current fundamental limitation with the following
non-fundamental limitation, which could be changed without a vote of
shareholders:
"The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commissions except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger. Any
securities issued by other investment companies would also have to meet the
fund's credit and maturity standards. In some cases, other
investment companies may incur expenses that are comparable to expenses
paid by the fund, which would be taken into account in considering
investments in such securities.
The ability of mutual funds to invest in other investment companies is
restricted by the 1940 Act and by some state regulations. The fund's
current fundamental investment limitation recites the most stringent of
former state restrictions. The federal restriction will remain
applicable to the fund whether or not it is recited in a fundamental
limitation. As a result, elimination of the above fundamental limitation is
not expected to have any impact on the fund's investment practices, except
to the extent that regulatory requirements may change in the future.
However, the Board of Trustees believes that efforts to standardize the
fund's investment limitations will facilitate FMR's investment compliance
efforts (see "Adoption of Standardized Investment Limitations" on page )
and are in the best interest of shareholders.
CONCLUSION. The Board of Trustees recommends that shareholders of the fund
vote FOR the proposal to eliminate the fund's fundamental investment
limitation regarding investments in other investment companies. If approved
by the shareholders, the proposed non-fundamental limitation will be
implemented on the effective date of the next prospectus. If the proposal
is not approved by shareholders, the fund's current limitation will remain
unchanged.
26. TO ELIMINATE LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INVESTMENTS IN THE SECURITIES OF NEWLY-FORMED
ISSUERS.
The fund's current fundamental investment limitation regarding investments
in securities of newly-formed issuers states:
"The fund may not purchase the securities of any issuer (except the United
States government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States) if, as a
result more than 5% of its total assets would be invested in securities,
such as industrial development bonds, where payment of principal and
interest are the responsibility of a company with less than three years'
operating history."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental limitation. If the proposal is approved, the Trustees
intend to replace the current fundamental limitation with the following
non-fundamental limitation, which could be changed without a vote of
shareholders:
"The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operations."
Newly-formed or "unseasoned issuers" are issuers with less than three
years of continuous operation. The purpose of the fundamental limitation on
investments in unseasoned issuers is to comply with state laws and to limit
the risks associated with investing in companies that have no proven track
record in business and whose prospects are uncertain. The proposed
non-fundamental limitation will clarify the fact that the fund's unseasoned
issuers limitation is applicable only to securities issued by newly-formed
entities engaged in a trade or business with a prior history of operations
of less than three years and not to pools of asset-backed securities and
U.S. government and foreign government securities. The proposal will have
no current impact on the fund. However, adoption of a standard
non-fundamental limitation will facilitate FMR's compliance efforts (see
"Adoption of Standardized Investment Limitations" on page ) and will enable
the fund to respond more promptly if applicable state laws change in the
future.
CONCLUSION. The Board of Trustees has determined that it is in the best
interests of the shareholders to replace the fund's fundamental investment
limitation concerning investments in unseasoned issuers with a
non-fundamental limitation. Accordingly, the Trustees recommend that
shareholders vote FOR the proposal to eliminate the fund's fundamental
investment limitation regarding investments in securities of newly-formed
issuers. If the proposal is approved, the new non-fundamental limitation
will be implemented on the effective date of the next prospectus. If the
proposal is not approved, the current limitation will remain unchanged.
27. TO ELIMINATE LIMITED TERM TAX-EXEMPT'S AND SHORT INTERMEDIATE
TAX-EXEMPT'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING INVESTING IN OIL,
GAS, AND MINERAL EXPLORATION PROGRAMS.
Currently both funds maintain a fundamental investment limitation
specifying that each fund may not "invest in oil, gas, or other mineral
exploration or development programs." Investment in oil, gas, or other
mineral exploration programs is permitted under federal standards for
mutual funds, but currently is prohibited by some state regulations.
The Trustees recommend that shareholders of each fund vote to eliminate
the above referenced fundamental investment limitation. If the proposal is
approved by shareholders of each fund, the Trustees intend to adopt the
following non-fundamental investment limitation, which could be changed
without a shareholder vote:
"The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases."
Currently Limited Term Tax-Exempt Fund does not have the above
non-fundamental investment limitation regarding investment in oil, gas or
other mineral exploration or development programs.
This proposal will have no current impact on either fund. However,
adoption of a standardized non-fundamental investment limitation will
facilitate FMR's investment compliance efforts (see "Adoption of
Standardized Investment Limitations" on page ), and will enable each fund
to respond more promptly if applicable state laws change in the future.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate each fund's fundamental investment limitation concerning
investment in oil, gas, and other mineral exploration programs. If
approved, the proposal will be implemented on the effective date of each
fund's next prospectus. If the proposal is not approved by the shareholders
of a fund, the fund's current limitation will remain unchanged.
2 8 . TO ELIMINATE LIMITED TERM TAX-EXEMPT FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING PURCHASING SECURITIES OF AN ISSUER IN
WHICH THE TRUSTEES OR DIRECTORS AND OFFICERS OF THE FUND OR FMR HOLD MORE
THAN 5% OF THE OUTSTANDING SECURITIES OF SUCH ISSUER.
The fund's fundamental investment limitation currently includes a
restriction which prohibits the fund from purchasing or retaining the
securities of any issuer if the officers and Trustees or directors of the
fund or FMR who individually own more than 5% of that issuer's securities.
The fund's current fundamental investment limitation provides:
"The fund may not purchase the securities of any issuer (except the United
States government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States) if, as a
result, the fund would hold the securities of any issuer other than the
securities of the fund where the Trustees and officers of the Trust, or of
the Manager, together own beneficially more than 5% of such outstanding
securities."
This investment limitation was originally adopted to address state
securities regulations (Blue Sky requirements) in connection with the
registration of shares of the fund for sale. Only one state currently
requires such limitation. FMR believes that this fundamental investment
limitation should be eliminated because, while this limitation has not
precluded investments in the past, its elimination will potentially
increase the fund's flexibility when choosing investments in the future.
