FIDELITY GINNIE MAE FUND
FIDELITY GOVERNMENT SECURITIES FUND
SPARTAN LIMITED MATURITY GOVERNMENT FUND
FUNDS OF
FIDELITY INCOME FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
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 Ginnie Mae Fund, Fidelity Government Securities
Fund, and Spartan Limited Maturity Government Fund (the funds), will
be held at the office of Fidelity Income Fund (the trust), 82
Devonshire Street, Boston, Massachusetts 02109 on July 15, 1998, 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. and Price
Waterhouse LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
4. To approve an amended management contract for Fidelity Ginnie Mae
Fund.
5. To amend Fidelity Ginnie Mae Fund's and Spartan Limited Maturity
Government Fund's fundamental investment limitation concerning
diversification.
The Board of Trustees has fixed the close of business on May
18,1998 as the record date for the determination of the shareholders
of each of the funds entitled to notice of, and to vote at, such
Meeting and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
May 8,1998
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC CORP. JOHN SMITH, TREASURER
2) ABC CORP. JOHN SMITH, TREASURER
C/O JOHN SMITH, TREASURER
B. 1) ABC CORP. PROFIT SHARING PLAN ANN B. COLLINS,
TRUSTEE
2) ABC TRUST ANN B. COLLINS,
TRUSTEE
3) ANN B. COLLINS, TRUSTEE ANN B. COLLINS,
TRUSTEE
U/T/D 12/28/78
C. 1) ANTHONY B. CRAFT, CUST. ANTHONY B. CRAFT
F/B/O ANTHONY B. CRAFT, JR.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY INCOME FUND:
FIDELITY GINNIE MAE FUND
FIDELITY GOVERNMENT SECURITIES FUND
SPARTAN LIMITED MATURITY GOVERNMENT FUND
TO BE HELD ON JULY 15, 1998
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity Income Fund (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Ginnie Mae Fund, Fidelity Government
Securities Fund, and Spartan Limited Maturity Government Fund (the
funds) and at any adjournments thereof (the Meeting), to be held on
July 15, 1998 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. Shareholders of the trust's other fund (Fidelity Advisor
Mortgage Securities Fund) will also participate in the Meeting and
have been mailed a separate notice and proxy statement relating to
proposals to be voted upon by the trust and/or by the shareholders of
that fund.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about May 18, 1998.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. and D.F. King & Co., Inc. (D.F. King) may be
paid on a per-call basis to solicit shareholders on behalf of the
funds at an anticipated cost of approximately $4,000 (Fidelity Ginnie
Mae Fund), $5,000 (Fidelity Government Securities Fund), and $3,000
(Spartan Limited Maturity Government Fund), respectively. The expenses
in connection with preparing this Proxy Statement and its enclosures
and of all solicitations will be paid by the funds (except for Spartan
Limited Maturity Government Fund, whose expenses will be borne by
FMR ) . The funds (FMR for Spartan Limited Maturity Government
Fund) will reimburse brokerage firms and others for their reasonable
expenses in forwarding solicitation material to the beneficial owners
of shares. The principal business address of Fidelity Distributors
Corporation (FDC), the 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 Fidelity Ginnie Mae Fund and Spartan Limited Maturity
Government Fund, is 82 Devonshire Street, Boston, Massachusetts 02109.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting and are
not revoked will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. D.F.
King , may be paid on a per-call basis for vote-by-phone
solicitations on behalf of the funds at an anticipated cost of
approximately $4,000 (Fidelity Ginnie Mae Fund), $5,000 (Fidelity
Government Securities Fund), and $3,000 (Spartan Limited Maturity
Government Fund). The expenses in connection with telephone voting
will be paid by the funds (except for Spartan Limited Maturity
Government Fund, whose expenses will be borne by FMR). 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 not present at the Meeting, or if a quorum is present
at the Meeting , but sufficient votes to approve one or more of
the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxy agents may
propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares present at the Meeting
or represented by proxy. When voting on a proposed adjournment, the
persons named as proxy agents will vote FOR the proposed adjournment
all shares that they are entitled to vote with respect to each item,
unless directed to vote AGAINST the item, in which case such shares
will be voted AGAINST the proposed adjournment with respect to that
item. A shareholder vote may be taken on one or more of the items in
this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
The following table summarizes the proposals applicable to each fund.
<TABLE>
<CAPTION>
<S> <C> <C>
PROPOSAL # PROPOSAL DESCRIPTION APPLICABLE FUNDS
1. TO ELECT AS TRUSTEES THE TWELVE FIDELITY GINNIE MAE FUND
NOMINEES PRESENTED IN PROPOSAL FIDELITY GOVERNMENT SECURITIES
1. FUND
SPARTAN LIMITED MATURITY
GOVERNMENT FUND
2. TO RATIFY THE SELECTION OF FIDELITY GINNIE MAE FUND
COOPERS & LYBRAND L.L.P. AND SPARTAN LIMITED MATURITY
PRICE WATERHOUSE LLP AS GOVERNMENT FUND
INDEPENDENT ACCOUNTANTS OF THE FIDELITY GOVERNMENT SECURITIES
FUNDS. FUND
3. TO AUTHORIZE THE TRUSTEES TO FIDELITY GINNIE MAE FUND
ADOPT AN AMENDED AND RESTATED FIDELITY GOVERNMENT SECURITIES
DECLARATION OF TRUST. FUND
SPARTAN LIMITED MATURITY
GOVERNMENT FUND
4. TO APPROVE AN AMENDED FIDELITY GINNIE MAE FUND
MANAGEMENT CONTRACT FOR
FIDELITY GINNIE MAE FUND THAT
WOULD REDUCE THE MANAGEMENT
FEE PAYABLE TO FMR BY THE FUND
AS FMR'S ASSETS UNDER
MANAGEMENT INCREASE.
5. DIVERSIFICATION: TO AMEND THE FIDELITY GINNIE MAE FUND
FUNDAMENTAL DIVERSIFICATION SPARTAN LIMITED MATURITY
LIMITATION TO EXCLUDE "SECURITIES GOVERNMENT FUND
OF OTHER INVESTMENT COMPANIES"
FROM ISSUER DIVERSIFICATION
LIMITS.
</TABLE>
Shares of each class of Fidelity Advisor Mortgage Securities
Fund and of each of the other funds of the trust issued and
outstanding as of March 31, 1998 are indicated in the following table:
FIDELITY GINNIE MAE FUND 80,429,214
F IDELITY GOVERNMENT S ECURITIES F UND 122,878,636
S PARTAN LIMITED M ATURITY GOVERNMENT
F UND 73,270,644
F IDELITY ADVISOR M ORTGAGE
S ECURITIES F UND CLASS A 47,521
FIDELITY A DVISOR MORTGAGE SECURITIES
F UND C LASS T 1,044,896
F IDELITY A DVISOR M ORTGAGE
SECURITIES F UND C LASS B 273,870
FIDELITY ADVISORY MORTGAGE SECURITIES FUND
INSTITUTIONAL CLASS 1,896,386
F IDELITY A DVISOR M ORTGAGE
SECURITIES F UND I NITIAL CLASS 42,830,336
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of a fund or a class on March 31, 1998 was as
follows:
FIDELITY GOVERNMENT SECURITIES FUND: The Bank of New York, New
York, NY (5.24%).
FIDELITY ADVISOR MORTGAGE SECURITIES FUND - CLASS A: FMR Corp.,
Boston, MA (21.82%); Vestax Securities, Hudson, OH (7.82%); United
Financial Markets, Houston, TX (7.55%); Linsco/Private Ledger, San
Diego, CA (7.24%); Quest Capital Strategies Inc., Santa Ana Heights,
CA (5.72%).
FIDELITY ADVISOR MORTGAGE SECURITIES FUND - CLASS T: Commonwealth
Equity Services, Waltham, MA (29.18%); Sunamerica Securities Inc.,
Phoenix, AZ (6.04%); LaSalle St. Securities, Inc., Chicago, IL
(5.19%).
FIDELITY ADVISOR MORTGAGE SECURITIES FUND - CLASS B: United
Financial Markets, Houston, TX (9.41%); 1717 Capital Management
Company, Newark, DE (7.99%); Merrill Lynch Pierce Fenner & Smith,
Jacksonville, FL (6.82%); Intersecurities, Inc., Largo, FL (6.73%);
Commercial Federal bank, Denver, CO (5.27%); Nathan & Lewis
Securities, New York, NY (5.26%).
FIDELITY ADVISOR MORTGAGE SECURITIES FUND - INSTITUTIONAL CLASS:
Magna Bank, Belleville, IL (26.88%); Reliance Financial Services,
Defiance, OH (10.35%); Oak Brook Bank, Oak brook, IL (9.38%).
FMR has advised the trust that for Proposals 1, 2, and 3 contained in
this Proxy Statement, it will vote its shares at the Meeting FOR each
Proposal. To the knowledge of the trust, no other shareholder owned of
record or beneficially more than 5% of the outstanding shares of a
fund or class on that date.
Shareholders of record at the close of business on May 18, 1998 will
be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF FIDELITY GINNIE MAE FUND'S AND/OR SPARTAN LIMITED
MATURITY FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JULY 31, 1997
AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED JANUARY 31,
1998, CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109. FOR
A FREE COPY OF FIDELITY GOVERNMENT SECURITIES FUND'S ANNUAL REPORT FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 1997 AND THE SEMIANNUAL REPORT FOR
THE FISCAL PERIOD ENDED MARCH 31, 1998, CALL 1-800-544-8888 OR WRITE
TO FIDELITY DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS
SUFFICIENT TO APPROVE PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
APPROPRIATE FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL
2. APPROVAL OF PROPOSAL 3 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" OF THE ENTIRE TRUST. APPROVAL OF
PROPOSALS 4 THROUGH 5 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.
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 Income Fund, the Trustees have determined that the number of
Trustees shall be fixed at twelve. It is intended that the enclosed
proxy card will be voted for the election as Trustees of the twelve
nominees listed below, unless such authority has been withheld in the
proxy card.
All nominees named below are currently Trustees of Fidelity Income
Fund and have served in that capacity continuously since originally
elected or appointed. Robert M. Gates, William O. McCoy, and Robert C.
Pozen were selected by the trust's Nominating and Administration
Committee (see page ) and were appointed to the Board in March 1997,
January 1997, and August 1997, respectively. None of the nominees are
related to one another. Those nominees indicated by an asterisk (*)
are "interested persons" of the trust by virtue of, among other
things, their affiliation with either the trust, the funds' investment
adviser (FMR, or the Adviser), or the funds' distribution agent, FDC.
The business address of each nominee who is an "interested person" is
82 Devonshire Street, Boston, Massachusetts 02109, and the business
address of all other nominees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Except for Robert M. Gates, William
O. McCoy, and Robert C. Pozen, each of the nominees is currently a
Trustee or General Partner, as the case may be, of 60
registered investment companies (trusts or partnerships) advised by
FMR. Mr. Gates and Mr. McCoy are currently a Trustee or
General Partner, as the case may be, of 53 registered investment
companies (trusts or partnerships) advised by FMR. Mr. Pozen
is currently a Trustee or General Partner, as the case may be,
of 52 registered investment companies (trusts or partnerships)
advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
NOMINEE PRINCIPAL OCCUPATION ** YEAR OF
(AGE) ELECTION OR
APPOINTMENT
RALPH F. COX PRESIDENT OF RABAR ENTERPRISES 1991
(66) (MANAGEMENT CONSULTING-ENGINEERING
INDUSTRY, 1994). PRIOR TO FEBRUARY
1994, HE WAS PRESIDENT OF GREENHILL
PETROLEUM CORPORATION (PETROLEUM
EXPLORATION AND PRODUCTION). UNTIL
MARCH 1990, MR. COX WAS PRESIDENT
AND CHIEF OPERATING OFFICER OF UNION
PACIFIC RESOURCES COMPANY
(EXPLORATION AND PRODUCTION). HE IS A
DIRECTOR OF USA WASTE SERVICES, INC.
