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
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(Name of Registrant as Specified In Its Charter)
(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.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND:
CLASS A
CLASS B
CLASS T
INITIAL CLASS
INSTITUTIONAL CLASS
FIDELITY ADVISOR STRATEGIC INCOME FUND:
CLASS A
CLASS B
CLASS T
INSTITUTIONAL CLASS
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND:
CLASS A
CLASS B
CLASS T
INSTITUTIONAL CLASS
FUNDS OF FIDELITY ADVISOR SERIES VIII
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-522-7297
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Advisor Strategic Opportunities Fund, Fidelity Advisor
Strategic Income Fund and Fidelity Advisor Emerging Markets Income Fund
(the funds) will be held at the office of Fidelity Advisor Series VIII (the
trust), 82 Devonshire Street, Boston, Massachusetts 02109 on June 18, 1997,
at 9:00 a.m. The purpose of the Meeting is to consider and act upon the
following proposals, and to transact such other business as may properly
come before the Meeting or any adjournments thereof.
1. To elect a board of Trustees.
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the trust.
3. To amend the Declaration of Trust to provide dollar-based voting rights
for shareholders of the trust.
4. To amend the Declaration of Trust regarding shareholder notification of
appointment of Trustees.
5. To amend the Declaration of Trust to provide each fund with the ability
to invest all of its assets in another open-end investment company with
substantially the same investment objective and policies.
6. To adopt a new fundamental investment policy for Strategic Opportunities
Fund to permit the fund to invest all of its assets in another open-end
investment company with substantially the same investment objective and
policies.
7. To approve an amended management contract for Strategic Opportunities
Fund.
8. To approve an amended management contract for Strategic Income Fund.
9. To approve an amended management contract for Emerging Markets Income
Fund.
10. To approve an amended Sub-Advisory Agreement between Strategic
Opportunities Fund and FMR Far East.
11. To approve an amended Sub-Advisory Agreement between Strategic
Opportunities Fund and FMR (U.K.).
12. To amend the Class B Distribution and Service Plan for Strategic
Opportunities Fund and Emerging Markets Income Fund.
13. To amend the Class T Distribution Plan for Strategic Opportunities Fund
and Emerging Markets Income Fund.
14. To approve an agreement and plan providing for the reorganization of
Strategic Opportunities Fund.
15. To approve an agreement and plan providing for the reorganization of
Strategic Income Fund.
16. To amend the fundamental investment limitation on diversification for
Strategic Opportunities Fund to permit increased investment in the
securities of any single issuer.
17. To amend Strategic Opportunities Fund's fundamental investment
limitation concerning diversification to exclude investments in other
investment companies from the limitation.
18. To amend the fundamental investment limitation concerning real estate
for Strategic Opportunities Fund.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
19. To amend Strategic Opportunities Fund's fundamental investment
limitation concerning senior securities.
20. To eliminate Strategic Opportunities Fund's fundamental investment
limitation concerning short sales of securities and replace it with a
similar non-fundamental investment limitation.
21. To eliminate Strategic Opportunities Fund's fundamental investment
limitation concerning margin purchases and replace it with a similar
non-fundamental investment limitation.
22. To amend Strategic Opportunities Fund's fundamental investment
limitation concerning borrowing.
23. To amend Strategic Opportunities Fund's fundamental investment
limitation concerning the underwriting of securities.
24. To amend Strategic Opportunities Fund's fundamental investment
limitation concerning the concentration of its investments in a single
industry.
25. To amend Strategic Opportunities Fund's fundamental investment
limitation concerning lending.
26. To eliminate Strategic Opportunities Fund's fundamental investment
limitation concerning investments in other investment companies.
27. To eliminate Strategic Opportunities Fund's fundamental investment
limitation concerning investing in oil, gas, and mineral exploration
programs.
28. To eliminate Strategic Opportunities Fund's fundamental investment
limitation concerning investments in securities of newly-formed issuers.
The Board of Trustees has fixed the close of business on April 21, 1997 as
the record date for the determination of the shareholders of each of the
funds and classes entitled to notice of, and to vote at, such Meeting and
any adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
APRIL 21, 1997
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 Ann B. Collins, Trustee
Plan
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
FIDELITY ADVISOR SERIES VIII:
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND:
CLASS A
CLASS B
CLASS T
INITIAL CLASS
INSTITUTIONAL CLASS
FIDELITY ADVISOR STRATEGIC INCOME FUND:
CLASS A
CLASS B
CLASS T
INSTITUTIONAL CLASS
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND:
CLASS A
CLASS B
CLASS T
INSTITUTIONAL CLASS
TO BE HELD ON JUNE 18, 1997
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 VIII (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Advisor Strategic Opportunities Fund, Fidelity
Advisor Strategic Income Fund and Fidelity Advisor Emerging Markets Income
Fund (the funds) and at any adjournments thereof (the Meeting), to be held
on June 18, 1997 at 9:00 a.m. at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and
Fidelity Management & Research Company (FMR), the funds' investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about April 21, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. may be paid [HOURLY RATES] to solicit shareholders on behalf of the
funds at an anticipated cost of approximately $_______ (Strategic
Opportunities Fund), $______ (Strategic Income Fund), and $_____ (Emerging
Markets Income Fund), respectively. The expenses in connection with
preparing this Proxy Statement and its enclosures and of all solicitations
will be paid by the funds. The funds will reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation material to
the beneficial owners of shares. The principal business address of Fidelity
Distributors Corporation (FDC), the funds' principal underwriter and
distribution agent, and Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East),
subadvisers to the funds, is 82 Devonshire Street, Boston, Massachusetts
02109. Fidelity Investments Japan Ltd. (FIJ) located at Shiroyama JT Mori
Building, 4-3-1 Toranomon, Minato-ku, Tokyo 105, Japan; Fidelity
International Investment Advisors (FIIA) located at Pembroke Hall, 42 Crow
Lane, Pembroke HM19, Bermuda; and Fidelity International Investment
Advisors (U.K.) Limited (FIIAL (U.K.)) located at 130 Tonbridge Road,
Hildenborough, Kent, TN119DZ, England are also subadvisers to Emerging
Markets Income Fund and Strategic Income Fund.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. 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 funds may also arrange to have votes recorded by telephone. D.F. King
& Co. may be paid on a per call basis for vote-by-phone solicitations on
behalf of the funds at an anticipated cost of approximately $______
(Strategic Opportunities Fund), $______ (Strategic Income Fund) and $______
(Emerging Markets Income Fund). The expenses in connection with telephone
voting will be paid by the funds. If the funds record votes by telephone,
they will use procedures designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have been
properly recorded. Proxies voted by telephone may be revoked at any time
before they are voted in the same manner that proxies voted by mail may be
revoked.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote FOR the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted AGAINST the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Shares of each class of each fund of the trust issued and outstanding as
of February 28, 1997 are indicated in the following table:
Fidelity Advisor Strategic Opportunities Fund:
Class A 28,970
Class B 4,286,220
Class T 21,569,490
Initial Class 871,621
Institutional Class 173,661
Fidelity Advisor Strategic Income Fund:
Class A 77,266
Class B 3,600,056
Class T 9,449,883
Institutional Class 558,132
Fidelity Advisor Emerging Markets Income
Fund:
Class A
Class B
Class T
Institutional Class
To the knowledge of the trust, substantial (5% or more) record ownership
of the funds on February 28, 1997 was as follows: for Strategic
Opportunities -- Class A _____, Class B _____, Class T _____, Initial Class
_____, Institutional Class _____, for Strategic Income -- Class A _____,
Class B _____, Class T _____, Institutional Class _____, and for Emerging
Markets Income -- Class A _____, Class B _____, Class T _____,
Institutional Class _____. To the knowledge of the trust, no other
shareholder owned of record or beneficially more than 5% of the outstanding
shares of the funds on that date. Shareholders of record at the close of
business on April 21, 1997 will be entitled to vote at the Meeting. Each
such shareholder will be entitled to one vote for each share held on that
date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996 CALL 1-800-843-3001 OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
BOTH THE TRUST AND OF EACH FUND OF THE TRUST AND OF EACH CLASS OF A FUND
AND, IN THE CASE OF PROPOSALS 4 AND 5 A "MAJORITY OF THE OUTSTANDING VOTING
SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF PROPOSALS 12 AND 13 REQUIRES
THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF
CLASS B AND CLASS T, RESPECTIVELY, OF THE APPLICABLE FUNDS. APPROVAL OF
PROPOSALS 6 THROUGH 11, AND PROPOSALS 14 THROUGH 28 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
THE APPROPRIATE FUNDS. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940
ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS
THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING
SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF
MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE PRESENT OR
REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING VOTING
SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following tables summarize the proposals applicable to each fund.
Proposal # Proposal Description Applicable Fund(s) or
Class(es)
1. To elect as Trustees Strategic Opportunities
the 12 nominees Fund
presented in proposal Strategic Income Fund
1. Emerging Markets Income
Fund
2. To ratify the selection Strategic Opportunities
of Coopers & Lybrand Fund
L.L.P as independent Strategic Income Fund
accountants of the Emerging Markets Income
trust. Fund
3. To amend the Strategic Opportunities
Declaration of Trust to Fund
provide voting rights Strategic Income Fund
based on a Emerging Markets Income
shareholder's total Fund
dollar investment in a
fund, rather than on the
number of shares
owned.
4. To amend the Strategic Opportunities
Declaration of Trust to Fund
eliminate the Strategic Income Fund
requirement that Emerging Markets Income
shareholders be Fund
notified in the event of
an appointment of a
trustee within three
months of the
appointment.
5. To amend the Strategic Opportunities
Declaration of Trust to Fund
clarify that the Trustees Strategic Income Fund
may authorize the Emerging Markets Income
investment of all of a Fund
fund's assets in
another open-end
investment company
with substantially the
same investment
objective and policies.
6. To adopt a new Strategic Opportunities
fundamental Fund
investment policy for
the fund that would
permit it to invest all of
its assets in another
open-end investment
company managed by
FMR or an affiliate with
substantially the same
investment objective
and policies.
7. To approve an Strategic Opportunities
amended management Fund
contract for the fund
that would reduce the
management fee
payable to FMR by the
fund as FMR's assets
under management
increase, and to modify
the performance
adjustment calculation.
8. To approve an Strategic Income Fund
amended management
contract for the fund
that would reduce the
management fee
payable to FMR by the
fund as FMR's assets
under management
increase.
9. To improve an Emerging Markets Income
amended management Fund
contract for the fund
that would reduce the
management fee
payable to FMR by the
fund as FMR's assets
under management
increase.
10. To approve an Strategic Opportunities
amended sub-advisory Fund
agreement with FMR
Far East to provide
investment advice and
research services or
investment
management services.
11. To approve an Strategic Opportunities
amended sub-advisory Fund
agreement with FMR
U.K. to provide
investment advice and
research services or
investment
management services.
12. To approve an Strategic Opportunities
amended Distribution Fund
and Service Plan for Class B
Class B shares of the Emerging Markets Income
fund that would remove Fund
from the 12b-1 fee Class B
calculation the
exclusion of shares
purchased 144 months
prior.
13. To approve an Strategic Opportunities
amended Distribution Fund
and Service Plan for Class T
Class T shares of the Emerging Markets Income
fund that would remove Fund
from the 12b-1 fee Class T
calculation the
exclusion of shares
purchased 144 months
prior.
14. REORGANIZATION: To Strategic Opportunities
approve an agreement Fund
and plan providing for
the reorganization of
the fund from a
separate series of one
Massachusetts
business trust to
another Massachusetts
business trust.
15. REORGANIZATION: To Strategic Income Fund
approve an agreement
and plan providing for
the reorganization of
the fund from a
separate series of one
Massachusetts
business trust to
another Massachusetts
business trust.
16. DIVERSIFICATION: To Strategic Opportunities
replace the fund's Fund
fundamental
investment limitation
concerning
diversification with a
fundamental
diversification limitation
permitting increased
investment in the
securities of any single
issuer.
17. DIVERSIFICATION: To Strategic Opportunities
amend the Fund
diversification limitation
to exclude "securities
of other investment
companies" from issuer
diversification limits.
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18. REAL ESTATE: To make Strategic Opportunities
explicit the ability of the Fund
fund to purchase any
security or instrument
backed by real estate
or real estate interests
and any security of
companies engaged in
the real estate
business. Also to
eliminate the restriction
that securities backed
by real estate must be
marketable.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
19. SENIOR SECURITIES. To Strategic Opportunities
amend the Fund
fundamental limitation
concerning senior
securities.
20. SHORT SALES: To Strategic Opportunities
replace the Fund
fundamental
investment limitation on
short sales with a
non-fundamental
limitation which
explicitly allows
investment in options
and removes the "at no
additional cost"
restriction from the
limitation.
21. MARGIN PURCHASES: To Strategic Opportunities
replace the Fund
fundamental
investment limitation on
margin purchases with
a similar
non-fundamental
investment limitation.
22. BORROWING: To amend Strategic Opportunities
the borrowing limitation Fund
to require a reduction
in borrowing if
borrowings exceed the
33 1/3% limit for any
reason rather than
solely because of a
decline in net assets.
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23. UNDERWRITING. To Strategic Opportunities
amend the fund's Fund
fundamental
investment limitation
concerning
underwriting.
24. CONCENTRATION: To Strategic Opportunities
standardize the Fund
language of the
limitation on industry
concentration and
modify it to refer to
"companies with
principal business
activities in the same
industry" rather than
"issuers in the same
industry."
25. LENDING: To clarify Strategic Opportunities
that the fund can Fund
purchase an entire
issue of debt securities
and to eliminate the
reference to "portfolio
securities" in the
exception for
repurchase
agreements.
26. OTHER INVESTMENT Strategic Opportunities
COMPANIES: To Fund
eliminate the
fundamental
investment limitation
restricting ownership of
other investment
companies.
27. OIL, GAS, & MINERAL Strategic Opportunities
EXPLORATION: To Fund
eliminate the
fundamental limitation
restricting investments
in oil, gas, and mineral
exploration programs.
28. NEWLY-FORMED Strategic Opportunities
ISSUERS: To eliminate Fund
the fundamental
investment limitation
concerning
investments in
securities of
newly-formed issuers.
1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the Trust.
Pursuant to the provisions of the Declaration of Trust of Fidelity Advisor
Series VIII, the Trustees have determined that the number of Trustees shall
be fixed at twelve. It is intended that the enclosed proxy card will be
voted for the election as Trustees of the twelve nominees listed below,
unless such authority has been withheld in the proxy card.
Except for Robert M. Gates and William O. McCoy, all nominees named below
are currently Trustees of Fidelity Advisor Series VIII and have served in
that capacity continuously since originally elected or appointed. Ralph F.
Cox, Phyllis Burke Davis and Marvin L. Mann were selected by the trust's
Nominating and Administration Committee (see page __) and were appointed to
the Board in November 1991, December 1992 and October 1993, respectively.
None of the nominees is related to one another. Those nominees indicated by
an asterisk (*) are "interested persons" of the trust by virtue of, among
other things, their affiliation with either the trust, the funds'
investment adviser (FMR, or the Adviser), or the funds' distribution agent,
FDC. The business address of each nominee who is an "interested person" is
82 Devonshire Street, Boston, Massachusetts 02109, and the business address
of all other nominees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Except for Robert M. Gates, Peter S. Lynch, and
William O. McCoy, each of the nominees is currently a Trustee or General
Partner, as the case may be, of 240 other funds advised by FMR or an
affiliate. Messrs. Gates and McCoy are currently Trustees or General
Partners, as the case may be, of _____ other funds advised by FMR or an
affiliate. Mr. Lynch is currently a Trustee or General Partner, as the case
may be, of 238 other funds advised by FMR or an affiliate.
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
*J. Gary Burkhead Senior Vice President, is 1986
(56) President of FMR; and President
and a Director of FMR Texas
Inc., Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
Ralph F. Cox Management consultant (1994). 1991
(64) Prior to February 1994, he was
President of Greenhill Petroleum
Corporation (petroleum
exploration and production).
Until March 1990, Mr. Cox was
President and Chief Operating
Officer of Union Pacific
Resources Company
(exploration and production). He
is a Director of Sanifill
Corporation (non-hazardous
waste, 1993), CH2M Hill
Companies (engineering), Rio
Grande, Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition, he is
a member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
(65) September 1991, Mrs. Davis
was the Senior Vice President of
Corporate Affairs of Avon
Products, Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX Companies,
Inc. (retail stores), and
previously served as a Director
of Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition, she is a
member of the President's
Advisory Council of The
University of Vermont School of
Business Administration.
Robert M. Gates Consultant, author, and lecturer ____
(53) (1993). Mr. Gates was Director
of the Central Intelligence
Agency (CIA) from 1991 - 1993.
From 1989 to 1991, Mr. Gates
served as Assistant to the
President of the United States
and Deputy National Security
Advisor. Mr. Gates is currently a
Trustee for the Forum For
International Policy, a Board
Member for the Virginia
Neurological Institute, and a
Senior Advisor of the Harvard
Journal of World Affairs. In
addition, Mr. Gates also serves
as a member of the corporate
board for Lucas Varity PLC
(automotive components and
diesel engines), Charles Stark
Draper Laboratory (non-profit),
NACCO Industries, Inc. (mining
and manufacturing), and TRW
Inc. (original equipment and
replacement products).
*Edward C. Johnson President, is Chairman, Chief 1968
3d Executive Officer and a Director
(66) of FMR Corp.; a Director and
Chairman of the Board and of
the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
(69) Mr. Jones was Chairman and
Chief Executive Officer of LTV
Steel Company. He is a Director
of TRW Inc. (original equipment
and replacement products),
Cleveland-Cliffs Inc (mining),
Consolidated Rail Corporation,
Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of
chemical products), and he
previously served as a Director
of NACCO Industries, Inc.
(mining and marketing,
1985-1995) and Hyster-Yale
Materials Handling, Inc.
(1985-1995). In addition, he
serves as a Trustee of First
Union Real Estate Investments,
a Trustee and member of the
Executive Committee of the
Cleveland Clinic Foundation, a
Trustee and member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
(64) at Columbia University Graduate
School of Business and a
financial consultant. From 1987
to January 1995, Mr. Kirk was a
Professor at Columbia University
Graduate School of Business.
Prior to 1987, he was Chairman
of the Financial Accounting
Standards Board. Mr. Kirk is a
Director of General Re
Corporation (reinsurance), and
he previously served as a
Director of Valuation Research
Corp. (appraisals and
valuations, 1993-1995). In
addition, he serves as Chairman
of the Board of Directors of the
National Arts Stabilization Fund,
Chairman of the Board of
Trustees of the Greenwich
Hospital Association, a Member
of the Public Oversight Board of
the American Institute of
Certified Public Accountants'
SEC Practice Section (1995),
and as a Public Governor of the
National Association of
Securities Dealers, Inc. (1996).
*Peter S. Lynch Vice Chairman and Director of 1990
(54) FMR (1992). Prior to May 31,
1990, he was a Director of FMR
and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
He is a Director of W.R. Grace &
Co. (chemicals) and Morrison
Knudsen Corporation
(engineering and construction).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston.
William O. McCoy Vice President of Finance for the ____
(63) University of North Carolina
(16-school system, 1995). Prior
to his retirement in December
1994, Mr. McCoy was Vice
Chairman of the Board of
BellSouth Corporation
(telecommunications) and
President of BellSouth
Enterprises. He is currently a
Director of Liberty Corporation
(holding company), Weeks
Corporation of Atlanta (real
estate, 1994), and Carolina
Power and Light Company
(electric utility, 1996). Previously,
he was a Director of First
American Corporation (bank
holding company, 1979-1996). In
addition, Mr. McCoy serves as a
member of the Board of Visitors
for the University of North
Carolina at Chapel Hill (1994)
and for the Kenan Flager
Business School (University of
North Carolina at Chapel Hill).
Gerald C. McDonough Chairman of G.M. Management 1989
(69) Group (strategic advisory
services). Prior to his retirement
in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems, and
metal products, 1992), CUNO,
Inc. (liquid and gas filtration
products, 1996), and Associated
Estates Realty Corporation (a
real estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products) from
1987-1996.
Marvin L. Mann Chairman of the Board, 1993
(64) President, and Chief Executive
Officer of Lexmark International,
Inc. (office machines, 1991).
Prior to 1991, he held the
positions of Vice President of
International Business Machines
Corporation ("IBM") and
President and General Manager
of various IBM divisions and
subsidiaries. Mr. Mann is a
Director of M.A. Hanna
Company (chemicals, 1993) and
Infomart (marketing services,
1991), a Trammell Crow Co. In
addition, he serves as the
Campaign Vice Chairman of the
Tri-State United Way (1993) and
is a member of the University of
Alabama President's Cabinet.
Thomas R. Williams President of The Wales Group, 1989
(68) Inc. (management and financial
advisory services). Prior to
retiring in 1987, Mr. Williams
served as Chairman of the
Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
[As of February 28, 1997 the nominees and officers of the trust owned, in
the aggregate, less than 1% of any of the funds' outstanding shares.]
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
seven non-interested Trustees, met eleven times during the twelve months
ended December 31, 1996. It is expected that the Trustees will meet at
least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets
four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Mr. Kirk (Chairman) and Mrs. Davis are members of the
Committee. If he is elected, it is anticipated that Mr. McCoy will also be
a member of the Committee. The committee oversees and monitors the trust's
internal control and structure, its auditing function and its financial
reporting process, including the resolution of material reporting issues.
The committee recommends to the Board of Trustees the appointment of
auditors for the trust. It reviews audit plans, fees and other material
arrangements in respect of the engagement of auditors, including all
non-audit services to be performed. It reviews the qualifications of key
personnel involved in the foregoing activities. The committee plays an
oversight role in respect of the trust's investment compliance procedures
and the code of ethics. During the twelve months ended December 31, 1996,
the Committee held four meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. McDonough (Chairman), Jones, and Williams. The Committee members
confer periodically and hold meetings as required. The committee makes
nominations for independent Trustees, and for membership on committees. The
committee periodically reviews procedures and policies of the Board of
Trustees and committees. It acts as the administrative committee under the
Retirement Plan for non-interested trustees. It monitors the performance of
legal counsel employed by the trust and the independent trustees. The
committee in the first instance monitors compliance with, and acts as the
administrator of, the provisions of the code of ethics applicable to the
independent Trustees. During the twelve months ended December 31, 1996, the
Committee held four meetings. The Nominating and Administration Committee
will consider nominees recommended by shareholders. Recommendations should
be submitted to the Committee in care of the Secretary of the Trust. The
trust does not have a compensation committee; such matters are considered
by the Nominating and Administration Committee.
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of each fund for his or her
services for the fiscal year ended December 31, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
Compensation Compensa Compensatio Compensation
from Strategic tion from n from from the Fund
OpportunitiesA, Strategic Emerging Complex*, A, E
B IncomeA, Markets
C IncomeA,D
J. Gary Burkhead** $ $ $ $ 0
Ralph F. Cox 137,700
Phyllis Burke Davis 134,700
Richard J. Flynn*** 168,000
Edward C. Johnson 0
3d**
E. Bradley Jones 134,700
Donald J. Kirk 136,200
Peter S. Lynch** 0
William O. McCoy**** 85,333
Gerald C. McDonough 136,200
Edward H. Malone*** 136,200
Marvin L. Mann 134,700
Thomas R. Williams 136,200
</TABLE>
* Information is as of December 31, 1996 for 235 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** During the period from May 1, 1996 to the present, William O. McCoy
has served as a member of the Advisory Board.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $______,
Phyllis Burke Davis, $________, Richard J. Flynn, $0, E. Bradley Jones,
$____, Donald J. Kirk, $______, Gerald C. McDonough, $______, Edward H.
Malone, $______, Marvin L. Mann, $_______ and Thomas R. Williams, $_______.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $______,
Phyllis Burke Davis, $________, Richard J. Flynn, $0, E. Bradley Jones,
$____, Donald J. Kirk, $______, Gerald C. McDonough, $______, Edward H.
Malone, $______, Marvin L. Mann, $_______ and Thomas R. Williams, $_______.
D The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $______,
Phyllis Burke Davis, $________, Richard J. Flynn, $0, E. Bradley Jones,
$____, Donald J. Kirk, $______, Gerald C. McDonough, $______, Edward H.
Malone, $______, Marvin L. Mann, $_______ and Thomas R. Williams, $_______.
E For the fiscal year ended December 31, 1996, certain of the
non-interested trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows: [need info as to
deferrals (dollar amount) for each trustee, by fund].
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before
December 30, 1996 may receive payments from a Fidelity fund during his or
her lifetime based on his or her basic trustee fees and length of service.
The obligation of a fund to make such payments is neither secured nor
funded. A Trustee became eligible to participate in the program at the end
of the calendar year in which he or she reached age 72, provided that, at
the time of retirement, he or she had served as a Fidelity fund Trustee for
at least five years.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of fees in accordance with the Plan will have a
negligible effect on a fund's assets, liabilities and net income per share,
and will not obligate the funds to retain the services of any Trustee or to
pay any particular level of compensation to the Trustee. The funds may
invest in such designated securities under the Plan without shareholder
approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
2. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand
L.L.P. has been selected as independent accountants for the trust to sign
or certify any financial statements of the trust required by any law or
regulation to be certified by an independent accountant and filed with the
Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition,
as required by the 1940 Act, the vote of the Trustees is subject to the
right of the trust, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Coopers & Lybrand L.L.P. has
advised the trust that it has no direct or material indirect ownership
interest in the trust.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of the trust's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including non-audit
services) and whether the performance of such services would affect the
accountants' independence. Representatives of Coopers & Lybrand L.L.P. are
not expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be available
should any matter arise requiring their presence.
3. TO AMEND THE DECLARATION OF TRUST TO PROVIDE DOLLAR-BASED VOTING RIGHTS
FOR SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve a proposal to amend Article VIII, Section 1 of the
Declaration of Trust. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Strategic Opportunities Fund, Strategic Income Fund and
Emerging Markets Income Fund are funds of Fidelity Advisor Series VIII, an
open-end management investment company organized as a Massachusetts
business trust. Currently, there are three funds in the trust. Shareholders
of each class vote separately on matters concerning only that class.
Shareholders of each fund vote separately on matters concerning only that
fund and vote on a trust-wide basis on matters that effect the trust as a
whole, such as electing trustees or amending the Declaration of Trust.