Subject to shareholder approval, the Trustees intend to replace this
fundamental investment limitation with a non-fundamental investment
limitation that could be changed by a vote of the Trustees in response to
regulatory, market, legal, or other developments without further approval
by shareholders. The new non-fundamental investment limitation, which is
substantially the same as the fund's current fundamental limitation, would
provide that:
"The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities."
CONCLUSION. The Trustees have considered the relevant factors and believe
that the proposed non-fundamental limitation is in the best interest of the
fund's shareholders. Therefore, the Trustees have recommended that the
shareholders vote FOR the elimination of the fundamental restriction
concerning investing in the issuers in which the officers, directors or
Trustees of the fund and FMR who own more than 5% of the outstanding
securities of such issuer. If approved, the new non-fundamental investment
limitation will be implemented on the effective date of the next
prospectus. If the proposal is not approved, the fund's current fundamental
limitation will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies.
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 which 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; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the Trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Stephen P. Jonas, Arthur S. Loring, and Leonard M.
Rush are currently officers of the fund and officers or employees of
FMR or FMR Corp. With the exception of Mr. Costello and Mr. Rush, all of
these persons are stockholders 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 a parent company, FMR Corp. 82
Devonshire Street, Boston, Massachusetts, which was organized on October
31, 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions, Fidelity Service Co., which is
the transfer and shareholder servicing agent for certain of the retail
funds advised by FMR, Fidelity Investments Institutional Operations
Company, which performs shareholder servicing functions for certain
institutional customers and funds sold through intermediaries, and Fidelity
Investments Retail Marketing Company, which provides marketing services to
various companies within the Fidelity organization. Messrs. Johnson 3d,
Burkhead, William L. Byrnes, James C. Curvey, Caleb Loring, Jr., and Ms.
Abigail P. Johnson are the Directors of FMR Corp. On March 31, 1995,
Messrs. Johnson 3d, Burkhead, Curvey, and Loring, Jr. and Ms. Johnson owned
approximately 24%, 3%, 3%, 13%, and 24%, respectively, of the voting common
stock of FMR Corp. In addition, various Johnson family members and various
trusts for the benefit of Johnson family members, for which Messrs.
Burkhead, Curvey, or Loring, Jr. are Trustees, owned in the aggregate
approximately 32% of the voting common stock of FMR Corp. Messrs. Johnson
3d, Burkhead, and Curvey owned approximately 2%, 3%, and 2%,
respectively,of the non-voting common and equivalent stock of FMR Corp. In
addition, various trusts for the benefit of members of the Johnson family,
for which Mr. Loring, Jr. is the sole Trustee, and other trusts for the
benefit of Johnson family members, through limited partnership interests in
a partnership the corporate general partner of which is controlled by Mr.
Johnson 3d, Mr. Loring, Jr., and other Johnson family members, together
owned approximately 43% of the non-voting common and equivalent stock of
FMR Corp. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d (President and a
Trustee of the trust), Johnson family members, and various trusts for the
benefit of the Johnson family form a controlling group with respect to FMR
Corp.
During the period December 1, 1993 through March 31, 1995 ,
the following 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. ;
Mr. Edward C. Johnson 3d converted 2,064 shares of voting common stock into
2,064 shares of non-voting common stock.
PRESENT MANAGEMENT CONTRACT
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR, each fund reimburses
UMB Bank, n.a. (United Missouri) for its services as each fund's
custodian and transfer agent. Although each fund's current management
contract provides that each fund will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices, and
reports to shareholders, the trust, on behalf of each fund has entered into
a revised transfer agent agreement with United Missouri, pursuant to which
United Missouri bears the costs of providing these services to existing
shareholders. The fund is also liable for such nonrecurring 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.
United Missouri has entered into a sub-contract with State Street Bank and
Trust (On behalf of Limited Term Tax-Exempt's and Short Intermediate
Tax-Exempt's Class A shares) and with Fidelity Investments Institutional
Operations Company ( FIIOC ) (on behalf of Limited Term
Tax-Exempt's Class B and Institutional Class) (each a Transfer Agent) under
the terms of which the Transfer Agent performs the processing activities
associated with providing transfer agent functions for the fund. Under the
sub-contract, the Transfer Agent 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. The Transfer Agent also pays all out-of-pocket expenses
associated with transfer agent services. Transfer agent fees, including
reimbursement for out-of-pocket expenses, paid to the Transfer Agent by
United Missouri on behalf of Limited Term Tax-Exempt Fund were
$100,542 (Class A), $985 (Class B) and $10,422 (Inst. Class) and on behalf
of Short Intermediate Tax-Exempt Fund were $8,143 (Class A) for the
fiscal period ended November 30, 1994.
United Missouri has a sub-contract with Fidelity Service Company (FSC)
which provides that FSC will perform the calculations necessary to
determine each class's net asset value per share and dividends, and
maintain each fund's accounting records. P ricing and bookkeeping
fees, including related out-of-pocket expenses, paid to FSC for fiscal 1994
were $48,062 (Limited Term Tax-Exempt) and $31,953 (Short
Intermediate Tax-Exempt).
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the
NASD. 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. Expenses in connection
with the offer and sale of shares are paid by FDC.
FMR is each fund's investment manager pursuant to a management contract
dated January 29, 1989 (Limited Term Tax-Exempt Fund), and January 20, 1994
(Short Intermediate Tax-Exempt Fund), which was approved by
shareholders on November 16, 1988 (Limited Term Tax-Exempt) and
on February 10, 1994 by FMR, the sole shareholder of Short
Intermediate Tax-Exempt.