(NON-HAZARDOUS WASTE, 1993), CH2M
HILL COMPANIES (ENGINEERING), RIO
GRANDE, INC. (OIL AND GAS PRODUCTION),
AND DANIEL INDUSTRIES (PETROLEUM
MEASUREMENT EQUIPMENT
MANUFACTURER). IN ADDITION, HE IS A
MEMBER OF ADVISORY BOARDS OF TEXAS
A&M UNIVERSITY AND THE UNIVERSITY OF
TEXAS AT AUSTIN.
PHYLLIS BURKE DAVIS PRIOR TO HER RETIREMENT IN 1992
(66) 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 1997
(54) (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 A
DIRECTOR OF LUCASVARITY PLC
(AUTOMOTIVE COMPONENTS AND DIESEL
ENGINES), CHARLES STARK DRAPER
LABORATORY (NON-PROFIT), NACCO
INDUSTRIES, INC. (MINING AND
MANUFACTURING), AND TRW INC.
(ORIGINAL EQUIPMENT AND
REPLACEMENT PRODUCTS). MR. GATES
ALSO IS A TRUSTEE OF THE FORUM FOR
INTERNATIONAL POLICY AND OF THE
ENDOWMENT ASSOCIATION OF THE
COLLEGE OF WILLIAM AND MARY. IN
ADDITION, HE IS A MEMBER OF THE
NATIONAL EXECUTIVE BOARD OF THE BOY
SCOUTS OF AMERICA.
*EDWARD C. JOHNSON 3D PRESIDENT, IS CHAIRMAN, CHIEF 1968
(68) EXECUTIVE OFFICER AND A DIRECTOR OF
FMR CORP.; A DIRECTOR AND
CHAIRMAN OF THE BOARD AND OF THE
EXECUTIVE COMMITTEE OF FMR;
CHAIRMAN AND A DIRECTOR OF FIDELITY
INVESTMENTS MONEY MANAGEMENT,
INC. (1998), FIDELITY MANAGEMENT &
RESEARCH (U.K.) INC., AND FIDELITY
MANAGEMENT & RESEARCH (FAR EAST)
INC.
E. BRADLEY JONES PRIOR TO HIS RETIREMENT IN 1984, MR. 1990
(70) JONES WAS CHAIRMAN AND CHIEF
EXECUTIVE OFFICER OF LTV STEEL
COMPANY. HE IS A DIRECTOR OF TRW
INC. (ORIGINAL EQUIPMENT AND
REPLACEMENT PRODUCTS),
CONSOLIDATED RAIL CORPORATION,
BIRMINGHAM STEEL CORPORATION, AND
RPM, INC. (MANUFACTURER OF
CHEMICAL PRODUCTS), AND HE
PREVIOUSLY SERVED AS A DIRECTOR OF
NACCO INDUSTRIES, INC. (MINING AND
MANUFACTURING, 1985-1995),
HYSTER-YALE MATERIALS HANDLING, INC.
(1985-1995), AND CLEVELAND-CLIFFS
INC (MINING), AND AS A TRUSTEE OF
FIRST UNION REAL ESTATE INVESTMENTS.
IN ADDITION, HE SERVES AS A TRUSTEE
OF THE CLEVELAND CLINIC FOUNDATION,
WHERE HE HAS ALSO BEEN A MEMBER
OF THE EXECUTIVE COMMITTEE AS WELL
AS CHAIRMAN OF THE BOARD AND
PRESIDENT, A TRUSTEE AND MEMBER OF
THE EXECUTIVE COMMITTEE OF
UNIVERSITY SCHOOL (CLEVELAND), AND A
TRUSTEE OF CLEVELAND CLINIC FLORIDA.
DONALD J. KIRK EXECUTIVE-IN-RESIDENCE (1995) AT 1987
(65) 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 FMR. 1990
(55) 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). 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 1997
(64) 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, 1984) AND
PRESIDENT OF BELLSOUTH ENTERPRISES
(1986). HE IS CURRENTLY A DIRECTOR OF
LIBERTY CORPORATION (HOLDING
COMPANY, 1984), WEEKS CORPORATION
OF ATLANTA (REAL ESTATE, 1994),
CAROLINA POWER AND LIGHT COMPANY
(ELECTRIC UTILITY, 1996) AND THE KENAN
TRANSPORT CO. (1996). PREVIOUSLY, HE
WAS A DIRECTOR OF FIRST AMERICAN
CORPORATION (BANK HOLDING COMPANY,
1979-1996). IN ADDITION, MR. MCCOY
SERVES AS A MEMBER OF THE BOARD OF
VISITORS FOR THE UNIVERSITY OF NORTH
CAROLINA AT CHAPEL HILL (1994) AND FOR
THE KENAN-FLAGER BUSINESS SCHOOL
(UNIVERSITY OF NORTH CAROLINA AT
CHAPEL HILL, 1988).
GERALD C. MCDONOUGH CHAIRMAN OF G.M. MANAGEMENT 1989
(70) GROUP (STRATEGIC ADVISORY SERVICES).
MR. MCDONOUGH IS A DIRECTOR OF
YORK INTERNATIONAL CORP. (AIR
CONDITIONING AND REFRIGERATION),
COMMERCIAL INTERTECH CORP.
(HYDRAULIC SYSTEMS, BUILDING
SYSTEMS, AND METAL PRODUCTS,
1992), CUNO, INC. (LIQUID AND GAS
FILTRATION PRODUCTS, 1996), AND
ASSOCIATED ESTATES REALTY
CORPORATION (A REAL ESTATE
INVESTMENT TRUST, 1993). MR.
MCDONOUGH SERVED AS A DIRECTOR OF
ACME-CLEVELAND CORP. (METAL
WORKING, TELECOMMUNICATIONS, AND
ELECTRONIC PRODUCTS) FROM
1987-1996 AND BRUSH-WELLMAN INC.
(METAL REFINING) FROM 1983-1997.
MARVIN L. MANN CHAIRMAN OF THE BOARD, PRESIDENT, 1993
(65) 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),
IMATION CORP. (IMAGING AND
INFORMATION STORAGE, 1997), 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.
*ROBERT C. POZEN SENIOR VICE PRESIDENT, IS PRESIDENT 1997
(51) AND A DIRECTOR OF FMR (1997); AND
PRESIDENT AND A DIRECTOR OF FIDELITY
INVESTMENTS MONEY MANAGEMENT,
INC. (1998), FIDELITY MANAGEMENT &
RESEARCH (U.K.) INC. (1997), AND
FIDELITY MANAGEMENT & RESEARCH
(FAR EAST) INC. (1997). PREVIOUSLY,
MR. POZEN SERVED AS GENERAL
COUNSEL, MANAGING DIRECTOR, AND
SENIOR VICE PRESIDENT OF FMR CORP.
THOMAS R. WILLIAMS PRESIDENT OF THE WALES GROUP, INC. 1989
(69) (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 CONAGRA, INC.
(AGRICULTURAL PRODUCTS), GEORGIA
POWER COMPANY (ELECTRIC UTILITY),
NATIONAL LIFE INSURANCE COMPANY OF
VERMONT, AMERICAN SOFTWARE, INC.,
AND APPLESOUTH, INC. (RESTAURANTS,
1992).
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of March 31, 1998, the nominees, Trustees and officers of the
trust and the funds of the trust owned, in the aggregate, less than 1%
of the outstanding shares of each class of Fidelity Advisor
Mortgage Securities Fund and less than 1% of the outstanding shares of
each of the other funds.
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 3 interested and 9
non-interested Trustees, met eleven times during the fiscal
year ended July 31, 1997 on behalf of Fidelity Ginnie Mae Fund
and Spartan Limited Maturity Fund and met eleven times during the
fiscal year ended September 30, 1997 on behalf of Fidelity Government
Securities Fund . It is expected that the Trustees will meet at
least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR , or its affiliates and
normally meets four times a year, or as required, prior to meetings of
the Board of Trustees. Currently, Messrs. Kirk (Chairman), Gates,
McCoy, and Mrs. Davis are members of the c ommittee. The
committee oversees and monitors the trust's internal control
structure, its auditing function and its financial reporting process,
including the resolution of material reporting issues. The committee
recommends to the Board of Trustees the appointment of auditors for
the trust. It reviews audit plans, fees and other material
arrangements in respect of the engagement of auditors, including
non-audit services to be performed. It reviews the qualifications of
key personnel involved in the foregoing activities. The committee
plays an oversight role in respect of the trust's investment
compliance procedures and the code of ethics. During the fiscal
year ended July 31, 1997, the committee held four meetings on
behalf of Fidelity Ginnie Mae Fund and Spartan Limited Maturity Fund
and during the fiscal year ended September 30, 1997, the committee
held four meetings on behalf of Fidelity Government Securities
Fund .
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones, and Williams. The
committee members confer periodically and hold meetings as required.
The committee makes nominations for independent trustees, and for
membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent Trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent Trustees. During the
fiscal year ended July 31, 1997, the committee held two
meetings on behalf of Fidelity Ginnie Mae Fund and Spartan Limited
Maturity Fund and during the fiscal year ended September 30, 1997 the
committee held two meetings on behalf of Fidelity Government
Securities Fund . The Nominating and Administration Committee will
consider nominees recommended by shareholders. Recommendations should
be submitted to the committee in care of the Secretary of the trust.
The trust does not have a compensation committee; such matters are
considered by the Nominating and Administration Committee.
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of the
fund for his or her services for the fiscal year ended July 31, 1997
or September 30, 1997 or calendar year ended December 31, 1997, as
applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TRUSTEES AND MEMBERS AGGREGATE AGGREGATE AGGREGATE TOTAL
OF THE ADVISORY BOARD COMPENSATION COMPENSATION COMPENSATION COMPENSATION
FROM FROM FROM SPARTAN FROM THE
FIDELITY GINNIE FIDELITY LIMITED MATURITY FUND
MAE FUNDB,C GOVERNMENT GOVERNMENT COMPLEX*A
SECURITIES FUNDB,E
FUNDB,D
J. GARY BURKHEAD**,# $ 0 $ 0 $ 0 $ 0
Ralph F. COX $ 315 $ 401 $ 282 $ 214,500
PHYLLIS BURKE DAVIS $ 308 $ 392 $ 275 $ 210,000
RICHARD J. FLYNN*** $ 129 $ 100 $ 117 $ 0
ROBERT M. GATES**** $ 151 $ 192 $ 132 $ 176,000
EDWARD C. JOHNSON 3D $ 0 $ 0 $ 0 $ 0
**
E. BRADLEY JONES $ 311 $ 395 $ 277 $ 211,500
DONALD J. KIRK $ 313 $ 399 $ 303 $ 211,500
PETER S. LYNCH** $ 0 $ 0 $ 0 $ 0
WILLIAM O. MCCOY***** $ 312 $ 183 $ 277 $ 214,500
GERALD C. MCDONOUGH $ 364 $ 476 $ 324 $ 264,500
EDWARD H. MALONE*** $ 108 $ 84 $99 $ 0
MARVIN L. MANN $ 315 $ 401 $ 282 $ 214,500
ROBERT C. POZEN** $ 0 $ 0 $ 0 $ 0
THOMAS R. WILLIAMS $ 316 $ 402 $ 282 $ 214,500
</TABLE>
* Information is for the calendar year ended December 3, 1997 for 230
funds in the complex.
** Interested Trustees of the fund s and Mr. Burkhead are
compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of
Trustees through December 31, 1996.
**** Mr. Gates was appointed to the Board of Trustees of Fidelity
Income Fund effective March 1, 1997.
***** During the period from May 1, 1996 through December 31, 1996,
William O. McCoy served as a Member of the Advisory Board of the
trust. Mr. McCoy was appointed to the Board of Trustees of Fidelity
Income Fund effective January 1, 1997.
# J. Gary Burkhead served on the Board of Trustees through July 31,
1997. Effective August 1, 1997, Mr. Burkhead serves as a Member of the
Advisory Board of the trust.
A Compensation figures include cash, amounts required to be deferred,
and may included amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the fund complex as follows: Ralph
F. Cox, $75,000; Phyllis Burke Davis, $75,000; Robert M. Gates,
$62,500; E. Bradley Jones, $75,000; Donald J. Kirk, $75,000; William
O. McCoy, $75,000; Gerald C. McDonough, $87,500; Marvin L. Mann,
$75,000; and Thomas R. Williams, $75,000. Certain of the
non-interested Trustees elected voluntarily to defer a portion of
their compensation as follows: Ralph F. Cox, $53,699; Marvin L. Mann,
$53,699; and Thomas R. Williams, $62,462.
