SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the [X]
Registrant
Filed by a [ ]
Party other than the
Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to Sec. 240.14a-11(c) or
Sec. 240.14a-12
(Name of Registrant as
Specified In Its Charter)
Fidelity Puritan Trust
(Name of Person(s) Filing
Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below
per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of
securities to which
transaction applies:
(2) Aggregate number of
securities to which
transaction applies:
(3) Per unit price or other
underlying value of
transaction
computed pursuant to Exchange
Act Rule 0-11:
(4) Proposed maximum aggregate
value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with
preliminary materials.
[ ] Check box if any part of the
fee is offset as provided by
Exchange Act Rule 0-11(a) (2)
and identify the filing for
which the offsetting fee was
paid previously. Identify the
previous filing by
registration statement
number, or the Form or
Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or
Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY PURITAN FUND
FIDELITY BALANCED FUND
FIDELITY GLOBAL BALANCED FUND
FIDELITY LOW-PRICED STOCK FUND
FUNDS OF
FIDELITY PURITAN TRUST
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 Puritan Fund, Fidelity Balanced Fund, Fidelity
Global Balanced Fund, and Fidelity Low-Priced Stock Fund (the funds)
will be held at the office of Fidelity Puritan Trust (the trust), 82
Devonshire Street, Boston, Massachusetts 02109 on July 14, 1999, 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 PricewaterhouseCoopers 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 each of Fidelity
Puritan Fund and Fidelity Balanced Fund.
5. To approve an amended management contract for Fidelity Global
Balanced Fund.
6. To approve an amended management contract for Fidelity Low-Priced
Stock Fund.
7. To approve a Distribution and Service Plan pursuant to Rule 12b-1
for each of Fidelity Puritan Fund and Fidelity Low-Priced Stock
Fund.
8. To approve an Agreement and Plan providing for the reorganization
of Fidelity Global Balanced Fund from a separate series of one
Massachusetts business trust to another.
9. To amend Fidelity Puritan Fund's fundamental investment objective
and eliminate certain fundamental investment policies of the fund.
10. To amend Fidelity Balanced Fund's fundamental investment objective
and eliminate certain fundamental investment policies of the fund.
11. To amend Fidelity Global Balanced Fund's fundamental investment
objective and eliminate certain fundamental investment policies of
the fund.
12. To eliminate a fundamental investment polic y of Fidelity
Low-Priced Stock Fund.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
13. To amend the fundamental investment limitation concerning
diversification to exclude securities of other investment
companies from the limitation for each fund.
14. To amend Fidelity Balanced Fund's fundamental investment
limitation concerning concentration.
The Board of Trustees has fixed the close of business on May 17, 1999
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 17, 1999
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY PURITAN TRUST:
FIDELITY PURITAN FUND
FIDELITY BALANCED FUND
FIDELITY GLOBAL BALANCED FUND
FIDELITY LOW-PRICED STOCK FUND
TO BE HELD ON JULY 14, 1999
This Proxy Statement is furnished in connection with a solicitation
of proxies made by, and on behalf of, the Board of Trustees of
Fidelity Puritan Trust (the trust) to be used at the Special Meeting
of Shareholders of Fidelity Puritan Fund, Fidelity Balanced Fund,
Fidelity Global Balanced Fund and Fidelity Low-Priced Stock Fund (the
funds) and at any adjournments thereof (the Meeting), to be held on
July 14, 1999 at 9:00 a.m. at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and
Fidelity Management & Research Company (FMR), the funds' investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about May 17, 1999.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, Management Information
Services Corp. (MIS) and D.F. King & Co., Inc. may be paid on a
per-call basis to solicit shareholders on behalf of the funds at an
anticipated cost of approximately $ 16,000 (Fidelity Puritan
Fund), $ 10,000 (Fidelity Balanced Fund), $ 2,000
(Fidelity Global Balanced Fund), and $ 10,000 (Fidelity
Low-Priced Stock Fund), respectively. The expenses in connection with
preparing this Proxy Statement and its enclosures and of all
solicitations will be paid by the funds. The funds will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares. The
principal business address of Fidelity Distributors Corporation (FDC)
the funds' principal underwriter and distribution agent, and Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management &
Research (Far East) Inc. (FMR Far East), sub - advisers to the
funds, is 82 Devonshire Street, Boston, Massachusetts 02109. The
principal business address of Fidelity Investments Money Management,
Inc. (FIMM), sub-adviser to Fidelity Puritan Fund and Fidelity
Balanced Fund, is 1 Spartan Way, Merrimack, New Hampshire 03054.
Fidelity Investments Japan Limited (FIJ) located at Shiroyama JT
Mori Blgd., 4-3-1 Toranomon, Minato-ku, Tokyo 105, Japan; Fidelity
International Investment Advisors (FIIA) located at Pembroke Hall, 42
Crow Lane, Pembroke HM19, Bermuda; and Fidelity International
Investment Advisors (U.K.) Limited (FIIAL (U.K.)) located at 130
Tonbridge Road, Hildenborough, Kent, TN119DZ, England are also
sub - advisers to Fidelity Global Balanced Fund.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, by the trust's receipt of a subsequent valid telephonic
vote or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If
no specification is made on a proxy card, it will be voted FOR the
matters specified on the proxy card. Only proxies that are voted will
be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of
any proposal being considered at the Meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. The
expenses in connection with telephone voting will be paid by the
funds. If the funds record votes by telephone, they will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted by telephone may be revoked at
any time before they are voted in the same manner that proxies voted
by mail may be revoked. D.F. King & Co., Inc. may be paid on a
per-call basis for vote-by-phone solicitations on behalf of the funds
at an anticipated cost of approximately $ 18,000 (Fidelity
Puritan Fund), $ 12,000 (Fidelity Balanced Fund), $ 3,000
(Fidelity Global Balanced Fund) and $ 12,000 (Fidelity
Low-Priced Stock Fund).
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
AGAINST the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement prior to such adjournment if sufficient votes have
been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of March
31, 1999 are indicated in the following table:
Fidelity Puritan Fund 1,283,478,089
Fidelity Balanced Fund 325,024,072
Fidelity Global Balanced Fund 5,628,536
Fidelity Low-Priced Stock Fund 332,940,375
As of March 31, 1999, the nominees , Trustees, and officers of
the trust owned, in the aggregate, less than 1% of the funds'
outstanding shares.
To the knowledge of the trust, no shareholder owned of record
or beneficial ly more than 5% of the outstanding shares of the funds
on that date.
Shareholders of record at the close of business on May 17, 1999 will
be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR
ENDED JULY 31, 1998 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD
ENDED JANUARY 31, 1999 CALL 1-800-544-8888 OR WRITE TO FIDELITY
DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS
SUFFICIENT TO APPROVE PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
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 14 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF
THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE FUNDS. UNDER THE
INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF
THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES PRESENT AT THE
MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY PROXY OR
(B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
The following tables summarize the proposals applicable to each fund.
<TABLE>
<CAPTION>
<S> <C> <C>
Proposal # Proposal Description Applicable Fund(s)
1. To elect as Trustees the 12 All
nominees presented in
proposal 1.
2. To ratify the selection of All
PricewaterhouseCoopers LLP
as independent accountants
of the funds.
3. To authorize the Trustees to All
adopt an amended and
restated Declaration of Trust.
4. To approve an amended Fidelity Puritan Fund
management contract for the Fidelity Balanced Fund
funds that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase, allow future
modifications of the
contract without a
shareholder vote if
permitted by the 1940 Act,
and reduce each fund's
individual fund fee rate
from 0.20% to 0.15%.
Proposal # Proposal Description Applicable Fund(s)
5. To approve an amended Fidelity Global Balanced Fund
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase, and allow future
modifications of the
contract without a
shareholder vote if
permitted by the 1940 Act.
6. To approve an amended Fidelity Low-Priced Stock Fund
management contract for the
fund that would reduce the
management fee payable to
FMR by the fund as FMR's
assets under management
increase, allow future
modifications of the
contract without a
shareholder vote if
permitted by the 1940 Act,
and modify the performance
adjustment calculations to
calculate the fund's
investment performance and
that of its comparative
index to the nearest 0.01%.