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: 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 in the following table on the left. The schedule
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 $ 288
billion of group net assets - the approximate level for March 1995 was
.1547 %, which is the weighted average of the respective fee rates
for each level of group net assets up to $ 288 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Rate Net Annual
Assets Assets Fee Rate
0 - $ 3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Under Limited Term Tax-Exempt's current management contract with FMR, the
group fee rate is based on a schedule with breakpoints ending at .1500% for
average group assets in excess of $84 billion. The group fee rate
breakpoints shown above for average group assets in excess of $120 billion
and under $228 billion were voluntarily adopted by FMR on January 1, 1992.
The additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
Under Short Intermediate Tax-Exempt's current management contract with
FMR, the group fee rate is based on a schedule with breakpoints ending at
.1325% for average group assets in excess of $ 336 billion.
On August 1, 1994, FMR voluntarily revised the group fee rate schedule,
and added new breakpoints. The revised group fee rate schedule provides for
lower management fee rates as FMR's assets under management increase. Each
fund's current management fee reflects the group fee rate schedule above
for average group net assets under $156 billion and the group fee rate
schedule below for average group net assets in excess of $156 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Rate Net Annual
Assets Assets Fee Rate
120 - $156 .1450% $150 billion .1736%
billion
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
Over 372 .1200 325 .1514
350 .1494
375 .1476
400 .1459
The individual fund fee rate for each fund is 0.25%. Based on the average
group net assets of the funds advised by FMR for March 1995, the annual
management fee rate for each fund would be calculated as follows:
Group Fee Rate Individual Fund Management Fee
Fee Rate Rate
. 1547 % + 0.25% = . 4047 %
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 1994, FMR received $286,027 and $31,109 for its services as
investment adviser to Limited Term Tax-Exempt and Short Intermediate
Tax-Exempt , respectively. This fee was equivalent to 0 .41% of
the average net assets of each fund (annualized for Short Intermediate
Tax-Exempt).
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and yield and repayment of
the reimbursement by the fund will lower its total returns and yield.
During fiscal 1994, FMR voluntarily agreed, subject to revision or
termination, to reimburse Limited Term Tax-Exemp t : Class A, Class B
and Institutional Class to the extent that their aggregate operating
expenses, including management fees, were in excess of an annual rate of
0.90%, 1.65%, and 0.65% of average net asset s , respectively. If this
reimbursement had not been in effect, for fiscal 1994, total operating
expense ratios would have been equivalent to 1.04 %,
2.36 % (annualized) , and .76 %, respectively, of average
net assets of the fund .
During fiscal 1994, FMR voluntarily agreed, subject to revision or
termination, to reimburse Short Intermediate Tax-Exempt to the extent that
aggregate operating expenses, including management fee, was in excess of an
annual rate of 0.75% of average net assets. If this reimbursement had not
been in effect, for the fiscal period ended November 30, 1994, the total
operating expense ratio would have been equivalent to 1.54% (annualized) of
average net assets of the fund .
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the fund's
management contract.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI), a subsidiary of FMR Corp., if the commissions are fair, reasonable,
and comparable to commissions charged by non-affiliated, qualified
brokerage firms for similar services.
For fiscal 1994 each 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 Investments Institutional
Services Co., whether other persons are beneficial owners of shares for
which proxies are being solicited and, if so, the number of copies of the
Proxy Statement and Annual Reports you wish to receive in order to supply
copies to the beneficial owners of the respective shares.
EXHIBIT 1
Underlined disclosure will be added; crossed-out disclosure will be
deleted.
Form of
MANAGEMENT CONTRACT
between
[ Tax-Exempt Portfolios: Limited Term Series ]
[[ FIDELITY ADVISOR SERIES VI: ]]
[[ FIDELITY LIMITED TERM TAX-EXEMPT FUND ]]
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT [ made ][[ AMENDED and RESTATED as of ]] this
[ 29th ][[ 1st ]] day of
[ January, ][[ MONTH ]] [ 1989, ][[ 19__, ]] by
and between [[ Fidelity Advisor Series ]]
[ Tax-Exempt ][[ VI ]] [ Portfolios, ] a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of [[ Fidelity
Advisor ]] Limited Term [[ Tax-Exempt ]]
[ Series ][[ Fund ]] (hereinafter called the "Portfolio"),
and Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser") [[ as set forth in its entirety
").below. ]]
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. For the services and facilities to be furnished, the Adviser
shall receive a monthly management fee, payable as soon as practicable
after the last day of each month, which shall be computed as follows: ]
[[ 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 and an Individual
Fund Fee ]] .
[ The Basic Fee rate shall be composed of two elements. ]
[ (i) ][[ (a) ]] Group Fee Rate. The Group FeeRate shall be
based upon the monthly average of the net assets of the registered
investment companies having Advisory and Service or Management Contracts
with the Adviser (computed in the manner set forth in the fund's
[ charter ] Declaration of Trust or each [[ other ]]
[ investment ][[ organizational
]][ company) ][[ document) ]] determined as of the close
of business on each business day throughout the month. The GroupFeeRate
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 - 156 ]] [[ .1450 ]]
[[ 156 - 192 ]] [[ .1400 ]]
[[ 192 - 228 ]] [[ .1350 ]]
[[ 228 - 264 ]] [[ .1300 ]]
[[ 264 - 300 ]] [[ .1275 ]]
[[ 300 - 336 ]] [[ .1250 ]]
[[ 336 - 372 ]] [[ .1225 ]]
[[ Over 372 ]] [[ .1200 ]]
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
0 .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
[ other than those expressly stated to be payable by the Adviser
hereunder, ] e 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
[ relating ][[ related ]] to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security [[ or
other investment instrument. ]]
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until
[ July ][[ June ]][ 31, ][[ 30, ]]
[ 1989 ][[ 1996 ]] 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.
(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.
EXHIBIT 2
Underlined disclosure will be added; crossed-out disclosure will be
deleted.
Form of
MANAGEMENT CONTRACT
between
FIDELITY ADVISOR SERIES VI
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT [made][[AMENDED and RESTATED as of]] this [20th][[1st]] day of
[January][[MONTH]] [1994,][[19__,]] by and between Fidelity Advisor Series
VI a Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Fidelity Advisor Short-Intermediate Tax-Exempt Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser") [[as set forth in its
entirety below.]]