B Compensation figures include cash, and may include amounts required
to be deferred, a pro rata portion of benefits accrued under the
retirement program for the period ended December 30, 1996 and required
to be deferred, and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $10, Phyllis Burke Davis, $10, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $10, Donald J. Kirk, $10, William O.
McCoy, $0, Gerald C. McDonough, $10, Edward H. Malone, $10, Marvin L.
Mann, $10, and Thomas R. Williams, $10.
D The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $12, Phyllis Burke Davis, $12, Richard J. Flynn, $0 ,
Robert M. Gates, $0, E. Bradley Jones, $12, Donald J. Kirk, $12,
William O. McCoy, $0, Gerald C. McDonough, $12, Edward H. Malone, $12,
Marvin L. Mann, $12, and Thomas R. Williams, $12.
E The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $10, Phyllis Burke Davis, $10, Richard J. Flynn, $0,
Robert M. Gates, $0, E. Bradley Jones, $10, Donald J. Kirk, $10,
William O. McCoy, $0, Gerald C. McDonough, $10, Edward H. Malone, $10,
Marvin L. Mann, $10, and Thomas R. Williams, $10.
Under a retirement program adopted in July 1988 and modified in
November 1995 and November 1996, each non-interested Trustee who
retired before December 30, 1996 may receive payments from a Fidelity
fund during his or her lifetime based on his or her basic trustee fees
and length of service. The obligation of a fund to make such payments
is neither secured nor funded. A Trustee became eligible to
participate in the program at the end of the calendar year in which he
or she reached age 72, provided that, at the time of retirement, he or
she had served as a Fidelity fund Trustee for at least five years.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are treated as though equivalent dollar amounts had been invested
in shares of a cross-section of Fidelity funds including funds in each
major investment discipline and representing a majority of Fidelity's
assets under management (the Reference Funds). The amounts ultimately
received by the Trustees under the Plan will be directly linked to the
investment performance of the Reference Funds. Deferral of fees in
accordance with the Plan will have a negligible effect on a fund's
assets, liabilities, and net income per share, and will not obligate a
fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In
connection with the termination of the retirement program, each
then-existing non-interested Trustee received a credit to his or her
Plan account equal to the present value of the estimated benefits that
would have been payable under the retirement program. The amounts
credited to the non-interested Trustees' Plan accounts are subject to
vesting and are treated as though equivalent dollar amounts had been
invested in shares of the Reference Funds. The amounts ultimately
received by the Trustees in connection with the credits to their Plan
accounts will be directly linked to the investment performance of the
Reference Funds. The termination of the retirement program and related
crediting of estimated benefits to the Trustees' Plan accounts did not
result in a material cost to the funds.
2. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AND PRICE
WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS OF THE FUNDS.
By a vote of the non-interested Trustees, the firm of Coopers &
Lybrand L.L.P. has been selected as independent accountants for
Fidelity Government Securities Fund and the firm of Price Waterhouse
LLP has been selected as independent accountants for Fidelity Ginnie
Mae Fund and Spartan Limited Maturity Government Fund, to sign or
certify any financial statements of each fund required by any law or
regulation to be certified by an independent accountant and filed with
the Securities and Exchange Commission (SEC) or any state. Pursuant to
the 1940 Act, such selection requires the ratification of
shareholders. In addition, as required by the 1940 Act, the vote of
the Trustees is subject to the right of each fund, by vote of a
majority of its outstanding voting securities at any meeting called
for the purpose of voting on such action, to terminate such employment
without penalty. Coopers & Lybrand L.L.P. and Price Waterhouse LLP
have advised each fund that they have no direct or material indirect
ownership interest in each fund.
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. In
recommending the selection of each fund's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such
services would affect the accountants' independence. Representatives
of Coopers & Lybrand L.L.P. and Price Waterhouse LLP are not expected
to be present at the Meeting, but have been given the opportunity to
make a statement if they so desire and will be available should any
matter arise requiring their presence.
On September 18, 1997 , Coopers & Lybrand L.L.P. and Price
Waterhouse LLP announced plans to merge their practices worldwide.
Coopers & Lybrand L.L.P. and Price Waterhouse LLP expect the merger,
which is subject to approval by the regulators, to become effective in
1998.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the
funds of the trust in the form attached to this Proxy Statement
as Exhibit 1 (New Declaration of Trust). The attached New Declaration
of Trust has been marked to show changes from the trust's existing
Declaration of Trust (Current Declaration of Trust). The New
Declaration of Trust is a more modern form of trust instrument for a
Massachusetts business trust and, going forward, will be used as the
standard Declaration of Trust for all new Fidelity Massachusetts
business trusts.
The New Declaration of Trust gives the Trustees more flexibility and,
subject to applicable requirements of the 1940 Act and Massachusetts
law, broader authority to act. This increased flexibility may allow
the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the funds to
operate in a more efficient and economical manner. ADOPTION OF THE NEW
DECLARATION OF TRUST WILL NOT ALTER IN ANY WAY THE TRUSTEES' EXISTING
FIDUCIARY OBLIGATIONS TO ACT WITH DUE CARE AND IN THE SHAREHOLDERS'
INTERESTS. BEFORE UTILIZING ANY NEW FLEXIBILITY THAT THE NEW
DECLARATION OF TRUST MAY AFFORD, THE TRUSTEES MUST FIRST CONSIDER THE
SHAREHOLDERS' INTERESTS AND THEN ACT IN ACCORDANCE WITH SUCH
INTERESTS.
Adoption of the New Declaration of Trust will NOT result in any
changes in the funds' Trustees or officers or in the investment
policies and shareholder services described in the funds' current
prospectuses.
Generally, a majority of the Trustees may amend the Current
Declaration of Trust when authorized by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the trust. On
October 16, 1997, the Trustees approved the form of the New
Declaration of Trust and authorized the submission of the New
Declaration of Trust to the trust's shareholders for their
authorization at this Meeting. On December 18, 1997, the Board
approved several additional changes to the form of the New Declaration
of Trust, which changes have been incorporated into the form attached
to this Proxy Statement.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. Unlike the
Current Declaration of Trust, the New Declaration of Trust generally
permits the Trustees, subject to applicable Federal and state law, to
reorganize or terminate the trust or any of its series. The Current
Declaration of Trust requires shareholder approval in order to
reorganize or terminate the trust or any of its series.
Under certain circumstances, it may not be in the shareholders'
interest to require a shareholder meeting to permit the trust or a
fund to reorganize into another entity. For example, in order to
reduce the cost and scope of state regulatory constraints or to take
advantage of a more favorable tax treatment offered by another state,
the Trustees may determine that it would be in the shareholders'
interests to reorganize a fund to domicile it in another state or to
change its legal form. Under the Current Declaration of Trust, the
Trustees cannot effectuate such a potentially beneficial
reorganization without first conducting a shareholder meeting and
incurring the attendant costs and delays. In contrast, the New
Declaration of Trust gives the Trustees the flexibility to reorganize
the trust or any of its series and achieve potential shareholder
benefits without incurring the delay and potential costs of a proxy
solicitation. Such flexibility should help to assure that the trust
and its funds operate under the most appropriate form of organization.
Similarly, under certain circumstances, it may not be in the
shareholders' interest to require a shareholder meeting to permit the
Trustees to terminate a fund. For example, a fund may have
insufficient assets to invest effectively or excessively high expense
levels due to operational needs. Under such circumstances, absent
viable alternatives, the Trustees may determine that terminating the
fund is in the shareholders' interest and the only appropriate course
of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the
fund's liquidation and termination and, in general, will increase the
costs associated with the termination. In such a case, it may be in
the shareholders' interest to permit fund termination without
incurring the costs and delays of a shareholder meeting.
As discussed above, before allowing the trust or fund reorganization
or termination to proceed without shareholder approval, the Trustees
have a fiduciary responsibility to first determine that the proposed
transaction is in the shareholders' interest. Any exercise of the
Trustees' increased authority under the New Declaration of Trust is
also subject to any applicable requirements of the 1940 Act and
Massachusetts law. Of course, in all cases, the New Declaration of
Trust would require that shareholders receive written notification of
any proposed transaction.
The New Declaration of Trust does NOT give the Trustees the authority
to merge a fund with another operating mutual fund or sell all of a
fund's assets to another operating mutual fund without first seeking
shareholder approval. Under the New Declaration of Trust, shareholder
approval is still required for these transactions.
FUTURE AMENDMENTS OF THE DECLARATION OF TRUST. The New Declaration of
Trust permits the Trustees, with certain exceptions, to amend the
Declaration of Trust without shareholder approval. Under the New
Declaration of Trust, shareholders generally have the right to vote on
any amendment affecting their right to vote, on any amendment altering
the maximum number of permitted Trustees, on any amendment affecting
the New Declaration of Trust's amendment provisions, on any amendment
required by law or the trust's registration statement, and on any
matter submitted to shareholders by the Trustees. The Current
Declaration of Trust, on the other hand, generally gives shareholders
the exclusive power to amend the Declaration of Trust. By allowing
amendment of the Declaration of Trust without shareholder approval,
the New Declaration of Trust gives the Trustees the necessary
authority to react quickly to future contingencies. As mentioned
above, such increased authority remains subordinate to the Trustees'
continuing fiduciary obligations to act with due care and in the
shareholders' interest.
OTHER CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
In addition to the significant changes above, the New Declaration of
Trust modifies the Current Declaration of Trust in a number of
important ways, including the following:
1. The New Declaration of Trust modifies the Current Declaration of
Trust to allow FMR and the trust, on behalf of each fund, to amend the
fund's respective Management Contract subject to the provisions of
Section 15 of the 1940 Act, as modified or interpreted by the SEC. In
contrast, the Current Declaration of Trust explicitly requires the
vote of a majority of the outstanding voting securities of a fund to
authorize all such amendments. A corresponding change is also proposed
for Fidelity Ginnie Mae Fund's Management Contract. For more
information on this topic generally, see "Modification of Management
Contract Amendment Provisions" on page .
2. The New Declaration of Trust clarifies that the Trustees may
impose other fees (for example, purchase fees) in addition to sales
charges upon investment in a fund and clarifies that deferred sales
charges and other fees (for example, redemption fees) may be imposed
upon redemption of a fund's shares.
3. The New Declaration of Trust confirms and clarifies various
existing Trustee powers. For example, the New Declaration of Trust
clarifies that the Trustees, in addition to banks and trust companies,
may employ as fund custodians companies that are members of a national
securities exchange or other entities permitted under the 1940 Act;
delegate authority to investment advisers and other agents; adopt and
offer dividend reinvestment and related plans; operate and carry on
the business of an investment company; and interpret the investment
policies, practices, and limitations of any fund.
4. The New Declaration of Trust clarifies that no shareholder of a
trust series shall have a claim on the assets of another series and
further clarifies that, by virtue of investing in a fund, a
shareholder is deemed to have assented to and agreed to be bound by
the terms of the New Declaration of Trust.
5. The New Declaration of Trust deletes various technical and/or
antiquated requirements from the Current Declaration of Trust,
including existing requirements that a Trustee vacancy be deemed to
occur when a Trustee is absent from his or her state of residence,
that Trustee vacancies must be filled within six calendar months, and
that portfolio securities be held pursuant to safeguards prescribed by
usual Massachusetts practice.
6. As a general matter, the New Declaration of Trust modifies the
Current Declaration of Trust to incorporate appropriate references to
classes of shares.
7. Lastly, the New Declaration of Trust generally expands various
1940 Act defined terms to encompass SEC modifications and
interpretations. Specific references to discrete sections of the 1940
Act that are contained in the New Declaration of Trust have likewise
been expanded to include SEC modifications and interpretations.
CONCLUSION. The Board of Trustees has concluded that the proposed
adoption of the New Declaration of Trust is in the best interests of
the trust's shareholders. Accordingly, the Trustees unanimously
recommend that the shareholders vote FOR the proposal to authorize
them to adopt and execute the New Declaration of Trust. If the
proposal is not approved, the Current Declaration of Trust will remain
unchanged and in effect.
4. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY GINNIE MAE
FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with Fidelity
Management & Research Company (FMR) (the Amended Contract). The
Amended Contract modifies the management fee that FMR receives from
the fund to provide for lower fees when FMR's assets under management
exceed certain levels. In addition, the Amended Contract allows FMR
and the trust, on behalf of the fund, to modify the Management
Contract subject to the requirements of the 1940 Act. The existing
Management Contract currently requires the vote of a majority of the
fund's outstanding voting securities to authorize all amendments. See
"Modification of Management Contract Amendment Provisions" on page
for more details. THE AMENDED CONTRACT WILL RESULT IN A MANAGEMENT FEE
THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT
MANAGEMENT CONTRACT (THE PRESENT CONTRACT). (For information on FMR,
see the section entitled "Activities and Management of FMR" on page
.)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is
supplied as Exhibit 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 August 1, 1998 (or, if later, the first day of the
first month following approval) and will remain in effect through June
30, 1999 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a
meeting called for the purpose, of a majority of the Independent
Trustees and (ii) the vote of either a majority of the Trustees or by
the vote of a majority of the outstanding shares of the fund. If the
Amended Contract is not approved, the Present Contract will continue
in effect through June 30, 1999, and thereafter only as long as its
continuance is approved at least annually as above.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $156 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $156 billion or less. Above $156 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contact, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on August 1, 1994 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 11 new fee breakpoints for
assets under FMR's management above $156 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used
to calculate the management fee, see the section entitled "Present
Management Contract" beginning on page .)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
AVERAGE GROUP PRESENT AVERAGE GROUP AMENDED
ASSETS CONTRACT* ASSETS CONTRACT
($ BILLIONS) ($ BILLIONS)
120 - 174 0.1450% 120 - 156 0.1450%
174 - 228 0.1400% 156 - 192 0.1400%
228 - 282 0.1375% 192 - 228 0.1350%
282 - 336 0.1350% 228 - 264 0.1300%
OVER 336 0.1325% 264 - 300 0.1275%
300 - 336 0.1250%
336 - 372 0.1225%
372 - 408 0.1200%
408 - 444 0.1175%
444 - 480 0.1150%
480 - 516 0.1125%
OVER 516 0.1100%
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 0 .1736% 0.1736%
200 0 .1 6 58% 0.1652%
250 0 .1604% 0.1587%
300 0 .1565% 0.1536%
350 0 .1533% 0.1494%
400 0 .1507% 0.1459%
450 0 .1487% 0.1427%
500 0 .1471% 0.1399%
550 0 .1457% 0.1372%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994 and January 1, 1996.
Average assets under FMR's management for March 1998 were
approximately $608 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended March 1998,
average assets under management by FMR were $608 billion. The fund's
management fee rate under the Amended Contract for the month ended
March 1998 would have been 0 .4 3 4 6 %, compared to
0 .4 445 % under the Present Contract. The management fee
rate remains the same under both the Present Contract and the Amended
Contract until assets under FMR's management exceed $156 billion, at
which point the management fee rate under the Amended Contract begins
to decline relative to the Present Contract.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended
July 31, 1997 to the management fee the fund would have incurred
if the Amended Contract had been in effect.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$3,560,572 $3,511,216 ( 1.39% )
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on August 1, 1994 and January 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the trust the ability to amend the
Management Contract to immediately reflect a management fee decrease
without the delay of having to first conduct a proxy solicitation. In
short, the proposed modification gives FMR and the trust added
flexibility to amend the Management Contract subject to 1940 Act
constraints. Of course, any future amendments to the Management
Contract would require the approval of the fund's Board of Trustees.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including all of the
Independent Trustees on October 16, 1997. Originally, t he Board
of Trustees considered and approved the modifications to the Group Fee
Rate schedule during the two month period from November to December
1995. The Board of Trustees received materials relating to the Amended
Contract in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their meetings , Trustees receive materials 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, (5) FMR's
management of the relationships with the fund's custodian and
subcustodians, (6) the resources devoted to and the record of
compliance with the fund's investment policies and restrictions and
with policies on personal securities transactions , and (7) the
nature, cost and audit of non-investment management services provided
by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees annually review a report detailing the background
of the fund's portfolio manager, and the fund's investment objective
and discipline. The Independent Trustees have also had discussions
with senior management of FMR responsible for investment operations,
and the senior management of Fidelity's fixed income group. Among
other things , they considered the size, education and
experience of FMR's investment staff, its use of technology, and FMR's
approach to recruiting, training and retaining portfolio managers and
other research, advisory , and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Amended Contract and under
separate agreements covering transfer agency functions and pricing,
bookkeeping and securities lending services, if any. The Board of
Trustees and the Independent Trustees have also considered the nature
and extent of FMR's supervision of third party service providers,
principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting , and direct shareholder services. They also
considered the allocation of fund brokerage to brokers affiliated with
FMR and the receipt of sales loads and payments under Rule 12b-1 plans
in respect of certain of the Fidelity funds. The Board of Trustees and
the Independent Trustees also considered the revenues and
profitability of FMR businesses other than its mutual fund business,
including FMR's retail brokerage, correspondent brokerage, capital
markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the
Independent Trustees considered the intangible benefits that accrue to
FMR and its affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the
Independent Trustees considered the benefit to shareholders of
investing in a fund that is part of a large family of funds offering a
variety of investment disciplines and providing for a large variety of
fund and shareholder services. With regard to the proposed
modification to the Present Contract's amendment provisions, the Board
of Trustees and the Independent Trustees considered the benefit to
shareholders of FMR's and the trust's increased flexibility (within
1940 Act constraints) to amend the Management Contract without the
delays and potential costs of a proxy solicitation.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule and
the proposed modification to the Present Contract's amendment
provisions, are in the best interest of the fund's shareholders. The
Board of Trustees, including the Independent Trustees, voted to
approve the submission of the Amended Contract to shareholders of the
fund and recommends that shareholders of the fund vote FOR the Amended
Contract. If approved, the Amended Contract will take effect on the
first day of the first month following shareholder approval.
5. TO AMEND FIDELITY GINNIE MAE FUND'S AND SPARTAN LIMITED MATURITY
GOVERNMENT FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION.
Fidelity Ginnie Mae Fund's and Spartan Limited Maturity Government
Fund's current fundamental investment limitation concerning
diversification is as follows:
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities if, as a result, (a) more than 5% of 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 Trustees recommend that shareholders of Fidelity Ginnie Mae Fund
and Spartan Limited Maturity Government Fund vote to replace Fidelity
Ginnie Mae Fund's and Spartan Limited Maturity Government 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. ((G)) overnment or any of its agencies or
instrumentalities((,or securities of other investment companies))) if,
as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer."
The percentage limits in the proposed fundamental limitation
concerning diversification are the percentage limitations imposed by
the 1940 Act for diversified investment companies. The amended
fundamental diversification limitation makes one change from the
current limitation: subject to applicable 1940 Act requirements, it
would permit each fund to invest without limit in the securities of
other investment companies. Pursuant to an order of exemption granted
by the SEC, each fund may invest up to 25% of total assets in
non-publicly offered money market or short-term bond funds (the
Central Funds) managed by FMR or an affiliate of FMR. The Central
Funds do not currently pay investment advisory, management, or
transfer agent fees, but do pay minimal fees for services, such as
custodian, auditor, and Independent Trustees fees. FMR anticipates
that making use of the Central Funds will benefit each fund by
enhancing the efficiency of cash management and by providing increased
short-term investment opportunities. If the proposal is approved, the
Central Funds are expected to serve as a principal option for cash
investment for each fund.
If this proposal is approved, the amended fundamental diversification
limitations cannot be changed without the approval of the
shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit each fund and its shareholders. The Trustees
recommend voting FOR the proposal. The amended fundamental
diversification limitation, upon shareholder approval, will become
effective when the disclosure is revised to reflect the changes. If
the proposal is not approved by the shareholders of a fund, that
fund's current fundamental diversification limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees, net assets, and total expenses of funds with investment
objectives similar to Fidelity Ginnie Mae Fund and advised by FMR is
contained in the Table of Average Net Assets and Expense Ratios in
Exhibit 3 beginning on page .
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; and Peter
S. Lynch, Vice Chairman. Each of the Directors is also a Trustee of
the trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead, John H.
Costello, Eric D. Roiter, Richard A. Silver, Leonard M. Rush, Fred L.
Henning, Jr., Dwight D. Churchill, and Curt Hollingsworth are
currently officers of the trust and officers or employees of FMR or
FMR Corp. With the exception of Mr. Costello and Mr. Silver,
all of these persons hold or have options to acquire stock of FMR
Corp. The principal business address of each of the Directors of FMR
is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore,
under the 1940 Act may be deemed to form a controlling group with
respect to FMR Corp.
During the period August 1, 1996 through March 31, 1998, no
transactions were entered into by Trustees and nominees as Trustee of
the trust involving more than 1% of the voting common, non-voting
common and equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed
in 1986 to provide research and investment advice with respect to
companies based outside the United States for certain funds for which
FMR acts as investment adviser. FMR may also grant the sub-advisers
investment management authority as well as authority to buy and sell
securities for certain of the funds for which it acts as investment
adviser, if FMR believes it would be beneficial to a fund.
Funds with investment objectives similar to Fidelity Ginnie Mae Fund
managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East, and the net assets of
each of these funds, are indicated in the Table of Average Net Assets
and Expense Ratios in Exhibit 3 beginning on page .
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and Robert C. Pozen, President. Mr. Johnson 3d also is
President and a Trustee of the trust and other funds advised by FMR;
Chairman and a Director of Fidelity Investments Money Management, Inc.
(FIMM); Chairman, Chief Executive Officer, President, and a Director
of FMR Corp., and a Director and Chairman of the Board and of the
Executive Committee of FMR. In addition, Mr. Pozen is Senior Vice
President and a Trustee of the trust and of other funds advised by
FMR; President and a Director of FMR; and President and a Director of
FIMM. Each of the Directors is a stock holder of FMR Corp. The
principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
Fidelity Ginnie Mae Fund employs FMR to furnish investment advisory
and other services. Under its management contract with the fund, FMR
acts as investment adviser and, subject to the supervision of the
Board of Trustees, directs the investments of the fund in accordance
with its investment objective, policies, and limitations. FMR also
provides the fund with all necessary office facilities and personnel
for servicing the fund's investments, compensates all officers of the
fund and all Trustees who are "interested persons" of the trust or of
FMR, and all personnel of the fund or FMR performing services relating
to research, statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include
providing facilities for maintaining the fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with the fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining the fund's records and the
registration of the fund's shares under federal and state laws;
developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 4.
In addition to the management fee payable to FMR, the fund pays
transfer agent and pricing and bookkeeping fees to Fidelity Service
Company, Inc. (FSC), an affiliate of FMR, its transfer, dividend
disbursing, and shareholder servicing agent. Although the fund's
current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust, on behalf of the fund has entered into a revised transfer agent
agreement with FSC, pursuant to which FSC bears the costs of providing
these services to existing shareholders. Other expenses paid by the
fund include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by Fidelity
Ginnie Mae Fund for fiscal year ended July 31, 1997 amounted to
$2,180,876.
Fidelity Ginnie Mae Fund also has a distribution agreement with FDC,
a Massachusetts corporation organized on July 18, 1960. FDC is a
broker-dealer registered under the Securities Exchange Act of 1934 and
is a member of the National Association of Securities Dealers, Inc.
The distribution agreement calls for FDC to use all reasonable
efforts, consistent with its other business, to secure purchasers for
shares of the fund, which are continuously offered at net asset value
per share. Promotional and administrative expenses in connection with
the offer and sale of shares are paid by FMR.
FMR is Fidelity Ginnie Mae Fund's manager pursuant to a management
contract dated August 1, 1994, which was approved by shareholders on
July 13, 1994. The amended management contract provided for lower fees
when FMR's assets under management exceed certain levels.