7. To approve a Distribution and Fidelity Puritan Fund
Service Plan for the fund Fidelity Low-Priced Stock Fund
which describes all material
aspects of the proposed
financing for the
distribution of fund shares.
8. To approve an Agreement and Fidelity Global Balanced Fund
Plan providing for the
reorganization of Fidelity
Global Balanced Fund from a
separate series of one
Massachusetts Business Trust
to another.
9. To amend the fundamental Fidelity Puritan Fund
investment objective and
eliminate certain
fundamental investment
policies of the fund.
10. To amend the fundamental Fidelity Balanced Fund
investment objective and
eliminate certain
fundamental investment
policies of the fund.
Proposal # Proposal Description Applicable Fund(s)
11. To amend the fundamental Fidelity Global Balanced Fund
investment objective and
eliminate certain
fundamental investment
policies of the fund.
12. To eliminate a fundamental Fidelity Low-Priced Stock Fund
investment policy of the fund.
ADOPTION OF STANDARDIZED
INVESTMENT LIMITATIONS
13. To amend the fundamental All
investment limitation
concerning diversification
to exclude securities of
other investment companies
from the limitation.
14. To amend the fundamental Fidelity Balanced Fund
investment limitation
concerning concentration.
</TABLE>
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 Puritan Trust, the Trustees have determined that the number
of Trustees shall be fixed at twelve. It is intended that the enclosed
proxy card will be voted for the election as Trustees of the twelve
nominees listed below, unless such authority has been withheld in the
proxy card.
All nominees named below are currently Trustees of Fidelity Puritan
Trust 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 16 ) 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 of 57 re gistered investment companies
advised by FMR. Mr. Gates and Mr. McCoy are currently
Trustees o f 54 registered investment companies advised by
FMR. Mr. Pozen is currently a Trustee of 51 registered investment
companies advised by FMR.
In the election of Trustees, those twelve nominees receiving the
highest number of votes cast at the Meeting, providing a quorum is
present, shall be elected.
<TABLE>
<CAPTION>
Nominee (Age) Principal Occupation ** Year of Election or Appointment
<S> <C> <C>
Ralph F. Cox (67) President of RABAR 1991
Enterprises (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 (67) Prior to her retirement in 1992
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 (55) Consultant, author, and 1997
lecturer (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 (69) President, is Chairman, Chief 1984
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 (71) Prior to his retirement in 1990
1984, Mr. 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 (66) Executive-in-Residence (1995) 1987
at Columbia University
Graduate School of Business
and a financial consultant.
From 1987 to January 1995,
Mr. Kirk was a Professor at
Columbia University Graduate
School of Business. Prior to
1987, he was Chairman of the
Financial Accounting
Standards Board. Mr. Kirk
previously served as a
Director of General Re
Corporation (reinsurance,
1987-1998) and Valuation
Research Corp. (appraisals
and valuations, 1993-1995).
He serves as Chairman of the
Board of Directors of
National Arts Stabilization
Inc., Chairman of the Board
of Trustees of the Greenwich
Hospital Association,
Director of the Yale-New
Haven Health Services Corp.
(1998), a Member of the
Public Oversight Board of
the American Institute of
Certified Public
Accountants' SEC Practice
Section (1995), and as a
Public Governor of the
National Association of
Securities Dealers, Inc.
(1996).
*Peter S. Lynch (56) Vice Chairman and Director of 1990
FMR. 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 (65) Vice President of Finance for 1997
the 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 (71) Chairman of G.M. Management 1989
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 (66) Chairman of the Board of 1993
Lexmark International, Inc.
(office machines, 1991).
Prior to 1991, he held the
positions of Vice President
of International Business
Machines Corporation ("IBM")
and President and General
Manager of various IBM
divisions and subsidiaries.
Mr. Mann is a Director of
M.A. Hanna Company
(chemicals, 1993) and
Imation Corp. (imaging and
information storage, 1997).
*Robert C. Pozen (52) Senior Vice President, is 1997
also President 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 (70) President of The Wales Group, 1989
Inc. (management and
financial advisory
services). Prior to retiring
in 1987, Mr. Williams served
as Chairman of the Board of
First Wachovia Corporation
(bank holding company), and
Chairman and Chief Executive
Officer of The First
National Bank of Atlanta and
First Atlanta Corporation
(bank holding company). He
is currently a of Director
of ConAgra, Inc.
(agricultural products),
Georgia Power Company
(electric utility), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
</TABLE>
** Except as otherwise indicated, each individual has held the office
shown or other offices in the same company for the last five years.
As of March 31, 1999 the nominees, Trustees and officers of the Trust
and each fund owned, in the aggregate, less than 1% of the funds'
outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of three interested
and nine non-interested Trustees, met eleven times during the twelve
months ended July 31, 1998. It is expected that the Trustees will meet
at least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are
not interested persons of the trust, FMR or its affiliates and
normally meets four times a year, or as required, prior to meetings of
the Board of Trustees. Currently, Messrs. Kirk (Chairman), Gates and
McCoy, and Mrs. Davis are members of the Committee. The committee
oversees and monitors the trust's internal control structure, its
auditing function and its financial reporting process, including the
resolution of material reporting issues. The committee recommends to
the Board of Trustees the appointment of auditors for the trust. It
reviews audit plans, fees and other material arrangements in respect
of the engagement of auditors, including non-audit services to be
performed. It reviews the qualifications of key personnel involved in
the foregoing activities. The committee plays an oversight role in
respect of the trust's investment compliance procedures and the code
of ethics. During the twelve months ended July 31, 1998, the committee
held four meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones, Williams and Mann.
The committee members confer periodically and hold meetings as
required. The committee makes nominations for independent trustees,
and for membership on committees. The committee periodically reviews
procedures and policies of the Board of Trustees and committees. It
acts as the administrative committee under the Retirement Plan for
non-interested trustees who retired prior to December 30, 1996. It
monitors the performance of legal counsel employed by the trust and
the independent trustees. The committee in the first instance monitors
compliance with, and acts as the administrator of the provisions of
the code of ethics applicable to the independent trustees. During the
twelve months ended July 31, 1998, the committee held no meetings. The
Nominating and Administration Committee will consider nominees
recommended by shareholders. Recommendations should be submitted to
the committee in care of the Secretary of the Trust. The trust does
not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of each
fund for his or her services for the fiscal year ended July 31, 1998,
or calendar year ended December 31, 1998, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE
COMPENSATION FROM J. Gary Burkhead**,# Ralph F. Cox Phyllis Burke Davis Robert M. Gates Edward C. Johnson 3d**
EACH FUND
Fidelity Puritan FundB,C,F $ 0 $ 8,439 $ 8,439 $ 8,545 $ 0
Fidelity Balanced FundB,D,F 0 1,613 1,614 1,634 0
Fidelity Global Balanced FundB 0 27 27 27 0
Fidelity Low-Priced Stock 0 3,854 3,852 3,900 0
FundB,E,F
TOTAL COMPENSATION FROM THE $ 0 $ 223,500 $ 220,500 $ 223,500 $ 0
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
AGGREGATE COMPENSATION FROM E. Bradley Jones
EACH FUND
Fidelity Puritan FundB,C,F $ 8,497
Fidelity Balanced FundB,D,F 1,625
Fidelity Global Balanced FundB 27
Fidelity Low-Priced Stock 3,881
FundB,E,F
TOTAL COMPENSATION FROM THE $ 222,000
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION
FROM Donald J. Kirk Peter S. Lynch** William O. McCoy Gerald C. McDonough Marvin L. Mann
EACH FUND
Fidelity Puritan FundB,C,F $ 8,497 $ 0 $ 8,545 $ 10,524 $ 8,379
Fidelity Balanced FundB,D,F 1,625 0 1,634 2,012 1,603
Fidelity Global Balanced FundB 27 0 27 33 26
Fidelity Low-Priced Stock 3,881 0 3,900 4,805 3,826
FundB,E,F
TOTAL COMPENSATION FROM THE $ 226,500 $ 0 $ 223,500 $ 273,500 $ 220,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AGGREGATE COMPENSATION FROM Robert C. Pozen** Thomas R. Williams
EACH FUND
Fidelity Puritan FundB,C,F $ 0 $ 8,497
Fidelity Balanced FundB,D,F 0 1,625
Fidelity Global Balanced FundB 0 27
Fidelity Low-Priced Stock 0 3,881
FundB,E,F
TOTAL COMPENSATION FROM THE $ 0 $ 223,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
# 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 include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; William O.