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 and an Individual Fund 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 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 - 156]] [[.1450]]
[[156 - 192]] [[.1400]]
[[192 - 228]] [[.1350]]
[[228 - 264]] [[.1300]]
[[264 - 300]] [[.1275]]
[[300 - 336]] [[.1250]]
[[336 - 372]] [[.1225]]
[[Over 372]] [[.1200]]
[120-174] [.1450]
[174-228] [.1400]
[228-282] [.1375]
[282-336] [.1350]
[Over 336] [.1325]
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be 0.25%
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 itsexpenses, 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,
[1995][[1996]] 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.]]
(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.
EXHIBIT 3
Underlined disclosure will be added; crossed-out disclosure will be
deleted.
Form of
DISTRIBUTION AND SERVICE PLAN
[[CLASS A SHARES]]
[FIDELITY ADVISOR TAX-EXEMPT PORTFOLIO
RETAIL CLASS ]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the Act) for [the][[Class A shares of Fidelity
Advisor Limited Term]] [Retail]][Tax-Exempt Fund ("Class ClassA"),]] [[a]]
[(the][[class]] ["Retail][[of]] [Class"])[[shares]] of Fidelity Advisor
[[Limited Term]] Tax-Exempt [Portfolio][[Fund]] (the
["Portfolio"),][["Fund"),]] a series of Fidelity [Oliver][[Advisor]]
[Street][[Series]] [Trust][[VI]] (the ["Fund").][["Trust").]]
[[2]]. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the
"Distributor")[[,]]a [wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"),] under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers of the Fund's shares of beneficial interest (the "Shares").
Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing
and promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing
and distribution of prospectuses of the Fund and reports to recipients
other than existing shareholders of the Fund; (4) obtaining such
information, analyses and reports with respect to marketing and promotional
activities as the Distributor may, from time to time, deem advisable; (5)
making payments to securities dealers and others engaged in the sale of
Shares or [who engage] in shareholder support services ("Investment
Professionals"); and (6) providing training, marketing and support [such
dealers and others] to Investment Professionals with respect to the sale of
Shares[[.]]
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement [the][[and
paragraph 2 hereof, all with respect]][Retail][[to]] Class [of][[A]]
[the][[Shares: Class]] [Portfolio][[A]] shall pay to the Distributor a
[[monthly]] fee at the annual rate of .40%[of such Class' average daily net
assets throughout the month,][[(or]] [or]such lesser amount as [may][[the]]
[be][[Trustees]] [established][[may,]] from time to[time by the][[time,]]
[Trustees][[determine)]] of the [Fund,][[average]] [as][[daily]]
[specified][[net]] [in paragraph][[assets]] [6]of [this][[Class]]
[Plan.][[A]] [Such][[throughout]] [fee shall][[the]] [be computed and paid
monthly.][[month.]] The determination of daily net assets shall be made at
the close of business each day throughout the month and computed in the
manner specified in the [Portfolio's][[Fund's]] then current Prospectus for
the determination of the net asset value of [shares of the][[Class]]
[Retail][[A]] [Class,][[Shares,]] but shall exclude assets attributable to
[(i)][[any]] [shares][[other]] [purchased][[class]] [more][[of]]
[than][[Shares]] [144][[of]] [months][[the]] [prior][[Fund.]] [[The]]
[to][[Distributor]] [such][[may,]] [day][[but]] [or][[shall]] [(ii)][[not]]
[any][[be]] [other Class of the Portfolio. The Distributor][[required]]
[may][[to,]] use all or any portion of the fee received pursuant to the
Plan to compensate[securities dealers or other][[Investment]]
[persons][[Professionals]] who have engaged in the sale of [[Class A]]
Shares or in shareholder support services [[with respect to Class A
shares]] pursuant to agreements with the Distributor, or to pay any of the
expenses associated with other activities authorized under paragraph 2
[thereof.][[hereof.]]
4. [Each][[The]] [Class of the Portfolio][[Fund]] presently pays, and will
continue to pay, a management fee to [the][[Fidelity Management & Research
Company (the Adviser)]] pursuant to a management agreement between the Fund
and the Adviser (the Management Contract). It is recognized that the
Adviser may use its management fee revenue, as well as its past profits or
its resources from any other source, to reimburse the Distributor for
expenses incurred in connection with the distribution of [[Class A]]
Shares, including the activities referred to in paragraph 2[and] 3 hereof.
To the extent that the payment of management fees by the [Class][[Fund]] to
the Adviser should be deemed to be indirect financing of any activity
primarily intended to result in the sale of [[Class A]] [shares][[Shares]]
within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a majority of the
outstanding voting securities" (as defined in the Act) of [the
Retai]l[[Class]] [Class,][[A,]] this Plan having been approved by a vote of
a majority of the Trustees of the [Fund,][[Trust,]] including a majority of
Trustees who are not "interested persons" of the [Fund][[Trust]] (as
defined in the Act) and who have no direct or indirect financial interest
in the operation of [this][[the]] Plan or in any agreement related to the
Plan (the Independent Trustees"), cast in person at a meeting called for
the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [July 31, 1993,] [[July 31, 1996]] and from year to year
thereafter; provided, however, that such continuance is subject to approval
annually by a vote of a majority of the Trustees of the Fund including a
majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on this Plan. This Plan may be amended at any
time by the Board of Trustees, provided that (a) any amendment to increase
materially the [maximum] fee provided for in paragraph 3 hereof or any
amendment of the Management Contract to increase the amount to be paid by
the Fund thereunder shall be effective only upon approval by a vote of a
majority of the outstanding voting securities of [Retail][[Class]]
[Class,][[A,]] in the case of [the][[this]] Plan, or upon approval by a
vote of a[[the]] majority of the outstanding voting securities of the Fund
in the case of the Management Contract, and (b) any material amendment of
this Plan shall be effective only upon approval in the manner provided in
the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of [the][[Class]]
[Class.][[A.]]
