SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
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[X] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
[ ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SEC. 240.14A-11(C) OR SEC. 240.14A-12
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(IF YOU CHECKED "FILED BY REGISTRANT ABOVE" DO NOT FILL THIS IN:
NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE
REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] NO FEE REQUIRED.
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14A-6(I)(1) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH
TRANSACTION APPLIES:
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH
TRANSACTION APPLIES:
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION
COMPUTED PURSUANT TO EXCHANGE ACT RULE 0-11:
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
(5) TOTAL FEE PAID:
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[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT RULE 0-11(A) (2)
AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS PAID PREVIOUSLY. IDENTIFY THE
PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF
ITS FILING.
(1) AMOUNT PREVIOUSLY PAID:
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
(3) FILING PARTY:
(4) DATE FILED:
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FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
CLASS A
CLASS B
CLASS T
CLASS C
INSTITUTIONAL CLASS
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-522-7297
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Fidelity Advisor Intermediate Municipal Income
Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Advisor Intermediate Municipal Income Fund (the
fund), a series of Fidelity Advisor Series VI, a single series trust
(the trust), will be held at the office of the trust, 82 Devonshire
Street, Boston, Massachusetts 02109 on October 7, 1998, at 10:00 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 approve an amended management contract for the fund.
2. To amend the fund's fundamental investment limitation concerning
diversification.
3. To approve an agreement and plan providing for the reorganization
of the fund from a separate series of one Massachusetts business trust
to another.
The Board of Trustees has fixed the close of business on August 10,
1998 as the record date for the determination of the shareholders of
the fund and each class entitled to notice of, and to vote at, such
Meeting and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
August 10, 1998
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
((REGISTRATION)) ((VALID SIGNATURE))
A. 1) ABC CORP. JOHN SMITH, TREASURER
2) ABC CORP. JOHN SMITH, TREASURER
C/O JOHN SMITH, TREASURER
B. 1) ABC CORP. PROFIT SHARING PLAN ANN B. COLLINS,
TRUSTEE
2) ABC TRUST ANN B. COLLINS,
TRUSTEE
3) ANN B. COLLINS, TRUSTEE ANN B. COLLINS,
TRUSTEE
U/T/D 12/28/78
C. 1) ANTHONY B. CRAFT, CUST. ANTHONY B. CRAFT
F/B/O ANTHONY B. CRAFT, JR.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY ADVISOR SERIES VI:
FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
CLASS A
CLASS B
CLASS T
CLASS C
INSTITUTIONAL CLASS
TO BE HELD ON OCTOBER 7, 1998
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 Intermediate Municipal
Income Fund (the fund) and at any adjournments thereof (the Meeting),
to be held on October 7, 1998 at 10:00 a.m. at 82 Devonshire Street,
Boston, Massachusetts 02109, the principal executive office of the
trust and Fidelity Management & Research Company (FMR), the fund's
investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about August 10, 1998.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $2,160. The expenses in connection
with preparing this Proxy Statement and its enclosures and of all
solicitations will be paid by the fund, provided the expenses do not
exceed Class A's existing expense cap of 0.90%, Class B's existing
expense cap of 1.65%, Class T's existing expense cap of 0.90%, Class
C's existing expense cap of 1.75%, and Institutional Class's existing
expense cap of 0.75%. Expenses exceeding each class's expense cap
will be paid by FMR. The fund will reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of shares. The principal business
address of Fidelity Distributors Corporation (FDC), the fund's
principal underwriter and distribution agent, is 82 Devonshire Street,
Boston, Massachusetts 02109.
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 are
not revoked will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The fund may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting will be paid by the fund,
provided the expenses do not exceed the fund's existing class expense
caps, as described above. Expenses exceeding each class's expense cap
will be paid by FMR. If the fund records votes by telephone, it will
use procedures designed to authenticate shareholders' identities, to
allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their
instructions have been properly recorded. Proxies voted by telephone
may be revoked at any time before they are voted in the same manner
that proxies voted by mail may be revoked. D.F. King & Co., Inc. may
be paid on a per-call basis for vote-by-phone solicitations on behalf
of the fund at an anticipated cost of approximately $702.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
Shares of each class issued and outstanding as of June 30, 1998 are
indicated in the following table:
FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND:
CLASS A __
CLASS B __
CLASS T __
CLASS C __
INSTITUTIONAL CLASS __
As of June 30, 1998 , the trustees and officers of the trust owned, in
the aggregate, less than 1% of the outstanding shares of each class of
the fund.
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of the fund's classes on June 30, 1998 was as
follows:
[Information to come]
To the knowledge of the trust, no other shareholder owned of record or
beneficially more than 5% of the outstanding shares of any class of
the fund on that date.
Shareholders of record at the close of business on August 10, 1998
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1997 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD
ENDED MAY 31, 1998 CALL 1-800-522-7297 OR WRITE TO FIDELITY
DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: APPROVAL OF PROPOSALS 1 THROUGH 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES"
OF THE FUND. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT),
THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS
THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING
SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE
HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE
PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE.
1. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY ADVISOR
INTERMEDIATE MUNICIPAL INCOME FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies the management fee that FMR
receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. In addition, the Amended
Contract allows FMR and the trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (the Present Contract) currently
requires the vote of a majority of the fund's outstanding voting
securities to authorize all amendments. See "Modification of
Management Contract Amendment Provisions" on page __ for more details.
THE AMENDED CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME
AS, OR LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT CONTRACT. (For
information on FMR, see the section entitled "Activities and
Management of FMR" on page __.)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is
supplied as Exhibit 1 on page __ . Except for the modifications
discussed above, it is substantially identical to the Present
Contract. (For a detailed discussion of the fund's Present Contract,
refer to the section entitled "Present Management Contract" beginning
on page __.) If approved by shareholders, the Amended Contract will
take effect on November 1, 1998 (or, if later, the first day of the
first month following approval) and will remain in effect through June
30, 1999 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a
meeting called for the purpose, of a majority of the Independent
Trustees and (ii) the vote of either a majority of the Trustees or 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, 1999, and thereafter only as long as its
continuance is approved at least annually as above.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $408 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $408 billion or less. Above $408 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contact, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract were voluntarily implemented by FMR on
January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds new fee breakpoints for
assets under FMR's management above $408 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used
to calculate the management fee, see the section entitled "Present
Management Contract" beginning on page ___.)
GROUP FEE RATE BREAKPOINTS
((PRESENT CONTRACT)) ((AMENDED CONTRACT))
AVERAGE GROUP PRESENT AVERAGE GROUP AMENDED
ASSETS ((CONTRACT*)) ASSETS ((CONTRACT))
((($ BILLIONS))) ((($ BILLIONS)))
OVER 372 .1200% 372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
OVER 516 .1100%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Present Amended
Assets ((Contract))* ((Contract))
((($ billions)))
150 .1736% .1736%
200 .1652% .1652%
250 .1587% .1587%
300 .1536% .1536%
350 .1494% .1494%
400 .1459% .1459%
450 .1430% .1427%
500 .1407% .1399%
550 .1588% .1372%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
Average assets under FMR's management for the month ended May 31,
1998 were approximately $625 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended May 31, 1998,
average assets under management by FMR were $625 billion. The fund's
management fee rate under the Amended Contract, for the month ended
May 31, 1998, would have been 0.3840%, compared to 0.3866% under the
Present Contract. The management fee rate remains the same under both
the Present Contract and the Amended Contract until assets under FMR's
management exceed $408 billion, at which point the management fee
rate under the Amended Contract begins to decline relative to the
Present Contract.
The following chart compares the fund's management fee as calculated
under the terms of the Present Contract for the fiscal year ended
November 30, 1997 to the management fee the fund would have incurred
if the Amended Contract had been in effect.
Present Contract Amended Contract
Management Management Percentage
((Fee))* ((Fee)) ((Difference))
$ 255,695 $ 255,140 (0.22%)
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended June
30, 1998 to the management fee the fund would have incurred if the
Amended Contract had been in effect.
Present Contract Amended Contract
Management Management Percentage
((Fee))* ((Fee)) ((Difference))
$ 244,523 $ 243,449 (0.44%)
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the trust the ability to amend the
Management Contract immediately to reflect a management fee decrease
without the delay of having to first conduct a proxy solicitation. In
short, the proposed modification gives FMR and the trust added
flexibility to amend the Management Contract subject to 1940 Act
constraints. Of course, any future amendments to the Management
Contract would require the approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believes that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including all of the
Independent Trustees, on October 16, 1997. The Board of Trustees
considered and approved the modifications to the Group Fee Rate
schedule during the two month period from November to December 1995.
The Board of Trustees received materials relating to the Amended
Contract in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their meetings Trustees receive materials that relate to 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 with
respect to the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the fund's investments. The Board of Trustees and
the Independent Trustees also consider periodically other material
facts such as (1) FMR's results and financial condition, (2)
arrangements in respect of the distribution of the fund's shares, (3)
the procedures employed to determine the value of the fund's assets,
(4) the allocation of the fund's brokerage, if any, including
allocations to brokers affiliated with FMR, (5) FMR's management of
the relationships with the fund's custodian and subcustodians, (6) the
resources devoted to and the record of compliance with the fund's
investment policies and restrictions and with policies on personal
securities transactions and (7) the nature, cost and audit of
non-investment management services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
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 and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations and the
senior management of Fidelity's fixed income group. Among other things
they considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the 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 classes' expense ratios and expense ratios of a peer
group of funds. They also considered the amount and nature of fees
paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of
the management of the Fidelity funds, whether the Fidelity funds
(including the fund) have appropriately benefitted from any economies
of scale, and whether there is potential for realization of any
further economies of scale. The Board of Trustees and the Independent
Trustees have concluded that FMR's mutual fund business presents some
limited opportunities to realize economies of scale and that these
economies are being shared between fund shareholders and FMR in an
appropriate manner. The Independent Trustees have also concluded that
the existing group fee structure should be continued but determined
that it would be appropriate to change the group fee structure as
proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, credit card, insurance,
publishing, real estate, international research and investment funds,
and others. The Board of Trustees and the Independent Trustees
considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the
Independent Trustees considered the benefit to shareholders of
investing in a fund that is part of a large family of funds offering a
variety of investment disciplines and providing for a large variety of
fund and shareholder services. With regard to the proposed
modification to the Present Contract's amendment provisions, the Board
of Trustees and the Independent Trustees considered the benefit to
shareholders of FMR's and the trust's increased flexibility (within
1940 Act constraints) to amend the Management Contract without the
delays and potential costs of a proxy solicitation.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule and
the proposed modification to the Present Contract's amendment
provisions, are in the best interest of the fund's shareholders. The
Board of Trustees, including the Independent Trustees, voted to
approve the submission of the Amended Contract to shareholders of the
fund and recommends that shareholders of the fund vote FOR the Amended
Contract. If approved, the Amended Contract will take effect on the
first day of the first month following shareholder approval.
2. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION.
The fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, (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."
The Trustees recommend that shareholders of the fund vote to replace
the fund's current fundamental investment limitation with the
following amended fundamental investment limitation governing
diversification:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities,(( or securities of other investment companies)))
if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer."
The percentage limits in the proposed fundamental limitation
concerning diversification are the percentage limitations imposed by
the 1940 Act for diversified investment companies. The amended
fundamental diversification limitation makes one change from the
current limitation: subject to applicable 1940 Act requirements, it
would permit the fund to invest without limit in the securities of
other investment companies. Pursuant to an order of exemption granted
by the SEC, the fund may invest up to 25% of total assets in
non-publicly offered money market or short-term bond funds (the
Central Funds) managed by FMR or an affiliate of FMR. The Central
Funds do not currently pay investment advisory, management, or
transfer agent fees, but do pay minimal fees for services, such as
custodian, auditor, and Independent Trustees fees. FMR anticipates
that making use of the Central Funds will benefit the fund by
enhancing the efficiency of cash management and by providing increased
short-term investment opportunities. If the proposal is approved, the
Central Funds are expected to serve as a principal option for cash
investment for the fund.
If this proposal is approved, the amended fundamental diversification
limitation (like the current limitation) cannot be changed without the
approval of the shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the disclosure is revised to reflect the changes. If
the proposal is not approved by the shareholders of the fund, the
fund's current fundamental diversification limitation will remain
unchanged.
3. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION
OF FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND FROM A SEPARATE
SERIES OF ONE MASSACHUSETTS BUSINESS TRUST TO ANOTHER.
The Board of Trustees has approved an Agreement and Plan of
Reorganization (the Plan of Reorganization) in the form attached to
this Proxy Statement as Exhibit 2. The Plan of Reorganization provides
for a reorganization of Fidelity Advisor Intermediate Municipal Income
Fund (the Fund) from a separate series of the trust, a Massachusetts
business trust, to a newly-established, separate series of Fidelity
Advisor Series II (Advisor II), also a Massachusetts business trust
(the Reorganization).
The investment objective, policies, and limitations of the Fund will
not change except as approved by shareholders and as described in this
proxy statement. A separate series of Advisor II will carry on the
business of the Fund following the Reorganization (the Series). The
Series, which has not yet commenced business operations, will have an
investment objective, policies, and limitations identical to those of
the Fund (except as they may be modified pursuant to a vote of the
shareholders as proposed in this proxy statement).
Both the trust and Advisor II are Massachusetts business trusts.
Advisor II has recently amended and restated its Declaration of Trust
(New Declaration of Trust). Advisor II's New Declaration of Trust
differs in a number of significant ways from the trust's existing
Declaration of Trust (Current Declaration of Trust). Accordingly,
following the Reorganization, the rights of the Fund's shareholders
under Advisor II's New Declaration of Trust will differ from the
rights that the shareholders currently enjoy under the trust's Current
Declaration of Trust. Generally, Advisor II's New Declaration of Trust
gives the Trustees more flexibility and broader authority to act. For
example, under Advisor II's New Declaration of Trust, the Trustees may
reorganize or terminate Advisor II or any fund of Advisor II without
shareholder approval. In addition, subject to certain exceptions,
Advisor II's Trustees may amend the New Declaration of Trust without
shareholder approval. Advisor II's Trustees' increased flexibility
under the New Declaration of Trust may allow the Trustees to react
more quickly to changes in competitive and regulatory conditions.
Advisor II's New Declaration of Trust does not alter in any way the
Trustees' fiduciary obligations to act with due care and in the
shareholders' interests. For a more complete description of the
differences between the trust's Current Declaration of Trust and
Advisor II's New Declaration of Trust, see "Comparison of Declarations
of Trust" on page __. A copy of Advisor II's New Declaration of Trust
marked to show differences from the trust's Current Declaration of
Trust is attached as Exhibit 3 to this Proxy Statement.
The Reorganization will not affect the operation of the Fund in a
material manner. The same individuals serve as Trustees of both
trusts. Both trusts are authorized to issue an unlimited number of
shares of beneficial interest, and each Declaration of Trust permits
the Trustees to create one or more additional series or funds.
In connection with the Reorganization, the fund's fiscal year end
will change from November 30 to October 31. The Trustees may change
the fiscal year end of the fund at their discretion in the future.
FMR, the Fund's investment adviser, will be responsible for the
investment management of the Series, subject to the supervision of the
Board of Trustees, under a management contract substantively identical
to the contract in effect between FMR and the Fund immediately prior
to the Closing Date (including as it may be modified pursuant to a
vote of shareholders of the Fund as proposed in the Proxy Statement)
(the New Management Contract).
The Fund's distribution agent, FDC, will distribute shares of the
Series under a General Distribution Agreement substantively identical
to the contract in effect between FDC and the Fund immediately prior
to the Closing Date.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently
organized as a series of the trust, which has one series of shares or
funds. The Board of Trustees unanimously recommends reorganization of
the Fund to a separate series of Advisor II (i.e., into the Series)
which will succeed to the business of the Fund. Moving the Fund from
the trust to Advisor II will consolidate and streamline the production
and mailing of certain legal documents. THE PROPOSED CHANGE WILL HAVE
NO MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
The proposal to present the Plan of Reorganization to shareholders
was approved by the Board of Trustees of the trust, including all of
the Trustees who are not interested persons of FMR, on October 16,
1997. The Board of Trustees recommend that Fund shareholders vote FOR
the approval of the Plan of Reorganization described below. Such a
vote encompasses approval of the reorganization of the Fund to a
separate series of Advisor II; temporary waiver of certain investment
limitations of the Fund to permit the Reorganization (see "Temporary
Waiver of Investment Restrictions" on page _); and authorization of
the trust, as sole shareholder of the Series, to approve (i) the New
Management Contract for the Series between Advisor II and FMR and (ii)
Distribution and Service Plans for each class of the Series under Rule
12b-1, substantively identical to the plans in effect with respect to
each class of the Fund immediately prior to the Closing Date (the New
Plans). If shareholders of the Fund do not approve the Plan of
Reorganization, the Fund will continue to operate as a series of the
trust.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion
summarizes the important terms of the Plan of Reorganization. This
summary is qualified in its entirety by reference to the Plan of
Reorganization itself, which is attached as Exhibit 2 to this Proxy
Statement.
On the Closing Date (defined below) of the Reorganization, the Fund
will transfer all of its assets to the Series, a series of shares of
Advisor II established for the purpose of effecting the
Reorganization, in exchange for the assumption by the Series of all of
the liabilities of the Fund and the issuance of Class A, T, B, and C
and Institutional Class shares of the Series (Series Shares) equal to
the number of Fund shares of the corresponding class outstanding on
the Closing Date. Immediately thereafter, the Fund will distribute one
Series Share of the applicable class for each Fund share (the Fund
Shares) held by the shareholder of such class on the Closing Date to
each Fund shareholder, in exchange for such Fund Shares. Immediately
after this distribution of the Series Shares, the Fund will be
terminated and, as soon as practicable thereafter, will be wound up
and liquidated. UPON COMPLETION OF THE REORGANIZATION, EACH FUND
SHAREHOLDER OF EACH CLASS WILL BE THE OWNER OF FULL AND FRACTIONAL
SERIES SHARES EQUAL IN NUMBER, DENOMINATION, AND AGGREGATE NET ASSET
VALUE TO HIS OR HER FUND SHARES OF THE CORRESPONDING CLASS.
The Plan of Reorganization authorizes the trust as the then sole
initial shareholder of the Series or its classes, as appropriate, to
approve (i) the New Management Contract and (ii) the New Plans.
Advisor II's Board of 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 removal; (c) any Trustee who requests to be retired
by written instrument signed by a majority of the other Trustees or
who is unable to serve due to physical or mental incapacity by reason
of disease or otherwise, death, or for any other reason, may be
retired; and (d) a Trustee may be removed at any Special Meeting of
the shareholders by a vote of two-thirds of the outstanding shares of
Advisor II. 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 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 New Management Contract and the New Plans will take effect on the
Closing Date. The New Management Contract will continue in force until
June 30,1999. The New Plans will continue in force until April 30,
1999. Each contract will continue in force thereafter from year to
year so long as its continuance is approved at least annually by (i)
the vote of a majority of the Trustees who are not "interested
persons" of Advisor II or FMR, cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by the vote of a
majority of the Trustees or by the vote of a majority of the
outstanding shares of the Series. The New Plans will continue in
effect only if approved annually by a vote of the Trustees and of
those Trustees who are not interested persons, cast in person at a
meeting called for that purpose. The New Management Contract will be
terminable without penalty on sixty days' written notice either by
Advisor II, or FMR, as the case may be, and will terminate
automatically in the event of its assignment. The New Plans may be
terminable at any time, without the payment of any penalty, by a vote
of a majority of the Independent Trustees or by a vote of a majority
of the outstanding voting securities of the applicable class.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the
close of business on February 26, 1999 (the Closing Date). However,
the Reorganization may become effective at such other date as the
parties may agree in writing.
The obligations of the trust and Advisor II under the Plan of
Reorganization are subject to various conditions as stated therein.
Notwithstanding the approval of the Plan of Reorganization by Fund
shareholders, the Plan of Reorganization may be terminated or amended
at any time prior to the Reorganization by action of the trustees to
provide against unforeseen events, if (1) there is a material breach
by the other party of any representation, warranty, or agreement
contained in the Plan of Reorganization to be performed at or prior to
the Closing Date or (2) it reasonably appears that a party will not or
cannot meet a condition of the Plan of Reorganization. Generally,
either party may at any time waive compliance with any of the
covenants and conditions contained in, or may amend, the Plan of
Reorganization, provided that such waiver or amendment does not
materially adversely affect the interests of Fund shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS AND PLANS. Advisor II's
transfer agent will establish an account for the Series' shareholders
containing the appropriate number and denominations of Series Shares
of each class to be received by each holder of Fund Shares of the
corresponding class under the Plan of Reorganization. Such accounts
will be identical in all material respects to the accounts currently
maintained by the Fund's transfer agent for the Fund's shareholders.
Fund shareholders who are receiving payment under a withdrawal plan
with respect to Fund Shares will retain the same rights and privileges
as to Series Shares under the Plan of Reorganization. Similarly, no
further action will be necessary in order to continue any automatic
investment plan or retirement plan currently maintained by a Fund
shareholder with respect to Fund Shares.
EXPENSES. The Fund and the Series shall each be responsible for all
of their respective expenses of the Reorganization, estimated at
$______ in the aggregate, provided that they do not exceed Class A's
expense cap of 0.90%, Class B's expense cap of 1.65%, Class T's
expense cap of 0.90%, Class C's expense cap of 1.75%, and
Institutional Class's expense cap of 0.75%. Expenses exceeding each
class's expense cap, as applicable, will be paid by FMR.
COMPARISON OF DECLARATIONS OF TRUST. Advisor II's Declaration of Trust
differs from the trust's Current Declaration of Trust in a number of
significant ways. The following discussion summarizes some of the more
significant differences between the Current Declaration of Trust and
the New Declaration of Trust.
SIGNIFICANT DIFFERENCES BETWEEN THE CURRENT DECLARATION OF TRUST AND
THE NEW DECLARATION OF TRUST. Unlike the trust's Current Declaration
of Trust, Advisor II's New Declaration of Trust generally permits the
Trustees, subject to applicable Federal and state law, to reorganize
or terminate Advisor II. The trust's Current Declaration of Trust
requires shareholder approval in order to reorganize or terminate the
trust or the Fund.
Before allowing a reorganization or termination to proceed without
shareholder approval, Advisor II's Trustees have a fiduciary
responsibility to first determine that the proposed transaction is in
the shareholders' interest. Any exercise of Advisor II's Trustees'
increased authority under the New Declaration of Trust is also subject
to any applicable requirements of the 1940 Act and Massachusetts law.
In all cases, the New Declaration of Trust requires that shareholders
receive written notification of any proposed transaction.
Advisor II's New Declaration of Trust does NOT give Advisor II's
Trustees the authority to merge the fund with another operating mutual
fund or sell all of the fund's assets to another operating mutual fund
without first seeking shareholder approval. Under the New Declaration
of Trust, shareholder approval is still required for these
transactions.
Advisor II's New Declaration of Trust also permits the Trustees, with
certain expectations, to amend the New Declaration of Trust without
shareholder approval. Under Advisor II's New Declaration of Trust,
shareholders generally have the right to vote on any amendment
affecting their right to vote, on any amendment altering the maximum
number of permitted Trustees, on any amendment affecting the New
Declaration of Trust's amendment provisions, on any amendment required
by law or Advisor II's registration statement, and on any matter
submitted to shareholders by the Trustees. The trust's Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Current Declaration of Trust. By
allowing amendment of the New Declaration of Trust without shareholder
approval, the New Declaration of Trust gives Advisor II's Trustees the
necessary authority to react quickly to future contingencies. As
mentioned above, such increased authority remains subordinate to the
Trustees' continuing fiduciary obligations to act with due care and in
the shareholders' interest.
OTHER DIFFERENCES BETWEEN THE CURRENT DECLARATION OF TRUST AND THE
NEW DECLARATION OF TRUST. In addition to the significant differences
above, Advisor II's New Declaration of Trust differs from the trust's
Current Declaration of Trust in a number of important ways, including
the following:
1. The New Declaration of Trust allows FMR and Advisor II, on behalf
of each of its funds, to amend the fund's Management Contract subject
to the provisions of Section 15 of the 1940 Act, as modified or
interpreted by the SEC. In contrast, the Current Declaration of Trust
explicitly requires the vote of a majority of the outstanding voting
securities of a fund to authorize all such amendments.
2. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
3. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees, in addition to banks and trust companies,
may employ as fund custodian companies that are members of a national
securities exchange or other entities permitted under the 1940 Act;
delegate authority to investment advisers and other agents; adopt and
offer dividend reinvestment and related plans; operate and carry on
the business of an investment company; and interpret the investment
policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of
Advisor II's series shall have a claim on the assets of another series
and further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
5. The New Declaration of Trust eliminates various technical and/or
antiquated requirements, including existing requirements that a
Trustee vacancy be deemed to occur when a Trustee is absent from his
or her state of residence, that Trustee vacancies must be filled
within six calendar months, and that portfolio securities be held
pursuant to safeguards prescribed by usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust incorporates
appropriate references to classes of shares.
7. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS. Certain fundamental
investment restrictions of the Fund, which prohibit the Fund from
acquiring more than a stated percentage of ownership of another
company, might be construed as restricting the Fund's ability to carry
out the Reorganization. By approving the Plan of Reorganization, Fund
shareholders will be agreeing to waive, only for the purpose of the
Reorganization, those fundamental investment restrictions that could
prohibit or otherwise impede the transaction.
TAX CONSEQUENCES OF THE REORGANIZATION. Each trust will receive an
opinion from its counsel, Kirkpatrick & Lockhart LLP, that the
Reorganization should constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986,
as amended. Accordingly, no gain or loss will be recognized for
federal income tax purposes by the Fund, the Series, or the Fund's
shareholders upon (1) the transfer of the Fund's assets in exchange
solely for the Series Shares and the assumption by Advisor II on
behalf of the Series of the Fund's liabilities or (2) the distribution
of Series Shares to the Fund's shareholders in exchange for their Fund
Shares. The opinion further provides, among other things, that (a) the
basis for federal income tax purposes of the Series Shares to be
received by each Fund shareholder will be the same as that of his or
her Fund Shares immediately prior to the Reorganization; and (b) each
Fund shareholder's holding period for his or her Series Shares will
include the Fund shareholder's holding period for his or her Fund
Shares, provided that said Fund Shares were held as capital assets on
the date of the exchange.
CONCLUSION. The Board of Trustees has concluded that the proposed
Plan of Reorganization to reorganize the Fund into a separate series
of a Massachusetts business trust is in the best interest of the
Fund's shareholders. The Trustees recommend that the Fund's
shareholders vote FOR the approval of the Plan of Reorganization as
described above. Such a vote encompasses approval of the
reorganization of the Fund to a separate series of a Massachusetts
business trust; temporary waiver of certain investment limitations of
the Fund to permit the Reorganization (see "Temporary Waiver of
Investment Restrictions" on page __); authorization of the trust, as
sole shareholder of the Series or its classes, as appropriate, to
approve (i) the New Management Contract and (ii) the New Plans. If
approved, the Plan of Reorganization will take effect on the Closing
Date. If the Plan of Reorganization is not approved, the Fund will
continue to operate as a series of the trust.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees, net assets, and total expenses of funds with investment
objectives similar to the fund and advised by FMR is contained in the
Table of Average Net Assets and Expense Ratios in Exhibit 4 beginning
on page __.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; and Peter
S. Lynch, Vice Chairman. Each of the Directors is also a Trustee of
the trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H.
Costello, Eric D. Roiter, Thomas D. Maher, Thomas Simpson, Richard A.
Silver, Leonard M. Rush, Fred L. Henning, Jr., Dwight D. Churchill,
and Norman U. Lind are currently officers of the trust and officers or
employees of FMR or FMR Corp. With the exception of Mr. Costello, Mr.
Simpson, and Mr. Silver, all of these persons hold or have options to
acquire stock of FMR Corp. The principal business address of each of
the Directors of FMR is 82 Devonshire Street, Boston, Massachusetts
02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore,
under the 1940 Act may be deemed to form a controlling group with
respect to FMR Corp.
During the period December 1, 1997 through June 30, 1998, no
transactions were entered into by Trustees and nominees as Trustee of
the trust involving more than 1% of the voting common, non-voting
common and equivalent stock, or preferred stock of FMR Corp.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other
services. Under its management contract with the fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the fund in accordance with its
investment objective, policies, and limitations. FMR also provides the
fund with all necessary office facilities and personnel for servicing
the fund's investments, compensates all officers of the fund and all
Trustees who are "interested persons" of the trust or of FMR, and all
personnel of the fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal and state laws;
developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 1.
In addition to the management fee payable to FMR, the fund reimburses
UMB Bank, n.a. (UMB) for its services as the fund's custodian,
transfer agent, and service agent. Although the fund's current
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders, the trust, on
behalf of the fund, has entered into a revised transfer agent
agreement with UMB, pursuant to which UMB bears the costs of providing
these services to existing shareholders. Other expenses paid by the
fund include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify the
trust's officers and Trustees with respect to litigation.
UMB has entered into a sub-transfer agent agreement with Fidelity
Investments Institutional Operations Company, Inc. (FIIOC), an
affiliate of FMR, under the terms of which FIIOC performs the
processing activities associated with providing transfer agency,
dividend disbursing and shareholder servicing functions for each
class. Under the sub-contract, FIIOC 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. FIIOC also pays all
out-of-pocket expenses associated with transfer agent services.
UMB has also entered into a sub-service agent agreement with Fidelity
Service Company, Inc. (FSC), an affiliate of FMR, under the terms of
which FSC performs all processing activities associated with providing
these services, including calculating the NAV and dividends for each
class of the fund and maintaining the fund's portfolio and general
accounting records, and receives all related pricing and bookkeeping
fees paid to UMB.
Transfer agent fees, including reimbursement for out-of-pocket
expenses, paid to FIIOC by the applicable class of the fund for the
fiscal year ended November 30, 1997 were $1,254 for Class A, $99,245
for Class B, $14,216 for Class T, $5 for Class C, and $12,291 for
Institutional Class.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid to FSC by the fund for fiscal 1997
amounted to $61,883.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the class, which are continuously offered. Promotional and
administrative expenses in connection with the offer and sale of
shares are paid by FMR. Sales charge revenue paid to, and retained by,
FDC for fiscal 1997 for the fund amounted to the following:
((Paid to FDC)) ((Retained by FDC))
((Class A)) ((Class T)) ((Class A)) ((Class T))
$ 5,724 $ 21,915 $ 1,250 $ 6,612
FDC collected deferred sales charge revenue on Class B shares during
fiscal 1997 of $19,218. When shares subject to a deferred sales charge
are sold, FDC pays commissions from its own resources to dealers
through which the sales are made. In addition, FDC received from the
fund's classes fees pursuant to Distribution and Service Plans under
Rule 12b-1 in fiscal 1997 as follows:
12b-1 Fees Paid to
((FDC))
Class A $ 521
Class B $ 67,287
Class T $ 127,082
Class C $ 6
Currently, the full amount of distribution fees paid by Class A and
Class T under their respective Distribution and Service Plans is
reallowed to investment professionals (including FDC) as compensation
for their services in connection with the distribution of Class A or
Class T shares, as applicable, and for providing support services to
Class A or Class T shareholders, as applicable, based upon the level
of services provided.
Currently, the full amount of distribution fees paid by Class B under
its Distribution and Service Plan is retained by FDC as compensation
for its services and expenses in connection with the distribution of
Class B shares, and the full amount of service fees paid by Class B
under its Distribution and Service Plan is reallowed to investment
professionals (including FDC) for providing personal service to and/or
maintenance of Class B shareholder accounts.
Currently, the full amount of distribution fees paid by Class C under
its Distribution and Service Plan is reallowed to investment
professionals (including FDC) after the first year of investment as
compensation for their services in connection with the distribution of
Class C shares. In addition, the full amount of service fees paid by
Class C under its Distribution and Service Plan is reallowed to
investment professionals (including FDC) after the first year of
investment for providing personal service to and/or maintenance of
Class C shareholder accounts.
FMR is the fund's manager pursuant to a management contract dated
July 1, 1995, which was approved by shareholders on June 14, 1995.
The management contract provides for lower fees when FMR's assets
under management exceed certain levels and permits the fund to place
portfolio transactions through broker-dealers affiliated with FMR and
through broker-dealers who provide research.
For the services of FMR under the management contract, the fund pays
FMR a monthly management fee which has two components: a group fee
rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts and is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown below on the left. The schedule
below on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $543 billion of group net assets - the approximate level for
November 1997 - was 0.1376%, which is the weighted average of the
respective fee rates for each level of group net assets up to $543
billion.
On January 1, 1996, FMR voluntarily modified the breakpoints in the
group fee rate schedule. The revised group fee rate schedule, depicted
below, provides for lower management fee rates as FMR's assets under
management increase.
((GROUP FEE RATE SCHEDULE)) ((EFFECTIVE ANNUAL FEE RATES))
Average Group Annualized Group Net Effective Annual
((Assets)) ((Rate)) ((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 .1690
24 - 30 .1800 200 .1652
30 - 36 .1750 225 .1618
36 - 42 .1700 250 .1587
42 - 48 .1650 275 .1560
48 - 66 .1600 300 .1536
66 - 84 .1550 325 .1514
84 - 120 .1500 350 .1494
120 - 156 .1450 375 .1476
156 - 192 .1400 400 .1459
192 - 228 .1350 425 .1443
228 - 264 .1300 450 .1427
264 - 300 .1275 475 .1413
300 - 336 .1250 500 .1399
336 - 372 .1225 525 .1385
372 - 408 .1200 550 .1372
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over 516 .1100
The fund's individual fund fee rate is 0.25%. Based on the average
group net assets of the funds advised by FMR for November 1997, the
fund's annual management fee rate would be calculated as follows:
((Group Fee Rate)) Individual Fund ((Management Fee
((Fee Rate)) Rate))
0.1376% + 0.25% = 0.3876%
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 1997, FMR received $255,140 for its services as
investment adviser to the fund. This fee was equivalent to 0.39% of
the average net assets of the fund.
FMR may, from time to time, agree to reimburse all or a portion of a
class's total operating expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses). FMR retains the
ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal
year.
During fiscal 1997, FMR voluntarily agreed, subject to revision or
termination, to reimburse each class of the fund to the extent that
its total operating expenses, as a percentage of its respective
average net assets exceeded the following rates:
Class A Class B Class T Class C Institutional
Class
0.90% 1.65% 1.00% 1.75% 0.75%
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the fund by FMR pursuant to authority contained in
the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC), an indirect subsidiary of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services.
During fiscal 1997, the fund paid no brokerage commissions to
affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Investments
Institutional Operations Company, Inc., 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; [BRACKETED] DISCLOSURE WILL
BE DELETED.
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY ADVISOR SERIES VI:
FIDELITY ADVISOR [LIMITED TERM TAX-EXEMPT] ((INTERMEDIATE MUNICIPAL
INCOME)) FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
[AGREEMENT AMENDED and RESTATED as of] ((AMENDMENT made)) this [1st
day of July 1995] (( day of _____ 1998)), 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 Limited Term Tax-Exempt]
((Intermediate Municipal Income)) Fund(( its single existing series of
shares of beneficial interest)) (hereinafter called the "Portfolio"),
and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser") as set forth in its
entirety below.
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]
((372)) - ((408)) ((.1200))
((408)) - ((444)) ((.1175))
((444)) - ((480)) ((.1150))
((480)) - ((516)) ((.1125))
((Over)) ((516)) ((.1100))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.25%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.
(c) In case of termination of this Contract during any month, the fee
for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security or other investment
instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until June
30, [1996] ((1999)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent[, such consent on
the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.))