McCoy, $55,039; and Thomas R. Williams, $63,433.
B Compensation figures include cash, and may include amounts 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, $3,956, Phyllis Burke Davis, $3,956, Robert M. Gates, $3,958, E.
Bradley Jones, $3,956, Donald J. Kirk, $3,956, William O. McCoy,
$3,958, Gerald C. McDonough, $4,615, Marvin L. Mann, $3,956, and
Thomas R. Williams, $3,956.
D The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $756, Phyllis Burke Davis, $756, Robert M. Gates, $756, E.
Bradley Jones, $756, Donald J. Kirk, $756, William O. McCoy, $756,
Gerald C. McDonough, $882, Marvin L. Mann, $756, and Thomas R.
Williams, $756.
E The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $1,802, Phyllis Burke Davis, $1,802, Robert M. Gates, $1,803, E.
Bradley Jones, $1,802, Donald J. Kirk, $1,802, William O. McCoy,
$1,803, Gerald C. McDonough, $2,102, Marvin L. Mann, $1,802, and
Thomas R. Williams, $1,802.
F For the fiscal year ended July 31, 1998, certain of the
non-interested Trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows: Ralph F. Cox,
$3,357, Puritan; Marvin L. Mann, $3,357, Puritan; William O. McCoy,
$1,940, Puritan; Thomas R. Williams, $3,357, Puritan; Ralph F. Cox,
$642, Balanced; Marvin L. Mann, $642, Balanced; William O. McCoy,
$375, Balanced; Thomas R. Williams, $642, Balanced; Ralph F. Cox,
$1,529, Low-Priced Stock; Marvin L. Mann, $1,529, Low-Priced Stock;
William O. McCoy, $921, Low-Priced Stock; Thomas R. Williams, $1,529,
Low-Priced Stock.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUNDS.
By a vote of the non-interested Trustees, the firm of
PricewaterhouseCoopers LLP has been selected as independent
accountants for each 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.
PricewaterhouseCoopers LLP has advised each fund that it has 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 PricewaterhouseCoopers LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if
they so desire and will be available should any matter arise requiring
their presence.
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED
DECLARATION OF TRUST.
The Board of Trustees has approved and recommends that the
shareholders of the trust authorize them to adopt and execute an
Amended and Restated Declaration of Trust for the trust and the 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. 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. On September 17, 1998, the Board authorized the submission
of the New Declaration of Trust to the trust's shareholders for their
authorization at this Meeting.
The New Declaration of Trust amends the Current Declaration of Trust
in a number of significant ways. The following discussion summarizes
some of the more significant amendments to the Current Declaration of
Trust effected by the New Declaration of Trust.
IN ADDITION TO THE CHANGES DESCRIBED BELOW, THERE ARE OTHER
SUBSTANTIVE AND STYLISTIC DIFFERENCES BETWEEN THE NEW DECLARATION OF
TRUST AND THE CURRENT DECLARATION OF TRUST. THE FOLLOWING SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NEW DECLARATION OF TRUST
ITSELF, WHICH IS ATTACHED AS EXHIBIT 1 TO THIS PROXY STATEMENT.
SIGNIFICANT CHANGES EFFECTED BY THE NEW DECLARATION OF TRUST.
REORGANIZATION OR TERMINATION OF THE TRUST OR ITS SERIES. 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 a 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 the funds' Management Contracts. For more information on this
topic generally, see "Modification of Management Contract Amendment
Provisions" on pages 27, 30 and 34 .
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 EACH OF FIDELITY
PURITAN FUND AND FIDELITY BALANCED 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 each fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract would lower two components of the
management fee FMR receives from the funds. First, the individual fund
fee rate would be reduced from 0.20% to 0.15% of the funds' average
daily net assets, resulting in a net decrease of 0.05% of average net
assets. Second, 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 funds, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (Present Contract) currently requires
the vote of a majority of the funds' outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page 28 for more details. THE AMENDED
CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS LOWER THAN THE FEE
PAYABLE UNDER THE PRESENT CONTRACT. The proposed 0.05% reduction in
the individual fund fee rate was voluntarily adopted by FMR on August
1, 1996. (For information on FMR, see the section entitled "Activities
and Management of FMR" on page .)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. Copies of the
Amended Contracts, marked to indicate the proposed amendments, are
supplied as Exhibits 2 and 3 on pages and ,
respectively. Except for the modifications discussed above, they are
substantially identical to the Present Contracts. (For a detailed
discussion of each fund's Present Contract, refer to the section
entitled "Present Management Contracts" beginning on page .) If
approved by shareholders, the Amended Contracts will take effect on
August 1, 1999 (or, if later, the first day of the first month
following approval) and will remain in effect through July 31, 2000
and thereafter, but only as long as their 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 Contracts are
not approved, the Present Contracts will continue in effect through
July 31, 1999, and thereafter only as long as their continuance is
approved at least annually as above.
The management fee is an annual percentage of each 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 Individual
Fund Fee Rate by reducing the Individual Fund Fee Rate from
0.20% of each fund's average net assets to 0.15% of each fund's
average net assets. The Amended Contract also modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $210 billion.
MODIFICATION TO INDIVIDUAL FUND FEE RATE. The Amended Contract would
decrease each fund's Individual Fund Fee Rate from 0.20% to 0.15% of
each fund's average daily net assets, matching Fidelity's standard
rate for balanced funds. The proposed reduction in each fund's
Individual Fund Fee Rate was voluntarily adopted by FMR on August 1,
1996. The proposed reduction in each fund's Individual Fund Fee Rate
and the proposed modification to the Group Fee Rate would make each
fund's management fee consistent with that of other funds advised by
FMR with comparable investment disciplines.
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 $210 billion or less. Above $210 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 each fund's Present Contract have been voluntarily implemented by
FMR on January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract revises the current fee
breakpoints for assets under FMR's management above $210 billion and
adds seven new fee breakpoints for assets under FMR's management above
$318 billion as illustrated in the following table. (For an
explanation of how the Group Fee Rate is used to calculate the
management fee, see the section entitled "Present Management
Contracts" beginning on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Assets ($ Present Contract* Average Group Assets ($ Amended Contract
billions) billions)
174 - 228 .3000% 174 - 210 .3000%
228 - 282 .2950% 210 - 246 .2950%
282 - 336 .2900% 246 - 282 .2900%
Over 336 .2850% 282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Assets ($ billions) Present Contract* Amended Contract
150 .3371% .3371%
200 .3284% .3284%
250 .3223% .3219%
300 .3175% .3163%
350 .3133% .3113%
400 .3098% .3067%
450 .3070% .3024%
500 .3048% .2982%
550 .3030% .2942%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
Average assets under FMR's management for March 1999 were
approximately $7 23 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended March 31,
1999, average assets under management by FMR were approximately
$7 23 billion. Each fund's management fee rate under the Amended
Contract, for the month ended March 31 , 1999, would have been
0 .43 36 %, compared to 0 .49 87 % under the
Present Contract. The management fee rate will decline under the
Amended Contract. In particular, the Individual Fund Fee Rate will
decrease by 0.05% of the funds ' average net assets. The Group
Fee Rate will remain the same under both the Present Contract and the
Amended Contract until assets under FMR's management exceed $210
billion, at which point the Group Fee Rate under the Amended Contract
begins to decline relative to the Present Contract, resulting in a
further reduction in the management fee rate beyond that attributable
to the reduction in the Individual Fund Fee Rate.