8. During the existence of this Plan, the Fund shall require the Adviser
and/or the Distributor to provide the Fund for review by the
[Fund's]Trustees, and the Trustees shall review, at least quarterly, a
written report of the amounts expended in connection with financing any
activity primarily intended to result in the sale of [shares of][[Class]]
[the Retail][[A]] [Class][[Shares]] (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were
made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares[[Class]] [of][[A]] [[the Class.]][[shares.]]
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust, any obligation assumed by
[the][[Class]] [Retail Class][[A]] pursuant to this Plan [or][[and]] any
agreement related to this Plan shall be limited in all cases to [the
Retail][[Class]] [Class][[A]] and its assets and shall not constitute an
obligation of any shareholder of the Fund or [[any other class]] of
[any][[the]] [other][[Fund,]] series [[of the Trust]] or class of
[the][[such]] [Fund.][[series.]]
11. If any provision of the Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
EXHIBIT 4
Underlined disclosure will be added; crossed-out disclosure will be
deleted.
Form of
DISTRIBUTION AND SERVICE PLAN
of Fidelity Advisor Series VI:
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
[[CLASS A SHARES]]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for [[Class A shares of]] Fidelity
Advisor [Short-Intermediate][[Short]] [Tax][[Intermediate]]
[Exempt][[Tax-Exempt]] Fund [[("Class A"), a class of shares (of Fidelity
Advisor Short]] [the][[Intermediate Tax-Exempt Fund (the]] "Fund"), a
series of Fidelity Advisor Series VI (the "Trust")[[.]]
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the Distributor )[[,]]
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the Shares)[[.]] Such efforts may include, but neither are
required to include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses of
the Fund and reports to recipients other than existing shareholders of the
Fund; (4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may, from time to
time, deem advisable; (5) making payments to securities dealers and others
engaged in the sale of Shares or[who engage] in shareholder support
services ("Investment Professionals"); and (6) providing training,
marketing and support to Investment Professionals with respect to the sale
of Shares[[.]]
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement [The][[and
paragraph 2 hereof, all with respect to Class A Shares: Class]]
[Fund][[A]] shall pay to the Distributor a [[monthly]] fee at the annual
rate of .40% [[(or such lesser amount as the Trustees may, from time to
time, determine)]] of [its][[the]] average daily net assets [[of Class A
]]throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in
the manner specified in the Fund's then current Prospectus for the
determination of the net asset value of [the][[Class]] [Fund's][[A]]
[shares,][[Shares,]] but [excluding][[shall exclude]] assets attributable
to [shares][[any]] [purchased][[other]] [more][[class]] [than][[of]]
[144][[Shares]] [months][[of]] [prior to such][[the]] [day.][[Fund.]] The
Distributor [[may, but shall not be required]] [may][[to,]] use all or any
portion of the fee received pursuant to the Plan to compensate[securities
dealers or other][[Investment]] [persons][[Professionals]] who have engaged
in the sale of [[Class A]] Shares or in shareholder support services [[with
respect to Class A shares]] pursuant to agreements[[with the]] Distributor,
or to pay any of the expenses associated with other activities authorized
under paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management [and][[&]] Research Company (the "Adviser") pursuant to
a management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to reimburse the Distributor for expenses incurred in connection
with the distribution of [[Class A Shares,]] including the activities
referred to in paragraph 2[and 3]hereof. To the extent that the payment
of management fees by the Fund to the Adviser should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of [[Class]] [shares][[A Shares]] within the meaning of Rule 12b-1, then
such payment shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by ["a][[a]] vote of at least a majority of the
outstanding voting securities" (as defined in the Act) [[of Class A,]] this
Plan having been approved by a vote of a majority of the Trustees of the
Trust, including a majority of Trustees who are not "interested persons"
of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related
to the Plan (the "Independent Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until July 31, [1995,][[1996,]] and from year to year thereafter;
provided, however, that such continuance is subject to approval annually by
a vote of a majority of the Trustees of the Trust, including a majority of
the Independent Trustees, cast in person at a meeting called for the
purpose of voting on this Plan. This Plan may be amended at any time by
the Board of Trustees, provided that (a) any amendment to increase
materially the fees provided for in [paragraphs 4 and][[paragraph]]
[5][[3]] hereof or any amendment of the Management Contract to increase the
amount to be paid by the Fund thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
[the][[Class]] [Fund][[A,]] in the case of this Plan, or upon approval by a
vote of the majority of the outstanding voting securities of the Fund, [[in
the case of the Management Contract,]] and (b) any material amendment of
this Plan shall be effective only upon approval in the manner provided in
the first sentence of [[this]] paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of [the][[Class]]
[Fund.][[A.]]
8. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of [shares][[Class]] [of][[A]] [the
Fund][[Shares]] (making estimates of such costs where necessary or
desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of [shares][[Class]] [of][[A]] [the Fund.][[shares.]]
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by
[the][[Class]] [Fund][[A]] pursuant to this Plan and any agreement related
to this Plan shall be limited in all cases to [the][[Class]] [Fund][[A]]
and its assets and shall not constitute an obligation of any shareholder of
the Trust or[of] any other class of the Fund, series of the Trust or class
of such series.
11. If any provision of [this][[the]] Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
EXHIBIT 5
Underlined disclosure will be added; crossed-out disclosure will be
deleted.
[[Form of]]
DISTRIBUTION AND SERVICE PLAN
[[CLASS B SHARES]]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for the Class B shares of Fidelity
Advisor Limited Term Tax-Exempt Fund ("Class B"), a class of shares of
Fidelity Advisor Limited Term Tax-Exempt Fund (the Fund) a series of
Fidelity Advisor Series VI (the Trust).