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY ADVISOR SERIES VI
on behalf of Fidelity Advisor [Limited Term Tax-Exempt]
((Intermediate Municipal Income)) Fund
[SIGNATURE LINES OMITTED]
FIDELITY MANAGEMENT & RESEARCH COMPANY
[SIGNATURE LINES OMITTED]
EXHIBIT 2
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of the __th day of ___ 199_, by and between Fidelity Advisor Series VI
(Advisor VI), on behalf of Fidelity Advisor Intermediate Municipal
Income Fund (the Fund), a separate series of Advisor VI, and Fidelity
Advisor Series II (Advisor II), each a business trust duly formed
under the laws of the Commonwealth of Massachusetts.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise (a) the transfer of all of the assets of
the Fund to a series of Advisor II (the Series) solely in exchange for
Class A, T, B, and C and Institutional Class shares of beneficial
interest of the Series (the Series Shares) and the assumption by the
Series of the Fund's liabilities; and (b) the constructive
distribution of such Series Shares by the Fund to its shareholders
(Fund Shareholder(s)) in complete liquidation and termination of the
Fund, in exchange for the corresponding classes of all of the Fund's
outstanding shares (Fund Shares). The Fund shall receive shares of the
applicable classes of the Series equal to the number and class of Fund
Shares on the Closing Date (as defined below). Immediately thereafter,
the Fund shall then distribute to each Fund Shareholder one Series
Share for each Fund Share held by the shareholder on the Closing Date.
The foregoing transactions are referred to herein as the
"Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE FUND
Advisor VI, on behalf of the Fund, represents and warrants as
follows:
(a) The Fund is a series of Advisor VI, a business trust duly formed,
validly existing, and in good standing under the laws of the
Commonwealth of Massachusetts, and has the power to own all of its
properties and assets and to carry out its obligations under this
Agreement. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) The Fund is a series of Advisor VI, which is duly registered as
an open-end management investment company under the Investment Company
Act of 1940 (the 1940 Act), as amended, and such registration is in
full force and effect;
(c) The Fund is not in, and the execution, delivery and performance
of this Agreement will not result in a violation of any provision of
the Amended and Restated Declaration of Trust or the Bylaws of Advisor
VI, or, to the Fund's knowledge, of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Fund is
a party or by which the Fund is bound or result in the acceleration of
any obligation or the imposition of any penalty under any agreement,
judgment or decree to which the Fund is a party or is bound;
(d) The Fund has no material contracts or other commitments (other
than this Agreement) that will not be terminated without liability to
the Fund on or prior to the Closing Date;
(e) To the Fund's knowledge, no material legal, administrative, or
other proceeding or investigation of, or before, any court or
governmental body presently is pending or threatened against the Fund
or any of its properties or assets that assert liability on the part
of the Fund, except as previously disclosed in writing to
Advisor II. The Fund knows of no facts that might form the basis for
the institution of such proceedings;
(f) The Fund has filed or will file all federal and state tax returns
that, to the knowledge of the Fund's officers, are required to be
filed by the Fund and has paid or will pay all federal and state taxes
shown to be due on said returns or provision shall have been made for
the payment thereof, and, to the best of the Fund's knowledge, no such
return is currently under audit and no assessment has been asserted
with respect to such returns;
(g) All of the issued and outstanding shares of the Fund are, and at
the Closing Date will be, duly and validly issued and outstanding and
fully paid and nonassessable as a matter of Massachusetts law (except
as disclosed in the Fund's Statement of Additional Information) and
have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of the Fund
will, at the Closing Date, be held by the persons and in the amounts
as certified in accordance with the provisions of this Agreement;
(h) The information to be furnished by the Fund for use in
applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and
shall comply in all material respects with federal securities and
other laws and regulations thereunder applicable thereto;
(i) At both the Valuation Time (as defined in Section 4) and the
Closing Date (as defined in Section 6), the Fund will have the full
right, power, and authority to sell, assign, transfer, and deliver its
portfolio securities and any other assets of the Fund to be
transferred to the Series pursuant to this Agreement. As of the
Closing Date, subject only to the delivery of the Fund's portfolio
securities and any such other assets as contemplated by this
Agreement, the Series will acquire the Fund's portfolio securities and
any such other assets subject to no encumbrances, liens, or security
interests (except for those that may arise in the ordinary course and
are disclosed to the Series) and without any restrictions upon the
transfer thereof;
(j) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of the Fund, and this Agreement
constitutes a valid and binding obligation of the Fund enforceable in
accordance with its terms, subject to shareholder approval;
(k) To the best knowledge of the Fund's management, there is no plan
or intention by any of the Fund's shareholders to sell, exchange or
otherwise dispose of any of the Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed
upon request;
(m) Immediately following consummation of the Reorganization, the
Fund Shareholders will own all of the Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares
immediately prior to the Reorganization;
(n) Immediately following the consummation of the Reorganization,
Advisor II will hold, on behalf of the Series, the same assets and be
subject to the same liabilities that the Fund held or was subject to
immediately prior thereto, except for assets used to pay expenses
incurred in connection with the Reorganization. Assets used to pay
expenses and all distributions (except for distributions and
redemptions arising in the ordinary course of the Fund's business as
an open-end investment company) made by the Fund immediately preceding
the Reorganization will, in the aggregate, constitute less than 1% of
the net assets of the Fund;
(o) At the time of the Reorganization, the Fund will not have
outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire shares
of beneficial interest in the Fund;
(p) The Fund's liabilities to be assumed by the Series in the
Reorganization were incurred by the Fund in the ordinary course of its
business and are associated with the assets to be transferred;
(q) Fund Shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(r) The fair market value of the Fund's assets to be transferred by
the Fund to the Series will equal or exceed the Fund's liabilities to
be assumed by the Series plus the liabilities to which the transferred
assets are subject;
(s) The Fund is a regulated investment company as defined in Section
851 of the Code;
(t) The Fund is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the
meaning of Section 368(a)(3)(A) of the Code;
(u) Immediately after the Reorganization, the Fund will not hold any
assets, conduct any business activities or have any beneficial owners;
(v) There is no current plan or intention for Advisor VI to create a
new series;
(w) To the Fund's knowledge, no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by the Fund of the transactions contemplated by this
Agreement, except such as shall have been obtained under the
Securities Act of 1933 (the 1933 Act), the Securities Exchange Act of
1934 (the 1934 Act), and the 1940 Act; and
(x) The Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of May 31, 1997 and those
incurred in the ordinary course of the Fund's business as an
investment company since May 31, 1997.
2. REPRESENTATIONS AND WARRANTIES OF ADVISOR II
Advisor II represents and warrants as follows:
(a) Advisor II is a business trust duly formed, validly existing, and
in good standing under the laws of the Commonwealth of Massachusetts.
It has all necessary federal, state, and local authorizations to carry
out its business as now being conducted and to carry out this
Agreement;
(b) Advisor II is duly registered as an open-end management
investment company under the 1940 Act, and the Series is a duly
established and designated series of Advisor II;
(c) Advisor II is not in, and the execution, delivery and performance
of this Agreement will not result in a violation of any provision of
the Amended and Restated Declaration of Trust or Bylaws of Advisor II,
or, to Advisor II's knowledge, of any agreement, indenture,
instrument, contract, lease or other undertaking to which Advisor II
is a party or by which Advisor II is bound or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment or decree to which Advisor II is a party or is
bound;
(d) To Advisor II's knowledge, no material legal, administrative, or
other proceeding or investigation of, or before, any court or
governmental body presently is pending or threatened against Advisor
II or any of its properties or assets that assert liability on the
part of Advisor II, except as previously disclosed in writing to
Advisor II. Advisor II knows of no facts that might form the basis for
the institution of such proceedings;
(e) Advisor II intends for the Series to be a regulated investment
company under Section 851 of the Code;
(f) Prior to the Closing Date, there shall be no issued and
outstanding Series Shares or any other securities issued by the Series
(except for the one share of each class that may be issued to FMR);
Series Shares issued in connection with the transactions contemplated
herein will be duly and validly issued and outstanding, fully paid and
non-assessable under Massachusetts law on the Closing Date;
(g) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Advisor II, and, upon its proper
execution, this Agreement will constitute a valid and binding
obligation of Advisor II enforceable against the Series in accordance
with its terms;
(h) As of the Closing Date, the Series Shares will have been duly
authorized and, when so issued and delivered, will be duly and validly
issued shares of the Series, fully paid and non-assessable under
Massachusetts law except that under Massachusetts law, shareholders of
a Massachusetts business trust, under certain circumstances, may be
held personally liable for obligations of Advisor II;
(i) The fair market value of the Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares surrendered in exchange therefor;
(j) Advisor II has no plan or intention on behalf of the Series to
issue additional Series Shares following the Reorganization other than
in the ordinary course of the business of the Series as the series of
a registered open-end investment company;
(k) Advisor II has no plan or intention to redeem or otherwise
reacquire any of the Series Shares issued to the Fund Shareholders
pursuant to the Reorganization other than through redemptions arising
in the ordinary course of the business of the Series as a series of a
registered open-end investment company;
(l) Following the Reorganization, Advisor II, on behalf of the
Series, will continue the Fund's historic business;
(m) Advisor II has no plan or intention to sell or otherwise dispose
of any of the Fund's assets to be acquired by the Series in the
Reorganization, except for dispositions made in the ordinary course of
its business or dispositions necessary to maintain the status of the
Series as a regulated investment company under Section 851 of the
Code;
(n) No consideration other than Series Shares will be issued in
exchange for the Fund Shares in the Reorganization;
(o) At the time of the Reorganization, there will be no intercompany
indebtedness existing between the Series and the Fund that was issued,
acquired or that will be settled at a discount;
(p) At the time of the Reorganization, the Series will be a regulated
investment company as defined in Section 851 of the Code;
(q) The information to be furnished by Advisor II with respect to the
Series for use in applications for orders, registration statements,
proxy materials and other documents that may be necessary in
connection with the transactions contemplated hereby shall be accurate
and complete and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(r) Advisor II, on behalf of the Series, shall use all reasonable
efforts to obtain the approvals and authorizations required by the
1933 Act and the 1940 Act as it may deem appropriate in order to
operate after the Closing Date;
(s) To Advisor II's knowledge, no consent, approval, authorization,
or order of any court or governmental authority is required for the
consummation by the Series of the transactions contemplated by this
Agreement, except such as shall have been obtained under the 1933 Act,
the 1934 Act, and the 1940 Act; and
(t) Advisor II, on behalf of the Series, will use the Employer
Identification Number that was used by the Fund.
3. REORGANIZATION
(a) Subject to the requisite approval of the Fund Shareholders, if
applicable, and to the other terms and conditions contained herein,
the Fund agrees to assign, convey, transfer, and deliver to the Series
established by Advisor II solely for the purpose of acquiring all of
the assets of the Fund (which Series has not issued any Series Shares
(except for one share of each class that may be issued to FMR) or
commenced operations) as of the Closing Date all of the assets of the
Fund of any kind and nature existing on the Closing Date. The Series
agrees in exchange therefor (1) to assume all of the Fund's
liabilities existing on or after the Closing Date, whether or not
determinable on the Closing Date, and (2) to issue and deliver to the
Fund the number of full and fractional Series Shares of the applicable
classes equal to the value and number of full and fractional shares of
the corresponding classes of the Fund outstanding at the time of the
closing, as described in paragraph 6, as of the Closing Date provided
for in Section 6(a).
(b) The assets of the Fund to be acquired by the Series and allocated
thereto shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by the Fund, and
any deferred or prepaid expenses shown as an asset on the books of the
Fund on the Closing Date. The Fund will pay or cause to be paid to the
Series any dividend or interest payments received by it on or after
the Closing Date with respect to the assets transferred to the Series
hereunder, and the Series will retain any dividend or interest
payments received by it after the Valuation Time (as defined in
Section 4) with respect to the assets transferred hereunder without
regard to the payment date thereof. The liabilities of the Fund to be
assumed by the Series and allocated thereto, shall include (except as
otherwise provided herein) all of the Fund's liabilities, debts,
obligations, and duties, of whatever kind or nature, whether absolute,
accrued, contingent,or otherwise, whether or not determinable on the
Closing Date, and whether or not specifically referred to in this
Agreement.