The following chart compares each fund's management fee as calculated
under the terms of the Present Contract for the fiscal year ended July
31, 1998 to the management fee each fund would have incurred if the
Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
Puritan Fund $ 117,853,000 $ 103,702,000 (12.0%)
Balanced Fund $ 22,685,000 $ 19,959,000 (12.0%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996, nor voluntary adoption of the
reduction in the Individual Fund Fee Rate on August 1, 1996.
The following chart compares each fund's management fee under the
terms of the Present Contract for the twelve month period ended
March 31 , 1999 to the management fee each fund would have
incurred if the Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
Puritan Fund $ 123,855,000 $ 108,320,000 (12.5%)
Balanced Fund $ 25,178,000 $ 22,018,000 (12.5%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996, nor voluntary adoption of the
reduction in the Individual Fund Fee rate on August 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the Trust, on behalf of a 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 a 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 a 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 each 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 each fund, including all of the
Independent Trustees, on September 17, 1998. The Board of Trustees,
including all of the Independent Trustees of each fund, considered and
approved the modifications to the Individual Fund Fee Rate on July 18,
1996, and considered and approved the modifications to the Group Fee
Rate schedule during the two month periods from November to December
1995 and June to July 1994. The Board of Trustees received materials
relating to the Amended Contract in advance of the meeting at which
the Amended Contract was considered, and had the opportunity to ask
questions and request further information in connection with such
consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their meetings the Trustees received materials specifically relating
to the Amended Contract. These materials included (i) information on
the investment performance of each fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption
data in respect of each fund, and (iii) the economic outlook and the
general investment outlook in the markets in which each fund invests.
The Board of Trustees and the Independent Trustees also consider
periodically other material facts such as (1) FMR's results and
financial condition, (2) arrangements in respect of the distribution
of each fund's shares, (3) the procedures employed to determine the
value of each fund's assets, (4) the allocation of each fund's
brokerage, if any, including allocations to brokers affiliated with
FMR and the use of "soft" commission dollars to pay fund expenses and
to pay for research and other similar services, (5) FMR's management
of the relationships with each fund's custodian and subcustodians, (6)
the resources devoted to and the record of compliance with each fund's
investment policies and restrictions and with policies on personal
securities transactions and (7) the nature, cost and character of
non-investment management services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the impact of performance adjustments to management fees, (c)
the choice of performance indices and benchmarks, (d) the composition
of peer groups of funds, (e) transfer agency and bookkeeping fees paid
to affiliates of FMR, (f) investment performance, (g) investment
management staffing, (h) the potential for achieving further economies
of scale, (i) operating expenses paid to third parties, and (j) the
information furnished to investors, including each fund's
shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether each fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly each fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of each
fund's portfolio manager and each fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations and the
senior management of Fidelity's equity group. Among other things they
considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered each fund's expense ratios and expense ratios of a peer
group of funds. They also considered the amount and nature of fees
paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including each fund. This consideration included
an extensive review of FMR's methodology in allocating its costs to
the management of each 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 each fund and whether the amount of
profit is a fair entrepreneurial profit for the management of each
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to each 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 each 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 each
fund and each fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with each fund.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Individual Fund Fee Rate, the
extension of the Group Fee Rate schedule and the proposed modification
to the Present Contract's amendment provisions, are in the best
interest of each fund's shareholders. The Board of Trustees, including
the Independent Trustees, voted to approve the submission of the
Amended Contract to shareholders of each fund and recommends that
shareholders of each 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 APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY GLOBAL
BALANCED FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies the management fee that FMR
receives from the fund to provide for lower fees when FMR's assets
under management exceed certain levels. In addition, the Amended
Contract allows FMR and the trust, on behalf of the fund, to modify
the Management Contract subject to the requirements of the 1940 Act.
The existing Management Contract (Present Contract) currently requires
the vote of a majority of the fund's outstanding voting securities to
authorize all amendments. See "Modification of Management Contract
Amendment Provisions" on page 34 for more details. THE AMENDED
CONTRACT WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER
THAN, THE FEE PAYABLE UNDER THE PRESENT CONTRACT. (For information on
FMR, see the section entitled "Activities and Management of FMR" on
page .)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is
supplied as Exhibit 4 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 Contracts" beginning
on page .) If approved by shareholders, the Amended Contract
will take effect on August 1, 1999 (or, if later, the first day of the
first month following approval) and will remain in effect through July
31, 2000 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a
meeting called for the purpose, of a majority of the Independent
Trustees and (ii) the vote of either a majority of the Trustees or by
the vote of a majority of the outstanding shares of the fund. If the
Amended Contract is not approved, the Present Contract will continue
in effect through July 31, 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 $210 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 $210 billion or less. Above $210 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contact, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract revises the current fee
breakpoints for assets under FMR's management above $210 billion and
adds seven new fee breakpoints for assets under FMR's management above
$318 billion as illustrated in the following table. (For an
explanation of how the Group Fee Rate is used to calculate the
management fee, see the section entitled "Present Management
Contracts" beginning on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Assets ($ Present Contract* Average Group Assets ($ Amended Contract
billions) billions)
174 - 228 .3000% 174 - 210 .3000%
228 - 282 .2950% 210 - 246 .2950%
282 - 336 .2900% 246 - 282 .2900%
Over 336 .2850% 282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The result at various levels of group net assets is illustrated by
the table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Assets ($ billions) Present Contract* Amended Contract
150 .3371% .3371%
200 .3284% .3284%
250 .3223% .3219%
300 .3175% .3163%
350 .3133% .3113%
400 .3098% .3067%
450 .3070% .3024%
500 .3048% .2982%
550 .3030% .2942%
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
Average assets under FMR's management for March 1999 were
approximately $7 23 billion.
COMPARISON OF MANAGEMENT FEES. For the month ended March 1999,
average assets under management by FMR were approximately $7 23
billion. The fund's management fee rate under the Amended Contract,
for the month ended March 1999, would have been
0 .73 36 %, compared to 0 .7 487 % 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 $210 billion, at which point the management fee rate
under the Amended Contract begins to decline relative to the Present
Contract.
The following chart compares the fund's management fee as calculated
under the terms of the Present Contract for the fiscal year
ended July 31, 1998 to the management fee the fund would have
incurred if the Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
$ 563,609 $ 555,880 (1.4%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended
March 31 , 1999 to the management fee the fund would have
incurred if the Amended Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C>
Present Contract Management Amended Contract Management Fee Percentage Difference
Fee*
$ 668,106 $ 656,724 (1.7%)
</TABLE>
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1996.
MODIFICATION OF MANAGEMENT CONTRACT AMENDMENT PROVISIONS. The Amended
Contract allows FMR and the Trust, on behalf of the fund, to amend the
Management Contract subject to the provisions of Section 15 of the
1940 Act, as modified or interpreted by the Securities and Exchange
Commission. In contrast, the Present Contract explicitly requires the
vote of a majority of the outstanding voting securities of the fund to
authorize all amendments. Generally, the proposed modification to the
Present Contract's amendment provisions will allow FMR and the Trust,
on behalf of the fund, to amend the Management Contract without
shareholder vote IF THE 1940 ACT PERMITS THEM TO DO SO. For example,
under current interpretations of Section 15 of the 1940 Act, the
Amended Contract would give FMR and the Trust the ability to amend the
Management Contract 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 September 17, 1998. The Board of Trustees
considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995
and June to July 1994. The Board of Trustees received materials
relating to the Amended Contract in advance of the meeting at which
the Amended Contract was considered, and had the opportunity to ask
questions and request further information in connection with such
consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their meetings the Trustees received materials specifically relating
to the Amended Contract. These materials included (i) information on
the investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption
data in respect of the fund, and (iii) the economic outlook and the
general investment outlook in the markets in which the fund invests.