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the Shares. Such efforts may include, but neither are required
to include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses of
the Fund and reports to recipients other than existing shareholders of the
Fund; (4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may, from time to
time, deem advisable; (5) making payments to securities dealers and others
engaged in the sale of Shares or [who engage] in shareholder support
services ("Investment Professionals"); and (6) providing training,
marketing and support to Investment Professionals with respect to the sale
of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General
Distribution Agreement with respect to [shares of] Class[B ("Class B
Shares"),][[Shares,]] the Distributor is hereby [specifically][[expressly]]
authorized to make payments to Investment Professionals in connection with
the sale of[the] Class B Shares. Such payments may be paid as a percentage
of the dollar amount of purchases of Class B Shares attributable to a
particular Investment Professional, or may take such other form as may be
approved by the Trustees.
4. In consideration [for][[of]] the services provided and the expenses
incurred by the Distributor pursuant to the General Distribution Agreement
and paragraphs 2 and 3 hereof, all with respect to[the] Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at the
annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class B throughout
the month. The determination of daily net assets shall be made at the
close of business each day throughout the month and computed in the manner
specified in the Fund's then current Prospectus for the determination of
the net asset value of Class B Shares, but shall exclude assets
attributable to [(i) Class B Shares purchased more than 144 months prior to
such date or (ii)] any other class of Shares of the Fund. The Distributor
may, but shall not be required to, use all or any portion of the
distribution fee received pursuant to the Plan to compensate Investment
Professionals who have engaged in the sale of Class B Shares or in
shareholder support services [[with respect to Class B Shares]] pursuant to
agreements with the Distributor, or to pay any of the expenses associated
with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent
deferred sales charges, which may be imposed upon the sale or redemption of
Class B Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate
of 0.25% (or such lesser amount as the Trustees may, from time to time,
determine) of the average daily net assets of Class B throughout the month.
The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified
in the Fund's then current Prospectus for the determination of the net
asset value of Class B Shares, but shall exclude assets attributable to any
other class of Shares of the Fund. In accordance with such terms as the
Trustees may from time to time establish, the Distributor may use all or a
portion of such service fees to compensate Investment Professionals for
personal service and/or the maintenance of shareholder accounts, or for
other services for which "service fees" lawfully may be paid in accordance
with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management [and][[&]] Research Company (the "Adviser") pursuant to
a management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to reimburse the Distributor for expenses incurred in connection
with the distribution of Class B Shares, including the activities referred
to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class
B Shares within the meaning of Rule 12b-1, then such payment shall be
deemed to be authorized by this Plan.
7. This Plan shall become effective upon the first business day of the
month following approval by ["a][[a]] vote of at least a majority of the
outstanding voting securities" (as defined in the Act) of Class B, this
Plan having been approved by a vote of a majority of the Trustees of the
Trust, including a majority of Trustees who are not "interested persons"
of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related
to the Plan (the "Independent Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [date], and from year to year thereafter; provided, however,
that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to increase materially the fees
provided for in paragraphs 4 and 5 hereof or any amendment of the
Management Contract to increase the amount to be paid by the Fund
thereunder shall be effective only upon approval by a vote of a majority of
the outstanding voting securities of Class B in the case of this Plan, or
upon approval by a vote of the majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in
the manner provided in the first sentence of [[this]] paragraph [7.][[8.]]
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Class B Shares (making estimates of such
costs where necessary or desirable) and the purposes for which such
expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Class B Shares.
12. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Class B and its assets and shall not constitute an
obligation of any shareholder of the Trust or of any other class of the
Fund, series of the Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
EXHIBIT 6
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
RATIO OF NET
ADVISORY FEES
TO AVERAGE RATIO OF
AVERAGE NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) (B) TO FMR (C) ASSETS
(C)
TAX-EXEMPT INCOME
California Tax-Free:
High Yield 2/28/94 $ 588.0 0.41% 0.57%
Insured 2/28/94 299.5 0.29* 0.48*
Money Market ((yen)) 2/28/94 540.0 0.41 0.64
Spartan Arizona:
Municipal Income 2/28/95** 4.2 -* -*
Money Market ((yen)) 2/28/95** 12.0 -* -*
Spartan California
Municipal:
High Yield 2/28/94 598.5 0.52* 0.52*
Intermediate 2/28/94** 7.7 -* -*
Money Market ((yen)) 2/28/94 944.0 0.21* 0.21*
Institutional Tax-