Currently, under the Declaration of Trust, each share is entitled to one
vote, regardless of the relative value of the shares of each fund in the
trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights to all shareholders as required by the 1940 Act. In
the case where a trust has several series or funds, such as Fidelity
Advisor Series VIII, voting rights may have become disproportionate since
the net asset value per share (NAV) of the separate funds generally diverge
over time. In the case where a fund has more than one class, voting rights
may have become disproportionate because the NAV of the separate classes of
a fund may also diverge over time. The Staff of the SEC has issued a
"no-action" letter permitting a trust to seek shareholder approval of a
dollar-based voting system. The proposed amendment will comply with the
conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of each
shareholder would be commensurate with the value of the shareholder's
dollar investment rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The table below shows each fund's net
asset value.
Fund Net Asset Value as $1,000 investment in terms of
of February 28, shares on February 28,, 1997
1997
Strategic $
Opportunities
Strategic $
Income
Emerging $
Markets
Income
For example, FUND NAME II shareholders would have approximately ______%
greater voting power than FUND NAME I shareholders because at current NAVs,
a $1,000 investment in FUND NAME II would equal ___ shares whereas a $1,000
investment in FUND NAME I would equal _____ shares. Accordingly, a
one-share, one-vote system may provide certain shareholders with a
disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares. Their voting power would be
proportionate to their economic interest, which FMR believes is a more
equitable result, and which is the result with respect to a typical
corporation where each voting share generally has an equal market price.
On matters requiring trust-wide votes where all funds are required to
vote, shareholders who own shares with a lower NAV than other funds in the
trust would be giving other shareholders in the trust more voting "power"
than they currently have. Similarly, on matters affecting a fund as a
whole, where each class of the fund is required to vote separately on an
issue, shareholders who own shares of a class with a lower NAV than other
classes in the funds would be giving the shareholders of the other classes
more voting "power" than they currently have. On matters affecting only one
fund, only shareholders of that fund vote on the issue and on matters
affecting only one class, only shareholders of that class vote on the
issue. In these instances, under both the current Declaration of Trust and
an amended Declaration of Trust, all shareholders of the fund or class
would have the same voting rights, since the NAV is the same for all shares
in a single fund or class.
AMENDMENT TO THE DECLARATION OF TRUST. Article VIII, Section 1 sets forth
the method of calculating voting rights for all shareholder votes for the
trust. If approved, Article VIII, Section 1 will be amended as follows
(material to be added is underlined and material to be deleted is
[bracketed]):
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote... On any matter
submitted to a vote of the Shareholders, all Shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects only the interests of one
or more Series, then only the Shareholders of such Series shall be entitled
to vote thereon. [Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote.] ((A Shareholder of each
Series shall be entitled to one vote for each dollar of net asset value
(number of Shares owned times net asset value per share) of such Series, on
any matter on which such Shareholder is entitled to vote and each
fractional dollar amount shall be entitled to a proportionate fractional
vote.)) There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws of
Trust to be taken by Shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Declaration of Trust
will become effective immediately. If the proposal is not approved by the
shareholders of the trust, the Declaration of Trust will remain unchanged.
4. TO AMEND THE DECLARATION OF TRUST REGARDING SHAREHOLDER NOTIFICATION OF
APPOINTMENT OF TRUSTEES.
The trust's Declaration of Trust provides that in the case of a vacancy on
the Board of Trustees, the remaining Trustees shall fill the vacancy by
appointing a person they, in their discretion, see fit, consistent with the
limitations of the 1940 Act. Section 16 of the 1940 Act states that a
vacancy may be filled by the Trustees, if after filling the vacancy, at
least two-thirds of the Trustees then holding office were elected by the
holders of the outstanding voting securities of the trust. It also states
that if at any time less than 50% of the Trustees were elected by
shareholders, a shareholder meeting must be called within 60 days for the
purposes of electing Trustees to fill the existing vacancies.
The Declaration of Trust currently requires that within three months of a
Trustee appointment, notification of such be mailed to each shareholder of
the trust. Trustees may appoint a Trustee in anticipation of a current
Trustee's retirement or resignation, or in the event of an increase in the
number of Trustees. The current Declaration of Trust also requires
shareholder notification within three months of such an appointment.
The Trustees recommend that shareholders of the trust vote to eliminate
the notification requirement from the trust's Declaration of Trust. The
language to be deleted from the Declaration of Trust is [bracketed].
ARTICLE IV
THE TRUSTEES
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. [Within three months of such appointment
the Trustees shall cause notice of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the trust.] An
appointment of a Trustee may be made by the Trustees then in office [and
notice thereof mailed to Shareholders as aforesaid] in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16 (a) of
the 1940 Act.
Notifying a trust's shareholders in the event of an appointment of a
Trustee is not required by any federal or state law. Such notification to
all shareholders of a trust would be costly to the funds of the trust. If
the proposal is approved, shareholders will be notified of Trustee
appointments in the next financial report for the fund. Other than
eliminating the notification requirement, this proposal does not amend any
other aspect of Trustee resignation or appointment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Declaration of Trust
will become effective immediately. If the proposal is not approved by the
shareholders of trust, the Declaration of Trust will remain unchanged.
5. TO AMEND THE DECLARATION OF TRUST TO PROVIDE EACH FUND WITH THE ABILITY
TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve, a proposal to amend Article V, Section 1 of the
Declaration of Trust to clarify that the Trustees may authorize the
investment of all of a fund's assets in another open-end investment company
with substantially the same investment objective and policies ("Master
Feeder Fund Structure"). The purpose of a Master Feeder Fund Structure is
to achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures. In order
to implement a Master Feeder Fund Structure, both the Declaration of Trust
and the funds' policies must permit the structure. Currently, Strategic
Opportunities Fund's policies do not allow for such investments. Proposal
6 on page __ seeks the approval of Strategic Opportunities Fund's
shareholders to adopt a fundamental investment policy to permit investment
in another open-end investment company. This proposal, which amends the
Declaration of Trust, clarifies the Board's ability to implement the Master
Feeder Fund Structure if a fund's policies permit it.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled investment, or "master" fund. For
example, an institutional equity fund with a high initial minimum
investment amount for large investors might pool its investments with an
equity fund with low minimums designed for retail investors. This structure
allows several Feeder Funds with substantially the same objective but
different distribution and servicing features to combine their investments
and manage them as one Master Fund instead of managing them separately. The
Feeder Funds combine their investments by investing all of their assets in
one Master Fund. (Each Feeder Fund invested in a single Master Fund retains
its own characteristics, but is able to achieve operational efficiencies by
investing together with the other Feeder Funds in the Master Feeder Fund
Structure.) The current Declaration of Trust does not specifically provide
the Trustees the ability to authorize the Master Feeder Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take maximum advantage of potential
efficiencies. While neither FMR nor the Trustees has determined that a fund
should invest in a Master Fund, the Trustees believe it could be in the
best interest of each fund to adopt such a structure at a future date. If
this proposal is approved, the Declaration of Trust amendment would provide
the Trustees with the power to authorize a fund to invest all of its assets
in a single open-end investment company. The Trustees will authorize such a
transaction only if a Master Feeder Fund Structure is permitted under the
fund's investment policies (see Proposal 6), if they determine that a
Master Feeder Fund Structure is in the best interest of a fund, and if,
upon advice of counsel, they determine that the investment will not have
material adverse tax consequences to each fund or its shareholders. The
Trustees will specifically consider the impact, if any, on fees paid by the
fund as a result of adopting a Master Feeder Fund Structure. Although the
current Declaration of Trust does not contain any explicit prohibition
against implementing a Master Feeder Fund Structure, the specific authority
is being sought in the event the Trustees deem it appropriate to adopt a
Master Feeder Fund Structure in the future.
AMENDMENT TO THE DECLARATION OF TRUST. If the proposal is approved,
Article V, Section 1 of the Declaration of Trust will be amended as
follows: (material to be added is underlined):
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have the power and authority:
(((t) Notwithstanding any other provision hereof, to invest all of the
assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company;"))
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Declaration of Trust
will become effective immediately. If the proposal is not approved by the
shareholders of the trust, the Declaration of Trust will remain unchanged.
6. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR STRATEGIC OPPORTUNITIES
FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY
WITH SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
Strategic Opportunities Fund approve, the adoption of a new fundamental
investment policy that would permit Strategic Opportunities Fund to invest
all of its assets in another open-end investment company with substantially
the same investment objective and policies ("Master Feeder Fund
Structure"). The purpose of the Master Feeder Fund Structure would be to
achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single "master" fund. In order to implement a
Master Feeder Fund Structure, an amendment to the Declaration of Trust is
proposed, as is the adoption of a new fundamental investment policy.
Proposal 5 proposes to amend the Declaration of Trust to allow the Trustees
to authorize the conversion to a Master Feeder Fund Structure when
permitted by each fund's policies. This proposal would add a fundamental
policy for Strategic Opportunities Fund that permits a Master Feeder Fund
Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that Strategic
Opportunities Fund should invest in a Master Fund, the Trustees believe it
could be in the best interests of Strategic Opportunities Fund to adopt
such a structure at a future date.
At present, certain of Strategic Opportunities Fund's fundamental
investment policies and limitations would prevent Strategic Opportunities
Fund from investing all of its assets in another investment company, and
would require a vote of shareholders before such a structure could be
adopted. To avoid the costs associated with a subsequent shareholder
meeting, the Trustees recommend that shareholders vote to permit Strategic
Opportunities Fund's assets to be invested in a single Master Fund, without
a further vote of shareholders. The Trustees will authorize such an
investment only if they determine that action to be in the best interests
of Strategic Opportunities Fund and its shareholders and if, upon advice of
counsel, they determine that the investment will not have material adverse
consequences to Strategic Opportunities Fund. Approval of Proposal 5
provides the Trustees with explicit authority to approve a Master Feeder
Fund Structure. If shareholders approve this proposal, certain fundamental
and non-fundamental policies and limitations of Strategic Opportunities
Fund that currently prohibit investment in shares of one investment company
would not apply to permit the investment in a Master Fund managed by FMR or
its affiliates or successor. These policies include Strategic Opportunities
Fund's limitations on investing more than 5% of assets in a single issuer
or more than 25% of assets in a single industry, purchasing more than 10%
of the securities of a single issuer, underwriting securities, investing
more than 5% of the fund's total assets in the securities of "unseasoned"
issuers and purchasing the securities of other investment companies.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Master
Feeder Fund Structure would facilitate the introduction of new Fidelity
mutual funds, increasing the investment options available to shareholders.
Strategic Opportunities Fund's method of operation and shareholder
services would not be materially affected by its investment in a Master
Fund, except that the assets of Strategic Opportunities Fund would be
managed as part of a larger pool. Were Strategic Opportunities Fund to
invest all of its assets in a Master Fund, it would hold only a single
investment security, and the Master Fund would directly invest in
individual securities pursuant to its investment objective. The Master Fund
would be managed by FMR or an affiliate, such as FMR Texas, Inc. in the
case of a money market fund. The Trustees would retain the right to
withdraw Strategic Opportunities Fund's investments from a Master Fund at
any time and would do so if the Master Fund's investment objective and
policies were no longer appropriate for Strategic Opportunities Fund.
Strategic Opportunities Fund would then resume investing directly in
individual securities as it does currently. Whenever a Feeder Fund is asked
to vote at a shareholder meeting of the Master Fund, the Feeder Fund will
hold a meeting of its shareholders if required by applicable law or the
Feeder Fund's policies to vote on the matters to be considered at the
Master Fund shareholder meeting. The fund will cast its votes at the Master
Fund meeting in the same proportion as the fund's shareholders voted at
their meeting.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing
Strategic Opportunities Fund's assets in a Master Fund only if they
determine that pooling is in the best interests of Strategic Opportunities
Fund and if, upon advice of counsel, they determine that the investment
will not have material adverse tax consequences to Strategic Opportunities
Fund or its shareholders. In determining whether to invest in a Master
Fund, the Trustees will consider, among other things, the opportunity to
reduce costs and to achieve operational efficiencies. The Trustees will not
authorize investment in a Master Fund if doing so would materially increase
costs (including fees) to shareholders.
FMR may benefit from the use of a Master Feeder Fund Structure if overall
assets under management are increased (since FMR's fees are based on
assets). Also, FMR's expenses of providing investment and other services to
Strategic Opportunities Fund may be reduced. If the fund's investment in a
Master Fund were to reduce FMR's expenses materially, the Trustees would
consider whether a reduction in FMR's management fee would be appropriate
if and when a Master Feeder Fund Structure is implemented.
PROPOSED FUNDAMENTAL POLICY. To allow the fund to invest in a Master Fund
at a future date, the Trustees recommend that Strategic Opportunities Fund
adopt the following fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research
Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for Strategic Opportunities Fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the
fundamental limitation will become effective immediately. If the proposal
is not approved by the shareholders of the fund, the fund's current
fundamental investment policies will remain unchanged with respect to
potential investment in Master Funds.
7. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR STRATEGIC OPPORTUNITIES
FUND.
The Board of Trustees, including a majority of those 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 amend the fund's management contract with FMR (the Amended Contract).
The Amended Contract modifies the management fee that FMR receives from
the fund in three ways: (1) to provide for lower fees when FMR's assets
under management exceed certain levels (the Group Fee Rate), (2) to modify
the performance adjustment calculation to calculate the fund's investment
performance and that of its comparative index (the Index) to the nearest
0.01%, rather than to the nearest percent (1.00%), and (3) to amend the
performance adjustment calculation to base the fund's investment
performance on the asset-weighted average performance of all classes of the
fund, rather than the performance of the worst performing class of the
fund. THE AMENDED CONTRACT WILL RESULT IN A GROUP FEE RATE THAT IS THE SAME
AS, OR LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT MANAGEMENT CONTRACT
(THE PRESENT CONTRACT). THE MODIFICATIONS TO THE PERFORMANCE ADJUSTMENT
CALCULATION WILL, IN FMR'S VIEW, PROVIDE A FAIRER REFLECTION OF THE FUND'S
ACTUAL INVESTMENT PERFORMANCE RESULTS AND WILL GENERALLY RESULT IN HIGHER
PERFORMANCE FEES BEING PAID WHETHER THE INVESTMENT PERFORMANCE OF THE FUND
EXCEEDS OR IS LESS THAN THE INVESTMENT PERFORMANCE OF THE INDEX. For the
performance period ended December 31, 1996, the proposed change to the
performance adjustment calculation would have resulted in a 0.46% increase
in the performance adjustment, which is equivalent to approximately $0 per
share per year.
FMR is the fund's investment adviser pursuant to a management contract
dated November 29, 1990, which was approved by shareholders on September
19, 1990. (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, the
Amended Contract is substantially identical to the fund's Present Contract
with FMR. (For a detailed discussion of the fund's Present Contract, refer
to the section entitled "Present Management Contract," on page __.) If
approved by shareholders, the Amended Contract will take effect on the
first day of the first month following approval and will remain in effect
through July 31, 1997 and thereafter, but only as long as its continuance
is approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of the Independent Trustees and (ii)
the vote of either a majority of the Trustees or a majority of the
outstanding shares of the fund. If the Amended Contract is not approved,
the Present Contract will continue in effect through July 31, 1997, 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 Basic Fee Rate and a
Performance Adjustment Rate. The Basic Fee Rate is the sum of 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 $138 billion. The sum of the Group Fee Rate and the Individual Fund
Fee Rate is referred to as the fund's Basic Fee Rate. One-twelfth (1/12) of
the Basic Fee Rate is applied to the fund's average net assets for the most
recent month, resulting in a dollar amount which is the Basic Fee for that
month. The Performance Adjustment is added to or subtracted from the Basic
Fee depending on whether the fund experienced better or worse performance
than the Index. The Performance Adjustment equals one-twelfth (1/12) of the
annual Performance Adjustment Rate as applied to the fund's average net
assets for the most recent month plus the previous 35 months. Under the
Present Contract, the Performance Adjustment Rate is calculated by
multiplying .02% by each percentage point that the fund's investment
performance (based on the worst performing class) for the performance
period was better or worse than the Index. The investment performance of
the fund and the Index are calculated to the nearest percentage point.
Under the Amended Contract, the fund's investment performance and the
performance of the Index are calculated to the nearest .01%, and the fund's
investment performance will be calculated by determining the asset-weighted
average investment performance of all classes of the fund. The maximum
Performance Adjustment Rate under both the Present and Amended Contracts is
+20%.
MODIFICATION TO GROUP FEE RATE. The Amended Contract adds additional
"breakpoints" to the Group Fee Rate Schedule. The additional breakpoints
will result in Group Fee Rates that are equal to or lower than current
rates. 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 $138 billion or less. Above $138
billion in assets under FMR's management, the Group Fee Rate declines under
the Amended Contract, but not under the Present Contract. Group Fee Rates
that are lower than those contained in the fund's Present Contract have
been voluntarily implemented by FMR on January 1, 1992, November 1, 1993,
August 1, 1994, and 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 12 new fee breakpoints for
assets under FMR's management above $138 billion. (For an explanation of
how the Group Fee Rate is used to calculate the management fee, see the
section entitled "Present Management Contract" beginning on page ___.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT
Average Group Present Average Group Amended
Assets Contract* Assets Contract
($ billions) ($ billions)
Over 102 .3100% 102-138 .3100%
138-174 .3050%
174-210 .3000%
210-246 .2950%
246-282 .2900%
282-318 .2850%
318-354 .2800%
354-390 .2750%
390-426 .2700%
426-462 .2650%
462-498 .2600%
498-534 .2550%
Over 534 .2500%]
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 .3375% .3371%
200 .3306% .3284%
250 .3265% .3219%
300 .3238% .3163%
350 .3218% .3113%
400 .3203% .3067%
450 .3192% .3024%
500 .3183% .2982%
550 .3175% .2942%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
Assets under FMR's management for February 1997 were approximately $472
billion.
MODIFICATION TO PERFORMANCE ADJUSTMENT CALCULATION - ROUNDING METHOD. The
Amended Contract modifies the rounding conventions used in the calculation
of the performance adjustment and measures fund performance based on the
asset-weighted performance of all classes of the fund. The modified
rounding methodology will not necessarily result in performance adjustments
that are higher or lower than the current levels. Measuring fund
performance based on the weighted performance of all classes will generally
result in higher performance adjustments than the current methodology.
Under the Present Contract, the investment performance of both the fund and
the Index are rounded to the nearest full percentage point (for example,
15.5123% is rounded to 16%.) Rounding to full percentage points results in
the Performance Adjustment rate being applied in 0.02% increments. In
comparison, under the Amended Contract, the investment performance of both
the fund and Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the difference
in investment performance. The more precise rounding method results in a
more accurate measure of the difference in investment performance and
allows for the Performance Adjustment to be applied in 0.0002% increments.
Calculating the investment performance of the fund and the Index to the
nearest .01% rather than 1.00% and applying the adjustment in 0.0002%
increments rather than .02% increments will produce more precise
performance comparisons and, therefore, reduce the chances of minor changes
in performance resulting in significant changes to the Performance
Adjustment, and ultimately the fund's management fee.
WEIGHTED AVERAGE CLASS PERFORMANCE. Under the Present Contract, the
Performance Adjustment is determined by comparing the fund's investment
performance based on the worst performing class of the fund for the
performance period to the performance of the Index. Under the Amended
Contract, the Performance Adjustment is determined by comparing the fund's
investment performance as measured by the asset-weighted average investment
performance of all classes of the fund for the performance period to the
performance of the Index. FMR believes that a Performance Adjustment based
on the asset-weighted average investment performance of all classes of a
fund rather than the worst performing class of a fund is a fairer means to
calculate relative performance and will avoid distortions that currently
may arise from differing class-level expenses, which are unrelated to
investment performance.
The fund currently has five classes of shares. The differences between the
performance of the fund's classes is, in large part, reflective of the
differences between the expenses of these classes. When the fund commenced
operations, use of the worst performing class meant that FMR had to
overcome the Fund's operating expenses plus .50% in Rule 12b-1 Plan
expenses to be equal to the performance of the Index. (12b-1 expenses are
distribution expenses incurred under a Distribution and Service Plan,
approved on behalf of Class A, Class B, Class T and Institutional Class
shares of the fund pursuant to Rule 12b-1 under the Investment Company Act
of 1940). At that time, classes with significantly higher 12b-1 fees were
not contemplated. However, with the addition of a class with 1.00% of 12b-1
expenses in 1994, the operating and maximum distribution expenses which
must be overcome have increased to 1.32%. FMR believes that having to
overcome this level of expense merely to achieve performance equal to the
Index presents an unduly high hurdle and that linking the performance
adjustment to the worst performing class of shares undercuts the purpose of
a performance fee.
A performance adjustment is meant to unite the interests of the investment
adviser and the shareholders in achieving performance superior to the
Index. Regardless of the number of classes of shares of a fund, the
investment adviser is managing a single portfolio and is providing the same
investment management services to each class; thus, in FMR's view,
calculation of the performance fee should not be driven by the performance
of one class alone, particularly by the one class which has the poorest
performance (highest expenses). By adopting the proposed asset-weighted
average investment performance calculation, the investment adviser's
compensation would be based on the investment performance of the fund
(rather than that of a single class), reflecting the dollar-weighted
average expenses paid by shareholders. Although using the asset-weighted
average performance of the classes, rather than the performance of the
worst performing class, will result in higher performance fees except in
those instances when measured fund performance differs from the Index by
more than the 10% allowable under the Contract, FMR believes the proposed
method is a fairer reflection of the fund's actual investment performance
results.
COMPARISON OF MANAGEMENT FEES. For February 1997, average assets under
management by FMR were $435 billion. The fund's Basic Fee Rate under the
Amended Contract would have been .6005%, compared to .6187% under the
Present Contract. The Basic Fee Rate remains the same under both the
Present Contract and the Amended Contract until assets under FMR's
management exceed $138 billion, at which point the Basic Fee Rate under the
Amended Contract begins to decline relative to the Present Contract. The
following chart compares the fund's management fee (including the
performance adjustment) under the terms of the Present Contract for the
fiscal year ended December 31, 1996, to the management fee the fund would
have incurred if the Amended Contract had been in effect.
Present Amended
Contract Contract
Management Management Percentage
Fee* Fee Difference
Basic Fee 4,583,688
Performance (962,281) (957,834) 0.46%
Adjustment
Total 3,625,854
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996 but does reflect FMR's voluntary adoption of basing the fund's
performance adjustment on the worst-performing class of the fund.
If the Amended Contract is approved, FMR will calculate the performance
adjustment using asset-weighted average performance for the entire 36 month
performance period beginning with the first full month following
shareholder approval.
The following tables provide data concerning each class' management fees
and expenses as a percentage of average net assets for the fiscal year
ended December 31, 1996 under the Present Contract and if the Amended
Contract had been in effect during the same period.
The following figures are based on historical expenses [adjusted to
reflect current fees] of Class T, Class B and Institutional Class Shares of
the fund and are calculated as a percentage of average net assets of the
Class B, Class T and Institutional Class of the fund. A portion of the
brokerage commissions that the fund pays is used to reduce the fund's
expenses. The fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances is used
to reduce custodian and transfer agent expenses. Including these
reductions, the total operating expenses presented in the table would have
been 1.79% for Class B, 0.76% for Institutional Class and 1.27% for Class T
under the present Contract and ___% for Class B, ___% for Institutional
Class and ___% for Class T under the Amended Contract.
COMPARATIVE FEE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Class A
Present Contract Amended
Contract
Management Fee 0.48% 0.48%
12b-1 Fee 0.25% 0.25%
Other Expenses 0.52%[A] 0.52%[A]
Total Fund Operating 1.25% %
Expenses
[A] Based on estimated expenses for first year.
Class B
Present Contract Amended
Contract
Management Fee 0.48% 0.48%
12b-1 Fee 1.00% 1.00%
Other Expenses 0.32% 0.32%
Total Fund Operating 1.80% %
Expenses*
Institutional Class
Present Contract Amended
Contract
Management Fee 0.48% 0.48%
12b-1 Fee None None
Other Expenses 0.30% 0.30%
Total Fund Operating 0.78% %
Expenses*
Class T
Present Contract Amended
Contract
Management Fee 0.48% 0.48%
12b-1 Fee 0.50% 0.50%
Other Expenses 0.30% 0.30%
Total Fund Operating 1.28% %
Expenses*
Initial Class
Present Contract Amended
Contract
Management Fee 0.48% 0.48%
12b-1 Fee None None
Other Expenses 0.34% 0.34%
Total Fund Operating 0.82% %
Expenses*
* Effective March 1, 1997, FMR agreed to cap the total expense ratios with
respect to each class of the fund's shares as follows: Class A, 1.75%;
Class B, 2.50%; Class T, 2.0%; Institutional Class, 1.50%; and Initial
Class, 1.50%.
EXAMPLE: The following illustrates the expenses, including the maximum
front-end sales charge or contingent deferred sales charge, as applicable,
on a $1,000 investment under the existing and proposed fees and expenses
stated above, assuming (1) 5% annual return and (2) redemption at the end
of each time period:
Class A
1 Year 3 Years 5 Years 10 Years
Present Contract $65 $90 $118 $196
Amended $ $ $ $
Contract
Class B
1 Year 3 Years 5 Years 10 Years
Present Contract $65* $87* $117* $190
Amended $ $ $ $
Contract
* Reflects reduction of applicable contingent deferred sales charge.
Institutional Class
1 Year 3 Years 5 Years 10 Years
Present Contract $8 $25 $43 $97
Amended $ $ $ $
Contract
Class T
1 Year 3 Years 5 Years 10 Years
Present Contract $48 $74 $103 $184
Amended $ $ $ $
Contract
Initial CLass
1 Year 3 Years 5 Years 10 Years
Present Contract $ $ $ $
Amended $ $ $ $
Contract
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of the
fund. The example above should not be considered a representation of past
or future expenses of the fund. Actual expenses may vary from year to year
and may be higher or lower than those shown above.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees on December 19, 1996. The Board
of Trustees considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995, June
to July 1994, September to October 1993, and November to December 1991, and
the modifications to the Performance Adjustment calculation during the two
month period from June to July 1995. The Board of Trustees received
materials relating to the Amended Contract in advance of the meetings 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 specifically relating 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 in respect of the
fund, (iii) the economic outlook and the general investment outlook in the
markets in which the fund invests, and (iv) notable changes in the fund's
investments. The Board of Trustees and the Independent Trustees also
consider periodically other material facts such as (1) FMR's results and
financial condition, (2) arrangements in respect of the distribution of the
fund's shares, (3) the procedures employed to determine the value of the
fund's assets, (4) the allocation of the fund's brokerage, if any,
including allocations to brokers affiliated with FMR and the use of "soft"
commission dollars to pay fund expenses and to pay for research and
execution services, (5) FMR's management of the relationships with the
fund's custodian and subcustodians, (6) the resources devoted to and the
record of compliance with the fund's investment policies and restrictions
and with policies on personal securities transactions, and (7) the nature,
cost and quality of non-investment management services provided by FMR and
its affiliates.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information
on and analysis of (a) the overall organization of FMR, (b) the impact of
performance adjustments on management fees, (c) the choice of performance
indices and benchmarks, (d) the composition of peer groups of funds, (e)
transfer agency and bookkeeping fees paid to affiliates of FMR, (f)
investment performance, (g) investment management staffing, (h) the
potential for achieving further economies of scale, (i) operating expenses
paid to third parties, and (j) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the following summary does not detail all of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include
the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review the background of the fund's portfolio manager,
and the fund's investment objective and discipline. The Independent
Trustees have also had discussions with senior management of FMR
responsible for investment operations, and the senior management of
Fidelity's equity group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Amended Contract and under separate agreements
covering transfer agency functions and pricing, bookkeeping and securities
lending services, if any. The Board of Trustees and the Independent
Trustees have also considered the nature and extent of FMR's supervision of
third party service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered
the fund's expense ratio and expense ratios of a peer group of funds. They
also considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to extend 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.