The Board of Trustees and the Independent Trustees also consider
periodically other material facts such as (1) FMR's results and
financial condition, (2) arrangements in respect of the distribution
of the fund's shares, (3) the procedures employed to determine the
value of the fund's assets, (4) the allocation of the fund's
brokerage, if any, including allocations to brokers affiliated with
FMR and the use of "soft" commission dollars to pay fund expenses and
to pay for research and other similar services, (5) FMR's management
of the relationships with the fund's custodian and subcustodians, (6)
the resources devoted to and the record of compliance with the fund's
investment policies and restrictions and with policies on personal
securities transactions and (7) the nature, cost and character of
non-investment management services provided by FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the impact of performance adjustments to management fees, (c)
the choice of performance indices and benchmarks, (d) the composition
of peer groups of funds, (e) transfer agency and bookkeeping fees paid
to affiliates of FMR, (f) investment performance, (g) investment
management staffing, (h) the potential for achieving further economies
of scale, (i) operating expenses paid to third parties, and (j) the
information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of the
fund's portfolio manager and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations and the
senior management of Fidelity's equity group. Among other things they
considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, insurance, publishing,
real estate, international research and investment funds, and others.
The Board of Trustees and the Independent Trustees considered the
intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with the fund.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule and
the proposed modification to the Present Contract's amendment
provisions, are in the best interest of the fund's shareholders. The
Board of Trustees, including the Independent Trustees, voted to
approve the submission of the Amended Contract to shareholders of the
fund and recommends that shareholders of the fund vote FOR the Amended
Contract. If approved, the Amended Contract will take effect on the
first day of the first month following shareholder approval.
6. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY LOW-PRICED
STOCK FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve, a
proposal to adopt an amended management contract with FMR (the Amended
Contract). The Amended Contract modifies several aspects of the
management fee that FMR receives from the fund for managing its
investments and business affairs. 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 42 for more details. (For information on
FMR, see the section entitled "Activities and Management of FMR," on
page .)
CURRENT MANAGEMENT FEE. The management fee is calculated and paid
monthly, and is normally expressed as an annual percentage of the
fund's average net assets. The fee has two components: a Basic Fee and
a Performance Adjustment. The Basic Fee is an annual percentage of the
fund's average net assets for the current month. The Basic Fee rate is
the sum of a Group Fee rate, which declines as FMR's fund assets under
management increase, and a fixed individual fund fee rate of 0.35%.
The Basic Fee rate for the fund's fiscal year ended July 31, 1998 (not
including the fee amendments discussed below) was 0.6521%.
The Performance Adjustment is a positive or negative dollar amount
based on the fund's performance and assets for the most recent 36
months. If the fund outperforms the Russell 2000 Index (the Index)
over 36 months, FMR receives a positive Performance Adjustment, and if
the fund underperforms the Index, the management fee is reduced by a
negative Performance Adjustment. The Performance Adjustment is an
annual percentage of the fund's average net assets over the 36-month
performance period. The Performance Adjustment rate is 0.02% for each
percentage point of outperformance or underperformance, subject to a
maximum of 0.20% if the fund outperforms or underperforms the Index by
more than ten percentage points. Performance of the fund and the Index
are rounded to the nearest whole percentage point for purposes of the
calculation.
PROPOSED MANAGEMENT FEE AMENDMENTS. The Amended Contract would (1)
reduce the Group Fee rate further if FMR's assets under management
remain over $210 billion, (2) modify the Performance Adjustment
calculation to round the performance of the fund and the Index to the
nearest 0.01%, rather than the nearest 1.00%, and (3) allow 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
42 for more details.
IMPACT OF GROUP FEE RATE REDUCTION. At FMR's current level of assets
under management (approximately $7 23 billion as of March
1999), the changes to the Group Fee rate reduce the management fee.
FMR has voluntarily implemented the Group Fee reductions pending
shareholder approval, and the Fund has paid lower management fees as a
result. For the fund's fiscal year ended July 31, 1998, the management
fee using the proposed Group Fee reductions (including the Performance
Adjustment) was 0.7430% of the Fund's average net assets. The Group
Fee reductions lowered the management fee rate by 0.0103% compared to
the rate FMR was entitled to receive under the Present Contract,
0.7533%.
IMPACT OF PERFORMANCE ADJUSTMENT CHANGES. The more precise rounding
method for the Performance Adjustment would have had no impact on the
management fee rate for the fiscal year ended July 31, 1998.
COMBINED EFFECT OF FEE CHANGES. In the fiscal year ended July 31,
1998, the Group Fee reductions and the changes to the Performance
Adjustment would have resulted in a 0.0103% reduction in the total
management fee. The future impact will depend on many different
factors, and may represent an increase or decrease from the management
fee under the Present Contract. The Group Fee rate reductions will
either reduce the management fee or leave it unchanged, depending on
the level of FMR's assets under management. Calculating performance to
the nearest 0.01% may increase or decrease the Performance Adjustment,
depending on whether performance would have been rounded up or down.
A copy of the Amended Contract, marked to indicate the proposed
amendments, is supplied as Exhibit 5 on page . Except for the
modifications discussed above, the Amended Contract is substantially
identical to the fund's Present Contract with FMR. (For a detailed
discussion of the fund's Present Contract, refer to the section
entitled "Present Management Contracts," on page .) If approved
by shareholders, the Amended Contract will take effect on the first
day of the first month following approval and will remain in effect
through July 31 , 2000 and thereafter, but only as long as its
continuance is approved at least annually by (i) the vote, cast in
person at a meeting called for the purpose, of a majority of the
Independent Trustees and (ii) the vote of either a majority of the
Trustees or a majority of the outstanding shares of the fund. If the
Amended Contract is not approved, the Present Contract will continue
in effect through July 31, 1999, and thereafter only as long as its
continuance is approved at least annually as described above.
MODIFICATION TO GROUP FEE RATE. The Group Fee rate varies based on
the aggregate net assets of all registered investment companies having
management contracts with FMR (group assets). As group assets
increase, the Group Fee rate declines. The Amended Contract would not
change the Group Fee rate if group assets are $210 billion or less.
Above $210 billion in group assets, the Group Fee rate declines under
both contracts, but under the Amended Contract, it declines faster.
The Group Fee rate is calculated according to a graduated schedule
providing for different rates for different levels of group assets.
The rate at which the Group Fee rate declines is determined by fee
"breakpoints" that provide for lower fee rates when group assets
increase. The Amended Contract would add seven new, lower breakpoints
applicable when group assets are above $318 billion as illustrated in
the following table. (For an explanation of how the Group Fee rate is
used to calculate the management fee see the section entitled "Present
Management Contracts" on page .)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE BREAKPOINTS
Average Group Assets ($ Present Contract Group Assets ($ billions) Amended Contract
billions)
174 - 228 .3000% 174 - 210 .3000%
228 - 282 .2950% 210 - 246 .2950%
282 - 336 .2900% 246 - 282 .2900%
Over 336 .2850% 282 - 318 .2850%
318 - 354 .2800%
354 - 390 .2750%
390 - 426 .2700%
426 - 462 .2650%
462 - 498 .2600%
498 - 534 .2550%
Over 534 .2500%
</TABLE>
The resulting Group Fee rates at various levels of group assets are
indicated below. (For an explanation of how the breakpoints are
combined to arrive at the Group Fee rate, see "Present Management
Contracts" on page .)
Effective GROUP FEE RATES
Group Assets ($ billions) Present Contract Amended Contract
150 .3371% .3371%
200 .3284% .3284%
250 .3223% .3219%
300 .3175% .3163%
350 .3133% .3113%
400 .3098% .3067%
450 .3070% .3024%
500 .3048% .2982%
550 .3030% .2942%
FMR voluntarily adopted various additional Group Fee breakpoints for
group assets over $210 billion in 1996. Although the new fee
breakpoints have not been added to the management contract pending
shareholder approval, FMR has voluntarily based its management fee on
the Group Fee schedule contained in the Amended Contract since January
1, 1996. Group assets for March 31 , 1999 were approximately
$7 23 billion.
MODIFICATIONS TO PERFORMANCE ADJUSTMENT ROUNDING METHOD. The annual
Performance Adjustment rate equals 0.02% for each percentage point by
which the fund outperforms or underperforms the Index over a 36-month
performance period. Under the Present Contract, the investment
performance of both the fund and the Index are rounded to the nearest
full percentage point (for example, 15.5123% is rounded to 16%.)