(c) Immediately upon delivery to the Fund of the Series Shares, the
individual Trustees of Advisor VI or any officer duly authorized by
them, on Advisor VI's behalf as the then sole shareholder of the
Series, shall (1) approve (i) a Management Contract between Advisor
II, on behalf of the Series, and FMR, (ii) a Distribution and Service
Plan under Rule 12b-1 under the 1940 Act between Advisor II, on behalf
of each class of the Series, and Fidelity Distributors Corporation
(FDC) substantively identical to the contracts and plans currently in
effect with respect to the Fund or class immediately prior to the
Closing Date (as defined below), except as to the parties to such
contract and plans, (iii) the independent accountants who currently
serve in that capacity for the Fund, and (iv) the adoption of the
revised fundamental policy described in Proposal 2 of the Proxy
Statement.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute to the Fund Shareholders the Series Shares
of the applicable classes pro rata in proportion to their respective
shares of beneficial interest of the corresponding classes of the
Fund, such Fund Shareholders being shareholders of record as
determined as of the Valuation Time on the Closing Date in accordance
with the Advisor VI Amended and Restated Declaration of Trust, in
liquidation of such Fund. Such distribution will be accomplished by
the Fund's transfer agent opening accounts on the share records of the
Series in the names of such Fund Shareholders and transferring the
Series Shares of the applicable classes thereto. Each Fund
Shareholder's account shall be credited with the respective pro rata
number of full and fractional (rounded to the third decimal place)
Series Shares of the applicable classes due that shareholder. All
outstanding Fund Shares, including any represented by certificates,
shall simultaneously be canceled on the Fund's share transfer records.
The Series shall not issue certificates representing Series Shares in
connection with such distribution.
(e) Immediately after the distribution of the Series Shares as set
forth in Section 3(d), the Fund shall be liquidated and terminated,
and any such further actions shall be taken in connection therewith as
required by applicable law.
(f) Any transfer taxes payable upon issuance of Series Shares in a
name other than that of the registered holder on the Fund's books of
the Fund Shares constructively exchanged for the Series Shares shall
be paid by the person to whom such Series Shares are to be issued, as
a condition of such transfer.
(g) Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the date on which it is
liquidated.
4. VALUATION
(a) The valuation time shall be the close of business of the New York
Stock Exchange on the Closing Date (the Valuation Time) or such other
date as may be mutually agreed upon in writing by the parties hereto.
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value per share of each class
computed as of the Valuation Time, using the valuation procedures set
forth in the Fund's then current Prospectus and Statement of
Additional Information, multiplied by the number of outstanding Fund
Shares.
(c) The number, value, class, and denomination of full and fractional
Series Shares to be issued in exchange for the Fund's net assets shall
be equal to the number, value, class, and denomination of full and
fractional Fund Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by
Fidelity Service Company, Inc. (FSC), a wholly-owned subsidiary of FMR
Corp., in accordance with its regular practice as pricing agent for
the Fund.
5. FEES; EXPENSES
(a) Advisor II and the Fund each represents that there is no person
who dealt with it who by reason of such dealings is entitled to any
broker's or finder's fees or commissions arising out of the
transactions contemplated hereby.
(b) The Fund shall be responsible for all expenses, fees and other
charges in connection with the transactions contemplated by the
agreement, provided that they do not exceed each class's expense cap.
Expenses exceeding each class's expense cap, as applicable, will be
paid by FMR, but not including costs incurred in connection with the
purchase or sale of portfolio securities.
6. CLOSING DATE
(a) The transfer of the Fund's assets in exchange for the assumption
by the Series of the Fund's liabilities and the issuance of Series
Shares, as described above, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of Advisor VI and Advisor II, 82
Devonshire Street, Boston, Massachusetts, on February 26, 1999, or at
such other place or date as the parties may agree in writing (the
Closing Date). All acts taking place at the Closing shall be deemed to
take place simultaneously as of the Valuation Time or at such other
time and/or place as the parties may agree.
(b) In the event that, on the Closing Date (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or reporting of trading on
said markets or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of the Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day
when such trading shall have been fully resumed and reporting shall
have been restored, or such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an
authorized officer stating that it has notified UMB Bank, as custodian
for the Fund, of the Fund's reorganization to a series of Advisor II.
(d) UMB Bank, as transfer agent for the Fund, shall deliver at the
Closing a certificate as to the conversion on its books and records of
each Fund Shareholder account to an account as a holder of Series
Shares. Advisor II shall issue and deliver a confirmation to the Fund
evidencing the Series Shares to be credited as of the Closing Date or
provide evidence satisfactory to the Fund that such Series Shares have
been credited to the Fund's account on the books of Advisor II. At the
Closing, each party shall deliver to the other such bills of sale,
checks, assignments, stock certificates, receipts or other documents
as such other party or its counsel may reasonably request.
7. SHAREHOLDER MEETING AND TERMINATION OF THE FUND
(a) If required to do so pursuant to the terms of Advisor VI's
Amended and Restated Declaration of Trust or otherwise by applicable
law, the Fund agrees to call a meeting of its shareholders (the
Shareholders' Meeting) to consider and act upon this Agreement. The
Fund shall take all other action necessary to obtain approval of the
transactions contemplated hereby.
(b) The Fund agrees that as soon as reasonably practicable after
distribution of the Series Shares, the Fund shall be liquidated and
terminated as a series of Advisor VI pursuant to its Amended and
Restated Declaration of Trust, any further actions shall be taken in
connection therewith as required by applicable law, and on and after
the Closing Date the Fund shall not conduct any business except in
connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF ADVISOR II
The obligations of Advisor II hereunder shall be subject to the
following conditions:
(a) That the Fund furnishes to Advisor II a statement, dated as of
the Closing Date, signed by an officer of Advisor VI, certifying that
as of the Valuation Time and the Closing Date all representations and
warranties of the Fund made in this Agreement are true and correct in
all material respects and that the Fund has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates;
(b) That the Fund furnishes Advisor II with copies of the
resolutions, certified by an officer of Advisor VI, evidencing the
adoption of this Agreement and, if applicable, the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of the Fund;
(c) That the Fund shall deliver to Advisor II at the Closing a
statement of its assets and liabilities, together with a certificate
as to the aggregate asset value of the Fund's portfolio securities,
all as of the Valuation Time, certified on the Fund's behalf by its
Treasurer or Assistant Treasurer;
(d) That the Fund's custodian shall deliver to Advisor II a
certificate identifying the assets of the Fund held by such custodian
as of the Valuation Time on the Closing Date and stating that at the
Valuation Time (i) the assets held by the custodian will be
transferred to the Series; (ii) the Fund's assets have been duly
endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the
custodian's knowledge, all necessary taxes in conjunction with the
delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment
has been made;
(e) That the Fund's transfer agent shall deliver to Advisor II at the
Closing a certificate setting forth the number of shares of each class
of shares of the Fund outstanding as of the Valuation Time and the
name and address of each holder of record of any such shares and the
number of shares held of record by each such shareholder;
(f) If applicable, that the Fund calls a Shareholder's Meeting to
consider and act upon this Agreement and that the Fund takes all other
action necessary to obtain approval of the transactions contemplated
hereby;
(g) That the Fund delivers to Advisor II a certificate of an officer
of Advisor VI, dated the Closing Date, that there has been no material
adverse change in the Fund's financial position since May 31, 1997,
other than changes in the market value of its portfolio securities, or
changes due to net redemptions of its shares, dividends paid, or
losses from operations; and
(h) That all of the issued and outstanding shares of beneficial
interest of the Fund shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the
extent that any audit of the records of the Fund or its transfer agent
by Advisor II or its agents shall have revealed otherwise, the Fund
shall have taken all actions that in the opinion of Advisor II are
necessary to remedy any prior failure on the part of the Fund to have
offered for sale and sold such shares in conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF THE FUND
The obligations of the Fund hereunder shall be subject to the
following conditions:
(a) That Advisor II shall have executed and delivered to the Fund an
Assumption of Liabilities, certified by an officer of Advisor II,
dated as of the Closing Date pursuant to which trust, on behalf of the
Series, will assume all of the liabilities of the Fund existing at the
Valuation Time in connection with the transactions contemplated by
this Agreement;
(b) That Advisor II furnishes to the Fund a statement, dated as of
the Closing Date, signed by an officer of trust, certifying that as of
the Valuation Time and the Closing Date all representations and
warranties of the Series made in this Agreement are true and correct
in all material respects, and Advisor II has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That the Fund shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to the Fund and Advisor II, to the effect that
the Series Shares are duly authorized and upon delivery to the Fund as
provided in this Agreement will be validly issued and will be fully
paid and nonassessable under Massachusetts law.
10. CONDITIONS TO OBLIGATIONS OF THE FUND AND ADVISOR II
The obligations of the Fund and Advisor II hereunder shall be subject
to the following conditions:
(a) If applicable, that this Agreement shall have been adopted and
the transactions contemplated herein shall have been approved by the
requisite vote of the holders of the outstanding shares of beneficial
interest of the Fund;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Securities and Exchange Commission
and of state blue sky and securities authorities, including "no
action" positions of such federal or state authorities) deemed
necessary by Advisor II or the Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order,
or permit would not involve a risk of a material adverse effect on the
assets or properties of Advisor II or the Fund, provided that either
party hereto may for itself waive any of such conditions;
(c) That all proceedings taken by either the Fund or the Series in
connection with the transactions contemplated by this Agreement and
all documents incidental thereto shall be satisfactory in form and
substance to it and its counsel, Kirkpatrick & Lockhart LLP;
(d) That Advisor II shall have taken all necessary action so that the
Series shall be a series of a registered open-end investment company
under the 1940 Act immediately after the closing.
(e) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;
(f) That Advisor II and the Fund shall have received an opinion of
Kirkpatrick & Lockhart LLP satisfactory to Advisor II and the Fund
that for federal income tax purposes:
(i) The Reorganization should constitute a reorganization under
Section 368(a)(1)(F) of the Code, and the Fund and the Series each
should be a party to the Reorganization under section 368(b) of the
Code;
(ii) No gain or loss will be recognized by the Fund upon the
transfer of all of its assets to the Series in exchange solely for the
applicable classes of the Series Shares and the assumption of the
Fund's liabilities followed by the distribution of those the Series
Shares to the shareholders of the corresponding classes of the Fund;
(iii) No gain or loss will be recognized by the Series on the
receipt of the Fund's assets in exchange solely for the Series Shares
and the assumption of the Fund's liabilities;
(iv) The basis of the Fund's assets in the hands of the Series will
be the same as the basis of such assets in the Fund's hands
immediately prior to the Reorganization;
(v) The Series' holding period in the assets to be received from the
Fund will include the Fund's holding period in such assets;
(vi) A Fund Shareholder will recognize no gain or loss on the
exchange of his or her shares of beneficial interest in the Fund for
the Series Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the the Series Shares to be
received by him or her will be the same as his or her basis in the
Fund Shares exchanged therefor;
(viii) A Fund Shareholder's holding period for his or her Series
Shares will include the holding period of the Fund Shares exchanged,
provided that those Fund Shares were held as capital assets on the
date of the Reorganization;
(ix) The Reorganization will not result in termination of the
Fund's taxable year and the Fund's tax attributes enumerated in
Section 381(c) of the Code will be taken into account by the Series as
if there had been no conversion.
Notwithstanding anything herein to the contrary, neither the Fund nor
Advisor II may waive the conditions set forth in this subsection
10(f).
11. COVENANTS OF THE FUND AND ADVISOR II
(a) The Fund covenants to operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include the payment of customary
dividends and distributions.
(b) The Fund covenants that the Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
(c) The Fund covenants that it will assist Advisor II in obtaining
such information as Advisor II reasonably requests concerning the
beneficial ownership of Fund Shares.
(d) The Fund covenants that its liquidation and termination will be
effected in the manner provided in its Amended and Restated
Declaration of Trust in accordance with applicable law and, after the
Closing Date, the Fund will not conduct any business except in
connection with its liquidation and termination.
12. TERMINATION; WAIVER
(a) The parties hereto may terminate this Agreement by mutual
consent. In addition, either party may, at its option, terminate this
Agreement at or prior to the Closing Date because
(i) Of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) A condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
(b) In the event of any such termination, there shall be no liability
for damages on the part of Advisor II or the Fund, or their respective
Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES
(a). This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the appropriate
officers of Advisor VI, Advisor II, the Fund, or the Series; provided,
however, that following the shareholders' meeting, if any, called by
the Fund pursuant to Section 7 of this Agreement, no such amendment
may have the effect of changing the provisions for determining the
number of the Series Shares to be received by the Fund shareholders
under this Agreement to the detriment of such shareholders without
their further approval.