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 rates, specifically
the extension of the Group Fee Rate schedule and the modifications to the
performance adjustment calculation, 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.
8. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR STRATEGIC INCOME FUND.
The Trustees recommend that the shareholders of the fund approve an
amendment to the fund's 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. THE AMENDED CONTRACT WILL RESULT IN A
MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE UNDER
THE PRESENT MANAGEMENT CONTRACT (THE PRESENT CONTRACT). (For information on
FMR, see the section entitled "Activities and Management of FMR" on page
__.)
PROPOSED AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment, is supplied as
Exhibit 2 on page __ . Except for the 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 July 1, 1997 (or, if later, the
first day of the first month following approval) and will remain in effect
through June 30, 1998 and thereafter, but only as long as its continuance
is approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of those Trustees who are not
"interested persons" of the trust or FMR (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,
1997, 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 $372 billion. Above $372
billion in assets under FMR's management, the Group Fee Rate declines under
both the Present Contract and the Amended Contact, but under the Amended
Contract, it declines faster. Group Fee Rates that are lower than those
contained in the fund's Present Contract have been voluntarily implemented
by FMR on 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 four new fee breakpoints for
assets under FMR's management above $372 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used to
calculate the management fee, see the section entitled "Present Management
Contract" beginning on page ___.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Present Average Amended
Group Contract* Group Contract
Assets Assets
($ billions) ($ billions)
84 - 120 .1500% 84 - 120 .1500%
120 - 156 .1450% 120 - 156 .1450%
156 - 196 .1400% 156 - 192 .1400%
192 - 228 .1350% 192 - 228 .1350%
228 - 264 .1300% 228 - 264 .1300%
264 - 300 .1275% 264 - 300 .1275%
300 - 336 .1250% 300 - 336 .1250%
336 - 372 .1225% 336 - 372 .1225%
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 .1388% .1372%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1996.
Assets under FMR's management for February 1997 were approximately $435
billion.
COMPARISON OF MANAGEMENT FEES. For February 1997, average assets under
management by FMR were $472 billion. The fund's management fee rate under
the Amended Contract would have been .5914%, compared to .5919% under the
Present Contract. The management fee rate will remain 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 under the
terms of the Present Contract for the fiscal year ended December 31, 1996
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
$ $ %
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees on December 19, 1996. 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
monthly meetings Trustees receive materials specifically relating 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
in respect of the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the fund's investments. The Board of Trustees and the
Independent Trustees also consider periodically other material facts such
as (1) FMR's financial results and 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 quality 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 of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include
the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review 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
fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to extend 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.
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 rates, that is the extension
of the Group Fee Rate schedule, 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.
9. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR EMERGING MARKETS INCOME
FUND.
The Trustees recommend that the shareholders of the fund approve an
amendment to the fund's 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. THE AMENDED CONTRACT WILL RESULT IN A
MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE UNDER
THE PRESENT MANAGEMENT CONTRACT (THE PRESENT CONTRACT). (For information on
FMR, see the section entitled "Activities and Management of FMR" on page
__.)
PROPOSED AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment(s), is supplied
as Exhibit 3 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 July 1, 1997 (or, if
later, the first day of the first month following approval) and will remain
in effect through June 30, 1998 and thereafter, but only as long as its
continuance is approved at least annually by (i) the vote, cast in person
at a meeting called for the purpose, of a majority of those Trustees who
are not "interested persons" of the trust or FMR (the Independent Trustees)
and (ii) the vote of either a majority of the Trustees or a majority of the
outstanding shares of the fund. If the Amended Contract is not approved,
the Present Contract will continue in effect through June 30, 1997, and
thereafter only as long as its continuance is approved at least annually as
above.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate, which
varies according to assets under management by FMR, and a fixed Individual
Fund Fee Rate. The Amended Contract modifies the Group Fee Rate by
providing for lower fee rates if FMR's assets under management remain above
$156 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon the
monthly average of the aggregate net assets of all registered investment
companies having management contracts with FMR (assets under management by
FMR). For example, as assets under management by FMR increase, the Group
Fee Rate declines. The Amended Contract would not change the group fee
calculation for assets under management by FMR of $156 billion. Above $120
billion in assets under FMR's management, the Group Fee Rate declines under
both the Present Contract and the Amended Contact, but under the Amended
Contract, it declines faster. Group Fee Rates that are lower than those
contained in the fund's Present Contract have been voluntarily implemented
by FMR on August 1, 1994 and 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 6 new fee breakpoints for assets
under FMR's management above $336 billion and revises the current
breakpoints for assets over $156 billion as illustrated in the following
table. (For an explanation of how the Group Fee Rate is used to calculate
the management fee, see the section entitled "Present Management Contract"
beginning on page ___.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Present Average Amended
Group Contract* Group Contract
Assets Assets
($ billions) ($ billions)
84 - 120 .1500% 84 - 120 .1500%
120 - 174 .1450% 120 - 156 .1450%
174 - 228 .1400% 156 - 192 .1400%
228 - 282 .1375% 192 - 228 .1350%
282 - 336 .1350% 228 - 264 .1300%
over 336 .1325% 264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
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 .1658% .1652%
250 .1604% .1587%
300 .1565% .1536%
350 .1533% .1494%
400 .1507% .1459%
450 .1487% .1427%
500 .1471% .1399%
550 .1457% .1372%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1996.
Assets under FMR's management for February 1997 were approximately $435
billion.
COMPARISON OF MANAGEMENT FEES. For February 1997, average assets under
management by FMR were $472 billion. The fund's management fee rate under
the Amended Contract would have been .6914%, compared to .6979% under the
Present Contract. The management fee rate will remain the same under both
the Present Contract and the Amended Contract until assets under FMR's
management exceed $156 billion, at which point the management fee rate
under the Amended Contract begins to decline relative to the Present
Contract. The following chart compares the fund's management fee under the
terms of the Present Contract for the fiscal year ended December 31, 1996
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
$ $ %
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees on December 19, 1996. The Board
of Trustees considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995 and
June to July 1994. The Board of Trustees received materials relating to the
Amended Contract in advance of the meeting at which the Amended Contract
was considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating 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
in respect of the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
notable changes in the fund's investments. The Board of Trustees and the
Independent Trustees also consider periodically other material facts such
as (1) FMR's financial results and 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 quality 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 of the matters
considered. Matters considered by the Board of Trustees and the Independent
Trustees in connection with their approval of the Amended Contract include
the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review 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
fund's expense ratio and expense ratios of a peer group of funds. They also
considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to extend 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.
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 rates, that is the extension
of the Group Fee Rate schedule, 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.
10. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR STRATEGIC
OPPORTUNITIES FUND.
In conjunction with its portfolio management responsibilities on behalf of
Strategic Opportunities Fund, FMR has entered into sub-advisory agreements
with affiliates whose offices are geographically dispersed around the
world. To strengthen and coordinate these relationships, the Board of
Trustees proposes that shareholders of the fund approve a new sub-advisory
agreement (the Proposed Agreement) between FMR Far East and FMR on behalf
of the fund to replace FMR's existing agreement with FMR Far East. The
Proposed Agreement would allow FMR not only to receive investment advice
and research services from FMR Far East, but also would permit FMR to grant
FMR Far East investment management authority if FMR believes it would be
beneficial to the fund and its shareholders. Because FMR pays all of FMR
Far East's fees, the Proposed Agreement would not affect the fees paid by
the fund to FMR. In addition, the Proposed Agreement includes a discussion
of FMR Far East's ability to use brokers and dealers to execute portfolio
transactions, consistent with the authority granted FMR under the
Management Contract.
On March 9, 1994, the Board of Trustees agreed to submit the Proposed
Agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. FMR provided substantial information to the
Trustees to assist them in their deliberations. The Trustees determined
that allowing FMR to grant investment management authority to FMR Far East
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR Far East, the ability to execute
portfolio transactions from points in the Far East that are physically
closer to foreign issuers and the primary markets in which their securities
are traded. Increasing FMR's proximity to foreign markets should enable the
fund to participate more readily in full trading sessions on foreign
exchanges, and to react more quickly to changing market conditions.
If approved by shareholders, the Proposed Agreement will replace the
sub-advisory agreement currently in effect with FMR Far East with respect
to the fund (the Current Agreement). The Current Agreement, dated November
29, 1990, was approved by the fund's shareholders on September 19, 1990. A
copy of the Proposed Agreement is attached to this proxy statement as
Exhibit 4.
FMR Far East, with its principal office in Tokyo, Japan is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR Far East may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FMR Far East's only client other
than FMR is FIL, an affiliate of FMR organized under the laws of Bermuda.
FIL provides investment advisory services to non-U.S. investment companies
and institutional investors investing in securities of issuers throughout
the world. Edward C. Johnson 3d, President and a Trustee of the trust, is
Chairman and a Director of FMR Far East, Chairman, and a Director of FIL,
and a principal stockholder of both FIL and FMR. For more information on
FMR Far East, see the section entitled "Activities and Management of FMR
U.K. and FMR Far East" on page__.
Under the Current Agreement, FMR Far East acts as an investment
consultant to FMR and supplies FMR with investment research information and
portfolio management advice as FMR reasonably requests on behalf of the
fund. FMR Far East provides investment advice and research services with
respect to issuers located outside of the United States, focusing primarily
on companies based in the Far East. Under the Current Agreement with FMR
Far East, FMR, NOT THE FUND, pays FMR Far East's fee equal to 105% of its
costs incurred in connection with the agreement.
For the fiscal year ended December 31, 1996, FMR paid FMR Far East $23,484
on behalf of the fund. Fees paid to the sub-adviser are not reduced to
reflect expense reimbursements or fee waivers by FMR, if any, in effect
from time to time.
Although FMR employees are expected to consult regularly with FMR Far
East, under the Current Agreement, FMR Far East has no authority to make
investment decisions on behalf of the fund. Under the Proposed Agreement,
FMR would continue to receive investment advice from FMR Far East, but it
could also grant investment management authority to FMR Far East with
respect to all or a portion of the fund's assets. If FMR Far East were to
exercise investment management authority on behalf of the fund, it would be
required, subject to the supervision of FMR, to direct the investments of
the fund in accordance with the fund's investment objective, policies, and
limitations as provided in the fund's Prospectus or other governing
instruments and such other limitations as the fund may impose by notice in
writing to FMR or FMR Far East. If FMR grants investment management
authority to FMR Far East with respect to all or a portion of the fund's
assets, FMR Far East would be authorized to buy or sell stocks, bonds, and
other securities for the fund subject to the overall supervision of FMR and
the Board of Trustees. In addition, the Proposed Agreement would authorize
FMR to delegate other investment management services to FMR Far East,
including, but not limited to, currency management services (including
buying and selling currency options and entering into currency forward and
futures contracts on behalf of the fund), other transactions in futures
contracts and options, and borrowing or lending portfolio securities. If
any of these investment management services were delegated, FMR Far East
would continue to be subject to the control and direction of FMR and the
Board of Trustees and to be bound by the investment objective, policies,
and limitations of the fund.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR Far East for investment advice as
described above would remain unchanged. However, to the extent that FMR
granted investment management authority to FMR Far East, FMR would pay FMR
Far East 50% of its monthly management fee with respect to the average net
assets managed on a discretionary basis by FMR Far East for investment
management and portfolio execution services.
If approved by shareholders, the Proposed Agreement would take effect on
July 1, 1997 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1997 and from year to
year thereafter, but only as long as its continuance was approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR and (ii) the vote of either a majority of the Trustees
or a majority of the outstanding shares of the fund.
The Proposed Agreement could be transferred to a successor of FMR Far East
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The Proposed Agreement would be terminable on 60
days' written notice by either party to the agreement and the Proposed
Agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. If the Proposed Agreement is not
approved, FMR's Current Agreement on behalf of the fund will continue in
effect.
11. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR STRATEGIC
OPPORTUNITIES FUND.
In conjunction with its portfolio management responsibilities on behalf of
Strategic Opportunities Fund, FMR has entered into sub-advisory agreements
with affiliates whose offices are geographically dispersed around the
world. To strengthen and coordinate these relationships, the Board of
Trustees proposes that shareholders of the fund approve a new sub-advisory
agreement (the Proposed Agreement) between FMR U.K. and FMR on behalf of
the fund to replace FMR's existing agreement with FMR U.K.. The Proposed
Agreement would allow FMR not only to receive investment advice and
research services from FMR U.K., but also would permit FMR to grant FMR
U.K. investment management authority if FMR believes it would be beneficial
to the fund and its shareholders. Because FMR pays all of FMR U.K.'s fees,
the Proposed Agreement would not affect the fees paid by the fund to FMR.
In addition, the Proposed Agreement includes a discussion of FMR U.K.'s
ability to use brokers and dealers to execute portfolio transactions,
consistent with the authority granted FMR under the Management Contract.
On March 9, 1994, the Board of Trustees agreed to submit the Proposed
Agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. FMR provided substantial information to the
Trustees to assist them in their deliberations. The Trustees determined
that allowing FMR to grant investment management authority to FMR U.K.
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR U.K., the ability to execute portfolio
transactions from points in Europe that are physically closer to foreign
issuers and the primary markets in which their securities are traded.
Increasing FMR's proximity to foreign markets should enable the fund to
participate more readily in full trading sessions on foreign exchanges, and
to react more quickly to changing market conditions.
If approved by shareholders, the Proposed Agreement will replace the
sub-advisory agreement currently in effect with FMR U.K. with respect to
the fund (the Current Agreement). The Current Agreement, dated November 29,
1990, was approved by the fund's shareholders on September 19, 1990. A
copy of the Proposed Agreement is attached to this proxy statement as
Exhibit 5.
FMR U.K., with its principal office in London, England is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR U.K. may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment adviser,
and to other clients. Currently, FMR U.K.'s only client other than FMR is
FIL, an affiliate of FMR organized under the laws of Bermuda. FIL provides
investment advisory services to non-U.S. investment companies and
institutional investors investing in securities of issuers throughout the
world. Edward C. Johnson 3d, President and a Trustee of the trust, is
Chairman and a Director of FMR U.K., Chairman, and a Director of FIL, and a
principal stockholder of both FIL and FMR. For more information on FMR
U.K., see the section entitled "Activities and Management of FMR U.K. and
FMR Far East" on page__.
Under the Current Agreement, FMR U.K. acts as an investment consultant to
FMR and supplies FMR with investment research information and portfolio
management advice as FMR reasonably requests on behalf of the fund. FMR
U.K. provides investment advice and research services with respect to
issuers located outside of the United States, focusing primarily on
companies based in Europe. Under the Current Agreement with FMR U.K., FMR,
NOT THE FUND, pays FMR U.K.'s fee equal to 110% of its costs incurred in
connection with the agreement.
For the fiscal year ended December 31, 1996, FMR paid FMR U.K. $24,977 on
behalf of the fund. Fees paid to the sub-adviser are not reduced to reflect
expense reimbursements or fee waivers by FMR, if any, in effect from time
to time.
Although FMR employees are expected to consult regularly with FMR U.K.,
under the Current Agreement, FMR U.K. has no authority to make investment
decisions on behalf of the fund. Under the Proposed Agreement, FMR would
continue to receive investment advice from FMR U.K., but it could also
grant investment management authority to FMR U.K. with respect to all or a
portion of the fund's assets. If FMR U.K. were to exercise investment
management authority on behalf of the fund, it would be required, subject
to the supervision of FMR, to direct the investments of the fund in
accordance with the fund's investment objective, policies, and limitations
as provided in the fund's Prospectus or other governing instruments and
such other limitations as the fund may impose by notice in writing to FMR
or FMR U.K. If FMR grants investment management authority to FMR U.K. with
respect to all or a portion of the fund's assets, FMR U.K. would be
authorized to buy or sell stocks, bonds, and other securities for the fund
subject to the overall supervision of FMR and the Board of Trustees. In
addition, the Proposed Agreement would authorize FMR to delegate other
investment management services to FMR U.K., including, but not limited to,
currency management services (including buying and selling currency options
and entering into currency forward and futures contracts on behalf of the
fund), other transactions in futures contracts and options, and borrowing
or lending portfolio securities. If any of these investment management
services were delegated, FMR U.K. would continue to be subject to the
control and direction of FMR and the Board of Trustees and to be bound by
the investment objective, policies, and limitations of the fund.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR U.K. for investment advice as described
above would remain unchanged. However, to the extent that FMR granted
investment management authority to FMR U.K., FMR would pay FMR U.K. 50% of
its monthly management fee with respect to the average net assets managed
on a discretionary basis by FMR U.K. for investment management and
portfolio execution services.
If approved by shareholders, the Proposed Agreement would take effect on
July 1, 1997 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1997 and from year to
year thereafter, but only as long as its continuance was approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR and (ii) the vote of either a majority of the Trustees
or a majority of the outstanding shares of the fund.
The Proposed Agreement could be transferred to a successor of FMR U.K.
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The Proposed Agreement would be terminable on 60
days' written notice by either party to the agreement and the Proposed
Agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. If the Proposed Agreement is not
approved, FMR's Current Agreement on behalf of the fund will continue in
effect.
12. TO AMEND THE CLASS B DISTRIBUTION AND SERVICE PLAN OF STRATEGIC
OPPORTUNITIES FUND AND EMERGING MARKETS INCOME FUND.
The Board of Trustees has approved, and recommends that Class B
shareholders approve, an amended Distribution and Service Plan for Class B
shares (the Amended Class B Plan). Rule 12b-1 (the Rule) under the
Investment Company Act of 1940 (the 1940 Act) provides that in order for a
mutual fund to act as a distributor of its shares, a written plan
"describing all material aspects of the proposed financing of distribution"
must be adopted by the fund.
A copy of the Amended Class B Plan is attached to this Proxy Statement as
Exhibit 6.
THE CURRENT CLASS B PLANS. The current Class B Plans (the Current Class B
Plans) were adopted on May 26, 1995, with respect to Emerging Markets
Income Fund, and June 26, 1994, with respect to Strategic Opportunities
Fund. Under each Current Class B Plan, Class B of each of Strategic
Opportunities Fund and Emerging Markets Income Fund may pay FDC a
distribution fee at an annual rate of up to 0.75% of its average daily net
assets. The determination of daily net assets is made at the close of
business each day throughout the month, but the net assets for purposes of
calculating the distribution fee exclude assets attributable to shares
purchased more than 144 months (12 years) prior to such date. Class B
shares, if converted into Class T shares, begin accruing time from the
initial purchase into Class B. Under each Current Class B Plan, Class B of
Strategic Opportunities Fund and Emerging Markets Income Fund may also pay
FDC a shareholder service fee at an annual rate of up to 0.25% of its
average daily net assets. The Trustees have approved a distribution fee for
Class B shares of Strategic Opportunities Fund and Emerging Markets Income
Fund at an annual rate of 0.75% and 0.65%, respectively, of average net
assets and a shareholder service fee for Class B shares of Strategic
Opportunities Fund and Emerging Markets Income Fund at an annual rate of
0.25% of their average net assets. FDC uses shareholder service fees to
compensate investment professionals for personal service and/or the
maintenance of shareholder accounts. For the fiscal year ended December 31,
1996, Class B of Strategic Opportunities Fund paid $993,060 in distribution
fees and $774,336 in shareholder service fees to FDC, which amounted to
1.00% and 0.75%, respectively, of its average net assets, and Class B of
Emerging Markets Income Fund paid $117,763 in distribution fees and $85,051
in shareholder service fees to FDC, which amounted to .90% and .64% of its
net assets, respectively. FDC may pay all or a portion of such fees to
securities dealers or other investment professionals as distribution or
service fees. To the extent the fees are not paid to investment
professionals, FDC may use the fees for its expenses incurred in the
distribution of, or shareholder support services for, Class B shares. For
the fiscal year ended December 31, 1996, FDC paid, on behalf of Class B
shares Strategic Opportunities Fund and Emerging Markets Income Fund,
$______ and $______ in shareholder service fees to National Financial
Services Corporation (NFSC), an affiliate of FMR Corp. NFSC passed
[CONFIRM: 100%] of these fees to investment professionals. FDC and NFSC are
both subsidiaries of FMR Corp. 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.
The Current Class B Plans also provide that to the extent that each fund's
payment of management fees to FMR might be considered to constitute
"indirect" financing of activities "primarily intended to result in the
sale of shares," such payment is expressly authorized.
Although each Current Class B Plan specifies that FMR and FDC may engage
in various distribution activities, it does not require them to perform any
specific type of distribution activity or to incur any specific level of
expense for such activities. FDC may retain any amounts received under the
Plan in excess of its expenditures.
THE AMENDED CLASS B PLANS. The Amended Class B Plans are identical to the
Current Class B Plans except that shares held more than 144 months would no
longer be excluded when calculating the amount of the distribution fee.
When the Fidelity Advisor funds were first introduced in the mid-1980's,
the National Association of Securities Dealers, Inc. (NASD) Conduct Rules
set a limit on the amount of front-end sales charges which a fund could
impose. However, no similar limit existed for 12b-1 fees. The 144-month
limitation was an effort by FDC and the Board of Trustees to protect
shareholders against payment on a given amount of assets over an indefinite
period of time. The 144-month period was intended to result in a limit on
total distribution charges (front-end sales charges plus 12b-1 fees)
comparable to the front-end sales charge limit then imposed by the NASD.
Since Class B shares convert automatically to Class T shares after a
maximum holding period of six years, the 144-month limitation was included
in the Current Class B Plans to allow time to begin accruing upon purchase
into Class B shares.
In July 1993, the NASD amended its Conduct Rules to establish a combined
limit on mutual fund sales charges and 12b-1 fees. Like the 144-month
limitation, the NASD Rule restricts a mutual fund's total payment of 12b-1
fees. Under the NASD Rule, a mutual fund is subject to a limit on aggregate
payments of 7.25% of total new gross sales (6.25% if a service fee is also
imposed), plus interest. When the limit is reached, no further sales
charges may be paid by the mutual fund to the distributor, and no further
payments under the 12b-1 plan can be made, until the mutual fund has
further gross sales that result in an increased limit.
The NASD Rule has become the industry standard for restricting
distribution charges. Regardless of whether the proposal is approved, each
class is, and will continue to be, subject to the NASD Rule. The NASD Rule
addresses concerns similar to those that the 144-month limitation was
intended to address. However, the NASD Rule and the 144-month limitation
address these concerns in different ways. For example, using reasonable
sales, redemption and performance assumptions, there is a considerable
likelihood that many mutual funds may never reach the limit imposed by the
NASD Rule, because the limit is constantly increased by additional gross
sales. To the extent that this is true, if Class B of each of Strategic
Opportunities Fund and Emerging Markets Income Fund contains assets older
than 144 months it will pay more in 12b-1 fees if the proposal is approved
than it would pay under the Current Class B Plan.
If approved by shareholders, each Amended Class B Plan will continue in
effect as long as its continuance is specifically approved at least
annually by a majority of the Board of Trustees, including a majority of
the Trustees who are not "interested persons" of the trust and who have no
direct or indirect financial interest in the operation of the Plan or any
agreement related to the Plan (the non-interested Trustees), cast in person
at a meeting called for the purpose of voting on the Plan.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of the
Amended Class B Plans, the trustees considered a variety of factors and
were advised by counsel who are not counsel to FMR or FDC. Implementation
of the Amended Class B Plans should assist in attracting investment
professionals for the sale of shares and thus increase each fund's asset
base, which in turn may prove beneficial to each fund and its shareholders
by spreading fixed costs over a larger asset base and making additional
monies available for investing. Positive cash flow affords portfolio
management a greater ability to diversify investments and minimizes the
need to sell securities to meet redemptions. In addition, since each class
is dependent primarily on investment professionals for sales of its shares,
the ongoing payment to investment professionals who have sold shares (by
reallowance of the distribution fee) should provide incentives to offer
better and continuous services to current shareholders. Investment
professionals also allow investors access to investment alternatives to
which they might otherwise not have been exposed.
The Board recognizes that a greater level of fund assets benefits FMR by
increasing its management fee revenues. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and retain
a high caliber of investment and other personnel and to develop and
implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to each
fund.
CONCLUSION. The Board of Trustees recommends that Class B shareholders
vote FOR approval of the amendment to the Class B Distribution and Service
Plan. If Class B shareholders approve the Amended Class B Plan, the amended
Plan will become effective the first day of the month following shareholder
approval. If Class B shareholders do not approve the Amended Class B Plan,
the Current Class B Plan will remain in effect unchanged. In this event,
the 144-month period would commence for Class B shares at the time they are
purchased but would never be completed because the Class B shares convert
automatically to Class A shares after a maximum holding period of seven
years.
13. TO AMEND THE CLASS T DISTRIBUTION AND SERVICE PLAN OF STRATEGIC
OPPORTUNITIES FUND AND EMERGING MARKETS INCOME FUND.
The Board of Trustees has approved, and recommends that Class T
shareholders approve, an amended Distribution and Service Plan for Class T
shares (the Amended Class T Plans). Rule 12b-1 (the Rule) under the
Investment Company Act of 1940 (the 1940 Act) provides that in order for a
mutual fund to act as a distributor of its shares, a written plan
"describing all material aspects of the proposed financing of distribution"
must be adopted by the fund.
A copy of the Amended Class T Plan with respect to Strategic Opportunities
Fund is attached to this Proxy Statement as Exhibit 7, and a copy of the
Amended Class T Plan with respect to Emerging Markets Income Fund is
attached to this Proxy Statement as Exhibit 8.