For the services of FMR under the contract, the fund pays FMR a
monthly management fee composed of the sum of two elements: a group
fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts and is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown 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 $522 billion of group net assets - the approximate level for
July 1997 - was 0.1387%, which is the weighted average of the
respective fee rates for each level of group net assets up to $522
billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
$0 - 3 billion 0 .3700% $ 0.5 billion 0 .3700%
3 - 6 0 .3400 25 0 .2664
6 - 9 0 .3100 50 0 .2188
9 - 12 0 .2800 75 0 .1986
12 - 15 0 .2500 100 0 .1869
15 - 18 0 .2200 125 0 .1793
18 - 21 0 .2000 150 0 .1736
21 - 24 0 .1900 175 0 .1695
24 - 30 0 .1800 200 0 .1658
30 - 36 0 .1750 225 0 .1629
36 - 42 0 .1700 250 0 .1604
42 - 48 0 .1650 275 0 .1583
48 - 66 0 .1600 300 0 .1565
66 - 84 0 .1550 325 0 .1548
84 - 120 0 .1500 350 0 .1533
120 - 174 0 .1450 400 0 .1507
174 - 228 0 .1400
228 - 282 0 .1375
282 - 336 0 .1350
Over 336 0 .1325
Prior to August 1, 1994, the group fee rate was based on a schedule
with breakpoints ending at 0.1400% for average group assets in excess
of $174 billion. The group fee rate breakpoints shown above for
average group assets in excess of $120 billion and under $228 billion
were voluntarily adopted by FMR on January 1, 1992. The additional
breakpoints shown above for average group assets in excess of $228
billion were voluntarily adopted by FMR on November 1, 1993. The
fund's current management contract reflects these extensions of the
group fee rate schedule.
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 $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 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 Annual
Assets Rate Assets Fee Rate
120 - $156 billion 0.1450% $ 150 billion 0 .1736%
156 - 192 0.1400 175 0 .1690
192 - 228 0.1350 200 0 .1652
228 - 264 0.1300 225 0 .1618
264 - 300 0.1275 250 0 .1587
300 - 336 0.1250 275 0 .1560
336 - 372 0.1225 300 0 .1536
372 - 408 0.1200 325 0 .1514
408 - 444 0.1175 350 0 .1494
444 - 480 0.1150 375 0 .1476
480 - 516 0.1125 400 0 .1459
Over 516 0.1100 425 0 .1443
450 0 .1427
475 0 .1413
500 0 .1399
525 0 .1385
550 0 .1372
The individual fund fee rate is 0.30%. Based on the average group net
assets of the funds advised by FMR for July 1997, the annual
management fee rate would be calculated as follows:
Group Fee Rate Individual Fund Management Fee Rate
Fee Rate
0.1387% + 0.30% = 0.4387%
One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the month, giving a dollar amount,
which is the fee for that month.
During fiscal 1997, FMR received $3,511,216 for its services as
investment adviser to the fund . This fee was equivalent to
0.44% of the average net assets of the fund.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to
be repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year. Expense
reimbursements by FMR will increase the fund's total returns and yield
and repayment of the reimbursement by the fund will lower its total
returns and yield.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Ginnie Mae 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. FMR
may also grant FMR U.K. and FMR Far East investment management
authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the fund. The sub-advisory
agreement between FMR and FMR U.K., dated August 1, 1994, was approved
by shareholders on July 13, 1994. The sub-advisory agreement between
FMR and FMR Far East, dated August 1, 1994, was approved by
shareholders on July 13, 1994.
Currently, FMR U.K. and FMR Far East 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. Under the sub-advisory agreements ,
FMR pays the fees of FMR U.K. and FMR Far East. For providing
non-discretionary investment advice and research services, 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.
For providing discretionary investment management and executing
portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal
to 50% of its monthly management fee rate with respect to the fund's
average net assets managed by the sub-adviser on a discretionary
basis.
For the fiscal year ended July 31, 1997, no fees were paid by FMR to
FMR U.K. or FMR Far East on behalf of Fidelity Ginnie Mae 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 National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (Japan), LLC
(FBSJ), indirect subsidiaries of FMR Corp., if the commissions are
fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. Prior
to December 9, 1997, FMR used research services provided by and placed
agency transactions with Fidelity Brokerage Services (FBS), an
indirect subsidiary of FMR Corp.
For fiscal year 1997, Fidelity Ginnie Mae Fund paid no brokerage
commissions to affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.,
P.O. Box 789, Boston, 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 AMENDED AND RESTATED DECLARATION OF TRUST))
(Headings that were underlined in the trust's current Amended and
Restated Declaration of Trust remain underlined in this Exhibit.)
((AMENDED AND RESTATED DECLARATION OF TRUST))
[DATED SEPTEMBER 15, 1994]
((DATED ___________, 1998))
AMENDED AND RESTATED DECLARATION OF TRUST, made [September 15,
1994]((______________, 1998)) by each of the Trustees whose signature
is affixed hereto (the"Trustees").
WHEREAS, the Trustees desire to amend and restate this Declaration of
Trust for the sole purpose of supplementing the Declaration ((of
Trust)) to incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on August 7, 1984 by Edward C.
Johnson 3d, Caleb Loring, Jr., and Frank Nesvet in order to establish
a trust fund for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in
[T]((t))rust under this Amended and Restated Declaration of Trust as
herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Fidelity Income
Fund."
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The [T]((t))erms "Affiliated Person((,))" "Assignment((,))"
"Commission((,))" "Interested Person((,))" "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section 2(a)(42)
of the 1940 Act, whichever may be applicable)((,)) and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
[amended from time to time] ((modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder));
(((b) "Bylaws" shall mean the bylaws of the Trust, if any, as amended
from time to time;))
(((c) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III));
(((d) "Declaration of Trust" means this Amended and Restated
Declaration of Trust, as further amended or restated, from time to
time;))
[(c)]((( e))) "Net Asset Value" means the net asset value of
each Series of the Trust ((or Class thereof)) determined in the manner
provided in Article X, Section 3;
[(d)]((( f))) "Shareholder" means a record owner of Shares of
the Trust;
[(f)](((g ))) "Shares" means the equal proportionate
transferable units of interest into which the beneficial interest of
((the Trust or)) each Series shall be divided from time to time,
((including such Class or Classes of Shares as the Trustees may from
time to time create and establish)) and [includes] ((including))
fractions of [s]((S))hares as well as whole [s]((S))hares ((as))
consistent with the requirements of Federal and/or [other] ((state))
securities laws; [and]
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III;
[(b)](( (i))) "Trust" refers to Fidelity Income [Bond]Fund and
reference to the Trust, when applicable to one or more Series of the
Trust, shall refer to any such Series;
[(e)](( (j))) [The]"Trustees" refer to the individual trustees
in their capacity as trustees hereunder of the Trust and their
successor or successors for the time being in office as such trustee
or trustees; ((and))
[(g)](( (k))) [The]"1940 Act" refers to the Investment Company
Act of 1940, as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series
((or Classes of Series)) as the Trustees shall((,)) from time to
time((,)) create and establish. The number of ((authorized)) Shares
((of each Series)), and ((Class thereof)), is unlimited. [e]((E))ach
Share shall be without par value and shall be fully paid and
nonassessable. The Trustees shall have full power and authority, in
their sole discretion((,)) and without obtaining any prior
authorization or vote of the ((Shareholders or any Series or Class
of)) Shareholders of the Trust (((a))) to create and establish
(and to change in any manner) Shares ((or any Series or Classes
thereof)) with such preferences, voting powers, rights, and privileges
as the Trustees may((,)) from time to time((,)) determine((;))
(((b))) to divide or combine the Shares ((or any Series or
Classes thereof)) into a greater or lesser number((;)) (((c)))
to classify or reclassify any issued Shares into one or more Series
((or Classes)) of Shares((;)) ((( d))) to abolish any one or
more Series ((or Classes)) of Shares((;)) and (((e))) to take such
other action with respect to the Shares as the Trustees may deem
desirable.
ESTABLISHMENT OF SERIES AND CLASSES
Section 2. The establishment of any Series ((or Class thereof)) shall
be effective upon the adoption of a resolution by a majority of the
then Trustees setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series ((or
Class)). At any time that there are no Shares outstanding of any
particular Series ((or Class)) previously established and designated,
the Trustees may by a majority vote abolish [that]((such)) Series ((or
Class)) and the establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books of
the Trust ((or a transfer or similar agent)). The Trustees may make
such rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of ((the Trust as kept by)) the
Trust ((or by any transfer or similar agent, as the case may be,))
shall be conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may((,)) from time to time((,))
authorize. Such investments may be in the form of cash((,)) [or]
securities(( , o r other property)) in which the appropriate
Series is authorized to invest, valued as provided in Article X,
Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the
Trustees' discretion be considered as outstanding((,)) and the amount
received by the Trustees on account of the contribution shall be
treated as an asset of the Trust. Subsequent investments in the Trust
shall be credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after the
investment is received; provided, however, that the Trustees may, in
their sole discretion[,] (a) impose a sales charge ((or other fee))
upon investments in the Trust ((or Series or any Classes thereof,))
and (b) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES AND CLASSES
Section 5. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange, or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall be referred to as "assets
belonging to" that Series. In addition, any assets, income, earnings,
profits, and proceeds thereof, funds, or payments [which]((that))
are no t readily identifiable as belonging to any particular
Series ((or Class,)) shall be allocated by the Trustees between and
among one or more of the Series ((or Classes)) in such manner as they,
in their sole discretion, deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of
all Series ((or Classes)) for all purposes and shall be referred to as
assets belonging to that Series ((or Class)). The assets belonging to
a particular Series shall be so recorded upon the books of the Trust
((or of its agent or agents and)) shall be held by the Trustees in
[T]((t))rust for the benefit of the holders of Shares of that Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges, and
reserves attributable to that Series, ((except that liabilities and
expenses may, in the Trustees' discretion, be allocated solely to a
particular Class and, in which case, shall be borne by that Class)).
Any general liabilities, expenses, costs, charges, or reserves of the
Trust that are not readily identifiable as belonging to any particular
Series or Class shall be allocated and charged by the Trustees between
or among any one or more of the Series or Classes in such manner as
the Trustees, in their sole discretion, deem fair and equitable ((and
shall be referred to as "liabilities belonging to" that Series or
Class)). Each such allocation shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes. Any creditor
of any Series may look only to the assets of that Series to satisfy
such creditor's debt. ((No Shareholder or former Shareholder of any
Series shall have a claim on or any right to any assets allocated or
belonging to any other Series.))
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
[LIMITATION OF PERSONAL LIABILITY]
((STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY))
Section 7. ((Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every shareholder by
virtue of having become a shareholder shall be held to have expressly
assented and agreed to be bound by the terms hereof. No Shareholder of
the Trust and of each Series shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or by or on behalf of
any Series)). The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum
of money or assessment whatsoever other than such as the Shareholder
may, at any time, personally agree to pay by way of subscription for
any Shares or otherwise. Every note, bond, contract, or other
undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust ((or to a Series)) shall include a recitation
limiting the obligation represented thereby to the Trust ((or to one
or more Series)) and its ((or their assets)) (but the omission of such
a recitation shall not operate to bind any Shareholder (((or
Trustee).))
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable
to carry out that responsibility.
[ELECTION: INITIAL TRUSTEES]
((INITIAL TRUSTEES; ELECTION))
Section 2. ((The initial Trustees shall be at least three individuals
who shall affix their signatures hereto.)) On a date fixed by the
Trustees, the Shareholders shall elect not less than three Trustees. A
Trustee shall not be required to be a Shareholder of the Trust. [The
initial Trustees shall be Edward C. Johnson 3d, Caleb Loring, Jr. and
Frank Nesvet and such other individuals as the Board of Trustees shall
appoint pursuant to Section 4 of the Article IV.]
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds (((2/3 ))) of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing
to be retired or who has become incapacitated by illness or injury may
be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any [S]((s))pecial [M]((m))eeting of the Trust by a vote
of two-thirds(((2/3 ))) of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation,
retirement, [removal][incapacity,]or [inability]removal of any of the
Trustees, or in case a vacancy shall, by reason of an increase in
number ((of the Trustees,)) or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the [Investment Company Act of] 1940 ((Act)). Such
appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by recording in the records of
the Trust, whereupon the appointment shall take effect. An appointment
of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement,
resignation((,)) or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only
at or after the effective date of said retirement, resignation((,)) or
increase in number of Trustees. As soon as any Trustee so appointed
shall have accepted this [t]((T))rust((,)) t he [t]((T))rust
estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The ((foregoing)) power of
appointment is subject to the provisions of Section 16(a) of the 1940
Act((, as modified by or interpreted by any applicable order or orders
of the Commission or any rules or regulations adopted or
interpretative releases of the Commission)).