(c) Either party may waive any condition to its obligations
hereunder, provided that such waiver does not have any material
adverse effect on the interests of Fund Shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. DECLARATIONS OF TRUST
Copies of the Declarations of Trust of Advisor II and Advisor VI, as
restated and amended, are on file with the Secretary of State of the
Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of Advisor II and
Advisor VI as trustees and not individually and that the obligations
of the Fund and the Series under this instrument are not binding upon
any of Advisor VI's or Advisor II's Trustees, officers, or
shareholders individually, but are binding only upon the assets and
property of such Fund or Series. The Fund and Advisor II each agrees
that its obligations hereunder apply only to such Fund and the Series,
respectively, and not to its shareholders individually or to the
trustees of such Fund or Series.
15. ASSIGNMENT
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
FIDELITY ADVISOR SERIES VI, on behalf of
FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
[signature lines omitted]
FIDELITY ADVISOR SERIES II
[signature lines omitted]
FMR hereby agrees to assume the expenses provided for in
accordance with paragraph 5(b) of this Agreement.
FIDELITY MANAGEMENT & RESEARCH COMPANY
[signature lines omitted]
EXHIBIT 3
Amended and Restated Declaration of Trust of Fidelity Advisor Series
II, dated May 13, 1998, marked to show differences from the Amended
and Restated Declaration of Trust of Fidelity Advisor Series VI, dated
September 14, 1995.
((UNDERLINED)) DISCLOSURE WILL BE ADDED; [BRACKETED] DISCLOSURE WILL
BE DELETED.
AMENDED AND RESTATED DECLARATION OF TRUST
[DATED SEPTEMBER 14, 1995]
((DATED MAY 13, 1998))
AMENDED AND RESTATED DECLARATION OF TRUST, made [September 14, 1995]
((May 13, 1998)) by each of the Trustees whose signature is affixed
hereto (the "Trustees").
WHEREAS, the Trustees desire to amend and restate this Declaration of
Trust for the sole purpose of supplementing the Declaration ((of Trust
)) to incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on [June 1, 1983] ((April 23,
1986)) by Edward C. Johnson 3d, [Caleb Loring, Jr.,] ((Samuel W.
Bodman,)) and Frank Nesvet in order to establish a trust fund for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in
[Trust]((trust)) under this Amended and Restated Declaration of Trust
as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Fidelity Advisor Series
[VI".]((II."))
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The [Terms]((terms)) "Affiliated Person," "Assignment,"
"Commission," "Interested Person," "Majority Shareholder Vote" (the
67% or 50% requirement of the third sentence of Section 2(a)(42) of
the 1940 Act, whichever may be applicable)((,)) and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, [as
amended from time to time;] ((as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder;))
[(b) The "Trust" refers to Fidelity Advisor Series VI and reference
to the Trust, when applicable to one or more Series of the Trust,
shall refer to any such Series;]
(( (b) "Bylaws" shall mean the bylaws of the Trust, if any, as amended
from time to time;
(c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III;
(d) "Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)](((e))) "Net Asset Value" means the net asset value of each
Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
([d)](((f))) "Shareholder" means a record owner of Shares of the
Trust;
[(e) The "Trustees" refer to the individual trustees in their
capacity as trustees hereunder of the Trust and their successor or
successors for the time being in office as such trustee or trustees;]
[(f)](((g))) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest of ((the Trust
or)) each Series shall be divided from time to time, ((including such
Class or Classes of Shares as the Trustees may from time to time
create and establish)) and [includes]((including)) fractions of
((Shares))[shares] as well as whole [shares]((Shares as)) consistent
with the requirements of Federal and/or [other] ((state)) securities
laws; [and]
[(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.]
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III;
(( (i) "Trust" refers to Fidelity Advisor Series II and reference to
the Trust, when applicable to one or more Series of the Trust, shall
refer to any such Series;
(j)"Trustees" refer to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for
the time being in office as such trustee or trustees; and
(k)"1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.))
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided
into such transferable Shares of one or more separate and distinct
Series ((or Classes of Series)) as the Trustees shall((,)) from time
to time((,)) create and establish. The number of ((authorized)) Shares
((of each Series, and Class thereof,)) is unlimited. [and each]
((Each)) Share shall be without par value and shall be fully paid and
nonassessable. The Trustees shall have full power and authority, in
their sole discretion((,)) and without obtaining any prior
authorization or vote of the ((Shareholders or any Series or Class
of)) Shareholders of the Trust (((a))) to create and establish (and to
change in any manner) Shares ((or any Series or Classes thereof)) with
such preferences, voting powers, rights((,)) and privileges as the
Trustees may((,)) from time to time((,)) determine((; (b))) to divide
or combine the [shares]((Shares or any Series or Classes thereof))
into ((a greater or lesser number; (c) to classify or reclassify any
issued Shares into)) one or more Series ((or Classes)) of Shares;
(((d))) to abolish any one or more Series ((or Classes)) of Shares;
and (((e))) to take such other action with respect to the Shares as
the Trustees may deem desirable.
ESTABLISHMENT OF SERIES ((AND CLASSES))
Section 2. The establishment of any Series ((or Class thereof))
shall be effective upon the adoption of a resolution by a majority of
the then Trustees setting forth such establishment and designation and
the relative rights and preferences of the Shares of such Series ((or
Class)). At any time that there are no Shares outstanding of any
particular Series ((or Class)) previously established and designated,
the Trustees may by a majority vote abolish [that] ((such)) Series
((or Class)) and the establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books of
the Trust ((or a transfer or similar agent)). The Trustees may make
such rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of ((the Trust as kept by)) the
Trust ((or by any transfer or similar agent, as the case may be,))
shall be conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may((,)) from time to time((,))
authorize. Such investments may be in the form of cash [or]((,
securities, or other property)) in which the appropriate Series is
authorized to invest, valued as provided in Article X, Section 3.
After the date of the initial contribution of capital, the number of
Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding((,)) and the amount received
by the Trustees on account of the contribution shall be treated as an
asset of the Trust. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full Shares at
the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion [,](a) impose a sales charge ((or other fee)) upon
investments in the Trust ((or Series or any Classes thereof,)) and (b)
issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES ((AND CLASSES))
Section 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be referred to as "assets
belonging to" that Series. In addition any assets, income, earnings,
profits, and proceeds thereof, funds, or payments [which] ((that)) are
not readily identifiable as belonging to any particular Series ((or
Class,)) shall be allocated by the Trustees between and among one or
more of the Series ((or Classes)) in such manner as they, in their
sole discretion, deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Shareholders of all Series ((or
Classes)) for all purposes[,] and shall be referred to as assets
belonging to that Series ((or Class)). The assets belonging to a
particular Series shall be so recorded upon the books of the Trust
((or of its agent or agents))[,] and shall be held by the Trustees in
[Trust]((trust)) for the benefit of the holders of Shares of that
Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges
[or]((, and)) reserves ((attributable to that Series, except that
liabilities and expenses may, in the Trustees' discretion, be
allocated solely to a particular Class and, in which case, shall be
borne by that Class. Any general liabilities, expenses, costs,
charges, or reserves)) of the Trust [which] ((that)) are not readily
identifiable as belonging to any particular Series ((or Class)) shall
be allocated and charged by the Trustees between or among any one or
more of the Series ((or Classes)) in such manner as the Trustees((,))
in their sole discretion((,)) deem fair and equitable[, and shall be
referred to as] "liabilities belonging to" that Series ((or Class)).
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series ((or Classes)) for all purposes. Any
creditor of any Series may look only to the assets of that Series to
satisfy such creditor's debt. ((No Shareholder or former Shareholder
of any Series shall have a claim on or any right to any assets
allocated or belonging to any other Series.))
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
((STATUS OF SHARES AND ))LIMITATION OF PERSONAL LIABILITY
(( Section 7. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder by
virtue of having become a Shareholder shall be held to have expressly
assented and agreed to be bound by the terms hereof. No Shareholder of
the Trust and of each Series shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or by or on behalf of
any Series.)) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum
of money or assessment whatsoever other than such as the Shareholder
may, at any time, personally agree to pay by way of subscription for
any Shares or otherwise. Every note, bond, contract, or other
undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust ((or to a Series)) shall include a recitation
limiting the obligation represented thereby to the Trust ((or to one
or more Series)) and its ((or their)) assets (but the omission of such
a recitation shall not operate to bind any Shareholder ((or
Trustee))).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable
to carry out that responsibility.
[ELECTION: INITIAL TRUSTEES]
((INITIAL TRUSTEES; ELECTION))
((Section 2. The initial Trustees shall be at least three
individuals who shall affix their signatures hereto.)) On a date fixed
by the Trustees, the Shareholders shall elect not less than three
Trustees. A Trustee shall not be required to be a Shareholder of the
Trust. [The initial Trustees shall be Edward C. Johnson 3d, Caleb
Loring, Jr. and Frank Nesvet and such other individuals as the Board
of Trustees shall appoint pursuant to Section 4 of the Article IV].
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of
this Trust, and until its termination as hereinafter ((provided))[;]
except (a) that any Trustee may resign his trust by written instrument
signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written
instrument, signed by at least two-thirds (((2/3))) of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing
to be retired or who has become incapacitated by illness or injury may
be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [Special Meeting]((special meeting)) of the Trust by
a vote of two-thirds (((2/3))) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation,
retirement, ((or)) removal[, incapacity, or inability] of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number[,] ((of the Trustees,)) or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the [Investment Company Act of 1940. ] ((1940 Act.))
Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by recording in the records of
the Trust, whereupon the appointment shall take effect. An
appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement,
resignation((,)) or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only
at or after the effective date of said retirement, resignation((,)) or
increase in number of Trustees. As soon as any Trustee so appointed
shall have accepted this [trust]((Trust,)) the [trust]((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 [as] ((a)) Trustee hereunder. The ((foregoing)) power
of appointment is subject to the provisions of Section 16(a) of the
1940 Act ((as modified by or interpreted by any applicable order or
orders of the Commission or any rules or regulations adopted or
interpretative releases of the Commission.))
TEMPORARY ABSENCE OF TRUSTEE((S))
Section 5. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six (((6))) months at any one time to any
other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more
than twelve (12), serving hereunder at any time shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee [is absent from the
Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or] is physically
or mentally incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy[, absence] or incapacity[,] shall
be conclusive[, provided, however, that no vacancy shall remain
unfilled for a period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [The]((the)) Trustees shall not
in any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which] ((that)) they, in their
[uncontrolled] discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the] ((this))
Declaration of Trust or by the Bylaws of the Trust, ((if any,)) the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,))being
bound or limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a bank] ((one or more banks,)) [or] trust [company]
((companies, companies that are members of a national securities
exchange, or other entities permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) as [custodian]((custodians)) of any assets of
the Trust subject to any conditions set forth in this Declaration of
Trust or in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [principal underwriter]((Principal Underwriter)) in the
manner hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent,]((investment adviser,
manager,)) custodian, [or] underwriter, ((or other agent or
independent contractor.))
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4 [(b)] hereof.
(j) To vote or give assent[,] or exercise any rights of ownership[,]
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees[, subject in either case to proper safeguards according to
the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III ((and to establish
Classes of such Series having relative rights, powers, and duties as
the Trustees may provide consistent with applicable laws.))
(n) To allocate assets, liabilities((,)) and expenses of the Trust to
a particular Series ((or Class, as appropriate,)) or to apportion the
same between or among two or more Series ((or Classes, as
appropriate)), provided that any liabilities or expenses incurred by a
particular Series ((or Class)) shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money and to pledge, mortgage or hypothecate the assets
of the Trust((,)) subject to applicable requirements of the 1940 Act[;
provided that with respect to the Short-Term Series, the Trustees
shall have power and authority to borrow money from a bank for
temporary or emergency purposes and not for investment purposes and
the Trustees shall not pledge, mortgage or hypothecate the assets of
the Trust except that, to secure borrowings, the Trustees may pledge
securities].
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(((t) To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.