Rounding to full percentage points results in the Performance
Adjustment rate being applied in 0.02% increments. In comparison,
under the Amended Contract, the investment performance of both the
fund and Index are rounded to the nearest 0.01% (using the prior
example, 15.5123% is rounded to 15.51%) prior to calculating the
difference in investment performance. The more precise rounding method
results in a more accurate measure of the difference in investment
performance and allows for the Performance Adjustment to be applied in
0.0002% increments. This reduces the chance of minor changes in
performance resulting in significant changes to the Performance
Adjustment, and ultimately the fund's management fee.
During fiscal 1998, using the more precise rounding methodology would
have had no impact on the management fee.
COMPARISON OF MANAGEMENT FEES. The following table compares the
fund's management fee as calculated under the terms of the Present
Contract (not including FMR's voluntary implementation of the Group
Fee reductions) for fiscal 1998 to the management fee the fund would
have incurred if the Amended Contract had been in effect. Management
fees are expressed in dollars and as percentages of the fund's average
net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 70,650,000 .6521 69,532,000 .6418 (1,118,000) (.0103)
Performance Adjustment 10,960,000 .1012 10,960,000 .1012 0 0
Total Management Fee 81,610,000 .7533 80,492,000 .7430 (1,118,000) (.0103)
</TABLE>
The following table compares the fund's management fee as
calculated under the terms of the Present Contract (not including
FMR's voluntary implementation of the Group Fee reductions) for the
twelve month period ended March 31, 1999 to the management fee the
fund would have incurred if the Amended Contract had been in effect.
Management fees are expressed in dollars and as percentages of the
fund's average net assets for the year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Present Contract Amended Contract Difference
$ % $ % $ %
Basic Fee 63,002,000 .6505 61,779,000 .6379 (1,223,000) (.0126)
Performance Adjustment 14,350,000 .1482 14,350,000 .1482 0 0
Total Management Fee 77,352,000 .7987 76,129,000 .7861 (1,223,000) (.0126)
</TABLE>
The following table provides data concerning the fund's management
fees and expenses as a percentage of average net assets for the fiscal
year ended July 31, 1998 under the Present Contract (not including
FMR's voluntary implementation of the Group Fee reductions) and if the
Amended Contract had been in effect during the same period.
The following figures are based on historical expenses of the fund
and are calculated as a percentage of average net assets.
COMPARATIVE FEE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net
assets)
Present Contract Amended Contract
Management Fee 0.75% 0.74%
Other Expenses 0.23% 0.23%
Total Fund Operating Expenses 0.98% 0.97%
A portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. The fund has entered into arrangements
with its custodian and transfer agent whereby credits realized as a
result of uninvested cash balances are used to reduce custodian and
transfer agent expenses. Including these reductions, the total
operating expenses presented in the table would have been 0. 96 %
under the Present Contract and 0. 95 % under the Amended
Contract.
EXAMPLE: The following illustrates the expenses on a $1,000
investment under the fees and expenses stated above, assuming (1) 5%
annual return;(2) redemption at the end of each time period and (3)
payment of the fund's 3.00% sales charge:
1 Year 3 Years 5 Years 10 Years
Present Contract $40 $60 $83 $147
Amended Contract $40 $60 $82 $145
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares of
the fund. The example above should not be considered a representation
of past or future expenses of the fund. Actual expenses may vary from
year to year and may be higher or lower than those shown above.
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 September 17, 1998. The Board of Trustees
considered and approved the modifications to the Group Fee Rate
schedule during the two month periods from November to December 1995
and June to July 1994, and the modifications to the Performance
Adjustment calculation during the period from June to July 1995. The
Board of Trustees received materials relating to the Amended Contract
in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their monthly meetings, the Trustees received materials specifically
relating to the Amended Contract. These materials included: (i)
information on the investment performance of the fund, a peer group of
funds and an appropriate index or combination of indices, (ii) sales
and redemption data in respect of the fund, and (iii) the economic
outlook and the general investment outlook in the markets in which the
fund invests. The Board of Trustees and the Independent Trustees also
consider periodically other material facts such as (1) FMR's results
and financial condition, (2) arrangements in respect of the
distribution of the fund's shares, (3) the procedures employed to
determine the value of the fund's assets, (4) the allocation of the
fund's brokerage, if any, including allocations to brokers affiliated
with FMR and the use of "soft" commission dollars to pay fund expenses
and to pay for research and other similar services, (5) FMR's
management of the relationships with the fund's custodian and
subcustodians, (6) the resources devoted to and the record of
compliance with the fund's investment policies and restrictions and
with policies on personal securities transactions and (7) the nature,
cost, and character of non-investment management services provided by
FMR and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the impact of performance adjustments to management fees, (c)
the choice of performance indices and benchmarks, (d) the composition
of peer groups of funds, (e) transfer agency and bookkeeping fees paid
to affiliates of FMR, (f) investment performance, (g) investment
management staffing, (h) the potential for achieving further economies
of scale, (i) operating expenses paid to third parties, and (j) the
information furnished to investors, including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all of the matters considered. Matters considered by the Board
of Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of
investment disciplines and providing for a large variety of fund and
shareholder services. With regard to the proposed modification to the
Present Contract's amendment provisions, the Board of Trustees and the
Independent Trustees considered the benefit to shareholders of FMR's
and the trust's increased flexibility (within 1940 Act constraints) to
amend the Management Contract without the delays and potential costs
of a proxy solicitation.
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees review at least annually the background of the
fund's portfolio manager, and the fund's investment objective and
discipline. The Independent Trustees have also had discussions with
senior management of FMR responsible for investment operations, and
the senior management of Fidelity's equity group. Among other things
they considered the size, education and experience of FMR's investment
staff, its use of technology, and FMR's approach to recruiting,
training and retaining portfolio managers and other research, advisory
and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Present Contract and the Amended
Contract and under separate agreements covering transfer agency
functions and pricing, bookkeeping and securities lending services, if
any. The Board of Trustees and the Independent Trustees have also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, 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.
CONCLUSION. In considering the Amended Contract, the Board of
Trustees and the Independent Trustees did not identify any single
factor as all-important or controlling, and the foregoing summary does
not detail all of the matters considered. Based on their evaluation of
all material factors and assisted by the advice of independent
counsel, the Trustees concluded (i) that the existing management fee
structure is fair and reasonable and (ii) that the proposed
modifications to the management fee rates, that is the reduction of
the Group Fee Rate schedule and the modifications to the performance
adjustment calculation, 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.
7. TO APPROVE A DISTRIBUTION AND SERVICE PLAN PURSUANT TO RULE 12B-1
FOR EACH OF FIDELITY PURITAN FUND AND FIDELITY LOW-PRICED STOCK FUND.
The Board of Trustees has approved, and recommends that shareholders
of Fidelity Puritan Fund and Fidelity Low-Priced Stock Fund approve a
Distribution and Service Plan (the Plan) for each fund. A copy of the
form of Plan is attached to this Proxy Statement as Exhibit 6.
THE PLAN. The Plan was approved by the Board as provided for by Rule
12b-1 (the Rule) promulgated by the Securities and Exchange Commission
(SEC) under the Investment Company Act of 1940 (the 1940 Act). The
Rule provides that, an investment company (e.g., a mutual fund) acting
as a distributor of its shares must do so pursuant to a written Plan
"describing all material aspects of the proposed financing of
distribution.'' Under the Rule, an investment company is deemed to be
acting as a distributor of its shares if it engages "directly or
indirectly in financing any activity which is primarily intended to
result in the sale of shares issued by such company, including, but
not necessarily limited to, advertising, compensation of underwriters,
dealers, and sales personnel, the printing and mailing of prospectuses
to other than current shareholders, and the printing and mailing of
sales literature.''
The Plan is designed to avoid legal uncertainties which may arise
from the ambiguity of the phrase "primarily intended to result in the
sale of shares'' and from the term "indirectly'' as used in the Rule.
The SEC has neither approved nor disapproved the Plan.