Exempt Cash ((yen)) 5/31/94 2,549.9 0.14* 0.18*
Daily Money Fund:
Capital Reserves:
Municipal Money
Market ((yen)) 7/31/94 132.6 0.44* 0.98*
Spartan Aggressive
Municipal 8/31/94 40.6 0.60 0.60
Spartan Intermediate
Municipal 8/31/94 265.6 0.20* 0.20*
Spartan Maryland
Municipal Income 8/31/94 39.2 0.03* 0.03*
Spartan Municipal
Income 8/31/94 792.2 0.55 0.55
Spartan Municipal
Money Market ((yen)) 8/31/94 2,123.9 0.33* 0.33*
Spartan Short-
Intermediate
Municipal 8/31/94 1,110.3 0.47* 0.47*
Advisor High Income
Municipal:
Class A 10/31/94 549.7 0.41 0.89
Class B 10/31/94 3.8 0.41 2.09
Daily Tax-Exempt
Money ((yen)) 10/31/94 518.4 0.48* 0.65*
Spartan New Jersey
Municipal Money
Market ((yen)) 10/31/94 364.5 0.28* 0.28*
RATIO OF NET
ADVISORY FEES
TO AVERAGE RATIO OF
AVERAGE NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) (B) TO FMR (C) ASSETS
(C)
Tax-Exempt Money
Market Trust ((yen)) 10/31/94 $ 3,388.7 0.31% 0.52%*
Advisor Limited
Term Tax-Exempt:
Class A 11/30/94 55.4 0.41 0.90*
Class B 11/30/94** 0.9 0.41 1.65(dagger)*
Institutional Class 11/30/94 14.1 0.41 0.65*
Advisor Short-Inter-
Mediate Tax Exempt 11/30/94** 10.7 -* 0.75(dagger)*
Connecticut Municipal
Money Market ((yen)) 11/30/94 309.7 0.41 0.60
High Yield Tax-Free 11/30/94 2,161.9 0.41 0.56
New Jersey Tax-Free
Money Market ((yen)) 11/30/94 393.7 0.41 0.62
Spartan Connecticut
Municipal:
High Yield 11/30/94 395.5 0.55 0.55
Money Market ((yen)) 11/30/94 160.9 0.50 0.50
Spartan Florida Municipal:
Income 11/30/94 403.1 0.54* 0.54*
Money Market ((yen)) 11/30/94 364.1 0.46* 0.46*
Spartan New Jersey
Municipal High Yield 11/30/94 381.1 0.55 0.55
Aggressive Tax-Free 12/31/94 880.7 0.46 0.63
Insured Tax-Free 12/31/94 388.6 0.41 0.58
Limited Term
Municipals 12/31/94 1,024.2 0.40 0.56
Michigan Tax-Free:
High Yield 12/31/94 506.4 0.41 0.57
Money Market ((yen)) 12/31/94 197.0 0.41 0.61
Minnesota Tax-Free 12/31/94 312.4 0.41 0.59
Municipal Bond 12/31/94 1,126.0 0.41 0.53
Ohio Tax-Free:
High Yield 12/31/94 401.9 0.41 0.57
Money Market ((yen)) 12/31/94 284.8 0.41 0.57
Spartan Pennsylvania
Municipal:
High Yield 12/31/94 274.4 0.55 0.55
Money Market ((yen)) 12/31/94 228.4 0.50 0.50
Massachusetts Tax-Free:
High Yield 1/31/95 1,144.3 0.41 0.54
Money Market ((yen)) 1/31/95 677.7 0.41 0.63
New York Tax-Free:
High Yield 1/31/95 $ 420.7 0.41% 0.58%
Insured 1/31/95 345.9 0.41 0.58
Money Market ((yen)) 1/31/95 678.1 0.41 0.60
Spartan Massachusetts
Municipal Money
Market ((yen)) 1/31/95 376.1 0.50 0.50
Spartan New York
Municipal:
High Yield 1/31/95 352.1 0.55 0.55
Intermediate 1/31/95 28.5 0.04* 0.04*
Money Market ((yen)) 1/31/95 529.0 0.50 0.50
- ---------------
(a) All data is as of the fiscal year end noted in the chart or as of
January 31,1995, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of
each fund or class at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(dagger) Annualized
** Less than a complete fiscal year
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to the fund.
RATIO OF NET
ADVISORY FEES
TO AVERAGE RATIO OF
AVERAGE NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) (B) TO FMR (C) ASSETS
(C)
FAVI-PXS-495 CUSIP #315917401/FUND #289
cusip #315917609/fund #689
cusip #315917302/fund #089
cusip #315917500/fund #636
IMPORTANT PROXY MATERIALS...
PLEASE CAST YOUR VOTE NOW!
April 27, 1995
Dear Fidelity Advisor Funds Shareholder:
In June, we are holding a special shareholder meeting for the following
Fidelity Advisor Funds:
(solid bullet) (solid bullet)Fidelity Advisor Limited Term Tax-Exempt Fund
(solid bullet) Fidelity Advisor Short-Intermediate Tax-Exempt Fund
THIS PACKAGE CONTAINS A SEPARATE VOTING CARD FOR EACH FUND YOU OWN. IF
THERE IS MORE THAN ONE CARD IN YOUR PACKAGE, IT IS IMPORTANT THAT YOU VOTE
EACH CARD.
The matters to be discussed are important, and directly affect your
investment. As a shareholder, you cast one vote for each share and
fractional votes for fractional shares of each fund you own. YOU MAY THINK
YOUR VOTE IS INSIGNIFICANT, BUT EVERY VOTE IS EXTREMELY IMPORTANT. We must
continue sending requests to vote until a majority of the shares are voted
prior to the meeting. Additional mailings are expensive, and these costs
are charged directly to the funds.
The enclosed Proxy Statement details the proposals under consideration. A
list of each issue can be found on the first page of the Proxy Statement.
After you have read the material, please cast your vote promptly by signing
and returning the enclosed proxy card(s). It is important that you sign
your proxy card exactly as your name appears in the registration of the
proxy card. A postage-paid envelope has been provided. Your time will be
well spent, and you will help save the cost of additional mailings.
These proposals have been carefully considered by the funds' Board of
Trustees, which is responsible for protecting your interests as a
shareholder. THE BOARD OF TRUSTEES BELIEVES THESE PROPOSALS ARE FAIR AND
REASONABLE, AND RECOMMENDS THAT YOU APPROVE THEM. If you have any
questions about any of the proposals, please do not hesitate to contact
your investment professional immediately.
In the months ahead, you may receive mailings similar to this if you own
other Fidelity Advisor Funds. These will be separate proxies, and, like
this one, will require your prompt attention. Remember, this is your
opportunity to voice your opinion on matters affecting your funds. YOUR
PARTICIPATION IS EXTREMELY IMPORTANT NO MATTER HOW MANY OR HOW FEW SHARES
YOU OWN.
Thank you. We appreciate your prompt attention.
Sincerely,
Paul J. Hondros
President
I.PXYVI-1ST-0495
Fidelity Advisor Funds
VOTE
Fidelity Advisor Funds
Dear Fidelity Advisor
Funds Shareholder:
By now you should have received a proxy kit for an important vote regarding
your Fidelity Advisor Funds investments. IF NOT, PLEASE CALL
1-800-522-7297.
By signing and mailing your voting cards right away, you will be helping us
hold the line on administrative costs!
Thank you.