THE CURRENT CLASS T PLANS. The current Class T Plans (the Current Class T
Plans) were adopted on August 25, 1987, with respect to Strategic
Opportunities Fund, and October 14, 1994, with respect to Emerging Markets
Income Fund. Under the Current Class T Plans, Class T of Strategic
Opportunities Fund and Emerging Markets Income Fund may pay FDC a fee at an
annual rate of up to 0.65% and 0.40%, respectively, of their average daily
net assets. The determination of daily net assets is made at the close of
business each day throughout the month, but the net assets for purposes of
calculating the fee exclude assets attributable to shares purchased more
than 144 months (12 years) prior to such date. Class T shares begin
accruing time upon initial purchase into Class T. The Trustees have
approved a distribution fee for Class T of Strategic Opportunities Fund and
Emerging Markets Income Fund at an annual rate of 0.50% of their average
net assets. For the fiscal year ended December 31, 1996, Class T of
Strategic Opportunities Fund paid $3,004,411 in distribution fees to FDC,
which amounted to .50% of its average net assets, and Class T of Emerging
Markets Income Fund paid $138,085 in distribution fees to FDC, which
amounted to .25% of its average net assets. FDC may pay all or a portion of
such fees to securities dealers or other investment professionals as
distribution or service fees. To the extent the fee is not paid to
investment professionals, FDC may use the fees for its expenses incurred in
the distribution of Class T shares. For the fiscal year ended December 31,
1996, FDC paid, on behalf of Class T shares of Strategic Opportunities
Fund, $_____ and, on behalf of Class T shares of Emerging Markets Income
Fund, $_______ in distribution fees to NFSC, an affiliate of FMR Corp. NFSC
passed [CONFIRM: 100%] of these fees to investment professionals. FDC and
NFSC are both subsidiaries of FMR Corp. 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.
The Current Class T Plans also provide that to the extent that each fund's
payment of management fees to FMR might be considered to constitute
"indirect" financing of activities "primarily intended to result in the
sale of shares," such payment is expressly authorized.
Although each Current Class T Plan specifies that FMR and FDC may engage
in various distribution activities, it does not require them to perform any
specific type of distribution activity or to incur any specific level of
expense for such activities. FDC may retain any amounts received under the
Plan in excess of its expenditures.
THE AMENDED CLASS T PLANS. The Amended Class T Plans are identical to the
Current Class T Plans, except that shares held more than 144 months would
no longer be excluded when calculating the amount of the distribution fee.
When the Fidelity Advisor funds were first introduced in the mid-1980's,
the NASD Conduct Rules set a limit on the amount of front-end sales charges
which a fund could impose. However, no similar limit existed for 12b-1
fees. The 144-month limitation was an effort by FDC and the Board of
Trustees to protect shareholders against payment on a given amount of
assets over an indefinite period of time. The 144-month period was intended
to result in a limit on total distribution charges (front-end sales charges
plus 12b-1 fees) comparable to the front-end sales charge limit then
imposed by the NASD.
In July 1993, the NASD amended its Conduct Rules to establish a combined
limit on mutual fund sales charges and 12b-1 fees. Like the 144-month
limitation, the NASD Rule restricts a mutual fund's total payment of 12b-1
fees. Under the NASD Rule, a mutual fund is subject to a limit on aggregate
payments of 7.25% of total new gross sales (6.25% if a service fee is also
imposed), plus interest. When the limit is reached, no further sales
charges may be paid by the mutual fund to the distributor, and no further
payments under the 12b-1 plan can be made, until the mutual fund has
further gross sales that result in an increased limit.
The NASD Rule has become the industry standard for restricting
distribution charges. Regardless of whether the proposal is approved, each
class is, and will continue to be, subject to the NASD Rule. The NASD Rule
addresses concerns similar to those that the 144-month limitation was
intended to address. However, the NASD Rule and the 144-month limitation
address these concerns in different ways. For example, using reasonable
sales, redemption and performance assumptions, there is a considerable
likelihood that many mutual funds may never reach the limit imposed by the
NASD Rule, because the limit is constantly increased by additional gross
sales. To the extent that this is true, if Class T of each of Strategic
Opportunities Fund and Emerging Markets Income Fund contain assets older
than 144 months, it will pay more in 12b-1 fees if the proposal is approved
than it would pay under its Current Class T Plan.
If approved by shareholders, each Amended Class T Plan will continue in
effect as long as its continuance is specifically approved at least
annually by a majority of the Board of Trustees, including a majority of
the Trustees who are not "interested persons" of the trust and who have no
direct or indirect financial interest in the operation of the Plan or any
agreement related to the Plan (the non-interested Trustees), cast in person
at a meeting called for the purpose of voting on the Plan.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of the
Amended Class T Plans, the trustees considered a variety of factors and
were advised by counsel who are not counsel to FMR or FDC. Implementation
of the Amended Class T Plans should assist in attracting investment
professionals for the sale of shares and thus increase each fund's asset
base, which in turn may prove beneficial to each fund and its shareholders
by spreading fixed costs over a larger asset base and making additional
monies available for investing. Positive cash flow affords portfolio
management greater ability to diversify investments and minimizes the need
to sell securities to meet redemptions. In addition, since each class is
dependent primarily on investment professionals for sales of its shares,
the ongoing payment to investment professionals who have sold shares (by
reallowance of the distribution fee) should provide incentives to offer
better and continuous services to current shareholders. Investment
professionals also allow investors access to investment alternatives to
which they might otherwise not have been exposed.
The Board recognizes that a higher level of fund assets benefits FMR by
increasing its management fee revenues. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and retain
a high caliber of investment and other personnel and to develop and
implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to each
fund.
CONCLUSION. The Board of Trustees recommends that Class T shareholders of
Strategic Opportunities Fund and Emerging Markets Income Fund vote FOR
approval of the amendment to the Class T Distribution and Service Plan. If
Class T shareholders approve the Amended Class T Plan, it will become
effective the first day of the month following shareholder approval. If the
Amended Class T Plan is not approved by Class T shareholders, the Current
Class T Plan will remain in effect unchanged for shares purchased into
Class T.
14. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION OF
STRATEGIC OPPORTUNITIES FROM A SEPARATE SERIES OF ONE MASSACHUSETTS
BUSINESS TRUST TO ANOTHER.
The Board of Trustees, including a majority of the Independent Trustees,
has approved an Agreement and Plan of Reorganization (the Plan of
Reorganization) in the form attached to this Proxy Statement as Exhibit 9.
The Plan of Reorganization provides for a reorganization of Strategic
Opportunities Fund (the Fund) from a separate series of Fidelity Advisor
Series VIII (Advisor VIII), a Massachusetts business trust, to a
newly-established series of Fidelity Advisor Series I (the Trust), also a
Massachusetts business trust (the Reorganization). THE PROPOSED CHANGE WILL
HAVE NO MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
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 the Trust 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). Since both Advisor VIII and the Trust are Massachusetts
business trusts, organized under substantially similar Declarations of
Trust, the rights of the security holders of the Fund under state law and
the governing documents are expected to remain unchanged after the
Reorganization, except for a possible change with regard to shareholder
voting rights as described below, nor will the Reorganization 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. If
Proposal 3 (see page __) is approved, shareholder voting rights for the
Fund will be based on the total dollar interest in the Fund (dollar-based
voting) while shareholder voting rights for the Series will be based on the
number of shares owned (share-based voting), unless shareholders of the
Trust also approve a proposal that will be submitted to them to approve
dollar-based voting. While the differences between the shareholder voting
rights would have no bearing on matters affecting only one fund in a trust
(unless the fund had several classes of shares), on matters requiring
trust-wide votes where all funds in a trust are required to vote (or where
more than one class of a fund vote together), dollar-based voting provides
shareholders voting power that is proportionate to their economic interest
whereas share-based voting may provide shareholders who own shares with a
lower net asset value than other funds in the trust with a disproportionate
ability to affect the vote relative to shareholders of the other funds in
the trust. Similarly, on matters affecting a fund as a whole, where each
class of the fund is required to vote separately on an issue, shareholders
who own shares of a class with a lower NAV than other classes in the fund
would be giving the shareholders of the other classes more voting "power"
than they currently have. On matters affecting only one class, only
shareholders of that class vote on the issue. In this instance, all
shareholders of the class would have the same voting rights, since the NAV
is the same for all shares in a single class. After the Reorganization, the
voting rights of Fund shareholders will change to reflect those of the
Series which, as noted above, will be share-based unless shareholders of
the Trust also approve a proposal establishing dollar-based voting. For
more information regarding voting rights of shareholders of the Fund, refer
to the section of the Fund's Statement of Additional Information called
"Description of the Trust." The Trust's fiscal year end is November 30,
which is different than that of Advisor VIII. The Trustees may change the
fiscal year end of the Trust 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 identical to the contract currently
in effect between FMR and the Fund (the Present Management Contract)
(except as it may be modified pursuant to a vote of shareholders of the
fund as proposed in this Proxy Statement); similarly, FMR U.K. and FMR Far
East, the Fund's sub-advisers, will have primary responsibility for
providing investment advice and research services outside the United States
or investment management authority (if Proposals 10 and 11 are approved)
under Sub-Advisory Agreements substantially identical to the agreements
currently in effect between FMR U.K. and FMR Far East and FMR (the Present
Sub-Advisory Agreements) (except as they may be modified pursuant to a vote
of shareholders of the Fund as proposed in this Proxy Statement).
The Fund's distribution agent, FDC will distribute shares of the Series
under a General Distribution Agreement identical to the contract currently
in effect between FDC and the Fund.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently organized as
a series of Advisor VIII, which has three series of shares or funds. The
Board of Trustees unanimously recommends reorganization of the Fund to a
separate series of the Trust (i.e., into the Series) which will succeed to
the business of the Fund. Moving the Fund from Advisor VIII to the Trust
will consolidate and streamline the production and mailing of certain
financial reports and legal documents. THE PROPOSED CHANGE WILL HAVE NO
MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
The proposed Reorganization, with the resulting change in the fiscal year
end, will facilitate combining all Advisor non-international equity funds
into one Prospectus, and permit mailing of the Annual Reports for these
funds at the same time the Prospectus is mailed. This should result in cost
savings to the funds. In addition, a combined Prospectus will enhance the
discussion of the Fund by presenting it in the context of a full spectrum
of domestic equity funds.
The Plan of Reorganization was approved by the Board of Trustees of
Advisor VIII, including all of the Trustees who are not interested persons
of FMR, on December 19, 1996. The Board of Trustees recommends 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 the Trust; temporary waiver of certain investment
limitations of the Fund to permit the Reorganization (see "Temporary Waiver
of Investment Restrictions" on page _); and authorization of Advisor VIII,
as sole shareholder of the Series, to approve (i) a Management Contract for
the Series between the Trust and FMR, (ii) the Sub-Advisory Agreements
between FMR and FMR U.K. and FMR Far East, with respect to the Series and
(iii) the Distribution and Service Plans for Class A shares, Class B
shares, Class T shares and Institutional Class shares under Rule 12b-1,
substantially identical to the contracts or Plans, as the case may be,
currently in effect with the Fund (except as the Management Contract may be
modified or the Distribution and Service Plans may be modified or approved
pursuant to a vote of shareholders of the fund or class, as the case may
be, as proposed in this Proxy Statement). If shareholders of the Fund do
not approve the Plan of Reorganization, the Fund will continue to operate
as a series of Advisor VIII.
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 9 to this Proxy Statement.
On the Closing Date of the Reorganization (defined below), the Fund will
transfer all of its assets to the Series, a series of shares of the Trust
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 shares of beneficial interest of the corresponding classes
of the Series (Trust Series Shares) equal to the number of Fund shares
outstanding on the Closing Date. Immediately thereafter, the Fund will
distribute one Trust Series Share of the applicable class for each Fund
share (the Fund Shares) held by the shareholder on the Closing Date to each
Fund shareholder, in liquidation of such Fund Shares. Immediately after
this distribution of the Trust 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 WILL BE THE
OWNER OF FULL AND FRACTIONAL TRUST SERIES SHARES EQUAL IN NUMBER,
DENOMINATION, AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND SHARES.
The Plan of Reorganization authorizes Advisor VIII as the then sole
initial shareholder of the Series or class, as appropriate, to approve (i)
a Management Contract with FMR for the Series (the New Management
Contract), (ii) the Sub-Advisory Agreements between FMR and FMR U.K. and
FMR Far East with respect to the Series (the New Sub-Advisory Agreements),
and (iii) the Distribution and Service Plan for Class A shares, Class B
shares, Class T shares and Institutional Class shares (the new Plans) under
Rule 12b-1 with respect to the Series, identical to the contracts or plans,
as the case may be, currently in effect with the Fund or class (except as
the Management Contract, Sub-Advisory Agreements and the Distribution and
Service Plans may be modified pursuant to a vote of shareholders of the
Fund or class, as the case may be, as proposed in this Proxy Statement).
The Trust'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 in writing 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 the Trust. In case a vacancy
shall for any reason exist, the remaining Trustees will fill such vacancy
by appointing another Trustee, so long as, immediately after such
appointment, at least two-thirds of the Trustees have been elected by
shareholders. If, at any time, less than a majority of the Trustees holding
office has been elected by 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, the New Sub-Advisory Agreements, and the New
Plans will take effect on the Closing Date. The New Management Contract,
the New Sub-Advisory Agreements, and the New Plans will continue in force
until July 31, 1997. Each agreement will continue in force thereafter from
year to year so long as its continuance is approved at least annually (i)
by the vote of a majority of the Trustees who are not "interested persons"
of the Trust, FMR, FMR U.K. or FMR Far East ("Independent Trustees"), cast
in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the Trustees or 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 and the New Sub-Advisory Agreements
will be terminable without penalty on sixty days' written notice either by
the Trust or FMR U.K. or FMR Far East, as the case may be, and will
terminate automatically in the event of its assignment. The New Plans will
be terminable at any time without penalty by a vote of a majority of the
Independent Trustees or a majority of the outstanding voting shares 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 ______________ (the Closing Date). However, the Reorganization
may become effective at such later date as the parties may agree in
writing.
The obligations of Advisor VIII and the Trust 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. Either trust 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. The Trust's transfer agent will
establish an account for the Series' shareholders containing the
appropriate number and denominations of Trust Series Shares to be received
by each holder of Fund Shares 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.
EXPENSES. The Fund and the Series shall each be responsible for all of
their respective expenses of the Reorganization, estimated at $______ in
the aggregate.
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 has received an opinion
from their counsel, Kirkpatrick & Lockhart LLP, that the Reorganization
will 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 Trust Series Shares and the
assumption by the Trust on behalf of the Series of the Fund's liabilities
or (2) the distribution of Trust Series Shares to the Fund's shareholders
in liquidation of their Fund Shares. The opinion further provides, among
other things, that (a) the basis for federal income tax purposes of the
Trust 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 Trust 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 Advisor VIII,
as sole shareholder of the Series, to approve (i) a Management Contract for
the Series between the Trust and FMR, (ii) Sub-Advisory Agreements for the
Series between FMR and FMR U.K. and FMR Far East, and (iii) a Distribution
and Service Plan for Class A shares, Class B shares, Class T shares and
Institutional Class shares, substantially identical to the contract or
plan, as the case may be, currently in effect with the Fund or class
(except as the Management Contract, Sub-Advisory Agreements and
distribution and Service Plans may be modified or the Distribution and
Service Plans may be modified pursuant to a vote of shareholders of the
Fund as proposed in this Proxy Statement). 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 fund
of Advisor VIII.
15. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION OF
STRATEGIC INCOME FROM A SEPARATE SERIES OF ONE MASSACHUSETTS BUSINESS TRUST
TO ANOTHER.
The Board of Trustees, including a majority of the Independent Trustees,
has approved an Agreement and Plan of Reorganization (the Plan of
Reorganization) in the form attached to this Proxy Statement as Exhibit 10.
The Plan of Reorganization provides for a reorganization of Strategic
Income Fund (the Fund) from a separate series of Fidelity Advisor Series
VIII (Advisor VIII), a Massachusetts business trust, to a newly-established
series of Fidelity Advisor Series II (the Trust), also a Massachusetts
business trust (the Reorganization). THE PROPOSED CHANGE WILL HAVE NO
MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
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 the Trust 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. Since both
Advisor VIII and the Trust are Massachusetts business trusts, organized
under substantially similar Declarations of Trust, the rights of the
security holders of the Fund under state law and the governing documents
are expected to remain unchanged after the Reorganization (except with
regard to shareholder voting rights as described below), nor will the
Reorganization affect the operation of the Fund in a material manner. The
same individuals serve as Trustees of both trusts, except that Robert M.
Gates and William O. McCoy are currently Trustees of the Trust. 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. Shareholder voting rights for the Fund
are currently based on the number of shares owned (share-based voting)
while shareholder voting rights for the Series will be based on total
dollar interest in the Series (dollar-based voting). If Proposal 3 (see
page __) is approved by the shareholders, however, shareholder voting
rights in the Fund would also be dollar-based. While the potential
difference between the shareholder voting rights would have no bearing on
matters affecting only one fund in a trust (unless the fund had several
classes of shares), on matters requiring trust-wide votes where all funds
in a trust are required to vote (or where more than one class of a fund
vote together), dollar-based voting provides shareholders voting power that
is proportionate to their economic interest whereas share-based voting may
provide shareholders who own shares with a lower net asset value than other
funds in the trust with a disproportionate ability to affect the vote
relative to shareholders of the other funds in the trust. Similarly, on
matters affecting a fund as a whole, where each class of the fund is
required to vote separately on an issue, shareholders who own shares of a
class with a lower NAV than other classes in the fund would be giving the
shareholders of the other classes more voting "power" than they currently
have. On matters affecting only one class, only shareholders of that class
vote on the issue. In this instance, all shareholders of the class would
have the same voting rights, since the NAV is the same for all shares in a
single class. After the Reorganization, the voting rights of Fund
shareholders will change to reflect those of the Series (i.e.,
dollar-based) even if Proposal 3 has not been approved by shareholders of
Advisor VIII. For more information regarding voting rights of shareholders
of the Fund, refer to the section of the Fund's Statement of Additional
Information called "Description of the Trust." The Trust's fiscal year end
is October 31, which is different than that of Advisor VIII. The Trustees
may change the fiscal year end of the Trust 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 identical to the contract currently
in effect between FMR and the Fund (the Present Management Contract)
(except as it may be modified pursuant to a vote of shareholders of the
fund as proposed in this Proxy Statement); similarly, FMR U.K., FMR Far
East, FIIAL U.K., FIIA and FIJ, the Fund's sub-advisers, will have primary
responsibility for providing investment advice and research services
outside the United States or investment management authority under
Sub-Advisory Agreements substantially identical to the agreements currently
in effect between FMR U.K., FMR Far East, FIJ, FIIA, FIIAL U.K., and FMR
(the Present Sub-Advisory Agreements).
The Fund's distribution agent, FDC, will distribute shares of the Series
under a General Distribution Agreement identical to the contract currently
in effect between FDC and the Fund.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently organized as
a series of Advisor VIII, which has three series of shares or funds. The
Board of Trustees unanimously recommends reorganization of the Fund to a
separate series of the Trust (i.e., into the Series) which will succeed to
the business of the Fund. Moving the Fund from Advisor VIII to the Trust
will consolidate and streamline the production and mailing of certain
financial reports and legal documents. THE PROPOSED CHANGE WILL HAVE NO
MATERIAL EFFECT ON SHAREHOLDERS OR THE MANAGEMENT OF THE FUND.
Strategic Income Fund is presently the only Advisor non-international
taxable bond fund offered by FDC that is not a series of the Trust, and has
a different fiscal year end from October 31. The proposed change would
allow FMR to consolidate certain documents for the Advisor
non-international taxable bond funds. In particular, a combined Prospectus
will enhance the discussion of the Fund by presenting it in the context of
a full spectrum of non-international taxable bond funds.
The Plan of Reorganization was approved by the Board of Trustees of
Advisor VIII, including all of the Trustees who are not interested persons
of FMR, on December 19, 1996. The Board of Trustees recommends 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 the Trust; temporary waiver of certain investment
limitations of the Fund to permit the Reorganization (see "Temporary Waiver
of Investment Restrictions" on page _); and authorization of Advisor VIII,
as sole shareholder of the Series, to approve (i) a Management Contract for
the Series between the Trust and FMR, (ii) the Sub-Advisory Agreements
between FMR and FMR U.K., FMR Far East, FIJ, FIIAL U.K. and FIIA with
respect to the Series and (iii) the Distribution and Service Plans for
Class A shares, Class B shares, Class T shares and Institutional Class
shares under Rule 12b-1, substantially identical to the contracts or Plans,
as the case may be, currently in effect with the Fund (except as the
Management Contract may be modified pursuant to a vote of shareholders of
the fund as proposed in this Proxy Statement). If shareholders of the Fund
do not approve the Plan of Reorganization, the Fund will continue to
operate as a series of Advisor VIII.
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 10 to this Proxy Statement.
On the Closing Date of the Reorganization (defined below), the Fund will
transfer all of its assets to the Series, a series of shares of the Trust
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 shares of beneficial interest of the corresponding classes
of the Series (Trust Series Shares) equal to the number of Fund shares
outstanding on the Closing Date. Immediately thereafter, the Fund will
distribute one Trust Series Share of the applicable class for each Fund
share (the Fund Shares) held by the shareholder on the Closing Date to each
Fund shareholder, in liquidation of such Fund Shares. Immediately after
this distribution of the Trust 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 WILL BE THE
OWNER OF FULL AND FRACTIONAL TRUST SERIES SHARES EQUAL IN NUMBER,
DENOMINATION, AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND SHARES.
The Plan of Reorganization authorizes Advisor VIII as the then sole
initial shareholder of the Series or class to approve (i) a Management
Contract with FMR for the Series (the New Management Contract), (ii) the
Sub-Advisory Agreements between FMR and FMR U.K., FMR Far East, FIJ, FIIA
and FIIAL U.K. with respect to the Series (the New Sub-Advisory
Agreements), and (iii) the Distribution and Service Plan for Class A
shares, Class B shares, Class T shares and Institutional Class shares (the
new Plans) under Rule 12b-1 with respect to the Series, identical to the
contracts or plans, as the case may be, currently in effect with the Fund
(except as the Management Contract may be modified pursuant to a vote of
shareholders of the Fund as proposed in this Proxy Statement).
The Trust'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 in writing 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 the Trust. In case a vacancy
shall for any reason exist, the remaining Trustees will fill such vacancy
by appointing another Trustee, so long as, immediately after such
appointment, at least two-thirds of the Trustees have been elected by
shareholders. If, at any time, less than a majority of the Trustees holding
office has been elected by 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, the New Sub-Advisory Agreements, and the New
Plans will take effect on the Closing Date. The New Management Contract,
the New Sub-Advisory Agreements, and the New Plans will continue in force
until June 30, 1998. Each agreement will continue in force thereafter from
year to year so long as its continuance is approved at least annually (i)
by the vote of a majority of the Trustees who are not "interested persons"
of the Trust, FMR, FMR U.K., FMR Far East, FIJ, FIIA or FIIA U.K.
("Independent Trustees"), cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by vote of a majority of the
Trustees or 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
and the New Sub-Advisory Agreements will be terminable without penalty on
sixty days' written notice either by the Trust or FMR U.K., FMR Far East,
FIJ, FIIA U.K. or FIIA, as the case may be, and will terminate
automatically in the event of its assignment. The New Plans will be
terminable at any time without penalty by a vote of a majority of the
Independent Trustees or a majority of the outstanding voting shares 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 ______________ (the Closing Date). However, the Reorganization
may become effective at such later date as the parties may agree in
writing.
The obligations of Advisor VIII and the Trust 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. Either trust 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. The Trust's transfer agent will
establish an account for the Series' shareholders containing the
appropriate number and denominations of Trust Series Shares to be received
by each holder of Fund Shares 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.
EXPENSES. The Fund and the Series shall each be responsible for all of
their respective expenses of the Reorganization, estimated at $______ in
the aggregate.
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 has received an opinion
from their counsel, Kirkpatrick & Lockhart LLP, that the Reorganization
will 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 Trust Series Shares and the
assumption by the Trust on behalf of the Series of the Fund's liabilities
or (2) the distribution of Trust Series Shares to the Fund's shareholders
in liquidation of their Fund Shares. The opinion further provides, among
other things, that (a) the basis for federal income tax purposes of the
Trust 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 Trust 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 Advisor VIII,
as sole shareholder of the Series, to approve (i) a Management Contract for
the Series between the Trust and FMR, (ii) Sub-Advisory Agreements for the
Series between FMR, FMR U.K., and FMR Far East, FIJ, FIIA and FIIA U.K. and
(iii) Distribution and Service Plans for Class A shares, Class B shares,
Class T shares and Institutional Class shares, identical to the contracts
or plans, as the case may be, currently in effect with the Fund or
class(except as the Management Contract may be modified pursuant to a vote
of shareholders of the Fund as proposed in this Proxy Statement). 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 fund of Advisor VIII.
16. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING DIVERSIFICATION TO PERMIT INCREASED INVESTMENT IN THE
SECURITIES OF ANY SINGLE ISSUER.
Strategic Opportunities Fund's current fundamental investment limitation
concerning diversification is as follows:
"The fund may not purchase the securities of any issuer (other than
obligations issued or guaranteed as to principal and interest by the
government of the United States, its agencies or instrumentalities) if, as
a result (a) more than 5% of its total assets would be invested in the
securities of such issuers; or (b) such purchase, at the time thereof,
would cause more than 10% of the outstanding voting securities of such
issuer to be held in the fund's portfolio."
The Trustees recommend that shareholders of Strategic Opportunities 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) 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 proposed fundamental limitation concerning diversification is the
limitation imposed by the 1940 Act for diversified investment companies.
The amended fundamental limitation allows the fund, with respect to 25% of
its total assets, to invest more than 5% of its total assets in the
securities of each of one or more issuers and to hold more than 10% of the
voting securities of any issuer. The fund will continue to be required to
invest 75% of its total assets so that no more than 5% of total assets are
invested in any one issuer, and so that the fund owns no more than 10% of
the voting securities of any such issuer.
The amended limitation would permit the fund, for example, to invest 25%
of its assets in a single issuer's securities, or to invest 10% of its
total assets in securities of one issuer and 15% in securities of another
issuer. The proposal would give the fund greater investment flexibility by
permitting it to acquire larger positions in the securities of individual
issuers. FMR believes that this increased flexibility may provide
opportunities to enhance the fund's performance. At the same time,
investing a larger percentage of the fund's assets in a single issuer's
securities increases the fund's exposure to credit and other risks
associated with that issuer's financial condition and business operations,
including the risk of default on debt securities. FMR will only invest
more than 5% of the fund's total assets in an issuer's securities when it
believes the securities' potential return justifies accepting the risks
associated with the higher level of investment. [NEED TO CONFIRM - FMR
does not currently expect that approval of this proposal will materially
affect the way in which the fund is managed with regard to the fund's
holding more than 10% of the voting securities of an issuer.]