TEMPORARY ABSENCE OF TRUSTEES
Section 5. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six (((6 ))) months at any one time
to any other Trustee or Trustees, provided that in no case shall less
than two Trustees personally exercise the other powers hereunder
except as herein otherwise expressly provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more
than twelve (12), serving hereunder at any time shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is [absent from the
Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or is] physically
or mentally incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy[, absence] or incapacity shall be
conclusive [, provided, however, that no vacancy shall remain unfilled
for a period longer than six calendar months].
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees((,)) in all instances((,)) shall act as
principals[,] and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. ((Except as otherwise
provided herein or in the 1940 Act,)) [T]((t))he Trustees shall not in
any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power
to make any and all investments [which]((that)) they, in their
[uncontrolled]discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in [the]((this))
Declaration of Trust or the Bylaws of the Trust, ((if any,)) the
Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested[,] without((,)) in any event((,)) being
bound or limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on((,)) and lease any or all of
the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ ((one or more)) [a] bank((s)), [or trust
company]((trust companies, companies that are members of a national
securities exchange, or other entities permitted under the 1940 Act,
as modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) as custodian((s)) of any
assets of the Trust subject to any conditions set forth in this
Declaration of Trust or in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a [p]((P))rincipal [u]((U))nderwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [agent,]((investment adviser,
manager,)) custodian((,)) [or] underwriter ((, or other agent or
independent contractor.))
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section [4(b)]((4)) hereof.
(j) To vote or give assent [,] or exercise any rights of ownership
[,] with respect to stock or other securities or property; and to
execute and deliver powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered((,)) or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees [, subject in either case to proper safeguards according
to the usual practice of Massachusetts trust companies or investment
companies].
(m) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article III ((and to
establish Classes of such Series having relative rights, powers, and
duties as the Trustees may provide consistent with applicable laws.))
(n) To allocate assets, liabilities((,)) and expenses of the Trust to
a particular Series ((or Class, as appropriate,)) or to apportion the
same between or among two or more Series ((or Classes, as
appropriate,)) provided that any liabilities or expenses incurred by a
particular Series ((or Class)) shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation((,)) or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy((,)) including, but
not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money, and to pledge, mortgage((,)) or hypothecate the
assets of the Trust, subject to ((the)) applicable
[limitations]((requirements)) of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders[,] and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder.
(((t) To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.))
(((u) To interpret the investment policies, practices or limitations
of any Series.))
(((v) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or
powers.))
[(t)](((w ))) Notwithstanding any other provision hereof, to
invest all of the assets of any [s]((S))eries in a single open-end
investment company, including investment by means of transfer of such
assets in exchange for an interest or interests in such investment
company.
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.))
((The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws((, if any.))
ACTION BY THE TRUSTEES
Section 3. [The]((Except as otherwise provided herein or in the 1940
Act, the)) Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by
telephone consent provided a quorum of Trustees participate in any
such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting [of] ((at which)) the
Trustees ((are present in person.)) At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the
Trustees or by any two other Trustees. Notice of the time, date((,))
and place of all meetings of the Trustees shall be given by the party
calling the meeting to each Trustee by telephone((, telefax)),
telegram((,)) or ((other electro-mechanical means)) sent to his home
or business address at least twenty-four ((( 24 ))) hours
in advance of the meeting or by written notice mailed to his home or
business address at least seventy-two(( ( 72 ))) hours in
advance of the meeting. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who
executes a written waiver of notice with respect to the meeting.
Subject to the requirements of the 1940 Act, the Trustees by majority
vote may delegate to any one of their number their authority to
approve particular matters or take particular actions on behalf of the
Trust. ((Written consents or waivers of Trustees may be executed in
one or more counterparts. Execution of a written consent or waiver and
delivery thereof to the Trust may be accomplished by telefax or other
electro-mechanical means.))
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the
Trust, and may be the chief executive, financial and accounting
officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust((;)) interest
expense, taxes, fees and commissions of every kind[,]((;)) expenses of
pricing Trust portfolio securities[,]((;)) expenses of issue,
repurchase and redemption of shares including expenses attributable to
a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and
[S]((s))tate laws and regulations[,]((;)) charges of custodians,
transfer agents, and registrars[,]((;))expenses of preparing and
setting up in type [P]((p))rospectuses and[S]((s))tatements of
[A]((a))dditional [I]information[,]((;)) expenses of printing and
distributing prospectuses sent to existing Shareholders[,]((;))
auditing and legal expenses[,]((;)) reports to Shareholders[,]((;))
expenses of meetings of Shareholders and proxy solicitations
therefor[,]((;)) insurance expense[,]((;)) association membership
dues((;)) and for such non-recurring items as may arise, including
litigation to which the Trust is a party[,]((;)) and for all losses
and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses((,)) and
liabilities the Trustees shall have a lien on the assets belonging to
the appropriate Series prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL, UNDERWRITER, AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees
may((,))in their discretion ((and)) from time to time((,)) enter into
an investment advisory or management contract(s) with respect to the
Trust or any Series thereof whereby the other party(ies) to such
contract(s) shall undertake to furnish the Trustees such management,
investment advisory, statistical((,)) and research facilities and
services and such other facilities and services, if any, and all upon
such terms and conditions, as the Trustees may((,)) in their
discretion((,)) determine. Notwithstanding any provisions of this
Declaration of Trust, the Trustees may authorize the investment
adviser(s) (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities and other investment instruments of
the Trust on behalf of the Trustees or may authorize any officer,
agent, or Trustee to effect such purchases, sales((,)) or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales((,)) and
exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
((as modified by or interpreted by any applicable order or orders of
the Commission or any rules or regulations adopted or interpretative
releases of the Commission thereunder,)) including those relating to
Shareholder approval, authorize the investment adviser to employ one
or more sub-advisers from time to time to perform such of the acts and
services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time
enter into [(a)]((an exclusive or non-exclusive contract(s) on behalf
of the Trust or any Series or Class thereof)) providing for the sale
of the Shares, whereby the Trust may either agree to sell the Shares
to the other party to the contract or appoint such other party its
sales agent for such Shares. In either case, the contract shall be on
such terms and conditions as may be prescribed in the Bylaws, if any,
and such further terms and conditions as the Trustees may((,)) in
their discretion((,)) determine not inconsistent with the provisions
of this Article [,]VII or of the Bylaws, if [;]any((.))
[and][s]((S))uch contract may also provide for the repurchase or sale
of Shares by such other party as principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may, in their discretion ((and)) from time to
time((,)) enter into [a]((one or more)) transfer agency and
Shareholder service contract((s)) whereby the other party shall
undertake to furnish the Trustees with transfer agency and Shareholder
services. [The]((Such)) contract((s)) shall be on such terms and
conditions as the Trustees may((,)) in their discretion((,)) determine
not inconsistent with the provisions of this Declaration of Trust or
of the Bylaws, if any. Such services may be provided by one or more
entities.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1, 2
and 3 of this Article VII or in Article IX hereof may be entered into
with any corporation, firm, partnership, trust or association,
although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or
rendered voidable by reason of the existence of any relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the Bylaws, if any. The same person
(including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections
1, 2 and 3 above or Article IX, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any
or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections 1 and 2 of
this Article VII shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act, ((as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretative releases of the
Commission)) ([including any amendments thereof] or other applicable
Act of Congress hereafter enacted)((,)) with respect to its
continuance in effect, [and no amendment to any contract, entered into
pursuant to Section 1 shall be effective unless assented to by a
Majority Shareholder Vote] ((its amendment)), its termination, and the
method of authorization and approval of such contract or renewal
thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote
[(i)](((a ))) for the election of Trustees as provided in
Article IV, Section 2[,]((;)) [(ii)](((b ))) for the removal of
Trustees as provided in Article IV, Section 3(d)[,]((;))[
(iii)](((c ))) with respect to any investment advisory or
management contract as provided in Article VII, Section 1[,] ((and 5;
(d) with respect to any termination, merger, consolidation,
reorganization, or sale of assets of the Trust or any of its Series or
Classes as provided in Article XII, Section 4;)) [(iv)](((e )))
with respect to the amendment of this Declaration of Trust as provided
in Article XII, Section 7; [(v)](f) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or
not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or
the Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust; and
[(vi)](((g ))) with respect to such additional matters relating
to the Trust as may be required or authorized by law, by this
Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the Trust with the Commission [the Securities and
Exchange Commission (the "Commission")] or any [S]((s))tate, as the
Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted by individual Series, ((except as provided in the
following sentence and)) except [(i)](((a ))) when required by
the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series; and[ (ii)](9(((b ))) when the Trustees have
determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to
vote thereon. ((The Trustees may also determine that a matter affects
only the interests of one or more Classes of a Series, in which case,
any such matter shall be voted on by such Class or Classes.)) A
Shareholder of each Series or Class thereof shall be entitled to one
vote for each dollar of net asset value (number of Shares owned times
net asset value per share) of such [s]((S))eries[,] ((or Class
thereof)) on any matter on which such [s]((S))hareholder is entitled
to vote((,)) and each fractional dollar amount shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law,
this Declaration of Trust or any Bylaws of the Trust((, if any,)) to
be taken by Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be held as specified
in Section 2 of Article IV at the principal office of the Trust or
such other place as the Trustees may designate. Special meetings of
the Shareholders of any Series may be called by the Trustees and shall
be called by the Trustees upon the written request of Shareholders
owning at least one-tenth ((( 1/10 ))) of the outstanding
Shares entitled to vote. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act, as
((modified by or interpreted by any applicable order or orders of))
the [same may be amended from time to time] ((Commission or any rules
or regulations adopted or interpretative releases of the Commission,))
seek the opportunity of furnishing materials to the other Shareholders
with a view to obtaining signatures on such a request for a meeting,
the Trustees shall comply with the provisions of said Section 16(c)
with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials
to such Shareholders of record. Shareholders shall be entitled to at
least fifteen (((15 ))) days' notice of any meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any
Series ((or Class)) shall vote as a Series ((or Class)) then a
majority of the aggregate number of Shares of that Series ((or Class))
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series ((or Class)). Any lesser number
shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except
when a larger vote is required ((by applicable law or)) by any
provision of this Declaration of Trust or the Bylaws, ((if any,)) a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or
requires that the holders of any Series ((or Class)) shall vote as a
Series[,] ((or Class,)) then a majority of the Shares of that Series
((or Class)) voted on the matter shall decide that matter insofar as
that Series ((or Class)) is concerned. ((Shareholders may act by
unanimous written consent. Actions taken by a Series or Class may be
consented to unanimously in writing by Shareholders of that Series or
Class.))
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank((, a company
that is a member of a national securities exchange,)) [or](( trust
company, or other entity permitted under the 1940 Act, as modified by
or interpreted by any applicable order or orders of the Commission or
any rules or regulations adopted or interpretative releases of the
Commission thereunder,)) having capital, surplus, and undivided
profits of at least two million dollars ($2,000,000), or such other
amount as shall be allowed by the Commission or by the 1940 Act, as
custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be
contained in the Bylaws of the Trust((, if any:))
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(2) to compute, if authorized to do so, [by the Trustees],the Net
Asset Value of any Series ((or Class thereof)) in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.
[If so directed by a Majority Shareholder Vote, the custodian shall
deliver and pay over all property of the Trust held by it as specified
in such vote.]
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such
sub-custodian shall be a bank, ((a company that is a member of a
national securities exchange,)) [or] trust company, ((or other entity
permitted)) [organized] ((under the)) [laws of the United States or
one of the states thereof] ((1940 Act, as modified by or interpreted
by any applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder, having capital,)) [and] surplus, and undivided profits of
at least two million dollars ($2,000,000)((,)) or such other [person
as may be permitted by the Commission, or otherwise in accordance with
the 1940 Act as from time to time amended] ((amount as shall be
allowed by the Commission, or by the 1940 Act.))