The Plan contemplates that all expenses relating to the distribution
of fund shares shall be paid for by FMR, or Fidelity Distributors
Corporation (FDC), a wholly owned subsidiary of FMR Corp., out of past
profits and other resources, including management fees paid by a fund
to FMR. The Plan also recognizes that FMR, either directly or through
FDC, may make payments from these sources to securities dealers and to
other third parties who engage in the sale of fund shares or who
render shareholder services. The Plan provides that, to the extent
that the fund's payment of management fees to FMR might be considered
to constitute the "indirect'' financing of activities "primarily
intended to result in the sale of shares,'' such payment is expressly
authorized. THE PLAN DOES NOT AUTHORIZE PAYMENTS BY THE FUND OTHER
THAN THOSE THAT ARE TO BE MADE TO FMR UNDER ITS MANAGEMENT CONTRACT.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
Although the Plan contemplates that FMR and FDC may engage in various
distribution activities, it does not require them to perform any
specific type of distribution activity or to incur any specific level
of expense for such activities.
The Plan contains a number of provisions relating to reporting
obligations and to its amendment and termination as required by the
Rule. If approved by shareholders, the Plan will continue in effect as
long as its continuance is specifically approved at least annually by
a majority of the Board of Trustees, including a majority of the
Trustees who are not "interested persons'' of the trust and who have
no direct or indirect financial interest in the operation of the Plan
or any agreement related to the Plan (the non-interested Trustees),
cast in person at a meeting called for the purpose of voting on the
Plan. The Plan may be amended at any time by the Trustees, except that
it may not be amended to authorize direct payments by the fund to
finance any activity primarily intended to result in the sale of
shares issued by the fund or to increase materially the amount spent
by the fund for distribution without the approval of a majority of the
outstanding shares of the fund and the Trustees. All material
amendments to the Plan must be approved by a majority of the
non-interested Trustees. Each Plan, and any agreements related to the
Plan, may be terminated at any time by a vote of a majority of
the non-interested Trustees or by a vote of a majority of the
outstanding shares of the fund. The Plan requires that the Trustees
receive, at least quarterly, a written report as to the amounts
expended during the quarter by FMR, or FDC, in connection with
financing any activity primarily intended to result in the sale of
shares issued by the fund, and the purposes for which such
expenditures were made. As required by the Rule, while the Plan is in
effect, the selection and nomination of those Trustees who are not
"interested persons" shall be committed to the discretion of the
non-interested Trustees then in office.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of
each Plan, the Board considered a variety of factors and was advised
by counsel who are not counsel to FMR or FDC. The Trustees believe
that the fees paid by the fund to FMR under the Management Contract,
are fair and reasonable, that the services provided thereunder are
necessary and appropriate for the fund and its shareholders, and that
the fund does not indirectly finance the distribution of its shares in
contravention of the Rule. Nonetheless, the Trustees concluded that
adoption of the Plan would avoid legal uncertainties which might arise
as a result of what they and FMR believe to be potentially subjective
and ambiguous language contained in the Rule and in public releases
issued by the SEC in connection with the proposal and adoption of the
Rule (SEC Releases). The Trustees believe that the adoption of the
Plan is advisable to minimize such legal uncertainties and to provide
other benefits to each fund and its shareholders.
The Trustees noted that each fund's Plan does not involve any direct
payment by the fund to finance any activity primarily intended to
result in the sale of shares issued by the fund, and that any
amendment of the fund's Management Contract with FMR to increase the
amount paid by the fund thereunder would require approval of both the
Trustees and the fund's shareholders. The Trustees also considered the
factors suggested in the SEC Releases including: the need for
independent counsel or experts to assist the Trustees in reaching a
determination; the nature and causes of the problems and circumstances
which made consideration of a Plan appropriate; the way in which a
Plan would resolve or alleviate the problems, including the nature and
approximate amount of the expenditures contemplated by the Plan; the
merits of possible alternatives to the Plan; the interrelationship
between the Plan and the activities of FMR in financing the
distribution of the fund's shares; the possible benefits of the Plan
to FMR and its affiliates relative to those expected to accrue to the
fund; and consequently the effects of the Plan on existing
shareholders.
The reduction in legal uncertainties arising from the potentially
subjective and ambiguous language that appears in the Rule and in the
SEC Releases enables the Trustees, in connection with their review of
the fund's Management Contract with FMR, to consider the full range of
services provided by FMR and FDC, including services which may be
related to the distribution of the fund's shares. In addition, the
Board of Trustees considered alternatives to the Plan, including
direct payments by a fund to FDC and/or third parties and the
implementation of a sales load. The Trustees believe it is appropriate
to ensure that FMR and FDC have the flexibility to direct their
distribution activities in a manner consistent with prevailing market
conditions by using, subject to approval of the Trustees, their
resources, including the current management fee, to make payments to
third parties. To the extent that FMR has greater flexibility under
each Plan, additional sales of the fund's shares may result. The
Trustees believe that this flexibility has the potential to benefit
the fund by reducing the possibility that the fund would experience
net redemptions, which might require the liquidation of portfolio
securities in amounts and at times that could be disadvantageous for
investment purposes. Of course, there can be no assurance that these
events will occur.
The Board of Trustees recognized that a greater level of fund assets
benefits FMR by increasing its management fee revenues. The Board
noted the high quality of investment management services and the
expansion of, and many innovations in, investor services that have
been provided by FMR over the years. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and
retain a high caliber of investment and other personnel and to develop
and implement new systems for providing services and information to
shareholders. The Board considers this ability to be an important
benefit to the fund and its shareholders.
CONCLUSION. For the reasons stated above, the members of the Board of
Trustees unanimously concluded in the exercise of their business
judgment and in light of their fiduciary duties under state law and
the 1940 Act that there is a reasonable likelihood that the Plan will
benefit each fund and its shareholders. The Trustees recommend that
shareholders of each fund vote FOR approval of the Plan. With respect
to each fund, if the Plan is not approved, the Board and FMR will
consider alternative means of obtaining the services that are to be
provided under the Plan.
8. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION
OF FIDELITY GLOBAL BALANCED FUND FROM A SEPARATE SERIES OF ONE
MASSACHUSETTS BUSINESS TRUST TO ANOTHER.
The Board of Trustees has approved an Agreement and Plan of
Reorganization (the Plan of Reorganization) in the form attached to
this Proxy Statement as Exhibit 7. The Plan of Reorganization provides
for the reorganization of Fidelity Global Balanced Fund (the Fund)
from a separate series of Fidelity Puritan Trust (the Trust), a
Massachusetts business trust, to a newly-established, separate series
of Fidelity Investment Trust (Investment Trust) , also a
Massachusetts business trust (the Reorganization).
The investment objective, policies, and limitations of the Fund will
not change except as approved by shareholders and as described in this
proxy statement. A separate series of the Trust will carry on the
business of the Fund following the Reorganization (the Series). The
Series, which has not yet commenced business operations, will have an
investment objective, policies, and limitations identical to those of
the Fund (except as they may be modified pursuant to a vote of the
shareholders as proposed in this proxy statement).
Since both the Trust and Investment Trust are Massachusetts business
trusts, organized under substantially similar Declarations of Trust,
the rights of the security holders of the Fund under state law and the
Fund's governing documents are expected to remain the same after the
Reorganization (except as the Trust's Declaration of Trust may be
modified pursuant to a vote of the Trust's shareholders as proposed in
this proxy statement).
In connection with the Reorganization, the Fund's fiscal year end
will change from July to October. The Trustees may change the fiscal
year end of the Fund at their discretion in the future.
FMR, the Fund's investment adviser, will be responsible for the
investment management of the Series, subject to the supervision of the
Board of Trustees, under a management contract substantively identical
to the contract in effect between FMR and the Fund immediately prior
to the Closing Date (including as it may be modified pursuant to a
vote of shareholders of the Fund as proposed in the proxy
statement)(the New Management Contract); similarly, Fidelity
Management & Research (U.K.) Inc. (FMR U.K.); Fidelity Management &
Research (Far East) Inc. (FMR Far East); Fidelity International
Investment Advisors (FIIA); Fidelity International Investment Advisors
(U.K.) Limited (FIIA (U.K.) L); and Fidelity Investments Japan Limited
(FIJ), the Fund's sub-advisers, will have primary responsibility for
providing investment advice and research services outside the United
States or investment management authority under Sub-Advisory
Agreements substantively identical to the agreements in effect between
FMR U.K., FMR Far East, FIIA, FIIA(U.K.)L, FIJ and FMR immediately
prior to the Closing Date (the New Sub-Advisory Agreements).