If the proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit Strategic Opportunities Fund and its shareholders.
The Trustees recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective immediately. If Proposal 18 is also approved, the fundamental
diversification limitation will be further changed as discussed below. If
the proposal is not approved by the shareholders of the fund, but Proposal
18 is approved, the fund's fundamental diversification limitation will be
changed as discussed in Proposal 18. If neither this proposal nor Proposal
18 is approved, the fund's fundamental diversification limitation will
remain unchanged.
17. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER
INVESTMENT COMPANIES FROM THE LIMITATION.
The Trustees recommend that the shareholders of Strategic Opportunities
Fund amend the fund's fundamental investment limitation to exclude
securities of other investment companies from the limitation. If Proposal
16 is adopted, this amendment would be effected by adding the underlined
text below to the fundamental investment limitation recommended in Proposal
16:
"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."
If Proposal 16 is not adopted, this amendment would be effected by adding
the same underlined language to the fund's current fundamental investment
limitation, so that the fundamental investment limitation would read as
follows:
"The fund may not purchase the securities of any issuer (other than
obligations issued or guaranteed as to principal and interest by the
government of the United States, its agencies or instrumentalities ((or
securities of other investment companies))) if, as a result (a) more than
5% of its total assets would be invested in the securities of such issuers;
or (b) such purchase, at the time thereof, would cause more than 10% of the
outstanding voting securities of such issuer to be held in the fund's
portfolio."
In either case, the exclusion recommended in this Proposal 17 would make
one change to the fund's fundamental diversification limitation: 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 Trustee fees. FMR
anticipates that the Central Funds will benefit the fund by enhancing the
efficiency of cash management for the Fidelity funds 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 most Fidelity funds.
If this proposal is approved, the amended fundamental diversification
limitation cannot be changed without the approval of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and its shareholders. If this proposal is
approved by the shareholders, whether or not Proposal 16 is adopted, the
fund's fundamental limitation with respect to diversification will be
revised to exclude "securities of other investment companies" from the
diversification limits. The amended fundamental diversification
limitation, upon shareholder approval, would become effective immediately.
If neither this proposal nor Proposal 16 is adopted, the fund's fundamental
diversification limit will remain unchanged.
18. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING REAL ESTATE.
Strategic Opportunities Fund's fundamental investment limitation
concerning real estate currently states:
"The fund may not purchase or sell real estate (but this shall not prevent
the fund from investing in marketable securities issued by companies such
as real estate investment trust's which deal in real estate or interests
therein and participation interests in pools of real estate mortgage
loans)."
The Trustees recommend that shareholders of the fund vote to replace this
fundamental investment limitation with the following fundamental investment
limitation governing purchases and sales of real estate.
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is authorized to invest and to conform the
fund's fundamental real estate limitation to a limitation that is expected
to become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page __.) If the proposal is
approved, the new fundamental real estate limitation may not be changed
without the approval of shareholders.
Adoption of the proposed limitation concerning real estate is not expected
to significantly affect the way in which the fund is managed, the
investment performance of the fund, or the securities or instruments in
which the fund invests. However, to the extent that the fund invests to a
greater extent in real estate related securities, it will be subject to the
risks of the real estate market. This industry is sensitive to factors such
as changes in real estate values and property taxes, overbuilding,
variations in rental income, and interest rates. Performance could also be
affected by the structure, cash flow, and management skill of real estate
companies.
The fund does not expect to acquire real estate. However, the proposed
limitation would clarify several points. First, the proposed limitation
would make explicit that the fund may acquire a security or other
instrument that is secured by a mortgage or other right to foreclose on
real estate, in the event of a default. Second, the proposed limitation
would clarify the fact that the fund may invest without limitation in
securities issued or guaranteed by companies engaged in acquiring,
constructing, financing, developing, or operating real estate projects
(e.g., securities of issuers that develop various industrial, commercial,
or residential real estate projects such as factories, office buildings, or
apartments). Any investments in these securities or other instruments are,
of course, subject to the fund's investment objective and policies and to
other limitations regarding diversification and concentration in particular
industries. Also, the proposed limitation specifically permits the fund to
sell real estate acquired as a result of ownership of securities or other
instruments. However, in light of the types of securities in which the fund
regularly invests, FMR considers this to be a remote possibility. The
proposed limitation covers all types of real estate-related investments,
while the current limitation refers to "marketable" securities. Any
unmarketable investments will continue to be limited to 10% of net assets
by the fund's existing non-fundamental limitations.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund's current limitation will remain unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of proposals 19 through 28 is to revise several of
Strategic Opportunities Fund's investment limitations to conform to
limitations which are standard for similar types of funds managed by FMR.
The Board of Trustees asked FMR to analyze the various fundamental and
non-fundamental investment limitations of the Fidelity funds, and, where
practical and appropriate to a fund's investment objective and policies,
propose to shareholders adoption of standard fundamental limitations and
elimination of certain other fundamental limitations. Generally, when
fundamental limitations are eliminated, Fidelity's standard non-fundamental
limitations replace them. By making these limitations non-fundamental, the
Board of Trustees may amend a limitation as they deem appropriate, without
seeking shareholder approval. The Board of Trustees would amend the
limitations to respond, for instance, to developments in the marketplace or
changes in federal or state law. The costs of shareholder meetings called
for these purposes are generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect the
way the fund is currently managed. However, FMR is presenting them to you
for your approval because FMR believes that increased standardization will
help to promote operational efficiencies and facilitate monitoring of
compliance with fundamental and non-fundamental investment limitations.
Although adoption of a new or revised limitation is not likely to have any
impact on the current investment techniques employed by the fund, it will
contribute to the overall objectives of standardization.
19. TO AMEND THE STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE ISSUANCE OF SENIOR SECURITIES.
Strategic Opportunities Fund's current fundamental investment limitation
regarding the issuance of senior securities states:
"The fund may not issue senior securities (except to the extent that
issuance of one or more classes of shares of the fund in accordance with an
order issued by the Securities and Exchange Commission may be deemed to
constitute issuance of a senior security)."
The Trustees recommend that shareholders vote to replace this limitation
with the following fundamental investment limitation governing the issuance
of senior securities:
"The fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940."
The primary purpose of the proposal is to revise the fund's fundamental
senior securities limitation to conform to a limitation that is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page _.) If the proposal is
approved, the new fundamental senior securities limitation cannot be
changed without the approval of shareholders.
Adoption of the proposed limitation on senior securities is not expected
to affect the way in which the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
However, the proposed limitation clarifies that the fund may issue senior
securities to the extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings
that takes precedence over the claims of the fund's shareholders. The 1940
Act generally prohibits mutual funds from issuing senior securities;
however, mutual funds are permitted to engage in certain types of
transactions that might be considered "senior securities" as long as
certain conditions are satisfied. For example, a transaction which
obligates a fund to pay money at a future date (e.g., the purchase of
securities for settlement on a date that is further away than the normal
settlement period) may be considered a "senior security." A mutual fund,
however, is permitted to enter into this type of transaction only if it
maintains a segregated account containing liquid securities in an amount
equal to its obligation to pay cash for the securities at a future date.
The fund utilizes transactions that may be considered "senior securities"
only in accordance with applicable regulatory requirements under the 1940
Act.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the amended
fundamental limitation will become effective immediately. If the proposal
is not approved by the shareholders of the fund, the fund's current
limitation will remain unchanged.
20. TO ELIMINATE STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING SHORT SALES OF SECURITIES.
Strategic Opportunities Fund's current fundamental investment limitation
on selling securities short is as follows:
"The fund may not make short sales of securities, (unless it owns, or by
virtue of its ownership of other securities has the right to obtain, at no
additional cost, securities equivalent in kind and amount to the securities
sold); provided, however, that the fund may enter into forward foreign
currency exchange transactions; and further provided that the fund may
purchase or sell futures contracts."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation. If the proposal is approved by
shareholders, the Trustees intend to adopt a non-fundamental limitation
that could be changed without a vote of shareholders. The proposed
non-fundamental limitation is set forth below, with a brief analysis of the
substantive differences between it and the current limitation.
"The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short."
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. In
an investment technique known as a short sale "against the box," an
investor sells securities short while owning the same securities in the
same amount, or having the right to obtain equivalent securities. The
investor could have the right to obtain equivalent securities, for example,
through its ownership of warrants, options, or convertible bonds.
The proposed non-fundamental limitation would clarify that transactions in
options are not deemed to constitute selling securities short. The fund's
current limitation permits it to engage in short sales "against the box,"
but only if the transaction does not incur any additional costs. The new
non-fundamental limitation does not impose this restriction.
The fund does not currently anticipate entering into any short sales other
than short sales against the box. If the proposal is approved, however, the
Board of Trustees would be able to change the proposed non-fundamental
limitation in the future, without a vote of shareholders subject to
appropriate disclosure to investors.
Elimination of the fund's fundamental limitation on short selling is
unlikely to affect the fund's investment techniques at this time. The Board
of Trustees believes that efforts to standardize the fund's investment
limitation will facilitate FMR's investment compliance efforts (see
"Adoption of Standardized Investment Limitations" on page __) and are in
the best interests of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the
non-fundamental limitation will become effective immediately. If the
proposal is not approved by the shareholders of the fund, the fund's
current limitation will remain unchanged.
21. TO ELIMINATE STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING MARGIN PURCHASES.
Strategic Opportunities Fund's current fundamental investment limitation
concerning purchasing securities on margin is as follows:
"The fund may not purchase securities or other property on margin, (except
for such short-term credits as are necessary for the clearance of
transactions); provided, however, that the fund may make initial and
variation margin payments in connection with purchases or sales of futures
contracts or options on futures contracts."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation. If the proposal is approved, the
Trustees intend to adopt a substantially identical non-fundamental
limitation for the fund that could be changed without the approval of
shareholders.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the
borrower places with a broker as collateral against the loan. The fund's
current fundamental limitation prohibits the fund from purchasing
securities on margin, except to obtain such short-term credits as may be
necessary for the clearance of transactions and for initial and variation
margin payments made in connection with the purchase and sale of futures
contracts and options on futures contracts. With these exceptions, mutual
funds are prohibited from entering into most types of margin purchases by
applicable SEC policies. The proposed non-fundamental limitation includes
these exceptions.
If the proposal is approved by shareholders, the Trustees intend to adopt
the following non-fundamental investment limitation, which would prohibit
margin purchases except as permitted under the conditions referred to
above:
"The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin."
Although elimination of fundamental limitation on margin purchases is
unlikely to affect the fund's investment techniques at this time, in the
event of a change in federal regulatory requirements, the fund may alter
its investment practices in the future. The Board of Trustees believes that
efforts to standardize investment limitations will facilitate FMR's
investment compliance efforts (see "Adoption of Standardized Investment
Limitations" on page __.) and are in the best interests of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the new
non-fundamental limitation will become effective immediately. If the
proposal is not approved by the shareholders of the fund, the fund's
current limitation will remain unchanged.
22. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING BORROWING.
Strategic Opportunities Fund's current fundamental investment limitation
concerning borrowing states:
"The fund may not borrow money except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of the fund's total assets
(including the amount borrowed) less liabilities (not including
borrowings). Any borrowings that come to exceed 33 1/3% of the fund's total
assets by reason of a decline in net assets, will be reduced within three
days (exclusive of Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation. The fund will not purchase securities for
investment while borrowings equaling 5% or more of its total assets are
outstanding."
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 borrowing:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page __.) If the proposal is approved, the
amended fundamental borrowing limitation cannot be changed without the
approval of shareholders.
Adoption of the proposed fundamental limitation concerning borrowing is
not expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests. However, the proposed limitation would clarify one point. Under
the proposed limitation, the fund must reduce borrowings that come to
exceed 33 1/3% of its total assets for any reason, while under the current
limitation, the fund must reduce borrowings that come to exceed 33 1/3% of
total assets only when there is a decline in net assets.
If the amended limitation is approved, the Trustees will also adopt the
following non-fundamental limitation for the fund which contains one policy
currently in the fundamental limitation, and adds an additional policy.
"The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation [number of fundamental
limitation on borrowing]. The fund will not purchase any security while
borrowings representing more than 5% of its total assets are outstanding.
The fund will not borrow from other funds advised by FMR or its affiliates
if total outstanding borrowings immediately after such borrowing would
exceed 15% of the fund's total assets."
The proposed non-fundamental limit would state the fund's policy of not
purchasing a security while borrowings representing more than 5% of total
assets are outstanding. It would also add that reverse repurchase
agreements would be considered as borrowings for purposes of the
fundamental limitation on borrowing. In a reverse repurchase agreement, a
fund sells a security to another party in return for cash and agrees to
repurchase that security at a particular price and time. Inclusion of the
specific reference in the non-fundamental limitation to reverse repurchase
agreements is not expected to change the way the fund is managed, the
investment performance of the fund, or the securities or instruments in
which the fund invests. If the proposal is approved, the statement in the
fund's present fundamental limitation that "the fund will not purchase
securities for investment while borrowings equaling 5% or more of its total
assets are outstanding" will be eliminated, but will be reflected in the
new non-fundamental limitation as referenced above. Non-fundamental limits
can be changed by the Board of Trustees without the approval of
shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit Strategic Opportunities Fund and its shareholders. The Trustees
recommend voting FOR the proposal. Upon shareholder approval, the amended
fundamental limitation will become effective immediately. If the proposal
is not approved by the shareholders of the fund, the fund's current
limitation will remain unchanged.
23. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING UNDERWRITING.
The Strategic Opportunities Fund's current fundamental investment
limitation concerning underwriting states:
"The fund may not underwrite any issue of securities (except to the extent
that the fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of "restricted securities")."
The trustees recommend that shareholders of the fund vote to replace this
limitation with the following fundamental limitation governing
underwriting:
"The fund may not underwrite securities issued by others, except to the
extent that the fund may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of restricted securities."
The primary purpose of the proposed amendment is to conform the fund's
fundamental fundamental investment limitation concerning underwriting to a
limitation which is expected to become standard for all funds managed by
FMR. (See "Adoption of Standardized Investment Limitations" on page __.) If
the proposal is approved, the new limitation may not be changed without the
approval of shareholders.
Adoption of the proposed limitation concerning underwriting is not
expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
24. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE CONCENTRATION OF ITS INVESTMENTS IN A SINGLE
INDUSTRY.
Strategic Opportunities Fund's current fundamental investment limitation
concerning the concentration of its investments within a single industry
states:
"The fund may not purchase the securities of any issuer (other than
obligations issued or guaranteed by the government of the United States,
its agencies or instrumentalities) if, as a result thereof, more than 25%
of the fund's total assets would be invested in the securities of one or
more issuers having their principal business activities in the same
industry."
The Trustees recommend that shareholders of the fund vote to replace this
fundamental investment limitation with the following amended fundamental
investment limitation governing concentration:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry."
The primary purpose of the proposal is to revise the fund's fundamental
concentration limitation to conform to a limitation which is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page __.) If the proposal is
approved, the new fundamental concentration limitation could not be changed
without the approval of shareholders.
The proposed amended limitation on concentration would be based on the
fund's investment in securities of "companies," rather than `issuers,"
having their principal business activities in the same industry. Because
the term "issuers" may be interpreted more broadly in various contexts than
the term "companies", the proposed limitation could be construed to permit
the fund to invest in certain securities, such as asset-backed pass-through
securities, to a greater degree than the current limitation. To this
extent, the proposed limitation could provide the fund with greater
investment flexibility.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
25. TO AMEND STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING LENDING.
Strategic Opportunities Fund's current fundamental investment limitation
concerning lending is as follows:
"The fund may not lend any security or make any other loan if as a result,
more than 33 1/3% of the fund's total assets would be lent to other parties
except (i) through the purchase of a portion of an issue of debt securities
in accordance with its investment objective, policies and limitations, or
(ii) by engaging in repurchase agreements with respect to portfolio
securities."
The Trustees recommend that the shareholders of the fund vote to replace
the fund's limitation with the following amended fundamental investment
limitation governing lending:
"The fund may not lend any security or make any other loan if, as a
result, more than 33 1/3% of its total assets would be lent to other
parties, but this limitation does not apply to purchases of debt securities
or to repurchase agreements."
The primary purpose of this proposal is to revise the fund's fundamental
lending limitation to conform to a limitation expected to become standard
for all funds managed by FMR. (See "Adoption of Standardized Investment
Limitations" on page __). If the proposal is approved, the new fundamental
lending limitation cannot be changed without the approval of shareholders.
Adoption of the proposed limitation on lending is not expected to affect
the way in which the fund is managed, the investment performance of the
fund, or the instruments in which the fund invests. However, the proposed
limitation would clarify two points. First, the proposed limitation
provides specific authority for the fund to acquire the entire portion of
an issue of debt securities. Ordinarily, if a fund purchases an entire
issue of debt securities, there may be greater risks of illiquidity and
unavailability of public information if the issuer has no other issue of
securities outstanding, and it may be more difficult to obtain pricing
information to be used in establishing a fund's daily share price. Second,
the proposed amendment eliminates the reference to "portfolio securities"
in the exception for repurchase agreements.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
26. TO ELIMINATE STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INVESTMENT IN OTHER INVESTMENT COMPANIES.
Strategic Opportunities Fund's current fundamental investment limitation
concerning investment in other investment companies states:
"The fund may not purchase securities of other investment companies
(except in the open market where no commission other than the ordinary
broker's commission is paid, or as part of a merger or consolidation, and
in no event may investments in such securities exceed 10% of the value of
total assets of the fund). The fund may not purchase or retain securities
issued by other open-end investment companies."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental limitation.
The ability of mutual funds to invest in other investment companies is
restricted by rules under the 1940 Act, and, until recently, by some state
regulations. The fund's fundamental restriction incorporates both the 1940
Act restrictions and the state regulations. The federal 1940 Act
restrictions will remain applicable to the fund whether or not they are
recited in a fundamental limitation. Because the state regulations were
recently superseded by federal legislation, shareholder approval is sought
to eliminate this fundamental limitation. Elimination of the limitation
would permit the fund to purchase the securities of other investment
companies to the extent permitted under the 1940 Act. If the proposal is
approved, the fund would be able to enhance its cash management by
investing in the Central Funds. (See Proposal 17.) In addition, the Board
of Trustees believes that efforts to standardize the fund's investment
limitations will facilitate FMR's investment compliance efforts. (See
"Adoption of Standardized Investment Limitations" on page __.) Elimination
of the fundamental restriction is not expected to have any impact on the
fund's current investment practices, except with respect to cash management
as detailed in Proposal 17.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental investment limitation regarding
investments in other investment companies. If approved, the proposal would
take effect immediately. If the proposal is not approved, the fund's
current limitation will remain unchanged.
27. TO ELIMINATE STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INVESTMENT IN OIL, GAS, AND OTHER MINERAL EXPLORATION
PROGRAMS.
Currently, Strategic Opportunities Fund maintains a fundamental investment
limitation specifying that the fund may not "invest in oil, gas or other
mineral exploration or development programs." Investment in oil, gas, or
other mineral exploration programs is permitted under federal standards for
mutual funds but was prohibited by some state regulations. Because these
state law restrictions were recently superseded by federal legislation, the
Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation.
Elimination of the fundamental limitation will give the fund investment
flexibility to choose such investments, to the extent consistent with its
investment objective and other investment policies.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental investment limitation concerning
investment in oil, gas and other mineral exploration programs. The Board
of Trustees has concluded that efforts to standardize the fund's investment
limitations will facilitate FMR's investment compliance efforts. (See
"Adoption of Standardized Investment Limitations" on page __.) In addition,
the proposed elimination would provide the fund more investment
flexibility. If approved, the proposal will take effect immediately. If
the proposal is not approved, the fund's current limitation will remain
unchanged.
28. TO ELIMINATE STRATEGIC OPPORTUNITIES FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INVESTMENT IN SECURITIES OF NEWLY-FORMED ISSUERS.
Strategic Opportunities Fund's current fundamental limitation regarding
investment in securities of newly-formed issuers states:
"The fund may not invest more than 5% of the fund's total assets (taken at
market value) in the securities of companies which, including predecessors,
have a record of less than three years' continuous operation."
The Trustees recommend that shareholders vote to eliminate the fund's
fundamental investment limitation referenced above. Newly-formed issuers
or "unseasoned issuers" are issuers with less than three years' continuous
operation. The purpose of the fundamental limitation on investments in
unseasoned issuers was to comply with state laws and limit the risks of
investing in companies that have no proven track record in business and
whose prospects are uncertain. The fundamental limitation was adopted in
accordance with state law restrictions which have recently been superseded
by federal legislation. Elimination of the fundamental investment
limitation will increase the fund's investment flexibility, and give it the
ability to invest in new companies that otherwise meet the investment
objective and criteria of the fund. In addition, the Board of Trustees
believes that efforts to standardize the fund's investment limitations will
facilitate FMR's investment compliance efforts. (See "Adoption of
Standardized Investment Limitations" on page __.)
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental investment limitation regarding
investments in securities of newly-formed issuers. If approved, the
proposal will take effect immediately. The Board of Trustees has concluded
that the proposed elimination would benefit the fund by providing more
investment flexibility. If the proposal is not approved, the fund's
current limitation will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to Strategic Opportunities Fund, Emerging Markets Income Fund and Strategic
Income Fund and advised by FMR is contained in the Table of Average Net
Assets and Expense Ratios in Exhibit 11 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; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Arthur S. Loring, Robert H. Morrison, Kenneth A.
Rathgeber, Leonard M. Rush, William J. Hayes, Robert A. Lawrence, and
Harris Leviton are currently officers of the trust and officers or
employees of FMR or FMR Corp. With the exception of Mr. Costello, Mr.
Rathgeber, Mr. Rush [Mr. Morrison] IF NOT A STOCKHOLDER - CALL A PROXY
COORDINATOR FOR THIS INFORMATION], all of these persons are stockholders of
FMR Corp. The principal business address of each of the Directors of FMR is
82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period December 31, 1996 through February 1997, the following
transactions were entered into by Trustees and nominees as Trustee of the
trust involving more than 1% of the voting common, non-voting common and
equivalent stock, or preferred stock of FMR Corp.
[TABLE, IF NEEDED]
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed in
1986 to provide research and investment advice with respect to companies
based outside the United States for certain funds for which FMR acts as
investment adviser. FMR may also grant the sub-advisers investment
management authority as well as authority to buy and sell securities for
certain of the funds for which it acts as investment adviser, if FMR
believes it would be beneficial to a fund.
Funds with investment objectives similar to Strategic Opportunities Fund
managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East or both, and the net assets
of each of these funds, are indicated in the Table of Average Net Assets
and Expense Ratios in Exhibit 12 beginning on page __.
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and J. Gary Burkhead, President. Mr. Johnson 3d also is President
and a Trustee of the trust and other funds advised by FMR; Chairman and a
Director of FMR Texas; Chairman, Chief Executive Officer, President, and a
Director of FMR Corp., Chairman of the Board and of the Executive Committee
of FMR, and a Director of FMR. In addition, Mr. Burkhead is Senior Vice
President and a Trustee of the trust and of other funds advised by FMR; a
Director of FMR Corp.; President and Director of FMR; and President and
Director of FMR Texas. Each of the Directors is a stockholder of FMR Corp.
The principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue under
the proposed management contractS described in proposals 7, 8 and 9.
In addition to the management fee payable to FMR, each fund (except for
Strategic Opportunities Fund, with respect to Initial Class shares) pays
transfer agent fees to Fidelity Investments Institutional Operations
Company ("FIIOC") for Class A, C:lass B, Class T, and Institutional Class,
and price and bookkeeping fees to FSC, affiliates of FMR. Until ________,
1996, such fees were paid to State Street Bank and Trust Company ("State
Street") for Class T shares. Although each fund's current management
contract provides that each fund will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices and
reports to shareholders, the trust, on behalf of each fund has entered into
a revised transfer agent agreement with FIIOC, pursuant to which FIIOC
bears the costs of providing these services to existing shareholders of the
applicable classes. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FIIOC and State Street,
and FSC by the funds for fiscal 1996 were as follows:
Fees Paid to
Fund FIIOC State FSC
Street
Strategic Opportunities $304,283 $1,345,676 $423,966
Emerging Markets Income $117,910 $ 138,085 $ 62,296
Strategic Income $273,900 $ 185,607 $ 60,655
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the NASD. Each
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
fund, which are continuously offered. 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 the funds during
fiscal 1996 were as follows:
Fund Paid to FDC Retained by FDC
Class T Class Class T Class A
A
Strategic Opportunities $909,434 $15,662 $145,926 $2,958
Emerging Markets 270,379 9,186 42,424 1,098
Income
Strategic Income 558,381 13,287 94,606 1,628
FMR collected deferred sales charge revenue during fiscal 1996 of $243,510
for Strategic Opportunities Fund, $46,800 for Emerging Markets Income Fund,
and $56,783 for Strategic income Fund.
FMR is Strategic Opportunities, Emerging Markets Income and Strategic
Income's manager pursuant to management contracts dated November 29, 1990,
January 20, 1994 and September 16, 1994, respectively. The management
contract for Strategic Opportunities Fund was most recently approved by
that fund's shareholders on September 19, 1990, at which time a proposed
reduction in the Group Fee rate was approved. The management contracts for
Emerging Markets Income Fund and Strategic Income Fund were approved by
FMR, then sole shareholder of each fund, on February 10, 1994 and October
14, 1994, respectively.
COMPUTING THE BASIC FEE. Each fund's basic fee rate is composed of two
elements: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management contracts
and is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown 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 $___ billion of group net assets
- - the approximate level for December 1996 - was .3021% for equity funds and
.1425% for fixed-income funds, which is the weighted average of the
respective fee rates for each level of group net assets up to $453 billion.
STRATEGIC INCOME. The following fee schedule is the current fee schedule
for Strategic Income Fund:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Rate Net Annual
Assets Assets Fee Rate
$0 - 3 billion .3700 $ 0.5 billion .3700
% %
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 156 .1450 400 .1507
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
Over 372 .1200
The following fee schedule is the current fee schedule for Emerging
Markets Income Fund:
Average Net Assets Annualized Rate (for each
level)
$0 - 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 174 .1450
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule for Emerging Markets Income Fund, and added new
breakpoints for average group assets in excess of $156 billion and under
$372 billion as shown in the schedule below, pending shareholder approval
of a new management contract reflecting the revised schedule. The revised
group fee rate schedule provides for lower management fee rates as FMR's
assets under management increase. The revised group fee rate schedule was
identical to the above schedule for average group assets under $156
billion.