CENTRAL [CERTIFICATE]DEPOSITORY SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934[,] or
such other person as may be permitted by the Commission[,] or
otherwise in accordance with the 1940 Act((,))[as from time to time
amended,] pursuant to which system all securities of any particular
[c]((C))lass or [s]((S))eries of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such
((securities))[,]((;)) provided that all such deposits shall be
subject to withdrawal only upon the order of the Trust ((or its
custodian, subcustodians, or other authorized agents.))
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees.
(b) The Trustees shall have the power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends, at the election of
the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series(( , or Classes thereof,)) at the election of each
Shareholder of that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock dividend))
pro rata among the Shareholders of a particular Series((, or Class
thereof,)) as of the record date of that Series ((or Class)) fixed as
provided in ((Article XII,)) Section3[hereof a "stockdividend"].
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other authorized
agent of that Series a written request or such other form of request
as the Trustees may((,)) from time to time((,)) authorize, requesting
that the Series purchase the Shares in accordance with this Section 2;
and the Shareholder so requesting shall be entitled to require the
Series to purchase, and the Series or the principal underwriter of the
Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series((,)) and payment for such
Shares ((less any applicable deferred sales charges and/or fees))
shall be made by the Series or the principal underwriter of the Series
to the Shareholder of record within seven (7) days after the date upon
which the request is effective.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series ((or Class))
shall mean that amount by which the assets of that ((Series))[,] or
Class exceed its liabilities, all as determined by or under the
direction of the Trustees. Such value per Share shall be determined
separately for each Series ((or Class)) of Shares and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities
for which market quotations are readily available, at the market value
of such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees,
provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations((,)) and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any [O]((o))rder of the Commission applicable
to the Series. The Trustees may delegate any of its powers and duties
under this Section 3 with respect to appraisal of assets and
liabilities. At any time((,)) the Trustees may cause the value
[par]((per)) Share last determined to be determined again in ((a))
similar manner and may fix the time when such redetermined value shall
become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify((,)) but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or
liable in any event for neglect or wrongdoing of them or any officer,
agent, employee((,)) or investment adviser of the Trust, but nothing
contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence((,)) or reckless disregard of the duties
involved in the conduct of his office.
[INDEMNIFICATION]
((INDEMNIFICATION OF COVERED PERSONS))
Section 2.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit((,)) or
proceeding in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office((;)) or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence((,)) or reckless disregard of
the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
[i]((I))nterested [p]((P))ersons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any Shareholder may, by appropriate
legal proceedings, challenge any such determination by the Trustees,
or by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer((,)) and shall inure to
the benefit of the heirs, executors((,)) and administrators of such a
person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit((,)) or proceeding of the character
described in [p]((P))aragraph (a) of this Section 2 may be paid by the
applicable Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the applicable Series if
it is ultimately determined that he is not entitled to indemnification
under this Section 2; provided, however, that either
[(a)](((i ))) such Covered Person shall have provided
appropriate security for such undertaking[,]((;)) [(b)](((ii )))
the Trust is insured against losses arising out of any such advance
payments((;)) or [(c)](((iii ))) either a majority of the
Trustees who are neither interested persons of the Trust nor parties
to the matter, or independent legal counsel in a written opinion,
shall have determined, based upon a review of readily available facts
(as opposed to a trial-type inquiry or full investigation), that there
is reason to believe that such Covered Person will be found entitled
to indemnification under this Section 2.
SHAREHOLDERS
INDEMNIFICATION OF SHAREHOLDERS
Section 3. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators((,)) or
other legal representatives or((,)) in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE XII
MISCELLANEOUS
[TRUST NOT A PARTNERSHIP ETC.]
((TRUST NOT A PARTNERSHIP, ETC.))
Section 1. It is hereby expressly declared that a trust is created
hereby and not a partnership((, joint stock association, corporation,
bailment, or any form of a legal relationship other than a trust)). No
Trustee hereunder shall have any power to ((personally)) bind
[personally] either the Trust's officers or any Shareholder. All
persons extending credit to, contracting with((,)) or having any claim
against the Trust or the Trustees shall look only to the assets of the
appropriate Series for payment under such credit, contract((,)) or
claim; and neither the Shareholders nor the Trustees, nor any of their
agents, whether past, present((,)) or future, shall be personally
liable therefor. Nothing in this Declaration of Trust shall protect a
Trustee against any liability to which the Trustee would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence((,)) or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
((TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY))
[TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY]
Section 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of Section 1 of this Article XII
and to Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1
of this Article XII and to Article XI, shall be under no liability for
any act or [O]((o))mission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to
give any bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividend((s,)) or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares shall go into
effect; or in lieu of closing the stock transfer books as aforesaid,
the Trustees may fix in advance a date not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividend((s)), or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares shall
go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting,
or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend, or
to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
[TERMINATION OF TRUST]
((DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.))
[Section 4.]
[(a)] ((Section 4.1 Duration.)) [This] ((The)) Trust shall continue
without limitation of time((,)) but subject to the provisions [of
sub-section] [(b)]of this [Section 4]((Article XII.))
[(b) Subject to a Majority Shareholder Vote of each Series affected
by the matter or, if applicable, to a Majority Shareholder Vote of the
Trust, the Trustees may
(i) sell and convey the assets of the Trust or any affected Series
to another trust, partnership, association or corporation organized
under the laws of any state which is a diversified open-end management
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of
beneficial interest or stock of such trust, partnership, association
or corporation; or
(ii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.
Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees shall be discharged
of any and all further liabilities and duties hereunder and the right,
title and interest of all parties shall be cancelled and discharged.]
((Section 4.2 Termination of the Trust, a Series or a Class.
(a) Subject to applicable Federal and state law, the Trust or any
Series or Class thereof may be terminated (i) by Majority Shareholder
Vote of the Trust, each Series affected, or each Class affected, as
the case may be; or (ii) without the vote or consent of Shareholders
by a majority of the Trustees either at a meeting or by written
consent. The Trustees shall provide written notice to the affected
Shareholders of a termination effected under clause (ii) above. Upon
the termination of the Trust or the Series or Class,))
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;))
(((ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below.))
(((iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights.))
(((b) After termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.))
((Section 4.3. Merger, Consolidation, and Sale of Assets.
Subject to applicable Federal and state law and except as
otherwise provided in Section 4.4 below, the Trust or any Series
thereof may merge or consolidate with any other corporation,
association, trust, or other organization or may sell, lease, or
exchange all or substantially all of the Trust property or Trust
property allocated or belonging to such Series, including its good
will, upon such terms and conditions and for such consideration when
and as authorized at any meeting of Shareholders called for such
purpose by a Majority Shareholder Vote of the Trust or affected
Series, as the case may be. Any such merger, consolidation, sale,
lease, or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to Massachusetts law.))
((Section 4.4.Incorporation; Reorganization . Subject to
applicable Federal and state law, the Trustees may without the vote or
consent of Shareholders cause to be organized or assist in organizing
a corporation or corporations under the laws of any jurisdiction or
any other trust, partnership, limited liability company, association,
or other organization to take over all of the Trust property or the
Trust property allocated or belonging to such Series or to carry on
any business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series thereof sells, conveys, or transfers
substantially all of its assets to another entity or merges or
consolidates with another entity.))
FILING OF COPIES, REFERENCES, AND HEADINGS
Section 5. The original or a copy of this instrument and of each
Declaration of Trust supplemental hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of
this instrument and of each supplemental Declaration of Trust shall be
filed by the Trustees with the Secretary of [t]((T))he Commonwealth of
Massachusetts and the Boston City Clerk, as well as any other
governmental office where such filing may from time to time be
required. Anyone dealing with the Trust may rely on a certificate by
an officer or Trustee of the Trust as to whether or not any such
supplemental Declarations of Trust have been made and as to any
matters in connection with the Trust hereunder, and with the same
effect as if it were the original, may rely on a copy certified by an
officer or Trustee of the Trust to be a copy of this instrument or of
any such supplemental Declaration of Trust. In this instrument or in
any such supplemental Declaration of Trust, references to this
instrument and all expressions like "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as amended or
affected by any such supplemental Declaration of Trust. Headings are
placed herein for convenience of reference only and in case of any
conflict, the text of this instrument, rather than the headings, shall
control. This instrument may be executed in any number of counterparts
each of which shall be deemed an original.
APPLICABLE LAW
Section 6. The [t]((T))rust set forth in this instrument is made in
[t]((T))he Commonwealth of Massachusetts, and it is created under and
is to be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust((, and the absence of a specific
reference herein to any such power, privilege, or action shall not
imply that the Trust may not exercise such power or privilege or take
such actions.))
AMENDMENTS
[Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case,
the Trustees shall amend or otherwise supplement this instrument, by
making a declaration of trust supplemental hereto, which thereafter
shall form a part hereof, except that an amendment which shall affect
the Shareholders of one or more Series but not the Shareholders of all
outstanding Series shall be authorized by vote of the Shareholders
holding a majority of the Shares entitled to vote of each Series
affected and no vote of Shareholders of a Series not affected shall be
required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Copies of the supplemental declaration of trust shall be filed as
specified in Section 5 of this Article XII.]
((Section 7. Except as specifically provided herein, the Trustees
may, without shareholder vote, amend or otherwise supplement this
Declaration of Trust by making an amendment, a Declaration of Trust
supplemental hereto or an amended and restated Declaration of Trust.
Shareholders shall have the right to vote (a) on any amendment that
would affect their right to vote granted in Section 1 of Article VIII;
(b) on any amendment that would alter the maximum number of Trustees
permitted under Section 6 of Article IV; (c) on any amendment to this
Section 7; (d) on any amendment as may be required by law or by the
Trust's registration statement filed with the Commission; and (e) on
any amendment submitted to them by the Trustees. Any amendment
required or permitted to be submitted to Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more
Series or Classes shall be authorized by vote of the Shareholders of
each Series or Class affected and no vote of shareholders of a Series
or Class not affected shall be required. Notwithstanding anything else
herein, any amendment to Article XI shall not limit the rights to
indemnification or insurance provided therein with respect to action
or omission of Covered Persons prior to such amendment.))
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified date
as set forth in the Bylaws, ((if any,)) provided, however, that the
Trustees may, without Shareholder approval, change the fiscal year of
the Trust.
USE OF THE WORD "FIDELITY"
Section 9. Fidelity Management & Research Company ("FMR") has
consented to the use by any Series of the Trust of the identifying
word "Fidelity" in the name of any Series of the Trust at some future
date. Such consent is conditioned upon the employment of FMR ((or a
subsidiary or affiliate thereof)) as investment adviser of each Series
of the Trust. As between the Trust and itself, FMR controls the use of
the name of the Trust insofar as such name contains the identifying
word "Fidelity((.))"[.] FMR may from time to time use the identifying
word "Fidelity" in other connections and for other purposes,
including, without limitation, in the names of other investment
companies, corporations((,)) or businesses [which]((that)) it may
manage, advise, sponsor or own or in which it may have a financial
interest. FMR may require the Trust or any Series thereof to cease
using the identifying word "Fidelity" in the name of the Trust or any
Series thereof if the Trust or any Series thereof ceases to employ FMR
or a subsidiary or affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
((Section 10. (a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.))
(((b) If any provision of this Declaration Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all [of] the [initial]
Trustees of the Trust, have executed this instrument this [ 15th day
of September, 1994] ((_________ day of__________, 1998)).
[SIGNATURE LINES OMITTED]
EXHIBIT 1
((UNDERLINED)) DISCLOSURE WILL BE ADDED AND [BRACKETED] DISCLOSURE
WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY INCOME FUND:
FIDELITY GINNIE MAE [PORTFOLIO] ((FUND))
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION made] ((AGREEMENT AMENDED and RESTATED as of)) this
[1st day of August, 1994] ((day of ____, 1998)), by and between
Fidelity Income 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 Ginnie Mae [Portfolio]
((Fund)) (hereinafter called the "Portfolio"), and Fidelity Management
& Research Company, a Massachusetts corporation (hereinafter called
the "Adviser") ((as set forth in its entirety below)).
Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the
Adviser hereby consent, pursuant to Paragraph 6 of the existing
Management Contract [modified December 1, 1992,] ((dated August 1,
1994)) to a modification of said Contract in the manner set forth
below. The [Modified] ((Amended)) Management Contract shall((,)) when
executed by duly authorized officers of the Fund and [the] Adviser,
take effect on [the later of August 1, 1994] ((_____, 1998)).
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Advisers hall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the fund's Declaration of
Trust or other organizational document) determined as of the close of
business on each business day throughout the month. The Group Fee Rate
shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
[120 - 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))
(b) Individual Fund Fee R a te. The Individual Fund Fee Rate
shall be .30%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.
(c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security ((or other investment
instrument)).
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until [June
30, 1995] ((June 30, 1999)) and indefinitely thereafter, but only so
long as the continuance after such date shall be specifically approved
at least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission)).
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange] Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 1
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
(A)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
TAXABLE BOND
Capital & Income ((pound)) 4/30/97 $ 2,173.2 0.61%
Intermediate Bond ((pound)) 4/30/97 3,007.7 0.44
Investment Grade Bond ((pound)) 4/30/97 1,418.2 0.44
Short-Term Bond ((pound)) 4/30/97 986.3 0.44
Spartan Government Income 4/30/97 275.3 0.60*
Spartan High Income ((pound)) 4/30/97 1,634.2 0.80
Spartan Short-Intermediate 4/30/97 73.0 0.65
Government
The North Carolina Capital
Management Trust:
Term Portfolio 6/30/97 66.5 0.36
Ginnie Mae ((pound)) 7/31/97 794.2 0.44
Spartan Limited Maturity 7/31/97 702.1 0.54*
Government ((pound))
Target Timeline Funds: ((pound))
1999 7/31/97 9.7 0.00*
2001 7/31/97 8.2 0.00*
2003 7/31/97 10.6 0.00*
Spartan Ginnie Mae 8/31/97 461.8 0.51*
Government Securities 9/30/97 978.5 0.44
Short-Intermediate Government 9/30/97 122.2 0.44
Spartan Investment Grade Bond ((pound)) 9/30/97 404.0 0.48*
Spartan Short-Term Bond ((pound)) 9/30/97 306.6 0.50*
Advisor Mortgage Securities:
Class A 10/31/97 1.6 0.44*
Class B 10/31/97 1.2 0.44*
Class T 10/31/97 13.0 0.44*
Institutional Class 10/31/97 15.2 0.44*
Initial Class 10/31/97 497.7 0.44
Advisor Government Investment:
Class A 10/31/97 0.7 0.44*
Class B 10/31/97 17.3 0.44*
Class T 10/31/97 171.0 0.44*
Class C ((hollow diamond)) 10/31/98** 24.4 0.44*
Institutional Class 10/31/97 22.0 0.44*
Advisor High Yield: ((pound))
Class A 10/31/97 $ 19.7 0.59%
Class B 10/31/97 460.7 0.59
Class T 10/31/97 1,972.7 0.59
Class C ((hollow diamond)) 10/31/98** 110.9 0.59
Institutional Class 10/31/97 54.6 0.59
Advisor Short Fixed-Income: ((pound))
Class A 10/31/97 3.1 0.44*
Class T 10/31/97 380.2 0.44
Class C ((hollow diamond)) 10/31/98** 0.7 0.44
Institutional Class 10/31/97 5.9 0.44*
Advisor Intermediate Bond: ((pound))
Class A 11/30/97 2.1 0.44*
Class B 11/30/97 19.6 0.44*
Class T 11/30/97 262.1 0.44
Class C 11/30/97 0.0 0.44*
Institutional Class 11/30/97 192.5 0.44
Institutional Short-Intermediate 11/30/97 342.8 0.45
Government
Real Estate High Income 11/30/97 46.1 0.74
Advisor Emerging Markets
Income: (Rex-All)
Class A 12/31/97 1.3 0.69*
Class B 12/31/97 22.3 0.69
Class T 12/31/97 92.2 0.69
Class C 12/31/97 0.0 0.69*
Institutional Class 12/31/97 3.6 0.69*
Advisor Strategic Income: (Rex-all)
Class A 12/31/97 1.7 0.59*
Class B 12/31/97 45.5 0.59
Class T 12/31/97 110.6 0.59
Class C 12/31/97 0.3 0.59*
Institutional Class 12/31/97 6.2 0.59*
Global Bond ((epslon)) 12/31/97 92.5 0.69
New Markets Income (Rex-all) 12/31/97 386.4 0.69
Real Estate High Income II 12/31/97 73.9 0.74
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
Variable Insurance Products: ((pound))
High Income :
Initial Class 12/31/97 $ 1,936.9 0.59%
Service Class 12/31/9 7 0.0 0.59
Variable Insurance Products II:
Investment Grade Bond 12/31/97 262.9 0.44
U.S. Bond Index 2/2 8 /98 632.8 0.32*
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of February 28, 1998 , if fiscal year end figures are not yet
available.
(b) Average net assets are computed on the basis of average net assets
of each fund at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from FMR pursuant to voluntary or state expense limitations. Funds so
affected are indicated by an (*).
** 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.
((epslon)) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR
Far East, 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.
((hollow diamond)) The ratio of net advisory fees to average net
assets paid to FMR represents the amount as of the prior fiscal year
end. Updated ratios will be presented for each class of shares of the
fund when the next fiscal year end figures are available.
INC-pxs-0598 CUSIP#31671K105/FUND#015
701690 CUSIP#316172105/FUND#054
CUSIP#31617K303/FUND#452
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ---------------------------------------------------------------------
FIDELITY INCOME FUND: FIDELITY GINNIE MAE FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Phyllis Burke Davis, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Income Fund: Fidelity Ginnie Mae Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders
of the fund to be held at the office of the trust at 82 Devonshire
St., Boston, MA 02109, on July 15, 1998 at 9:00 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 31617K105/fund# 015
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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>
FOR AGAINST ABSTAIN
2. To ratify the selection of Price Waterhouse LLP as [ ] [ ] [ ] 2.
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and [ ] [ ] [ ] 3.
Restated Declaration of Trust.
4. To approve an amended management contract for the [ ] [ ] [ ] 4.
fund.
5. To amend the fund's fundamental investment [ ] [ ] [ ] 5.
limitation concerning diversification.
</TABLE>
MOG-PXC-0598 cusip # 31617K105/fund # 015
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ---------------------------------------------------------------------
FIDELITY INCOME FUND: FIDELITY GOVERNMENT SECURITIES FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Phyllis Burke Davis, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Income Fund: Fidelity Government Securities Fund
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on July 15, 1998 at 9:00 a.m. and at
any adjournments thereof. All powers may be exercised by a majority
of said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316172105/fund# 054
Please refer to the Proxy Statement discussion of each of these
matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the twelve nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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>
____________________________________________________________________
FOR AGAINST ABSTAIN
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as [ ] [ ] [ ] 2.
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and [ ] [ ] [ ] 3.
Restated Declaration of Trust.
</TABLE>
GOV-PXC-0598 cusip # 316172105/fund # 054
Vote this proxy card TODAY! Your prompt response will
save 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.
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FIDELITY INCOME FUND: SPARTAN LIMITED MATURITY GOVERNMENT FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Phyllis Burke Davis, or any one or
more of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Income Fund: Spartan Limited Maturity Government
Fund which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at
82 Devonshire St., Boston, MA 02109, on July 15, 1998 at 9:00 a.m. and
at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if
only one votes and acts, then by that one. This Proxy shall be voted
on the proposals described in the Proxy Statement as specified on the
reverse side. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 31617K303/fund# 452
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 twelve nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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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FOR AGAINST ABSTAIN
2. To ratify the selection of Price Waterhouse LLP as [ ] [ ] [ ] 2.
independent accountants of the fund.
3. To authorize the Trustees to adopt an Amended and [ ] [ ] [ ] 3.
Restated Declaration of Trust.
5 . To amend the fund's fundamental investment [ ] [ ] [ ] 5 .
limitation concerning diversification.
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SLM-PXC-0598 cusip # 31617K303/fund # 452
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY GINNIE MAE FUND
FIDELITY GOVERNMENT SECURITIES FUND
SPARTAN LIMITED MATURITY GOVERNMENT FUND
Dear Shareholder:
I am writing to let you know that a special meeting of shareholders of
the Fidelity funds mentioned above will be held in July. The purpose
of the meeting is to vote on several important proposals that affect
the funds and your investment in them. As a shareholder, you have the
opportunity to voice your opinion on the matters that affect your
fund(s). This package contains information about the proposals and
the materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card(s). PLEASE VOTE AND RETURN YOUR CARD(S) PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees believe these proposals are in the best
interest of shareholders. They recommend that you vote for each
proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of the proposals is described in greater detail in
the enclosed proxy statement.
VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED.
To cast your vote, simply complete the proxy card(s) enclosed in this
package. Be sure to sign the card(s) before mailing it in the
postage-paid envelope.
If you have any questions before you vote, please call Fidelity at
1-800-544-8888. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important information to help you understand and vote on the proposals
Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposals to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You may be asked to vote on the following proposals:
1. To elect a Board of Trustees.
2. To ratify the selection of Coopers & Lybrand L.L.P. and Price
Waterhouse LLP as independent accountants of the funds.
3. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
4. To approve an amended management contract for Fidelity Ginnie Mae
Fund.
5. To amend Fidelity Ginnie Mae Fund's and Spartan Limited Maturity
Government Fund's fundamental investment limitation concerning
diversification.
THE PROXY STATEMENT SAYS THAT THE BOARD OF TRUSTEES HAS APPROVED THESE
PROPOSALS. WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of each fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of shareholders, including approving policy changes such as
those proposed in the proxy statement. In addition, the Trustees
review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to the
funds.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. They also
sign or certify any financial statements of the funds that are
required by law to be independently certified and filed with the
Securities and Exchange Commission (SEC).
WHY ARE THE FUNDS PROPOSING TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST? (PROPOSAL 3)
The new Declaration of Trust is a more modern form of trust instrument
for a Massachusetts business trust. It gives the Trustees more
flexibility, and, subject to the applicable requirements of federal
and state law, broader authority to act. This increased flexibility
may allow the Trustees to react more quickly to changes in competitive
and regulatory conditions. Adoption of the new Declaration of Trust
will not alter the Trustees' existing fiduciary obligations to act in
the best interests of the funds' shareholders. Before utilizing any
new flexibility that the new Declaration of Trust may afford, the
Trustees must first consider the shareholders' interests and act in
accordance with such interests. The new Declaration of Trust amends
the current Declaration of Trust in a number of significant ways.
Please review the proxy statement for specific details.
WHY IS FIDELITY GINNIE MAE FUND PROPOSING TO ADOPT AN AMENDED
MANAGEMENT CONTRACT?
(PROPOSAL 4)
The amended management contract principally modifies the current
contract to provide for lower management fees to be paid to Fidelity
Management & Research Company (FMR) when FMR's assets under management
exceed certain levels. In addition, the amended management contract
allows FMR and the trust, on behalf of the fund, to modify the
management contract subject to the requirements of the Investment
Company Act of 1940.
The amended management contract will result in a management fee that
is the same as or lower than the fee payable under the present
contract. Please refer to the proxy statement for specific details of
the amended management contract.
WHAT IS THE BENEFIT OF AMENDING THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION FOR FIDELITY GINNIE MAE FUND AND SPARTAN
LIMITED MATURITY GOVERNMENT FUND? (PROPOSAL 5)
This proposal would permit the funds, subject to the requirements of
the Investment Company Act of 1940, to invest without limit in the
securities of other investment companies. As a result of an order of
exemption granted by the SEC, the funds may invest up to 25% of their
total assets in non-publicly offered money market and short-term bond
funds (the Central Funds) managed by FMR or an affiliate of FMR. FMR
anticipates that the Central Funds will benefit each fund by enhancing
the efficiency of cash management and by providing increased
short-term investment opportunities.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED EACH PROPOSAL?
Yes. The Board of Trustees has unanimously approved all of the
proposals and recommends that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of a fund on the record date. The record date is
May 18, 1998.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card, and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or
how to vote your shares, please call Fidelity at 800-544-8888.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account
registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform
exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