(u) To interpret the investment policies, practices or limitations
of any Series.
(v) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or
powers.))
[(t)] (((w))) Notwithstanding any other provision hereof, to invest
all of the assets of any [series]((Series)) in a single open-end
investment company, including investment by means of transfer of such
assets in exchange for an interest or interests in such investment
company.
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws((, if any.))
ACTION BY THE TRUSTEES
Section 3. [The] ((Except as otherwise provided herein or in the
1940 Act, the)) Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of] ((at which)) the
Trustees ((are present in person)). At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date((,))
and place of all meetings ((of the Trustees shall be given by the
party calling the meeting)) to each Trustee by telephone((, telefax,))
[or] telegram, ((or other electro-mechanical means)) sent to his home
or business address at least twenty-four (((24))) hours in advance of
the meeting or by written notice mailed to his home or business
address at least seventy-two (((72))) hours in advance of the meeting.
Notice need not be given to any Trustee[s] who attends the meeting
without objecting to the lack of notice or who executes a written
waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may
delegate to any one of their number their authority to approve
particular matters or take particular actions on behalf of the Trust.
((Written consents or waivers of Trustees may be executed in one or
more counterparts. Execution of a written consent or waiver and
delivery thereof to the Trust may be accomplished by telefax or other
electro-mechanical means.))
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the
Trust, and may be the chief executive, financial and accounting
officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust; interest
expense, taxes, fees and commissions of every kind; expenses of
pricing Trust portfolio securities; expenses of issue, repurchase and
redemption of shares including expenses attributable to a program of
periodic repurchases or redemptions, ((expenses of registering and
qualifying the Trust and its Shares under Federal and state laws and
regulations; charges of custodians, transfer agents, and registrars;))
expenses of preparing and setting up in type
[Prospectuses]((prospectuses)) and [Statements]((statements)) of
[Additional Information]((additional Information)); expenses of
printing and distributing prospectuses sent to existing Shareholders;
auditing and legal expenses; reports to Shareholders; expenses of
meetings of Shareholders and proxy solicitations [therefor]
((therefore)); insurance expense; association membership dues; and for
such non-recurring items as may arise, including litigation to which
the Trust is a party; and for all losses and liabilities by them
incurred in administering the Trust, and for the payment of such
expenses, disbursements, losses((,)) and liabilities the Trustees
shall have a lien on the assets belonging to the appropriate Series
prior to any rights or interests of the Shareholders thereto. This
section shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER,
AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees
may((,)) in their discretion ((and)) from time to time((,)) enter into
an investment advisory or management contract(s) with respect to the
Trust or any Series thereof whereby the other party(ies) to such
contract(s) shall undertake to furnish the Trustees such management,
investment advisory, statistical((,)) and research facilities and
services and such other facilities and services, if any, and all upon
such terms and conditions, as the Trustees may((,)) in their
discretion((,)) determine. Notwithstanding any provisions of this
Declaration of Trust, the Trustees may authorize the investment
adviser(s) (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities and other investment instruments of
the Trust on behalf of the Trustees or may authorize any officer,
agent, or Trustee to effect such purchases, sales((,)) or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales((,)) and
exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
((as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) including those relating to
Shareholder approval, authorize the investment adviser to employ one
or more sub-advisers from time to time to perform such of the acts and
services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time
enter into [(a)] (((an) exclusive or non-exclusive)) contract(s) ((on
behalf of the Trust or any Series or Class thereof)) providing for the
sale of the Shares, whereby the Trust may either agree to sell the
Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall
be on such terms and conditions as may be prescribed in the Bylaws, if
any, and such further terms and conditions as the Trustees may((,)) in
their discretion((,)) determine not inconsistent with the provisions
of this Article VII[,] or of the Bylaws, if any[, and such]((. Such))
contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may((,)) in their discretion ((and)) from
time to time((,)) enter into [a] ((one or more)) transfer agency and
Shareholder service [contract] ((contracts)) whereby the other party
shall undertake to furnish the Trustees with transfer agency and
Shareholder services. [The]((Such)) [contract] ((contracts)) shall be
on such terms and conditions as the Trustees may((,)) in their
discretion((,)) determine not inconsistent with the provisions of this
Declaration of Trust or of the [bylaws]((Bylaws)), if any. Such
services may be provided by one or more entities.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1, 2
and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association,
although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or
rendered voidable by reason of the existence of any relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the Bylaws, if any. The same person
(including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections
1, 2 and 3 above or Article IX, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any
or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections 1 and 2 of
this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act((, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission)) ([including any amendments thereof] or other applicable
Act of Congress hereafter enacted) with respect to its continuance in
effect, ((its amendment,)) its termination, and the method of
authorization and approval of such contract or renewal thereof[, and
no amendment to any contract, entered into pursuant to Section 1 shall
be effective unless assented to by a Majority Shareholder Vote].
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote [(i)](((a)))
for the election of Trustees as provided in Article IV, Section 2[,
(ii)]((; (b))) for the removal of Trustees as provided in Article IV,
Section 3(d)[, (iii)]((; (c))) with respect to any investment advisory
or management contract as provided in Article VII,
[Section]((Sections)) 1 ((and 5; (d) with respect to any termination,
merger, consolidation, reorganization, or sale of assets of the Trust
or any of its Series or Classes as provided in Article XII, Section 4;
(e)))[(iv)] with respect to the amendment of this Declaration of Trust
as provided in Article XII, Section 7, [(v)](((f))) to the same extent
as the shareholders of a Massachusetts business corporation, as to
whether or not a court action, proceeding or claim should be brought
or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust, and
(vi)(((g))) with respect to such additional matters relating to the
Trust as may be required or authorized by law, by this Declaration of
Trust, or the Bylaws of the Trust, if any, or any registration of the
Trust with the [Securities and Exchange] Commission [(the
"Commissions")] or any [State]((state)), as the Trustees may consider
desirable.
On any matter submitted to a vote of the Shareholders, all
[shares]((Shares)) shall be voted by individual Series, ((except as
provided in the following sentence and)) except [(i)](((a))) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and [(ii)](((b))) when the Trustees have
determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to
vote thereon. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes.)) A
Shareholder of each Series ((or Class thereof)) shall be entitled to
one vote for each dollar of net asset value (number of Shares owned
times net asset value per share) of such Series ((or Class
thereof))[,] on any [mater] ((matter)) on which such Shareholder is
entitled to vote((,)) and each fractional dollar amount shall be
entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required
or permitted by law, this Declaration of Trust or any Bylaws of the
Trust((, if any,)) to be taken by Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be held as
specified in Section 2 of Article IV at the principal office of the
Trust or such other place as the Trustees may designate. Special
meetings of the Shareholders of any Series may be called by the
Trustees and shall be called by the Trustees upon the written request
of Shareholders owning at least one-tenth (((1/10))) of the
outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the [qualification]((qualifications)) set forth
in Section 16(c) of the 1940 Act, as ((modified by or interpreted by
any applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission,))
[same may be amended from time to time,] seek the opportunity of
furnishing materials to the other Shareholders with a view to
obtaining signatures on such a request for a meeting, the Trustees
shall comply with the provisions of said Section 16(c) with respect to
providing such Shareholders access to the list of the Shareholders of
record of the Trust or the mailing of such materials to such
Shareholders of record. Shareholders shall be entitled to at least
fifteen [day's ](((15) days)) notice of any meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class)) shall vote as a Series ((or Class)) then a
majority of the aggregate number of Shares of that Series ((or Class))
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series ((or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or)) by any
provision of this Declaration of Trust or the Bylaws, ((if any,)) a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class)) shall vote as a
Series ((or Class)), then a majority of the Shares of that Series ((or
Class)) voted on the matter shall decide that matter insofar as that
Series ((or Class)) is concerned. ((Shareholders may act by unanimous
written consent. Actions taken by a Series or Class may be consented
to unanimously in writing by Shareholders of that Series or Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank((, a
company that is a member of a national securities exchange,)) or trust
company((, or other entity permitted under the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) having capital, surplus and undivided profits
of at least two million dollars ($2,000,000), or such other amount [or
such other entity] as shall be allowed by the Commission or by the
1940 Act, as custodian with authority as its agent, but subject to
such restrictions, limitations or other requirements, if any, as may
be contained in the Bylaws of the Trust((, if any)):
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if [confirmed] in writing, or by
such electro-mechanical or electronic devices as are agreed to by the
Trust and the custodian, if such procedures have been authorized in
writing by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
[Trustee] ((Trustees)) may direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so[by the Trustees] , the Net
Asset Value of any Series ((or Class thereof)) in accordance with the
provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. [If so directed by a Majority Shareholder
Vote, the custodian shall deliver and pay over all property of the
Trust held by it as specified in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((, a company that is a member of a
national securities exchange,)) [or] trust company((, or other entity
permitted under the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder,)) [organized under the laws of the United States or one of
the states thereof and] having capital, surplus and undivided profits
of at least two million dollars ($2,000,000) or such other [person as
may be permitted by the Commission, or otherwise in accordance with
the 1940 Act as from time to time amended] ((amount as shall be
allowed by the Commission or by the 1940 Act.))
CENTRAL [CERTIFICATE] ((DEPOSITORY)) SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act [as from time to time
amended], pursuant to which system all securities of any particular
[class] ((Class)) or [series] ((Series)) of any issuer deposited
within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust ((or its custodian,
subcustodians, or other authorized agents)).
ARTICLE X
DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION
OF NET ASSET VALUE
[DISTRIBUTIONS AND REDEMPTIONS]
((DISTRIBUTIONS))
Section 1.
(a) The Trustees may from time to time declare and pay dividends.
The amount of such dividends and the payment of them shall be wholly
in the discretion of the Trustees.
(b) The Trustees shall have power, to the fullest extent permitted by
the laws of Massachusetts, at any time to declare and cause to be paid
dividends on Shares of a particular Series, from the assets belonging
to that Series, which dividends, at the election of the Trustees, may
be paid daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees
may determine, and may be payable in Shares of that Series((, or
Classes thereof,)) at the election of each Shareholder of that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock dividend))
pro rata among the Shareholders of a particular Series((, or Class
thereof,)) as of the record date of that Series ((or Class)) fixed as
provided in ((Article XII,)) Section 3 [hereof a "stock dividend"].
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the [principal underwriter]
((Principal Underwriter)) of the Series shall purchase his said
Shares, but only at the Net Asset Value thereof (as described in
Section 3 hereof). The Series shall make payment for any such [Share]
((Shares)) to be redeemed, as aforesaid, in cash ((or property)) from
the assets of that Series((,)) and payment for such Shares ((less any
applicable deferred sales charges and/or fees)) shall be made by the
Series or the principal underwriter of the Series to the Shareholder
of record within seven (7) days after the date upon which the request
is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series ((or Class))
shall mean that amount by which the assets of that Series ((or Class))
exceed its liabilities, all as determined by or under the direction of
the Trustees. Such value per Share shall be determined separately for
each Series ((or Class)) of Shares and shall be determined on such
days and at such times as the Trustees may determine. Such
determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the
fair value as determined in good faith by the Trustees, provided,
however, that the Trustees, without Shareholder approval, may alter
the method of appraising portfolio securities insofar as permitted
under the 1940 Act and the rules, regulations, and interpretations
thereof promulgated or issued by the Commission or insofar as
permitted by any [Order] ((order)) of the Commission applicable to the
Series. The Trustees may delegate any of its powers and duties under
this Section 3 with respect to appraisal of assets and liabilities.
At any time((,)) the Trustees may cause the value per Share last
determined to be determined again in ((a)) similar manner and may fix
the time when such redetermined value shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY ((AND INDEMNIFICATION))
Section 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
INDEMNIFICATION ((OF COVERED PERSONS))
Section 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office((, ))
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[interested persons] ((Interested Persons)) of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [paragraph]((Paragraph)) (a) of this Section 2 may be
paid by the applicable Series from time to time prior to final
disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the
applicable Series if it is ultimately determined that he is not
entitled to indemnification under this Section 2; provided, however,
that either ([a)] (((i))) such Covered Person shall have provided
appropriate security for such undertaking[, (b)] ((; (ii))) the Trust
is insured against losses arising out of any such advance
payments((;)) or [(c)] (((iii))) either a majority of the Trustees who
are neither interested persons of the Trust nor parties to the matter,
or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be found entitled to
indemnification under this Section 2.