On January 1, 1996, FMR voluntarily added new breakpoints (revised, in the
case of Emerging Markets Income Fund) to the revised schedule for average
group assets in excess of $372 billion, pending shareholder approval of a
new management contract reflecting the revised schedule and additional
breakpoints. The revised group fee rate schedule and its extensions provide
for lower management fee rates as FMR's assets under management increase.
For average group assets in excess of $156 billion, the revised group fee
rate schedule with additional breakpoints voluntarily adopted by FMR is as
follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
120 - $156 billion .1450 $150 billion .1736%
%
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
STRATEGIC OPPORTUNITIES. The following fee schedule is the current fee
schedule for Strategic Opportunities Fund:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets
Fee Rate
0 - $ 3 billion .5200% $ 0.5 .5200%
billion
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Under the fund's current management contract with FMR, the group fee rate
is based on a schedule with breakpoints ending at .3100% for average group
assets in excess of $102 billion. The group fee rate breakpoints shown
above for average group assets in excess of $138 billion and under $228
billion were voluntarily adopted by FMR on January 1, 1992. The additional
breakpoints shown above for average group assets in excess of $228 billion
were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $210 billion and under $390 billion as shown in the schedule
below, pending shareholder approval of a new management contract reflecting
the revised schedule. The revised group fee rate schedule provides for
lower management fees as FMR's assets under management increase. The
revised group fee rate schedule was identical to the above schedule for
average group assets under $210 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $390 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $210
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE EFFECTIVE ANNUAL FEE
SCHEDULE RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
174 - $210 billion .3000 $150 .3371%
% billion
210 - 246 .2950 175 .3325
246 - 282 .2900 200 .3284
282 - 318 .2850 225 .3249
318 - 354 .2800 250 .3219
354 - 390 .2750 275 .3190
390 - 426 .2700 300 .3163
426 - 462 .2650 325 .3137
462 - 498 .2600 350 .3113
498 - 534 .2550 375 .3090
Over 534 .2500 400 .3067
425 .3046
450 .3024
475 .3003
500 .2982
525 .2962
550 .2942
The individual fund fee rates for each fund are set forth below. Based on
the average group net assets of the funds advised by FMR for December 1996,
the annual basic fee rate would be calculated as follows:
Group Fee Individual Fund Manageme
Rate Fee Rate nt/Basic
Fee Rate
Strategic Opportunities .3021% + 0.30% = .6021%
Emerging Markets .1425% + 0.55% = .6925%
Income
Strategic Income .1425% + 0.45% = .5925%
One-twelfth of this annual basic fee or management fee rate, as
applicable, is applied to each fund's net assets averaged for the month,
giving a dollar amount, which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for Strategic
Opportunities is subject to upward or downward adjustment, depending upon
whether, and to what extent, the fund's investment performance for the
performance period exceeds, or is exceeded by, the record of the S&P 500
(the Index) over the same period. The performance period consists of the
current month plus the previous 35 months. Each percentage point of
difference, calculated to the nearest 1.0% (up to a maximum difference of
+/-10.00 ) is multiplied by a performance adjustment rate of .02%. Thus,
the maximum annualized adjustment rate is +/-.20%. The fund is comprised of
five classes of shares: Initial shares, Class A shares, Class B shares,
Class T shares and Institutional shares. Investment performance will be
measured separately for each class, and the least of the five results
obtained will be used in calculating the performance adjustment to the
management fee paid by the fund. This performance comparison is made at the
end of each month. One twelfth (1/12) of this rate is then applied to the
fund's average net assets for the entire performance period, giving a
dollar amount which will be added to (or subtracted from) the basic fee.
The fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if reinvested in
fund shares at the net asset value as of the record date for payment. The
record of the Index is based on change in value and is adjusted for any
cash distributions from the companies whose securities compose the Index.
Because the adjustment to the basic fee is based on Strategic
Opportunities Fund's performance compared to the investment record of the
Index, the controlling factor is not whether the fund's performance is up
or down per se, but whether it is up or down more or less than the record
of the Index. Moreover, the comparative investment performance of Strategic
Opportunities Fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter
period of time.
During fiscal 1996 for its services as investment adviser to the funds,
FMR received fees (including the amount of any performance adjustment) as
follows:
Fund Managemen Performanc Management Fee
t e as a Percentage
Fee Adjustment of
Average Net
Assets
Strategic Opportunities $4,583,688 $962,281 0.48%
(downward)
Emerging Markets $488,344 N/A 0.69%
Income
Strategic Income $641,715 N/A 0.59%
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield (with respect to
Strategic Income and Emerging Markets Income) and repayment of the
reimbursement by each fund will lower its total returns and yield.
SUB-ADVISORY AGREEMENTS
On behalf of Strategic Income Fund and Emerging Markets Income Fund, FMR
has entered into sub-advisory agreements with FMR U.K., FMR Far East, FIJ,
and FIIA. FIIA, in turn, has entered into a sub-advisory agreement with
FIIAL U.K. On behalf of Strategic Opportunities Fund, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to the
sub-advisory agreements, FMR may receive investment advice and research
services outside the United States from the sub-advisers. On behalf of
Strategic Income Fund and Emerging Markets Income Fund, FMR may also grant
FMR U.K., FMR Far East, FIJ and FIIA investment management authority as
well as the authority to buy and sell securities if FMR believes it would
be beneficial to the funds. Strategic Opportunities Fund's sub-advisory
agreements, dated November 29, 1990, were approved by shareholders on
September 19, 1990. Emerging Markets Income Fund's sub-advisory agreements,
dated January 20, 1994, were approved by FMR as sole shareholder of the
fund on February 10, 1994. Strategic Income Fund's sub-advisory agreements,
dated September 16, 1994, were approved by FMR as sole shareholder on
October 14, 1994.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIAL U.K. each focus on
issuers in countries other than the United States such as those in Europe,
Asia, and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. FIJ and FIIA are wholly owned subsidiaries of FIL, a
Bermuda company formed in 1968 which primarily provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities throughout the world. Edward C. Johnson 3d, Johnson
family members, and various trusts for the benefit of the Johnson family
owns, directly or indirectly, more than 25% of the voting common stock of
FIL. FIJ was organized in Japan in 1986. FIIA was organized in Bermuda in
1983. FIIAL U.K. was organized in the United Kingdom in 1984, and is a
wholly owned subsidiary of Fidelity International Management Holdings
Limited, an indirect wholly owned subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIAL U.K. For
providing non-discretionary investment advice and research services the
sub-advisers are compensated as follows:
FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection
with providing investment advice and research services.
FMR pays FIIA and FIJ fees equal to 30% of FMR's monthly management fee
with respect to the average net assets held by the fund for which the
sub-adviser has provided FMR with investment advice and research services.
FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s costs incurred
in connection with providing investment advice and research services.
On behalf of Emerging Markets Income Fund and Strategic Income Fund, for
providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50% of its
monthly management fee with respect to each fund's average net assets
managed by the sub-adviser on a discretionary basis.
FIIA pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s costs incurred
in connection with providing discretionary investment management services.
For the fiscal year ended December 31, 1996, no fees were paid by FMR to
FMR U.K., FMR Far East, FIIA, FIIAL, or FIJ on behalf of Emerging Markets
Income Fund and Strategic Income Fund.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the fund's
management contract.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services.
The brokerage commissions incurred by each fund for fiscal 1996 are listed
in the following table:
Total
Fund Amount To FBSI To FBS
Paid
Strategic Opportunities $257,886 $246,329 $11,557
Emerging Markets Income $ N/A $ N/A $ N/A
Strategic Income $ N/A $ N/A $ N/A
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., 82 Devonshire Street, Boston, Massachusetts
02109, whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of the Proxy
Statement and Annual Reports you wish to receive in order to supply copies
to the beneficial owners of the respective shares.
EXHIBIT 1
UNDERLINED DISCLOSURE WILL BE ADDED:
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY ADVISOR SERIES VIII:
FIDELITY [SPECIAL SITUATIONS] STRATEGIC OPPORTUNITIES FUND
((AMENDMENT)) [AGREEMENT] made this [29th] ___ day of [November] ((July
)),[1990] ((1997)), by and between ((Fidelity Advisor Series VIII Trust))
[Fidelity Special Situations Fund], a Massachusetts business trust which
may issue one or more series of shares of beneficial interest (hereinafter
called the "Fund"),(( on behalf of Fidelity Strategic Opportunities Fund
(hereinafter called the "Portfolio")), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser"),
((as set forth in its entirety below.))
Required authorization[s] and approval[s] by shareholders and Trustees
having been obtained, [Fidelity Special Situations] ((the)) Fund, on behalf
of [its two existing classes of shares of beneficial interest within a
single portfolio (hereinafter called] the "Portfolio"[)], and [Fidelity
Management & Research Company] ((the Adviser)) hereby consent, pursuant to
Paragraph 6 of the existing Management Contract dated November 1, 1987,
((as amended and restated July 29, 1990)) to a modification of said
Contract in the manner set forth below. [The term "Portfolio" shall be
understood to apply to Initial Class shares and Plymouth Class shares of
the Fund.] The [modifications] ((Amended Management Contract)) shall take
effect [upon the execution of this modification of the Management Contract]
((when executed)) by duly authorized officers of the Fund and the Adviser,
((on July 1, 1997 or the first day of the month following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act", and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of 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 [,at its own expense,] 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 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 the 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. Management Fee. The Adviser will be compensated on the following basis
for the services and facilities to be furnished hereunder. The Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Basic Fee and a
Performance Adjustment. [to the basic fee based upon the investment
performance of the Portfolio in relation to] ((The Performance Adjustment
is added to or subtracted from the Basic Fee depending on whether the
Portfolio experiences better or worse performance than)) the Standard &
Poor's Daily Stock Price Index of 500 Common Stocks (the "Index"). The
[adjustment to the basic fee rate will not be ] ((Performance Adjustment is
not)) cumulative. An increased fee will result even though the performance
of the Portfolio over some period of time shorter than the performance
period has been behind that of the Index, and, conversely, a reduction in
the fee will be made for a month even though the performance of the
Portfolio over some period of time shorter than the performance period has
been ahead of that of the Index. The Basic Fee and the Performance
Adjustment will be computed as follows:
(a) Basic Fee Rate: [The basic fee rate shall be composed of two
elements.] ((The annual Basic Fee Rate shall be the sum of the Group Fee
Rate and the Individual Fund Fee Rate calculated to the nearest millionth
decimal place as follows:))
(i) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having
((Advisory and Service or)) Management Contracts with the Adviser (computed
in the manner set forth [in the charter of each investment company] ((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:
<TABLE>
<CAPTION>
<S> <C>
((Average Net Assets)) Annualized Fee Rate (for each level)
$ 0 - 3 billion .520%
3 - 6 .490
6 - 9 .460
9 - 12 .430
12 - 15 .400
15 - 18 .385
18 - 21 .370
21 - 24 .360
24 - 30 .350
30 - 36 .345
36 - 42 .340
42 - 48 .335
48 - 66 .325
66 - 84 .320
84 - 102 .315
((102 - 138)) .310
((138 - 174)) ((3050))
((174 - 210)) ((3000))
((210 - 246)) ((2950))
((246 - 282)) ((2900))
((282 - 318)) ((2850))
((318 - 354)) .((2800))
((354 - 390)) ((2750))
((390 - 426)) ((2700))
((426 - 462)) .((2650))
((462 - 498)) .((2600))
((498 - 534)) .((2550))
((Over - 543)) .((2500))
</TABLE>
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.30%.
(((b) ))Basic Fee. One-twelfth of the [annual] ((Basic Fee Rate)) shall
be applied to the average of the net assets of the Portfolio (computed in
the manner set forth in the Fund's Declaration of Trust ((or other
organizational document)) determined as of the close of business on each
business day throughout the month. ((The resulting dollar amount comprises
the Basic Fee.))
[The basic fee will be subject to upward or downward adjustment on the
basis of the Portfolio's investment performance as follows:]
[An adjustment to the monthly basic fee will be made by applying a
performance adjustment rate to the average net assets of the Portfolio over
the performance period. The resulting dollar figure will be added to or
subtracted from the basic fee depending on whether the Portfolio
experienced better or worse performance than the performance index.]
(((c) ))Performance Adjustment ((Rate:)) The Performance Adjustment Rate
is 0.02% for each percentage point [rounded to the nearer point (the higher
point if exactly one-half point)] ((the performance of the Portfolio and
the Index each being calculated to the nearest .01%)) that the Portfolio's
investment performance for the performance period was better or worse than
the record of the Index as then constituted. The maximum performance
adjustment rate is +0.20%.
The performance period will commence with the first day of the first full
month following the [effective date of the Fund's registration statement]
((the Portfolio's commencement of operations.)) During the first eleven
months of [the operation of the Contract] ((the performance period for the
Portfolio,)) there will be no performance adjustment. Starting with the
twelfth month of [operation] ((the performance period,)) the performance
adjustment will take effect. Following the twelfth month a new month will
be added to the performance period until the performance period equals 36
months. Thereafter the performance period will consist of the current
month plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing (i)
the opening net asset value of one share of the Portfolio on the first
business day of the performance period with (ii) the closing net asset
value of one share of the Portfolio as of the last business day of such
period. In computing the investment performance of the Portfolio and the
investment record of the Index, distributions of realized capital gains,
the value of capital gains taxes per share paid or payable on undistributed
realized long-term capital gains accumulated to the end of such period and
dividends paid out of investment income on the part of the Portfolio, and
all cash distributions of the securities included in the Index, will be
treated as reinvested in accordance with Rule 205-1 or any other applicable
rules under the Investment Advisers Act of 1940, as the same from time to
time may be amended.
[The Portfolio's investment performance will be measured separately for
Initial Class shares and Plymouth Class shares, and the lesser of the two
results obtained will be used in calculating the performance adjustment.
In calculating the investment performance of the Plymouth Class, the
investment performance of the Initial Class shall be the investment
performance of the Plymouth Class for the period before the first Plymouth
Class share was issued.]
(((d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average net assets of the Portfolio
(computed in the manner set forth in the Fund's Declaration of Trust or
other organizational document) determined as of the close of business on
each business day throughout the month and the performance period. ))
(((e) ))In case of termination of this Contract during any month, the fee
for that month shall be reduced proportionately on the basis of the number
of business days during which it is in effect for that month. The ((Basic
Fee Rate)) will be computed on the basis of and applied to net assets
averaged over that month ending on the last business day on which this
Contract is in effect. ((The amount of this Performance Adjustment to the
Basic Fee will be computed on the basis of and applied to net assets
average over the 36-month period ending on the last business day on which
this Contract is in effect provided that if this Contract has been in
effect less than 36 months, the computation will be made on the basis of
the period of time during which is has been in effect.))
4. It is understood that the Portfolio will pay all its expenses [other
than those expressly stated to be payable by the Adviser hereunder,] which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having ((Advisory and Service or)) Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity and
other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security ((or other
investment instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this contract shall continue in force until July 31,
199[1]8 and indefinitely thereafter, but only so long as the continuance
after such date shall be specifically approved at least annually by vote of
the Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust ((or
other organizational document)) and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust ((or other
organizational document)) are separate and distinct from those of any and
all other Portfolios.
((8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving effect
to the choice of laws provisions thereof.))
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
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 VIII TRUST
[FIDELITY SPECIAL SITUATIONS FUND]
on behalf of Fidelity Strategic Opportunities Fund))
By ______________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By ______________________________________
President
EXHIBIT 2
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY ADVISOR SERIES VIII:
FIDELITY ADVISOR STRATEGIC INCOME FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AMENDMENT [AGREEMENT] made this [16th] ___ day of [September] July
199[4]7 by and between Fidelity Advisor Series VIII, 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
Strategic Income Portfolio (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser") ((as set forth in its entirety below.))
((Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
July 16, 1994, to a modification of said Contract in the manner set forth
below. The Amended Management Contract shall, when executed by duly
authorized officers of the Fund and Adviser, take effect on July 1, 1997 or
the first day of the month following approval. ))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Portfolio 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 Portfolio 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:
<TABLE>
<CAPTION>
<S> <C>
Average Net Assets Annualized Fee Rate (for each level)
(($0 - 3 billion)) (( .3700%))
((3 - 6)) ((.3400))
((6 - 9)) ((.3100))
(( 9 - 12)) ((.2800))
((12 - 15)) ((.2500))
((15 - 18)) ((.2200))
((18 - 21)) ((.2000))
((21 - 24)) ((.1900))
((24 - 30)) ((.1800))
((30 - 36)) ((.1750))
((36 - 42)) ((.1700))
((42 - 48)) ((.1650))
((48 - 66)) ((.1600))
((66 - 84)) ((.1550))
((84 - 120)) ((.1500))
((120 - 174)) ((.1450))
((156 - 192)) ((.1400))
((192 - 228)) ((.1350))
((228 - 264)) ((.1300))
((264 - 300)) ((.1275))
((300 - 336)) ((.1250))
((336 - 372)) ((.1225))
((372 - 408)) ((.1220))
((408 - 444)) ((.1175))
((444 - 480)) ((.1150))
((480 - 516)) ((.1125))
((Over 516)) ((.1100))
</TABLE>
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.45%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the
Annual Management Fee Rate. One-twelfth of the Annual Management Fee Rate
shall be applied to the average of the net assets of the Portfolio
(computed in the manner set forth in the Fund's Declaration of Trust or
other organizational document) determined as of the close of business on
each business day throughout the month.
(((c) In case of termination of this contract during any month, the fee
for that
month shall be reduced proportionately on the basis of the number of
business days during which it is in effect, and the fee computed upon the
average net assets for the business days it is so in effect for that
month.))
4. It is understood that the Portfolio will pay all its expenses, [other
than those expressly stated to be payable by the Adviser hereunder,] 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,
19[__] 98 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 portfolio or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Portfolio 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 VIII
on behalf of Fidelity Advisor Strategic Income Fund
By____________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By____________________________________
President
EXHIBIT 3
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY ADVISOR SERIES VIII:
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) [AGREEMENT] made this [20th] ___ day of [January 1994]
((July 1997 ))by and between Fidelity Advisor Series VIII, 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
Emerging Markets Income Portfolio (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser") ((as set forth in its entirety below.))
((Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
January 20, 1994, to a modification of said Contract in the manner set
forth below. The Amended Management Contract shall, when executed by duly
authorized officers of the Fund and Adviser, take effect on July 1, 1997 or
the first day of the month following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Portfolio, of all Trustees of the Portfolio
who are `interested persons" of the [Portfolio] ((Fund)) or of the Adviser
and of all personnel of the [Portfolio] ((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
[Portfolio's] ((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 [Portfolio] ((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 Portfolio'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 [Portfolio] ((Fund)) as the [Portfolio's] ((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 [Portfolio's]
((Fund's)) Board of Trustees with respect to [Portfolio] ((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 [Portfolio] ((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
portfolio 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 Portfolio, and
that the Adviser may be or become interested in the Portfolio 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
[Portfolio] ((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 Portfolio'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:
<TABLE>
<CAPTION>
<S> <C>
Average Net Assets Annualized Fee Rate (for each level)
(( $0 - 3 billion)) (( .3700%))
((3 - 6)) ((.3400))
((6 - 9)) ((.3100))
((9 - 12)) ((.2800))
((12 - 15)) ((.2500))
((15 - 18)) ((.2200))
((18 - 21)) ((.2000))
((21 - 24)) ((.1900))
((24 - 30)) ((.1800))
((30 - 36)) ((.1750))
((36 - 42)) ((.1700))
((42 - 48)) ((.1650))
((48 - 66)) ((.1600))
((66 - 84)) ((.1550))
((84 - 120)) ((.1500))
(([120 - 174])) (([.1450]))
(([174 - 228])) (([.1400]))
(([228 - 282])) (([.1375]))
(([282 - 336])) (([.1350]))
(([Over 336])) (([.1325]))
((120 - 156)) ((.1450))
((156 - 192)) ((.1400))
((192 - 228)) ((.1350))
((228 - 264)) ((.1300))
((264 - 300)) ((.1275))
((300 - 336)) ((.1250))
((336 - 372)) ((.1225))
((372 - 408)) ((.1200))
((408 - 444)) ((.1175))
((444 - 480)) ((.1150))
((480 - 516)) ((.1125))
((Over 516)) ((.1100))
</TABLE>
(b) Individual [Portfolio] ((Fund)) Fee Rate. The Individual [Portfolio]
((Fund ))Fee Rate shall be .55%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual [Portfolio] ((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 Portfolio'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
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
[Portfolio's] ((Fund's)) Trustees other than those who are "interested
persons" of the [Portfolio] ((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
[Portfolio] ((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) it 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
[Portfolio's] ((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,
199[5]((8)) 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 portfolio 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 Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Portfolio 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 [Portfolio's] ((Fund's))
Declaration of Trust or other organizational document and agrees that the
obligations assumed by the [Portfolio] ((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 [Portfolio] ((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 VIII
on behalf of Fidelity Advisor Emerging Markets Income
[Portfolio] ((Fund))
By____________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By____________________________________
President
EXHIBIT 4
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
SUB-ADVISORY AGREEMENT
between
FIDELITY MANAGEMENT & RESEARCH COMPANY
and
FIDELITY MANAGEMENT & RESEARCH (Far East) INC.
and
((FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND))
AGREEMENT made this [29th of November, 1990] ____ day of _________, 1997,
by and between Fidelity Management & Research Company, a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts (hereinafter called the "Advisor"); [and] Fidelity Management
& Research (Far East) Inc. [a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts] (hereinafter called
the "Sub-Advisor");(( and Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust") on behalf of Advisor Strategic
Opportunities Fund (hereinafter called the "Portfolio").))
WHEREAS ((the Trust and)) the Advisor [has] ((have)) entered into a
Management Contract [with Fidelity Special Situations Fund, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity Special
Situations Fund its single existing series of shares] (hereinafter called
the "Portfolio")], ((on behalf of the Portfolio)) pursuant to which the
Advisor is to act as investment [advisor to] ((manager of)) the Portfolio,
and
[WHEREAS the Sub-Advisor has personnel in Asia and the Pacific Basin and
was formed for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries and
issuers located outside of North America, principally in Asia and the
Pacific Basin.]
((WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of various
countries, and securities of issuers located in such countries, and
providing investment advisory services in connection therewith;))
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, ((the Trust)), the Advisor and the Sub-Advisor agree
as follows:
[1. The Sub-Advisor shall act as an investment consultant to the Advisor
and shall furnish the Advisor factual information, research reports and
investment recommendations relating to non-U.S. issuers of securities
located in, and the economies of, various countries outside the U.S., all
as the Advisor may reasonably require. Such information shall include
written and oral reports and analyses.]
((1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the
Portfolio. The services and the portion of the investments of the
Portfolio to be advised or managed by the Sub-Advisor shall be as agreed
upon from time to time by the Advisor and the Sub-Advisor. The Sub-Advisor
shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.))
(((a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the Portfolio
and the Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such information
may include written and oral reports and analyses.))
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only
to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction of
the Advisor and the Trust's Board of Trustees.))
(((c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.))
((2. Information to be provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analysses to the Trust and the Advisor as the
Trust's Board of Trustees or the Advisor may reasonably request from time
to time, or as the Sub-Advisor may deem to be desirable.))
[2. The Sub-Advisor will be compensated by the Advisor on the following
basis for the services to be furnished hereunder: the Advisor agrees to
pay the Sub-Advisor a monthly fee equal to 105% of the Sub-Advisor's costs
incurred in connection with the Agreement, said costs to be determined in
relation to the assets of the Portfolio that benefit from the services of
the Sub-Advisor.]
((3. Brokerage: In connection with the services provided under
subparagraph (b) of
paragraph 1 of this Agreement, the Sub-Advisor shall place all orders for
the purchase and sale of portfolio securities for the Portfolio's account
with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The
Sub-Advisor 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 to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor 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 Sub-Advisor 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 Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust 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.))
((4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.))
(((a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 105% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.))
(((b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.))
(((c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.))
((5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, 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 Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (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 Trust 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 therefore;
(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 Advisor, 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 Trust's Trustees and officers with respect thereto.))
[3.] (( 6. Interested Persons:)) It is understood that Trustees, officers
and shareholders of the [Fund] ((Trust)) are or may be or become interested
in the Advisor [and] ((or)) the Sub-Advisor as directors, officers or
otherwise and that directors, officers and stockholders of the Advisor
[and] or the Sub-Advisor are or may be or become similarly interested in
the [Fund] ((Trust)) and that the Advisor or the Sub-Advisor may be or
become interested in the [Fund] ((Trust)) as a shareholder or otherwise.
[4. The Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor or the Fund. The Sub-Advisor
shall have no authority to act for, represent, bind or obligate the Advisor
or the Fund, and shall in no event have discretion to invest or reinvest
assets held by the Portfolio.]
[5.] ((7. Services to Other Companies or Accounts:)) The Services of
the Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor 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 Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations [with respect
to rendering investment advice] hereunder. ((The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Fund.))
((8. Standard of Care:)) In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, [the Fund] ((the Trust,)) 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.
((9. Duration and Termination of Agreement: Amendments:))
[6.] (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph [6] ((9,)) this Agreement shall continue in force until July
31, [1991] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph [6] ((9,)) the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] ((Trust)) who are not parties to [such] ((this))
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or ((with respect to the Portfolio)) by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7.] ((10. Limitation of Liability:)) The Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as set
forth in the Declaration of Trust [of the Fund] ((or other organizational
document of the Trust)) and agrees that any obligations of the [Fund]
((Trust ))or the Portfolio arising in connection with this Agreement shall
be limited in all cases to the Portfolio and its assets, and the
Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the
Sub-Advisor seek satisfaction of any such obligation from the Trustees or
any individual Trustee.
((11. Governing Law: 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 "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
[Investment Company Act of 1940] ((1940 Act)) as now in effect or as
hereafter amended.
IN WITNESS WHEREOF the parties hereto 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 MANAGEMENT & RESEARCH (Far East) INC.
By _________________________________
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________
President
((FIDELITY ADVISOR SERIES VIII on behalf of
Fidelity Advisor Strategic Opportunities Fund))
BY: _________________________________
((Title))
EXHIBIT 5
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
SUB-ADVISORY AGREEMENT
between
FIDELITY MANAGEMENT & RESEARCH COMPANY
and
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
and
((FIDELITY ADVISOR SERIES VIII ON BEHALF OF
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND))
AGREEMENT made this [29th of November, 1990] ____ day of _________, 1997,
by and between Fidelity Management & Research Company, a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts (hereinafter called the "Advisor"); [and] Fidelity Management
& Research (U.K.) Inc. [a Massachusetts corporation with principal offices
at 82 Devonshire Street, Boston, Massachusetts] (hereinafter called the
"Sub-Advisor"); ((and Fidelity Advisor Series VIII, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Trust") on behalf of Advisor Strategic
Opportunities Fund (hereinafter called the "Portfolio").))