Fidelity Advisor Funds logo.
Fidelity Distributors Corp., 82 Devonshire Street, Boston, MA 02109
Vote this proxy card TODAY! Your prompt response will
save Limited Term Tax-Exempt-Class A 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 ADVISOR SERIES VI: FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND -
CLASS A
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VI: Fidelity Advisor Limited Term Tax-Exempt Fund
- - Class A which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 14, 1995 at 9:00 AM 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 _____________, 1995
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 315917401 /fund# 289
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 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund to permit the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To amend the Bylaws of the Trust to require only FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Trustee approval of further amendments to the bylaws.
8. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
fund.
10. To amend the Class A Distribution and Service Plan FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
for the fund.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12. To amend the fund's investment objective and policies FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
to provide greater investment latitude to seek high
current income.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
13. To replace certain of the fund's fundamental FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
investment policies with non-fundamental policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
14. To adopt a fundamental investment policy
concerning FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
the tax-exempt status of distributions
for the fund.
1 5 . To adopt a fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 1 5 .
concerning senior securities for the fund.
1 6 . To adopt a fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 1 6 .
concerning commodities for the fund.
17. To amend the fund's fundamental
investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning diversification .
18. To eliminate the fund's fundamental
investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning short sales of
securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning margin purchases.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
22. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning the concentration of its
investments in a single industry.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning real estate.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
25. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 25.
limitation concerning investments in other investment
companies.
26. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 26.
limitation concerning investments in securities of
newly-formed issuers.
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
2 8 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 2 8 .
limitation concerning purchasing securities of an
issuer in which the Trustees or directors and officers of
the fund or FMR hold more than 5% of the outstanding
securities of such issuer.
</TABLE>
ATEP -PXC- 495 cusip # 315917401 /fund# 289
Vote this proxy card TODAY! Your prompt response will
save Limited Term Tax-Exempt Fund - Class B 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 ADVISOR SERIES VI: LIMITED TERM TAX-EXEMPT FUND - CLASS B
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VI: Limited Term Tax-Exempt Fund - Class B which
the undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire St.,
Boston, MA 02109, on June 14, 1995 at 9:00 AM 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 _____________, 1995
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 315917609 /fund# 689
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 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund to permit the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To amend the Bylaws of the Trust to require only FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Trustee approval of further amendments to the bylaws.
8. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
fund.
10. To amend the Class A Distribution and Service Plan FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
for the fund.
11. To amend the Class B Distribution and Service Plan FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
for the fund.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12. To amend the fund's investment objective and policies FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
to provide greater investment latitude to seek high
current income.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
13. To replace certain of the fund's fundamental FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
investment policies with non-fundamental policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
14. To adopt a fundamental investment
policy concerning FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
the tax-exempt status of distributions
for the fund.
1 5 . To adopt a fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 1 5 .
concerning senior securities for the fund.
1 6 . To adopt a fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 1 6 .
concerning commodities for the fund.
17. To amend the fund's fundamental
investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning diversification .
18. To eliminate the fund's fundamental
investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning short sales of
securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning margin purchases.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
22. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning the concentration of its
investments in a single industry.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning real estate.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
25. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 25.
limitation concerning investments in other
investment companies.
26. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 26.
limitation concerning investments in securities of
newly-formed issuers.
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
2 8 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 2 8 .
limitation concerning purchasing securities of an
issuer in which the Trustees or directors and officers of
the fund or FMR hold more than 5% of the outstanding
securities of such issuer.
</TABLE>
ATEP -PXC- 495 cusip # 315917609 /fund# 689
Vote this proxy card TODAY! Your prompt response will
save Limited Term Tax-Exempt Fund - Institutional Class 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 ADVISOR SERIES VI: FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND -
INSTITUTIONAL CLASS
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VI: Fidelity Advisor Limited Term Tax-Exempt Fund -
Institutional Class which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on June 14, 1995 at 9:00 AM
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 _____________, 1995
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 315917302 /fund# 089
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 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund to permit the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To amend the Bylaws of the Trust to require only FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Trustee approval of further amendments to the bylaws.
8. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
fund.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12. To amend the fund's investment objective and policies FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
to provide greater investment latitude to seek high
current income.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
13. To replace certain of the fund's fundamental FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
investment policies with non-fundamental policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
14. To adopt a fundamental investment policy
concerning FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
the tax-exempt status of distributions
for the fund.
1 5 . To adopt a fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 1 5 .
concerning senior securities for the fund.
1 6 . To adopt a fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 1 6 .
concerning commodities for the fund.
17. To amend the fund's fundamental
investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning diversification
for the fund.
18. To eliminate the fund's fundamental
investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning short sales of
securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning margin purchases.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
22. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning the concentration of its
investments in a single industry.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning real estate.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
25. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 25.
limitation concerning investments in other investment
companies.
26. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 26.
limitation concerning investments in securities of
newly-formed issuers.
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
2 8 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 2 8.
limitation concerning purchasing securities of an
issuer in which the Trustees or directors and officers of
the fund or FMR hold more than 5% of the outstanding
securities of such issuer.
</TABLE>
ATEP-PXC-495 cusip # 315917302 /fund# 089
Vote this proxy card TODAY! Your prompt response will
save Short Intermediate Tax-Exempt Fund - Class A 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 ADVISOR SERIES VI: SHORT INTERMEDIATE TAX-EXEMPT FUND - CLASS A
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VI: Short Intermediate Tax-Exempt Fund - Class A
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 14, 1995 at 9:00 AM 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 _____________, 1995
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 315917500 /fund# 636
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 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund to pernit the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To amend the Bylaws of the Trust to require only FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Trustee approval of further amendments to the bylaws.
9. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 9
fund.
10. To amend the Class A Distribution and Service Plan FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
for the fund.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
</TABLE>
ASIT -PXC- 495 cusip # 315917500 /fund# 636