((INDEMNIFICATION OF ))SHAREHOLDERS
Section 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators((,)) or
other legal representatives or((,)) in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by ((the
Shareholder, assume the defense of any claim made against)) the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP((, ETC.))
Section 1. It is hereby expressly declared that a trust ((is created
hereby)) and not a partnership [is created hereby]((, joint stock
association, corporation, bailment, or any form of a legal
relationship other than a trust.)) No Trustee hereunder shall have any
power to ((personally)) bind [personally] either the Trust's officers
or any Shareholder. All persons extending credit to, contracting
with((,)) or having any claim against the Trust or the Trustees shall
look only to the assets of the appropriate Series for payment under
such credit, contract((,)) or claim; and neither the Shareholders nor
the Trustees, nor any of their agents, whether past, present((,)) or
future, shall be personally liable [therefor.] ((therefore.)) Nothing
in this Declaration of Trust shall protect a Trustee against any
liability to which the Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence((,)) or reckless
disregard of the duties involved in the conduct of the office of
Trustee hereunder.
[TRUSTEE'S] ((TRUSTEES' ))GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY
Section 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article
XII and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1
of this Article XII and to Article XI, shall be under no liability for
any act or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any [dividend,] ((dividends,)) or the date for the
allotment of rights, or the date when any change or conversion or
exchange of Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of, and to vote
at, any such meeting, or entitled to receive payment of any such
dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of
Shares, and in such case such Shareholders and only such Shareholders
as shall be Shareholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend, or to receive such allotment or
rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust
after any such record date fixed or aforesaid.
((DURATION; ))TERMINATION OF TRUST((, A SERIES OR A CLASS; MERGERS,
ETC.))
[Section 4.
(a) This Trust shall continue without limitation of time but subject
to the provisions of sub-section (b) of this Section 4.]
((Section 4.1. Duration. The Trust shall continue without limitation
of time, but subject to the provisions of this Article XII.))
[(b) Subject to a Majority Shareholder Vote of each Series affected
by the matter or, if applicable, to a Majority Shareholder Vote of the
Trust, the Trustees may]
((Section 4.2. Termination of the Trust, a Series or a Class. (a)
Subject to applicable Federal and state law, the Trust or any Series
or Class thereof may be terminated (i) by Majority Shareholder Vote of
the Trust, each Series affected, or each Class affected, as the case
may be; or (ii) without the vote or consent of Shareholders by a
majority of the Trustees either at a meeting or by written consent.
The Trustees shall provide written notice to the affected Shareholders
of a termination effected under clause (ii) above. Upon the
termination of the Trust or the Series or Class,))
[(i) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or]
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
[(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.]
(((ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below;))
[Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding].
(((iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights.))
[(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees shall be discharged
of any and all further liabilities and duties hereunder and the right,
title and interest of all parties shall be cancelled and discharged.]
(((b) After termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.
Section 4.3. Merger, Consolidation, and Sale of Assets. Subject to
applicable Federal and state law and except as otherwise provided in
Section 4.4 below, the Trust or any Series thereof may merge or
consolidate with any other corporation, association, trust, or other
organization or may sell, lease, or exchange all or substantially all
of the Trust property or Trust property allocated or belonging to such
Series, including its good will, upon such terms and conditions and
for such consideration when and as authorized at any meeting of
Shareholders called for such purpose by a Majority Shareholder Vote of
the Trust or affected Series, as the case may be. Any such merger,
consolidation, sale, lease, or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to Massachusetts
law.
Section 4.4. Incorporation; Reorganization. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all of the Trust property or the Trust
property allocated or belonging to such Series or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series thereof sells, conveys, or transfers
substantially all of its assets to another entity or merges or
consolidates with another entity.))
FILING OF COPIES, REFERENCES, ((AND ))HEADINGS
Section 5. The original or a copy of this instrument and of each
[declaration] ((Declaration)) of [trust] ((Trust)) supplemental hereto
shall be kept at the office of the Trust where it may be inspected by
any Shareholder. A copy of this instrument and of each supplemental
[declaration] ((Declaration)) of [trust] ((Trust)) shall be filed by
the Trustees with the Secretary of [the] ((The)) Commonwealth of
Massachusetts and the Boston City Clerk, as well as any other
governmental office where such filing may from time to time be
required. Anyone dealing with the Trust may rely on a certificate by
an officer or Trustee of the Trust as to whether or not any such
supplemental [declarations] ((Declarations)) of [trust] ((Trust)) have
been made and as to any matters in connection with the Trust
hereunder, and with the same effect as if it were the original, may
rely on a copy certified by an officer or Trustee of the Trust to be a
copy of this instrument or of any such supplemental pdeclaration]
((Declaration)) of [trust. ] ((Trust.)) In this instrument or in any
such supplemental [declaration] ((Declaration)) of [trust,] ((Trust,))
references to this ((instrument))[,] and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer to this
instrument as amended or affected by any such supplemental
[declaration] ((Declaration)) of [trust.] ((Trust.)) Headings are
placed herein for convenience of reference only and in case of any
conflict, the text of this instrument, rather than the headings, shall
control. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
APPLICABLE LAW
Section 6. The [trust] ((Trust)) set forth in this instrument is
made in [the] ((The)) Commonwealth of Massachusetts, and it is created
under and is to be governed by and construed and administered
according to the laws of said Commonwealth. The Trust shall be of the
type commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust((, and the absence of a
specific reference herein to any such power, privilege, or action
shall not imply that the Trust may not exercise such power or
privilege or take such actions.))
AMENDMENTS
[Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case,
the Trustees shall amend or otherwise supplement this instrument, by
making a declaration of trust supplemental hereto, which thereafter
shall form a part hereof, except that an amendment which shall affect
the Shareholders of one or more Series but not the Shareholders of all
outstanding Series shall be authorized by vote of the Shareholders
holding a majority of the Shares entitled to vote of each Series
affected and no vote of Shareholders of a Series not affected shall be
required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Copies of the supplemental declaration of trust shall be filed as
specified in Section 5 of this Article XII].
((Section 7. Except as specifically provided herein, the Trustees
may, without shareholder vote, amend or otherwise supplement this
Declaration of Trust by making an amendment, a Declaration of Trust
supplemental hereto or an amended and restated Declaration of Trust.
Shareholders shall have the right to vote (a) on any amendment that
would affect their right to vote granted in Section 1 of Article VIII;
(b) on any amendment that would alter the maximum number of Trustees
permitted under Section 6 of Article IV; (c) on any amendment to this
Section 7; (d) on any amendment as may be required by law or by the
Trust's registration statement filed with the Commission; and (e) on
any amendment submitted to them by the Trustees. Any amendment
required or permitted to be submitted to Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more
Series or Classes shall be authorized by vote of the Shareholders of
each Series or Class affected and no vote of shareholders of a Series
or Class not affected shall be required. Notwithstanding anything else
herein, any amendment to Article XI shall not limit the rights to
indemnification or insurance provided therein with respect to action
or omission of Covered Persons prior to such amendment.))
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified
date as set forth in the Bylaws, ((if any,)) provided, however, that
the Trustees may, without Shareholder approval, change the fiscal year
of the Trust.
USE OF THE WORD "FIDELITY"
Section 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying
word "Fidelity" in the name of any Series of the Trust at some future
date. Such consent is conditioned upon the employment of FMR ((or a
subsidiary or affiliate thereof)) as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of
the name of the Trust insofar as such name contains the identifying
word "Fidelity." FMR may from time to time use the identifying word
"Fidelity" in other connections and for other purposes, including,
without limitation, in the names of other investment companies,
corporations((,)) or businesses [which] ((that)) it may manage,
advise, sponsor or own or in which it may have a financial interest.
FMR may require the Trust or any Series thereof to cease using the
identifying word "Fidelity" in the name of the Trust or any Series
thereof if the Trust or any Series thereof ceases to employ FMR or a
subsidiary or affiliate thereof as investment adviser.
((PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
Section 10.(a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.
(b) If any provision of this Declaration Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this 14th] ((this ))day [of
September, 1995].((of , 1998.))
((SIGNATURE LINES OMITTED))
EXHIBIT 4
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
[TO BE UPDATED AS OF 5/30/98]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
MUNICIPAL INCOME
Advisor Municipal Bond
Class A ((dagger)) 12/31/97** $ 101.1 .40%*
Class B 12/31/96 0.2 .40*
Class T 12/31/96 2.3 .40*
Initial Class 12/31/96 988.5 .40*
Institutional Class 12/31/96 0.5 .40*
Limited Term Municipal Income 12/31/96 921.3 .38
Spartan Agressive Municipal Income 12/31/96 870.2 .45
Spartan Insured Municipal Income 12/31/96 339.2 .40
Spartan Michigan Municipal Income 12/31/96 235.5 .40
Spartan Minnesota Municipal Income 12/31/96 301.8 .40
Spartan Ohio Municipal Income 12/31/96 385.8 .40
Spartan Pennsylvania Municipal Income 12/31/96 276.7 .55
New York Insured Municipal Income 1/31/97 322.0 .40
New York Municipal Income 1/31/97 410.1 .40
Spartan Massachusetts Municipal Income 1/31/97 1,123.0 .39
Spartan New York Intermediate Municipal 1/31/97 54.4 .55*
Income
Spartan New York Municipal Income 1/31/97 312.1 .55
Spartan California Municipal Income 2/28/97 481.4 .39
Spartan Arizona Municipal Income 8/31/97 22.0 .55
Spartan Maryland Municipal Income 8/31/97 44.2 .55
Spartan Short-Intermediate Municipal 8/31/97 736.9 .55
Income
Advisor Municipal Income (formerly
Advisor High Income Municipal)
Class A 10/31/97 1.9 .39*
Class B 10/31/97 39.9 .39
Class T 10/31/97 424.8 .39
Class C ((dagger)) 10/31/98** 0.7 .39
Institutional Class 10/31/97 1.1 .39*
Advisor Intermediate Municipal Income
Class A 11/30/97 0.4 .39*
Class B 11/30/97 7.5 .39*
Class T 11/30/97 50.8 .39*
Class C 11/30/97 0.0 .39*
Institutional Class 11/30/97 6.8 .39*
Spartan Connecticut Municipal Income 11/30/97 332.2 .55
Spartan Florida Municipal Income 11/30/97 393.4 .55
Spartan Municipal Income 11/30/97 1,829.4 .39
Spartan New Jersey Municipal Income 11/30/97 354.3 .55
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of November 30, 1997, if fiscal year end figures are not available.
(b) Average net assets are computed on the basis of average net assets
of each fund or class at the close of business on each business day
throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from FMR pursuant to voluntary or state expense limitations. Funds so
affected are indicated by an (*).
((dagger)) The ratio of net advisory fees to average net assets paid
to FMR represents the amount as of the prior fiscal year end. Updated
ratios will be presented for each class of shares of the fund when the
next fiscal year end figures are available.
** Less than a complete fiscal year
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------
FIDELITY ADVISOR SERIES VI: FIDELITY ADVISOR INTERMEDIATE MUNICIPAL
INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Donald J. Kirk, or any one or more
of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Advisor Series VI: Fidelity Advisor Intermediate
Municipal Income Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on October 7,
1998 at 10:00 a.m. and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your
name appears on this Proxy. When
signing in a fiduciary capacity,
such as executor, administrator,
trustee, attorney, guardian, etc.,
please so indicate. Corporate and
partnership proxies should be
signed by an authorized person
indicating the person's title.
Date , 1998
___________________________________
___________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 315917807/fund# 262
cusip # 315917609/fund# 689
cusip # 315917401/fund# 289
cusip # 315917872/fund# 525
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> <C>
1. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
fund.
2. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
diversification for the fund to exclude investments in
other investment companies from the limitation.
3. To approve and agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
reorganization of the fund.
</TABLE>
AIM-PXC-0898 cusip # 315917807/fund# 262
cusip # 315917609/fund# 689
cusip # 315917401/fund# 289
cusip # 315917872/fund# 525
cusip # 315917302/fund# 089