WHEREAS(( the Trust and)) the Advisor [has] ((have)) entered into a
Management Contract [with Fidelity Special Situations Fund, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (hereinafter called the "Fund"), on behalf of Fidelity Special
Situations Fund (hereinafter called the "Portfolio")], ((on behalf of the
Portfolio)) pursuant to which the Advisor is to act as investment [advisor
to] ((manager of)) the Portfolio, and
[WHEREAS the Sub-Advisor has personnel in Western Europe and was formed
for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries and
issuers located outside of North America, principally in Western Europe.]
((WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of various
countries, and securities of issuers located in such countries, and
providing investment advisory services in connection therewith;))
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, ((the Trust,)) the Advisor and the Sub-Advisor agree
as follows:
[1. The Sub-Advisor shall act as an investment consultant to the Advisor
and shall furnish the Advisor factual information, research reports and
investment recommendations relating to non-U.S. issuers of securities
located in, and the economies of, various countries outside the U.S., all
as the Advisor may reasonably require. Such information shall include
written and oral reports and analyses.]
((1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the
Portfolio. The services and the portion of the investments of the
Portfolio to be advised or managed by the Sub-Advisor shall be as agreed
upon from time to time by the Advisor and the Sub-Advisor. The Sub-Advisor
shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.))
(((a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the Portfolio
and the Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such information
may include written and oral reports and analyses.))
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only
to the extent such duties are delegated in writing by the Advisor, to
provide additional investment management services to the Portfolio,
including but not limited to services such as managing foreign currency
investments, purchasing and selling or writing futures and options
contracts, borrowing money, or lending securities on behalf of the
Portfolio. All investment management and any other activities of the
Sub-Advisor shall at all times be subject to the control and direction of
the Advisor and the Trust's Board of Trustees.))
(((c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.))
[2. The Sub-Advisor will be compensated by the Advisor on the following
basis for the services to be furnished hereunder: the Advisor agrees to
pay the Sub-Advisor a monthly fee equal to 110% of the Sub-Advisor's costs
incurred in connection with the Agreement, said costs to be determined in
relation to the assets of the Portfolio that benefit from the services of
the Sub-Advisor.]
((2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall
furnish such reports, evaluations, information or analyses to the Trust and
the Advisor as the Trust's Board of Trustees or the Advisor may reasonably
request from time to time, or as the Sub-Advisor may deem to be
desirable.))
((3. Brokerage: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall
place all orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor 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 to
the other accounts over which the Sub-Advisor or Advisor exercise
investment discretion. The Sub-Advisor 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 Sub-Advisor 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 Sub-Advisor has with respect to
accounts over which it exercises investment discretion. The Trustees of
the Trust 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.))
((4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.))
(((a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 110% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.))
(((b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.))
(((c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.))
((5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, 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 Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (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 Trust 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 therefore;
(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 Advisor, 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 Trust's Trustees and officers with respect thereto.))
[3.] ((6. Interested Persons:)) It is understood that Trustees, officers
and shareholders of the [Fund] ((Trust)) are or may be or become interested
in the Advisor [and] ((or)) the Sub-Advisor as directors, officers or
otherwise and that directors, officers and stockholders of the Advisor
[and] ((or)) the Sub-Advisor are or may be or become similarly interested
in the [Fund] ((Trust)) and that the Advisor or the Sub-Advisor may be or
become interested in the [Fund] ((Trust)) as a shareholder or otherwise.
[4. The Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor or the Fund. The Sub-Advisor
shall have no authority to act for, represent, bind or obligate the Advisor
or the Fund, and shall in no event have discretion to invest or reinvest
assets held by the Portfolio.]
[5.] ((7. Services to Other Companies or Accounts:)) The Services of
the Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor 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 Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations [with respect
to rendering investment advice] hereunder. ((The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Fund.))
((8. Standard of Care:)) Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, [the Fund] ((the Trust)), 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.
((9. Duration and Termination of Agreement: Amendments:))
[6.] (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph [6](( 9,)) this Agreement shall continue in force until July
31, [1991] ((1998)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph [6] ((9,)) the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] ((Trust)) who are not parties to [such] ((this))
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or ((with respect to the Portfolio)) by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7.] ((10. Limitation of Liability:)) The Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as set
forth in the Declaration of Trust [of the Fund] ((or other organizational
document of the Trust)) and agrees that any obligations of the [Fund]
((Trust)) or the Portfolio arising in connection with this Agreement shall
be limited in all cases to the Portfolio and its assets, and the
Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the
Sub-Advisor seek satisfaction of any such obligation from the Trustees or
any individual Trustee.
((11. Governing Law: This Agreement shall be governed by, and construed to
accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.))
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
[Investment Company Act of 1940] ((1940 Act)) as now in effect or as
hereafter amended.
IN WITNESS WHEREOF the parties hereto 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 MANAGEMENT & RESEARCH (U.K.) INC.
By _________________________________
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________
President
((FIDELITY ADVISOR SERIES VIII on behalf of
Fidelity Advisor Strategic Opportunities Fund))
BY: _________________________________
((Title))
EXHIBIT 6
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
DISTRIBUTION AND SERVICE PLAN
{Fund Name}
Class B Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
[Securities and Exchange Commission] Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Act") for [the] Class B shares of
{Fund Name} ("Class B"), a class of shares of {Fund Name} (the "Fund"), a
series of Fidelity Advisor Series VIII (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf of
the Fund with Fidelity Distributors Corporation (the "Distributor") under
which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial
interest (the "Shares"). Such efforts may include, but neither are required
to include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses of
the Fund and reports to recipients other than existing shareholders of the
Fund; (4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may, from time to
time, deem advisable; (S) making payments to securities dealers and others
engaged in the sale of Shares or [who engage] in shareholder support
services ("Investment Professionals"); and (6) providing training,
marketing and support to Investment Professionals with respect to the sale
of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General
Distribution Agreement with respect to [shares of] Class B ((Shares))
[("Class B Shares")], the Distributor is hereby [specifically]
((expressly)) authorized to make payments to Investment Professionals in
connection with the sale of [the] Class B Shares. Such payments may be paid
as a percentage of the dollar amount of purchases of Class B Shares
attributable to a particular Investment Professional, or may take such
other form as may be approved by the Trustees.
4. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement and
paragraphs 2 and 3 hereof, all with respect to the Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at the
annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class B throughout
the month. The determination of daily net assets shall be made at the close
of business each day throughout the month and computed in the manner
specified in the Fund's then current Prospectus for the determination of
the net asset value of Class B Shares, but shall exclude assets
attributable to [(i) Class B Shares purchased more than 144) months prior
to such date or (ii)] any other class of Shares of the Fund. The
Distributor may, but shall not be required to, use all or any portion of
the distribution fee received pursuant to the Plan to compensate Investment
Professionals who have engaged in the sale of Class B Shares or in
shareholder support services ((with respect to Class B Shares)) pursuant to
agreements with the Distributor, or to pay any of the expenses associated
with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent
deferred sales charges, which may be imposed upon the sale or redemption of
Class B Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate
of 0.25% (or such lesser amount as the Trustees may, from time to time,
determine) of the average daily net assets of Class B throughout the month.
The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified
in the Fund's then current Prospectus for the determination of the net
asset value of Class B shares, but shall exclude assets attributable to any
other class of Shares of the Fund. ((In accordance with such terms as the
Trustees may from time to time establish,)) the Distributor [shall] ((may))
use all or a portion of such service fees to compensate Investment
Professionals for personal service and/or the maintenance of the
shareholder accounts, ((or for other services for which "service fees"
lawfully may be paid in accordance with applicable rules and regulations.))
6. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management and Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to make payments to the Distributor with respect to any expenses
incurred in connection with the distribution of Class B Shares, including
the activities referred to in paragraphs 2 and 3 hereof. To the extent that
the payment of management fees by the Fund to the Adviser should be deemed
to be indirect financing of any activity primarily intended to result in
the sale of Class B Shares within the meaning of Rule 12b-1, then such
payment shall be deemed to be authorized by this Plan.
7. This Plan shall become effective upon the first business day of the
month following approval by "a vote of at least a majority of the
outstanding voting securities" (as defined in the Act) of Class B, this
Plan having been approved by a vote of a majority of the Trustees of the
Trust, including a majority of Trustees who are not "interested persons" of
the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related
to the Plan (the "Independent Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [date] ((April 30, 1998,)) and from year to year thereafter;
provided, however, that such continuance is subject to approval annually by
a vote of a majority of the Trustees of the Trust, including a majority of
the Independent Trustees, cast in person at a meeting called for the
purpose of voting on this Plan. This Plan may be amended at any time by the
Board of Trustees, provided that (a) any amendment to increase materially
the fees provided for in paragraphs 4 and 5 hereof or any amendment of the
Management Contract to increase the amount to be paid by the Fund
thereunder shall be effective only upon approval by a vote of a majority of
the outstanding voting securities of Class B, in the case of this Plan, or
upon approval by a vote of the majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in
the manner provided in the first sentence of [paragraph 7] ((this paragraph
8.))
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Class B Shares (making estimates of such
costs where necessary or desirable) and the purposes for which such
expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Class B Shares.
12. Consistent with the limitation of shareholder liability as set forth in
the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Class B and its assets and shall not constitute an
obligation of any shareholder of the Trust or of any other class of the
Fund, series of the Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
EXHIBIT 7
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
DISTRIBUTION AND SERVICE PLAN
((Fidelity Strategic Opportunities Fund
Class T Shares))
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for ((the Class T shares of)) Fidelity
Advisor Strategic Opportunities Fund ("Class T"), [(formerly Fidelity
Special Situations Fund: Plymouth Class)] a class ((of shares ))of Fidelity
Advisor Strategic Opportunities Fund (the "Fund"), ((a portfolio of
Fidelity Advisor Series VIII (the "Trust").))
2. The [Fund] ((Trust)) has entered into a General Distribution Agreement
on behalf of the [Portfolio] ((Fund)) with Fidelity Distributors
Corporation (the "Distributor"), [a wholly-owned subsidiary of Fidelity
Management & Research Company (the "Adviser"),] under which the Distributor
uses all reasonable efforts, consistent with its other business, to secure
purchasers of the Fund's shares of benef1cial interest (the "Shares"). Such
efforts may include, but neither are required to include nor are limited
to, the following: ( 1 ) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing
and distribution of prospectuses of the Fund and reports to recipients
other than ((the)) existing shareholders of the Fund; (4) obtaining such
information, analyses and reports with respect to marketing and promotional
activities as the Distributor may, from time to time, deem advisable; (5)
making payments to securities dealers and others engaged in the sale of
Shares or who engage in shareholder support services; and (6) providing
training, marketing and support to such dealers [and others] with respect
to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement ((and
paragraph 2 hereof, all with respect to Class T Shares,)) Class T shall pay
to the Distributor a fee at the annual rate of .65% ((or such lesser amount
as the Trustees may, from time to time, determine)) of ((the)) average
daily net assets [determined as of the close of business on each day] ((of
Class T)) throughout the month.
[, but excluding assets attributable to shares purchased more than 144
months prior to such day. Such fees are to be computed and paid monthly.]
((The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified
in the Fund's then current Prospectus for the determination of the net
asset value of the Fund's Class T Shares.)) The Distributor may use all or
any portion of the fee received pursuant to [the] ((this)) Plan to
compensate securities dealers or other persons who have engaged in the sale
of Class T Shares or in shareholder support services pursuant to agreements
with the Distributor, or to pay any of the expenses associated with other
activities authorized under paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee to
[the
Adviser] ((Fidelity Management & Research Company ("the Adviser")))
pursuant to a management agreement between the Fund and the Adviser (the
"Management Contract"). It is recognized that the Adviser may use its
management fee revenue, as well as its past profits or its resources from
any other source, to make [payments] ((payment)) to the Distributor with
respect to any expenses incurred in connection with the distribution of
((Class T)) Shares, including the activities referred to in [paragraphs 2
and 3] ((paragraph 2)) hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of
((Class T)) Shares within the meaning of Rule 12b-1, then such payment
shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities [of Class T]" (as defined in the Act) ((of
Class T,)) this Plan having been approved by a vote of a majority of the
Trustees of the [Fund] ((Trust)), including a majority of Trustees who are
not "interested persons" of the [Fund] ((Trust ))(as defined in the Act)
and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement related to the Plan (the "Independent
Trustees"), cast in person at a meeting called for the purpose of voting on
this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [July 31, 1988] ((April 30, 1998,)) and from year to year
thereafter; provided, however, that such continuance is subject to approval
annually by a vote of a majority of the Trustees of the [Fund] ((Trust,))
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to increase materially the fee provided for in paragraph 3 hereof
or any amendment of the Management Contract to increase the amount to be
paid by [Class T] ((the Fund)) thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
Class T, ((in the case of this Plan, or upon approval by a vote of a
majority of the outstanding voting securities of the Fund in the case of
the Management Contract)), and (b) any material amendment of this Plan
shall be effective only upon approval in the manner provided in the first
sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of Class T.
8. During the existence of this Plan, the [Fund] ((Trust)) shall require
the Adviser and/or the Distributor to provide the [Fund] ((Trust)), for
review by the [Fund 's] Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of shares
of Class T (making estimates of such costs where necessary or desirable)
and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of [shares of Class T] ((Class T Shares.))
10. Consistent with the limitation of shareholder liability as set forth
in the [Fund's] ((Trust's)) Declaration of Trust, [any] obligation assumed
by Class T pursuant to this Plan and any agreement related to this Plan
shall be limited in all cases to Class T and its assets and shall not
constitute an obligation of any shareholder of the [Fund] ((Trust)) or of
any other class [or series of shares] of the Fund, ((series of the Trust or
class of such series.))
11. If any provision of the Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
EXHIBIT 8
UNDERLINED DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
CLASS T SHARES
[(formerly Class A Shares)]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for ((the Class T shares of)) Fidelity
Advisor Emerging Markets Income Fund ((("Class T"), a class of shares of
Fidelity Advisor Emerging Markets Income Fund ))(the "Fund"), a [series]
((portfolio)) of Fidelity Advisor Series VIII (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the fund with Fidelity Distributors Corporation (the "Distributor"),
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the "Shares"). Such efforts may include, but neither are
required to include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses of
the Fund and reports to recipients other than ((the)) existing shareholders
of the Fund; (4) obtaining such information, analyses and reports with
respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or who engage in
shareholder support services [("Investment Professionals")]; and (6)
providing training, marketing and support to [Investment Professionals]
((such dealers)) with respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement ((and
paragraph 2 hereof, all with respect to Class T Shares,)) [the Fund]
((Class T)) shall pay to the Distributor a fee at the annual rate of .40%
(((or such lesser amount as the Trustees may, from time to time,
determine))) of [its] ((the)) average daily net assets ((of Class T))
throughout the month. The determination of daily net assets shall be made
at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the
determination of the net asset value of the Fund's ((Class T)) Shares. [but
excluding assets attributable to shares purchase more than 144 months prior
to such day.] The Distributor may use all or any portion of the fee
received pursuant to [the] ((this)) Plan to compensate securities dealers
or other persons who have engaged in the sale of ((Class T)) Shares or in
shareholder support services pursuant to agreements with the Distributor,
or to pay any of the expenses associated with other activities authorized
under paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management and Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to make payments to the Distributor with respect to any expenses
incurred in connection with the distribution of Share, including the
activities referred to in [paragraphs 2 and 3] ((paragraph 2)) hereof. To
the extent that the payment of management fees by the Fund to the Adviser
should be deemed to be indirect financing of any activity primary intended
to result in the sale of ((Class T)) Shares within the meaning of Rule
12b-1, then such payment shall be deemed to be authorized by this Plan.
5. This plan shall become effective upon the first business day of the
month following approval by a vote of at least "a majority of the
outstanding voting securities" (as defined in the Act) of [the Fund]
((Class T,)) this Plan having been approved by a vote of a majority of the
Trustees of the Trust, including a majority of Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan (the "Independent Trustees"), cast in
person at a meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [July 31, 1995] ((April 30, 199_,)) and from year to year
thereafter; provided, however, that such continuance is subject to approval
annually by a vote of a majority of the Trustees of the Trust, including a
majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on this Plan. This Plan may be amended at any
time by the Board of Trustees, provided that (a) any amendment to increase
materially the [fees] ((fee)) provided for in [paragraphs 4 and 5]
((paragraph 3)) hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective
only upon approval by a vote of a majority of the outstanding voting
securities of [the Fund] ((Class T, in the case of this Plan, or upon
approval by a vote of a majority of the outstanding voting securities of
the Fund, in the case of the Management Contract,)) and (b) any material
amendment of this Plan shall be effective only upon approval in the manner
provided in the first sentence of ((this)) paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of [the Fund] ((Class T.))
8. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of shares of [the Fund] ((Class T)) (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of [shares of the Fund] ((Class T Shares.))
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by [the Fund]
((Class T)) pursuant to this Plan and any agreement related to this Plan
shall be limited in all cases to [the Fund] ((Class T)) and its assets and
shall not constitute an obligation of any shareholder of the Trust or of
any other class of the Fund, series of the Trust or class of such series.
11. IF ANY PROVISION OF THIS PLAN SHALL BE HELD OR MADE INVALID BY A COURT
DECISION, STATUTE, RULE OR OTHERWISE, THE REMAINDER OF THE PLAN SHALL NOT
BE AFFECTED THEREBY.
EXHIBIT 9
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the 19th day of December 1996, by and between Strategic Opportunities Fund
(the Fund), a separate series of Fidelity Advisor Series VIII and Fidelity
Advisor Series I (the Trust), 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
the Trust (the Series) solely in exchange for shares of beneficial interest
of the applicable classes of the Series (the Trust Series Shares) and the
assumption by the Series of the Fund's liabilities; and (b) the
constructive distribution of such Trust Series Shares of the applicable
classes by the Fund to its shareholders (Fund Shareholders) in complete
liquidation and termination of the Fund in exchange for all of the Fund's
outstanding shares of the corresponding classes (Fund Shares). The Fund
shall receive shares of the Series equal to the number of Fund Shares on
the Closing Date (as defined below). Immediately thereafter, the Fund shall
then distribute to each Fund Shareholder one Trust 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 VIII on behalf of the Fund represents and warrants as follows:
(a) The Fund is a series of Advisor VIII, 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 duly registered as an open-end management investment
company under the Investment Company Act of 1940 (the 1940 Act), as
amended, or is a series of a registrant 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, violation of any provision of the
Amended and Restated Declaration of Trust or the Fund's Bylaws, 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 which assert liability on the part of the Fund, except
as previously disclosed in writing to the Trust. 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
which, 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
which 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. At 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 of the knowledge of the Fund's management, there is no
plan or intention by the Fund's shareholders to sell, exchange or otherwise
dispose of any of the Trust Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed upon
request;
(m) No consideration other than Trust Series Shares will be issued in
exchange for the Fund Shares in the Reorganization;
(n) Immediately following consummation of the Reorganization, the Fund
Shareholders will own all of the Trust Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares immediately
prior to the Reorganization;
(o) Immediately following the consummation of the Reorganization, the
Trust 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 [Confirm with Treasurers: 1%] of the net assets of the Fund;
(p) 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 stock in the Fund;
(q) There is no intercompany indebtedness between the Series and the Fund
that was issued, acquired or that will be settled at a discount;
(r) 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;
(s) The Fund's shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(t) 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;
(u) The Fund is a regulated investment company as defined in Section 851
of the Internal Revenue Code of 1986, as amended;
(v) At the time of the Reorganization, 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;
(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
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;
(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 December 31, 1996 and those incurred in the
ordinary course of the Fund's business as an investment company since
December 31, 1996; and
(y) The Fund will be liquidated immediately after the Reorganization.
2. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants as follows:
(a) The Trust 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) The Trust 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 the Trust;
(c) The Trust is not in, and the execution, delivery and performance of
this Agreement will not result in, violation of any provision of the
Amended and Restated Declaration of Trust or the Trust's Bylaws, or, to the
Trust's knowledge, of any agreement, indenture, instrument, contract, lease
or other undertaking to which the Trust is a party or by which the Trust 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 Trust is a
party or is bound;
(d) To the Trust'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 Trust or any of its
properties or assets which assert liability on the part of the Trust,
except as previously disclosed in writing to the Trust. The Trust knows of
no facts that might form the basis for the institution of such proceedings;
(e) The Trust 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
Trust Series Shares or any other securities issued by the Series (except
for the one share of each class that may be issued to FMR); Trust 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 the Trust, and, upon its proper execution, this
Agreement will constitute a valid and binding obligation of the Trust
enforceable against the Series in accordance with its terms;
(h) The Trust Series Shares at the Closing 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 the Trust;
(i) The fair market value of the Trust Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares constructively surrendered in exchange therefor;
(j) The Trust has no plan or intention on behalf of the Series to issue
additional Trust Series Shares following the Reorganization except for
issuance of shares arising in the ordinary course of the business of the
Series as the series of an open-end investment company;
(k) The Trust has no plan or intention to reacquire the Trust 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 an open-end investment company;
(l) Following the Reorganization, the Trust, on behalf of the Series, will
continue the Fund's historic business;
(m) The Trust 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 and
dispositions necessary to maintain the status of the Series as a regulated
investment company under Section 851 of the Code;
(n) The information to be furnished by the Trust with respect to the
Series for use in applications for orders, registration statements, proxy
materials and other documents which 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;
(o) The Trust, 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; and
(p) To the Trust'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 have been obtained under the 1933 Act, the 1934
Act, and the 1940 Act.
3. REORGANIZATION
(a) Subject to the requisite approval of the shareholders of the Fund and
to the other terms and conditions contained herein, the Fund agrees to
assign, convey, transfer, and deliver to the Series established by the
Trust solely for the purpose of acquiring all of the assets of the Fund,
which Series has not issued any Trust Series Shares (except for one share
of each class that may be issued to FMR) or commenced operations, on 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 Trust 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, on 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.
(c) Immediately upon delivery to the Fund of the Trust Series Shares, the
individual Trustees of Advisor VIII or any officer duly authorized by them,
on Advisor VIII's behalf as the then sole shareholder of the Series, shall
(1) elect as trustees of the Trust (Trustees) the persons who are elected
pursuant to Proposal 1 in the proxy statement distributed in connection
with the Special Meeting of Fund Shareholders (Proxy Statement) in the same
manner that Fund Shareholders so vote; (2) approve (i) a Management
Contract between the Trust on behalf of the Series and FMR, (ii)
Sub-Advisory Agreements between FMR and Fidelity Management & Research
(U.K.) Inc. and Fidelity Management & Research (Far East) Inc., (iii)
Distribution and Service Plans for Class A shares, Class B shares, Class T
shares and Institutional Class shares under Rule 12b-1 under the 1940 Act
between the Trust on behalf of the Series and Fidelity Distributors
Corporation (FDC) substantively identical to the plans and contracts
currently in effect with the Fund, except as to the parties to such plan or
contracts, (iv) the independent accountants who currently serve in that
capacity for the Fund, and (v) the adoption of revised fundamental policies
described in Proposals 16 through 28 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 the Trust Series Shares of the applicable classes
pro rata in proportion to their respective shares of beneficial interest of
the corresponding classes of the Fund to Fund Shareholders of record
determined as of the Valuation Time on the Closing Date in accordance with
the Fund's 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 Trust 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) Trust 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 Trust Series Shares in connection with such distribution.
(e) Immediately after the distribution of the Trust 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 Trust 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 Trust Series Shares shall be
paid by the person to whom such Trust 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 4:00 p.m. Eastern time on the Closing Date
(the Valuation Time).
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value computed as of the Valuation Time,
using the valuation procedures set forth in the Fund's then current
Prospectus and Statement of Additional Information.
(c) The number, value, class and denomination of full and fractional Trust
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 FIIOC, a
division of FMR Corp., in accordance with its regular practice as pricing
agent for the Fund.
5. FEES; EXPENSES
(a) The Trust and the Fund each represent 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, subject to FMR's voluntary expense limitation, if applicable.
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 Trust 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 the Advisor VIII and the Trust, 82
Devonshire Street, Boston, Massachusetts, on ____, 1997, or at such other
place or later 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 Bank of New York, as custodian for the
Fund, of the Fund's reorganization to a series of the Trust.
(d) Fidelity Investments Institutional Operations Company, Inc., 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 Trust Series Shares. The Trust shall issue and
deliver a confirmation to the Fund evidencing the Trust Series Shares to be
credited on the Closing Date or provide evidence satisfactory to the Fund
that such Trust Series Shares have been credited to the Fund's account on
the books of the Trust. 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) The Fund agrees to call a meeting of its shareholders (the
Shareholders' Meeting) to consider and act upon this Agreement and to 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 Trust Series Shares, the Fund shall be liquidated and
terminated as a series of Advisor VIII 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 THE TRUST
The obligations of the Trust hereunder shall be subject to the following
conditions:
(a) That the Fund furnishes to the Trust a statement, dated as of the
Closing Date, signed by an officer of Advisor VIII, 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 the Trust with copies of the resolutions,
certified by an officer of Advisor VIII, evidencing the adoption of this
Agreement and 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 the Trust 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 the Trust 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 the Trust at the
Closing a certificate setting forth the number of shares of each class 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 of each
class held of record by each such shareholder;
(f) That the Fund calls a Shareholders' Meeting to consider and act upon
this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby;
(g) That the Fund delivers to the Trust a certificate of an officer of
Advisor VIII, dated the Closing Date, that there has been no material
adverse change in the Fund's financial position since December 31, 1996,
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 the Trust or its agents
shall have revealed otherwise, the Fund shall have taken all actions that
in the opinion of the Trust 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 the Trust shall have executed and delivered to the Fund an
Assumption of Liabilities, certified by an officer of the Trust, 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 the Trust 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 the Trust 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 the Trust, to the effect that the Trust 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 THE TRUST
The obligations of the Fund and the Trust hereunder shall be subject to
the following conditions:
(a) 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 Commission and of state blue sky and securities authorities,
including "no action" positions of such federal or state authorities)
deemed necessary by the Trust 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 the Trust 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 the Trust 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 the Trust and the Fund shall have received an opinion of
Kirkpatrick & Lockhart LLP satisfactory to the Trust and the Fund that for
federal income tax purposes:
(i) The Reorganization will be a reorganization under Section
368(a)(1)(F) of the Code, and the Fund and the Series will each be parties
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 Trust Series
Shares of the applicable classes and the assumption of the Fund's
liabilities followed by the distribution of the Trust Series Shares to the
shareholders of the corresponding classes of the Fund in liquidation 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 the Trust 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 Trust Series
Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the the Trust 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 Trust 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.
Notwithstanding anything herein to the contrary, neither the Fund nor the
Trust may waive the conditions set forth in this subsection 10(f).
11. COVENANTS OF THE FUND AND THE TRUST
(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 Trust 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 the Trust in obtaining such
information as the Trust 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 Trust and the Fund may terminate this Agreement by mutual
agreement. In addition, either the Trust or the Fund 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 the Trust 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 respective
President, any Vice President, or Treasurer of the Series or the Fund;
provided, however, that following the shareholders' meeting 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 Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on the
interests of such Fund's 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 Declaration of Trust of the Trust and Advisor VIII, 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 the Trust and Advisor
VIII as trustees and not individually and that the obligations of the Fund
and the Series under this instrument are not binding upon any of such
Fund's or Trust's Trustees, officers, or shareholders individually but are
binding only upon the assets and property of such Fund or Series. The Fund
and the Trust 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.
[SIGNATURE LINES OMITTED]
EXHIBIT 10
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the 19th day of December 1996, by and between Strategic Income Fund (the
Fund), a separate series of Fidelity Advisor Series VIII (Advisor VIII) and
Fidelity Advisor Series II (the Trust), 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
the Trust (the Series) solely in exchange for shares of beneficial interest
of the applicable classes of the Series (the Trust Series Shares) and the
assumption by the Series of the Fund's liabilities; and (b) the
constructive distribution of such Trust Series Shares of the applicable
classes by the Fund to its shareholders (Fund Shareholders) in complete
liquidation and termination of the Fund in exchange for all of the Fund's
outstanding shares of the corresponding classes (Fund Shares). The Fund
shall receive shares of the Series equal to the number of Fund Shares on
the Closing Date (as defined below). Immediately thereafter, the Fund shall
then distribute to each Fund Shareholder one Trust 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 VIII on behalf of the Fund represents and warrants as follows:
(a) The Fund is a series of Advisor VIII, 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 duly registered as an open-end management investment
company under the Investment Company Act of 1940 (the 1940 Act), as
amended, or is a series of a registrant 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, violation of any provision of the
Amended and Restated Declaration of Trust or the Fund's Bylaws, 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 which assert liability on the part of the Fund, except
as previously disclosed in writing to the Trust. 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
which, 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
which 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. At 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 of the knowledge of the Fund's management, there is no
plan or intention by the Fund's shareholders to sell, exchange or otherwise
dispose of any of the Trust Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed upon
request;
(m) No consideration other than Trust Series Shares will be issued in
exchange for the Fund Shares in the Reorganization;
(n) Immediately following consummation of the Reorganization, the Fund
Shareholders will own all of the Trust Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares immediately
prior to the Reorganization;
(o) Immediately following the consummation of the Reorganization, the
Trust 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 [Confirm with Treasurers: 1%] of the net assets of the Fund;
(p) 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 stock in the Fund;
(q) There is no intercompany indebtedness between the Series and the Fund
that was issued, acquired or that will be settled at a discount;
(r) 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;
(s) The Fund's shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(t) 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;
(u) The Fund is a regulated investment company as defined in Section 851
of the Internal Revenue Code of 1986, as amended;
(v) At the time of the Reorganization, 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;
(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
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;
(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 December 31, 1996 and those incurred in the
ordinary course of the Fund's business as an investment company since
December 31, 1996; and
(y) The Fund will be liquidated immediately after the Reorganization.
2. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants as follows:
(a) The Trust 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) The Trust 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 the Trust;
(c) The Trust is not in, and the execution, delivery and performance of
this Agreement will not result in, violation of any provision of the
Amended and Restated Declaration of Trust or the Trust's Bylaws, or, to the
Trust's knowledge, of any agreement, indenture, instrument, contract, lease
or other undertaking to which the Trust is a party or by which the Trust 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 Trust is a
party or is bound;
(d) To the Trust'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 Trust or any of its
properties or assets which assert liability on the part of the Trust,
except as previously disclosed in writing to the Trust. The Trust knows of
no facts that might form the basis for the institution of such proceedings;
(e) The Trust 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
Trust Series Shares or any other securities issued by the Series (except
for the one share of each class that may be issued to FMR); Trust 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 the Trust, and, upon its proper execution, this
Agreement will constitute a valid and binding obligation of the Trust
enforceable against the Series in accordance with its terms;
(h) The Trust Series Shares at the Closing 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 the Trust;
(i) The fair market value of the Trust Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares constructively surrendered in exchange therefor;
(j) The Trust has no plan or intention on behalf of the Series to issue
additional Trust Series Shares following the Reorganization except for
issuance of shares arising in the ordinary course of the business of the
Series as the series of an open-end investment company;
(k) The Trust has no plan or intention to reacquire the Trust 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 an open-end investment company;
(l) Following the Reorganization, the Trust, on behalf of the Series, will
continue the Fund's historic business;
(m) The Trust 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 and
dispositions necessary to maintain the status of the Series as a regulated
investment company under Section 851 of the Code;
(n) The information to be furnished by the Trust with respect to the
Series for use in applications for orders, registration statements, proxy
materials and other documents which 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;
(o) The Trust, 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; and
(p) To the Trust'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 have been obtained under the 1933 Act, the 1934
Act, and the 1940 Act.
3. REORGANIZATION
(a) Subject to the requisite approval of the shareholders of the Fund and
to the other terms and conditions contained herein, the Fund agrees to
assign, convey, transfer, and deliver to the Series established by the
Trust solely for the purpose of acquiring all of the assets of the Fund,
which Series has not issued any Trust Series Shares (except for one share
of each class that may be issued to FMR) or commenced operations, on 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 Trust 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, on 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.
(c) Immediately upon delivery to the Fund of the Trust Series Shares, the
individual Trustees of Advisor VIII or any officer duly authorized by them,
on behalf as the then sole shareholder of the Series, shall (1) elect as
trustees of the Trust (Trustees) the persons who are elected pursuant to
Proposal 1 in the proxy statement distributed in connection with the
Special Meeting of Fund Shareholders (Proxy Statement) in the same manner
that Fund Shareholders so vote (2) approve (i) a Management Contract
between the Trust on behalf of the Series and FMR, (ii) Sub-Advisory
Agreements between FMR and Fidelity Management & Research (U.K.) Inc.,
Fidelity Management & Research (Far East) Inc., Fidelity International
Investment Advisors, Fidelity International Investment Advisors (U.K.)
Limited, and Fidelity Investments Japan Ltd., (iii) Distribution and
Service Plans for Class A shares, Class B shares, Class T shares and
Institutional Class shares under Rule 12b-1 under the 1940 Act between the
Trust on behalf of the Series and Fidelity Distributors Corporation (FDC)
substantively identical to the plans and contracts currently in effect with
the Fund, except as to the parties to such plans or contracts, and except
as such plans or contracts may be modified pursuant to a vote of
shareholders of the Fund as proposed in this Proxy Statement and (iv) the
independent accountants who currently serve in that capacity for the Fund.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute the Trust Series Shares of the applicable classes
pro rata in proportion to their respective shares of beneficial interest of
the corresponding classes of the Fund to Fund Shareholders of record
determined as of the Valuation Time on the Closing Date in accordance with
the Fund's 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 Trust 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) Trust 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 Trust Series Shares in connection with such distribution.
(e) Immediately after the distribution of the Trust 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 Trust 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 Trust Series Shares shall be
paid by the person to whom such Trust 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 4:00 p.m. Eastern time on the Closing Date
(the Valuation Time).
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value computed as of the Valuation Time,
using the valuation procedures set forth in the Fund's then current
Prospectus and Statement of Additional Information.
(c) The number, value, class and denomination of full and fractional Trust
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 FIIOC, a
division of FMR Corp., in accordance with its regular practice as pricing
agent for the Fund.
5. FEES; EXPENSES
(a) The Trust and the Fund each represent 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, subject to FMR's voluntary expense limitation, if applicable.
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 Trust 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 VIII and the Trust, 82 Devonshire
Street, Boston, Massachusetts, on ((____,)) 1997, or at such other place or
later 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 Bank of New York, as custodian for the
Fund, of the Fund's reorganization to a series of the Trust.
(d) Fidelity Investments Institutional Operations Company, Inc., 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 Trust Series Shares. The Trust shall issue and
deliver a confirmation to the Fund evidencing the Trust Series Shares to be
credited on the Closing Date or provide evidence satisfactory to the Fund
that such Trust Series Shares have been credited to the Fund's account on
the books of the Trust. 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) The Fund agrees to call a meeting of its shareholders (the
Shareholders' Meeting) to consider and act upon this Agreement and to 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 Trust Series Shares, the Fund shall be liquidated and
terminated as a series of Advisor VIII 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 THE TRUST
The obligations of the Trust hereunder shall be subject to the following
conditions:
(a) That the Fund furnishes to the Trust a statement, dated as of the
Closing Date, signed by an officer of Advisor VIII, 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 the Trust with copies of the resolutions,
certified by an officer of Advisor VIII, evidencing the adoption of this
Agreement and 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 the Trust 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 the Trust 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 the Trust at the
Closing a certificate setting forth the number of shares of each class 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 of each
class held of record by each such shareholder;
(f) That the Fund calls a Shareholders' Meeting to consider and act upon
this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby;
(g) That the Fund delivers to the Trust a certificate of an officer of
Advisor VIII, dated the Closing Date, that there has been no material
adverse change in the Fund's financial position since December 31, 1996,
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 the Trust or its agents
shall have revealed otherwise, the Fund shall have taken all actions that
in the opinion of the Trust 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 the Trust shall have executed and delivered to the Fund an
Assumption of Liabilities, certified by an officer of the Trust, 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 the Trust 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 the Trust 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 the Trust, to the effect that the Trust 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 THE TRUST
The obligations of the Fund and the Trust hereunder shall be subject to
the following conditions:
(a) 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 Commission and of state blue sky and securities authorities,
including "no action" positions of such federal or state authorities)
deemed necessary by the Trust 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 the Trust 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 the Trust 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 the Trust and the Fund shall have received an opinion of
Kirkpatrick & Lockhart LLP satisfactory to the Trust and the Fund that for
federal income tax purposes:
(i) The Reorganization will be a reorganization under Section
368(a)(1)(F) of the Code, and the Fund and the Series will each be parties
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 Trust Series
Shares of the applicable classes and the assumption of the Fund's
liabilities followed by the distribution of the Trust Series Shares to the
shareholders of the Fund in liquidation 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 the Trust Series Shares and
the assumption of the corresponding classes 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 Trust Series
Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the the Trust 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 Trust 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.
Notwithstanding anything herein to the contrary, neither the Fund nor the
Trust may waive the conditions set forth in this subsection 10(f).
11. COVENANTS OF THE FUND AND THE TRUST
(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 Trust 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 the Trust in obtaining such
information as the Trust 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 Trust and the Fund may terminate this Agreement by mutual
agreement. In addition, either the Trust or the Fund 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 the Trust 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 respective
President, any Vice President, or Treasurer of the Series or the Fund;
provided, however, that following the shareholders' meeting 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 Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on the
interests of such Fund's 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 Declaration of Trust of the Trust and Advisor VIII, 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 the Trust and Advisor
VIII as trustees and not individually and that the obligations of the Fund
and the Series under this instrument are not binding upon any of such
Fund's or Trust's Trustees, officers, or shareholders individually but are
binding only upon the assets and property of such Fund or Series. The Fund
and the Trust 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.
[SIGNATURE LINES OMITTED]
EXHIBIT 11
[TABLE TO BE UPDATED]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
<S> <C> <C> <C> <C> <C> <C>
GROWTH
Select Portfolios:
Air Transportation ((pound)) 2/28/95 $ 9.4 0.24%* 2.50%*
American Gold 2/28/95 350.5 0.62 1.41
Automotive ((pound)) 2/28/95 102.2 0.62 1.80*
Biotechnology ((pound)) 2/28/95 413.9 0.62 1.59
Brokerage and Investment
Management ((pound)) 2/28/95 30.5 0.26* 2.54*
Chemicals ((pound)) 2/28/95 144.0 0.62 1.51*
Computers ((pound)) 2/28/95 131.6 0.62 1.69*
Construction and 2/28/95 40.9 0.62 1.74*
Housing ((pound))
Consumer Products ((pound)) 2/28/95 7.9 0.30* 2.49*
Defense and Aerospace ((pound)) 2/28/95 5.2 -* 2.49*
Developing 2/28/95 222.6 0.62 1.50*
Communications ((pound))
Electronics ((pound)) 2/28/95 155.8 0.62 1.71*
Energy ((pound)) 2/28/95 104.4 0.62 1.85
Energy Service ((pound)) 2/28/95 59.4 0.62 1.79*
Environmental 2/28/95 45.0 0.62 2.01*
Services ((pound))
Financial Services ((pound)) 2/28/95 108.2 0.62 1.54*
Food and Agriculture ((pound)) 2/28/95 92.7 0.62 1.68*
Health Care ((pound)) 2/28/95 642.9 0.62 1.36*
Home Finance ((pound)) 2/28/95 200.7 0.62 1.45*
Industrial Equipment ((pound)) 2/28/95 123.8 0.62 1.78*
Industrial Materials ((pound)) 2/28/95 177.3 0.62 1.53*
Insurance ((pound)) 2/28/95 10.3 0.62 2.34*
Leisure ((pound)) 2/28/95 73.1 0.62 1.62*
Medical Delivery ((pound)) 2/28/95 214.0 0.62 1.45*
Multimedia ((pound)) ((psi)) 2/28/95 31.5 0.62 2.03*
Natural Gas ((pound)) 2/28/95 77.1 0.62 1.66*
Paper and Forest 2/28/95 56.2 0.62 1.87*
Products ((pound))
Precious Metals and 2/28/95 437.1 0.62 1.46
Minerals ((pound))
Regional Banks ((pound)) 2/28/95 143.9 0.62 1.56*
Select Portfolios (continued):
Retailing ((pound)) 2/28/95 $ 60.8 0.62% 1.96*%
Software and Computer 2/28/95 182.1 0.62 1.50*
Services ((pound))
Technology ((pound)) 2/28/95 206.1 0.62 1.56*
Telecommunications ((pound)) 2/28/95 374.3 0.62 1.55*
Transportation ((pound)) 2/28/95 12.7 0.62 2.36*
Utilities Growth((pound))((psi)) 2/28/95 224.4 0.62 1.42*
Magellan ((pound)) 3/31/95 35,788.6 0.75 0.96*
Mid Cap Stock 4/30/95** 300.2 0.66(dagger) 1.22(dagger)*
Small Cap Stock 4/30/95 640.2 0.56 0.90*
Fidelity Fifty ((pound)) 6/30/94** 44.2 0.63(dagger) 1.58(dagger)
Blue Chip Growth 7/31/94 1,359.3 0.70 1.22
Low-Priced Stock ((pound)) 7/31/94 2,084.5 0.79 1.13
OTC Portfolio 7/31/94 1,296.9 0.50 .88
Export Fund 8/31/95** 62.6 0.62(dagger) 1.65(dagger)
Advisor Strategic
Opportunities:
Class A ((pound)) 9/30/94 337.0 0.72 1.84
Class B ((pound)) 9/30/94** 3.3 0.72 2.63(dagger)
Initial Shares ((pound)) 9/30/94 19.6 0.72 1.14
Destiny I 9/30/94 3,204.9 0.65 0.70
Destiny II 9/30/94 1,326.8 0.73 0.80
Advisor Emerging Asia Fund, Inc.
((oval)) 10/31/94 125.5 1.00(dagger) 1.78(dagger)
Advisor Global 10/31/94 115.8 0.77 2.07*
Resources ((pound))
Advisor Growth 10/31/94 3,215.2 0.69 1.62*
Opportunities - Class A
Advisor Overseas ((sigma)) 10/31/94 428.7 0.80 2.12
Canada ((sigma)) 10/31/94 214.8 0.80 1.57
Capital Appreciation ((pound)) 10/31/94 1,720.3 0.77 1.17
Disciplined Equity ((pound)) 10/31/94 891.4 0.72 1.05
Diversified International ((sigma)) 10/31/94 316.5 0.72 1.25
Emerging Markets ((sigma)) 10/31/94 1,639.2 0.77 1.52
Europe ((sigma)) 10/31/94 493.3 0.72 1.35
Europe Capital 10/31/94** 288.2 0.77(dagger) 1.54(dagger)
Appreciation ((sigma))
International Value ((Rex-all)) 10/31/95** 9.6 0.77(dagger) 2.00(dagger)*
Japan ((Rex-all)) 10/31/94 362.4 0.75 1.42
Latin America ((sigma)) 10/31/94 $ 782.5 0.77% 1.48%
Overseas ((sigma)) 10/31/94 1,895.8 0.80 1.24
Pacific Basin ((Rex-all)) 10/31/94 509.8 0.86 1.54
Southeast Asia ((Rex-all)) 10/31/94 806.9 0.69 1.47
Stock Selector ((pound)) 10/31/94 710.5 0.72 1.09
Value ((pound)) 10/31/94 3,325.0 0.52 0.79
Worldwide ((sigma)) 10/31/94 530.6 0.77 1.32
Advisor Equity Portfolio Growth :
Class A ((pound)) 11/30/94 663.9 0.64 1.70
Institutional Class ((pound)) 11/30/94 364.1 0.64 0.84
Emerging Growth ((pound)) 11/30/94 617.7 0.66 1.02
Growth Company ((pound)) 11/30/94 2,748.9 0.73 1.05
New Millennium 11/30/94 312.2 0.82 1.29
Retirement Growth ((pound)) 11/30/94 2989.2 0.77 1.07
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or as of
April 30,1995, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of
each fund 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 (*).
(d) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations, or paid by or due
from brokers to which certain portfolio trades have been directed. Funds so
affected are indicated by an (*).
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
((Rex-All)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: Fidelity Management
& Research (U.K.) Inc. (FMR U.K.), Fidelity Management & Research (Far
East) Inc. (FMR Far East), Fidelity Investments Japan Ltd. (FIJ), Fidelity
International Investment Advisors (FIIA), and Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.), with respect to the fund.
((sigma)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR Far
East, FIJ (New Markets Income and Advisor Emerging Markets only), FIIA, and
FIIAL U.K., with respect to the fund.
((pound)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect to the
fund.
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to the fund.
((psi)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FIIA and FIJ, with respect to the fund.
((oval)) Effective August 3, 1994, Utilities Income Fund and Select
Utilities Portfolio have been renamed to Utilities Fund and Utilities
Growth Portfolio, respectively.
EXHIBIT 12
[TABLE TO BE UPDATED]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
<S> <C> <C> <C> <C> <C> <C>
TAXABLE BOND FUNDS
</TABLE>
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Opportunities Fund - Class T 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 VIII: FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
- - CLASS T
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities Fund
- - Class T which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315918300/fund #230]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
FMR Far East to provide investment advice and
research services or investment management services.
9. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR U.K. to provide investment advice and research
services or investment management services.
10. To amend the Class T Distribution and Service Plan for FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
the fund.
11. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
diversification for the fund to permit increased
investment in the securities of any single issuer.
13. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
diversification for the fund to exclude investments in
other investment companies from the limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning real estate.
15. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
limitation concerning senior securities for the fund.
16. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
limitation concerning short sales of securities and
replace it with a similar non-fundamental investment
limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
17. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning margin purchases and replace it
with a similar non-fundamental investment limitation.
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning the concentration of its
investments in a single industry.
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
22. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning investments in other investment
companies.
23. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning investing in oil, gas, and mineral
exploration programs.
24. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning investments in securities of
newly-formed issuers.
</TABLE>
[ASOT-PXC-497] [cusip #315918300/fund #230]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Opportunities Fund - Class B the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
- - CLASS B
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities Fund
- - Class B which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920306/fund
#608]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
FMR Far East to provide investment advice and
research services or investment management services.
9. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR U.K. to provide investment advice and research
services or investment management services.
10. To amend the Class B Distribution and Service Plan FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
for the fund.
11. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
diversification for the fund to permit increased
investment in the securities of any single issuer.
13. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
diversification for the fund to exclude investments in
other investment companies from the limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning real estate.
15. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
limitation concerning senior securities for the fund.
16. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
limitation concerning short sales of securities and
replace it with a similar non-fundamental investment
limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
17. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning margin purchases and replace it
with a similar non-fundamental investment limitation.
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning the concentration of its
investments in a single industry.
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
22. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning investments in other investment
companies.
23. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning investing in oil, gas, and mineral
exploration programs.
24. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning investments in securities of
newly-formed issuers.
</TABLE>
[ASOB-PXC-497] [cusip #315920306/fund #608]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Opportunities Fund - Initial Class the
expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
- - INITIAL CLASS
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities Fund
- - Initial Class which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the fund to be held at the office of the trust
at 82 Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at
any adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # 316401108/fund# 014]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
FMR Far East to provide investment advice and
research services or investment management services.
9. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR U.K. to provide investment advice and research
services or investment management services.
10. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
diversification for the fund to permit increased
investment in the securities of any single issuer.
12. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
diversification for the fund to exclude investments in
other investment companies from the limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
13. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
limitation concerning real estate.
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning senior securities for the fund.
15. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
limitation concerning short sales of securities and
replace it with a similar non-fundamental investment
limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
16. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
limitation concerning margin purchases and replace it
with a similar non-fundamental investment limitation.
17. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning the concentration of its
investments in a single industry.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning investments in other investment
companies.
22. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning investing in oil, gas, and mineral
exploration programs.
23. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning investments in securities of
newly-formed issuers.
</TABLE>
[ASOIN-PXC-497] [cusip #316401108/fund #014]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Opportunities Fund - Class A the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
- - CLASS A
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities Fund
- - Class A which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920801/fund #266]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
FMR Far East to provide investment advice and
research services or investment management services.
9. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR U.K. to provide investment advice and research
services or investment management services.
10. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
diversification for the fund to permit increased
investment in the securities of any single issuer.
12. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
diversification for the fund to exclude investments in
other investment companies from the limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
13. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
limitation concerning real estate.
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning senior securities for the fund.
15. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
limitation concerning short sales of securities and
replace it with a similar non-fundamental investment
limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
16. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
limitation concerning margin purchases and replace it
with a similar non-fundamental investment limitation.
17. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning the concentration of its
investments in a single industry.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning investments in other investment
companies.
22. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning investing in oil, gas, and mineral
exploration programs.
23. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning investments in securities of
newly-formed issuers.
</TABLE>
[ASOA-PXC-497] [cusip # 315920801/fund# 266]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Opportunities Fund - Institutional Class
the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
- - INSTITUTIONAL CLASS
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities Fund
- - Institutional Class which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM
and at any adjournments thereof. All powers may be exercised by a majority
of said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # 315920884/fund# 694]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
FMR Far East to provide investment advice and
research services or investment management services.
9. To approve an amended sub-advisory agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR U.K. to provide investment advice and research
services or investment management services.
10. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
diversification for the fund to permit increased
investment in the securities of any single issuer.
12. To amend the fundamental investment limitation on FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
diversification for the fund to exclude investments in
other investment companies from the limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
13. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
limitation concerning real estate.
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning senior securities for the fund.
15. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
limitation concerning short sales of securities and
replace it with a similar non-fundamental investment
limitation.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
16. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
limitation concerning margin purchases and replace it
with a similar non-fundamental investment limitation.
17. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning borrowing.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning the underwriting of securities.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
19. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning the concentration of its
investments in a single industry.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning lending.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning investments in other investment
companies.
22. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning investin in oil, gas, and mineral
exploration programs.
23. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning investments in securities of
newly-formed issuers.
</TABLE>
[ASOI-PXC-497] [cusip # 315920884/fund# 694]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Emerging Markets Income Fund - Class A the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
- - CLASS A
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Emerging Markets Income Fund
- - Class A which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920876/fund #255]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
</TABLE>
[AEMIA-PXC-497] [cusip #315920876/fund #255]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Emerging Markets Income Fund - Class T 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 VIII: FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
- - CLASS T
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Emerging Markets Income Fund
- - Class T which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920207/fund #635]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fund.
7. To amend the Class T Distribution and Service Plan for FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
the fund.
</TABLE>
[AEMIT-PXC-497] [cusip #315920207/fund #635]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Emerging Markets Income Fund - Class B the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
- - CLASS B
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Emerging Markets Income Fund
- - Class B which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920405/fund #637]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
7. To amend the Class B Distribution and Service Plan FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
for the fund.
</TABLE>
[AEMIB-PXC-497] [cusip #315920405/fund #637]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Emerging Markets Income Fund - Institutional Class
the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
- - INSTITUTIONAL CLASS
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Emerging Markets Income Fund
- - Institutional Class which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM
and at any adjournments thereof. All powers may be exercised by a majority
of said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920702/fund #607]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
</TABLE>
[AEMII-PXC-496] [cusip #315920702/fund #607]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Income Fund - Class A the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC INCOME FUND -
CLASS A
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Income Fund -
Class A which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920850/fund# 260]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
7. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
[ASIA-PXC-0697] [cusip #315920850/fund#260]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Income Fund - Class T 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 VIII: FIDELITY ADVISOR STRATEGIC INCOME FUND -
CLASS T
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Income Fund -
Class T which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920504/fund #638]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
7. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
[ASIT-PXC-497] [cusip #315920504/fund #638]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Income Fund - Class B the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC INCOME FUND -
CLASS B
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Income Fund -
Class B which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920603/fund #639]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
7. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
</TABLE>
[ASIB-PXC-497] [cusip #315920603/fund #639]
Vote this proxy card TODAY! Your prompt response will
save Fidelity Advisor Strategic Income Fund - Institutional Class the
expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES VIII: FIDELITY ADVISOR STRATEGIC INCOME FUND -
INSTITUTIONAL CLASS
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Thomas R. Williams, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Income Fund -
Institutional Class which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the fund to be held at the office of the
trust at 82 Devonshire St., Boston, MA 02109, on June 18, 1997 at 9:00 AM
and at any adjournments thereof. All powers may be exercised by a majority
of said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip #315920801/fund #648]
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:
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1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, William O. McCoy, nominees.
Marvin L. Mann, and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
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2. To ratify the selection of Coopers & Lybrand, L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund.
7. To approve an agreement and plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
reorganization of the fund from a separate series of one
Massachusetts business trust to another Massachusetts
business trust.
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[ASII-PXC-497] [cusip #315920801/fund #648]