The Fund's distribution agent, Fidelity Distributors Corporation
(FDC) will distribute shares of the Series under a General
Distribution Agreement substantively identical to the contract in
effect between FDC and the Fund immediately prior to the Closing Date.
REASON FOR THE PROPOSED REORGANIZATION. The Fund is presently
organized as a series of the Trust, which has four series of shares or
funds. The Board of Trustees unanimously recommend reorganization of
the Fund to a separate series of Investment Trust (i.e., into the
Series), which will succeed to the business of the Fund. Moving the
Fund from the Trust to Investment Trust will consolidate and
streamline the production and mailing of certain legal documents. THE
PROPOSED CHANGE WILL HAVE NO MATERIAL EFFECT ON SHAREHOLDERS OR THE
MANAGEMENT OF THE FUND.
The proposal to present the Plan of Reorganization to shareholders
was approved by the Board of Trustees of the Trust, including all of
the Trustees who are not interested persons of FMR, on September 17,
1998. The Board of Trustees recommend that Fund shareholders vote FOR
the approval of the Plan of Reorganization described below. Such a
vote encompasses approval of the reorganization of the Fund to a
separate series of Investment Trust; temporary waiver of certain
investment limitations of the Fund to permit the Reorganization (see
"Temporary Waiver of Investment Restrictions" on page 52 ); and
authorization of the Trust, as sole shareholder of the Series, to
approve (i) the New Management Contract; (ii) the New Sub-Advisory
Agreements; and (iii) the Distribution and Service Plan for the Series
under Rule 12b-1, substantively identical to the Plan in effect with
respect to the Fund immediately prior to the Closing Date (the New
Plan). If shareholders of the Fund do not approve the Plan of
Reorganization, the Fund will continue to operate as a series of the
Trust.
SUMMARY OF THE PLAN OF REORGANIZATION. The following discussion
summarizes the important terms of the Plan of Reorganization. This
summary is qualified in its entirety by reference to the Plan of
Reorganization itself.
On the Closing Date (defined on page 52 ) of the
Reorganization, the Fund will transfer all of its assets to the
Series, a series of shares of Investment Trust established for the
purpose of effecting the Reorganization, in exchange for the
assumption by the Series of all of the liabilities of the Fund and the
issuance of shares of beneficial interest in the Series (Series
Shares) equal to the number of Fund shares outstanding on the Closing
Date. Immediately thereafter, the Fund will distribute one Series
Share for each Fund share (the Fund Shares) held by the
shareholder s on the Closing Date to each Fund shareholder, in
exchange for such Fund Shares. Immediately after this distribution of
the Series Shares, the Fund will be terminated and, as soon as
practicable thereafter, will be wound up and liquidated. UPON
COMPLETION OF THE REORGANIZATION, EACH FUND SHAREHOLDER WILL BE THE
OWNER OF FULL AND FRACTIONAL SERIES SHARES EQUAL IN NUMBER,
DENOMINATION, AND AGGREGATE NET ASSET VALUE TO HIS OR HER FUND SHARES.
The Plan of Reorganization authorizes the Trust as the then sole
initial shareholder of the Series to approve (i) the New Management
Contract, (ii) the New Sub-Advisory Agreements, and (iii) the New
Plan.
Investment Trust's Board of Trustees will hold office without time
limits, except that (a) any Trustee may resign; (b) any Trustee may be
removed by written instrument signed by at least two-thirds of the
number of Trustees prior to removal; (c) any Trustee who requests to
be retired by written instrument signed by a majority of the other
Trustees or who is unable to serve due to physical or mental
incapacity by reason of disease or otherwise, death, or for any other
reason, may be retired; and (d) a Trustee may be removed at any
Special Meeting of the shareholders by a vote of two-thirds of the
outstanding shares of Investment Trust. In case a vacancy shall for
any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such
appointment, at least two-thirds of the Trustees have been elected by
shareholders. If, at any time, less than a majority of the Trustees
holding office has been elected by shareholders, the Trustees then in
office will promptly call a shareholders' meeting for the purpose of
electing a Board of Trustees. Otherwise, there will normally be no
meeting of shareholders for the purpose of electing Trustees.
The New Management Contract, the New Sub-Advisory Agreements, and the
New Plan will take effect on the Closing Date. The New Management
Contract and the New Sub-Advisory Agreements will continue in force
until July 31, 2000. The New Plan will continue in force until April
30, 2000. The New Sub-Advisory Agreements and the New Management
Contract will continue in force thereafter from year to year so long
as their continuance is approved at least annually by (i) the vote of
the majority of the Trustees who are not "interested persons" of
Investment Trust, FMR, or in the case of the Sub-Advisory
A greement s , FMR U.K., FMR Far East, FIJ, FIIA or
FIIA(U.K.)L, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by the vote of a majority of the
Trustees or by the vote of a majority of the outstanding shares of the
Series. The New Plan will continue in effect only if approved annually
by a vote of the Trustees and of those Trustees who are not interested
persons, cast in person at a meeting called for that purpose. The New
Management Contract and the New Sub-Advisory Agreements will be
terminable without penalty on sixty days' written notice either by
Investment Trust, FMR, FMR U.K., FMR Far East, FIJ, FIIA or
FIIA(U.K.)L, as the case may be, and will terminate automatically in
the event of its assignment. The New Plan may be terminable at any
time, without the payment of any penalty, by a vote of a majority of
the Independent Trustees or by a vote of a majority of the outstanding
voting securities of the fund.
Assuming the Plan of Reorganization is approved, it is currently
contemplated that the Reorganization will become effective at the
close of business on December 29, 1999 (the Closing Date). However,
the Reorganization may become effective at such other date as the
parties may agree in writing.
The obligations of the Trust and Investment Trust under the Plan of
Reorganization are subject to various conditions as stated therein.
Notwithstanding the approval of the Plan of Reorganization by Fund
shareholders, the Plan of Reorganization may be terminated or amended
at any time prior to the Reorganization by action of the Trustees to
provide against unforeseen events, if (1) there is a material breach
by the other party of any representation, warranty, or agreement
contained in the Plan of Reorganization to be performed at or prior to
the Closing Date or (2) it reasonably appears that a party will not or
cannot meet a condition of the Plan of Reorganization. Generally,
either party may at any time waive the other party's compliance with
any of the covenants and conditions contained in, or both parties may
amend, the Plan of Reorganization, provided that such waiver or
amendment does not materially adversely affect the interests of Fund
shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS AND PLANS. Investment
Trust's transfer agent will establish an account for the Series'
shareholders containing the appropriate number and denominations of
Series Shares to be received by each holder of Fund Shares under the
Plan of Reorganization. Such accounts will be identical in all
material respects to the accounts currently maintained by the Fund's
transfer agent for the Fund's shareholders. Fund shareholders who are
receiving payment under a withdrawal plan with respect to Fund Shares
will retain the same rights and privileges as to Series Shares under
the Plan of Reorganization. Similarly, no further action will be
necessary in order to continue any automatic investment plan or
retirement plan currently maintained by a Fund shareholder with
respect to Fund Shares.
EXPENSES. The Fund and the Series shall each be responsible for all
of their respective expenses of the Reorganization, estimated at
$ 6,000 in the aggregate.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS. Certain fundamental
investment restrictions of the Fund, which prohibit the Fund from
acquiring more than a stated percentage of ownership of another
company, might be construed as restricting the Fund's ability to carry
out the Reorganization. By approving the Plan of Reorganization, Fund
shareholders will be agreeing to waive, only for the purpose of the
Reorganization, those fundamental investment restrictions that could
prohibit or otherwise impede the transaction.
TAX CONSEQUENCES OF THE REORGANIZATION. Each trust will receive an
opinion from its counsel, Kirkpatrick & Lockhart LLP, that the
Reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986,
as amended. Accordingly, no gain or loss will be recognized for
federal income tax purposes by the Fund, the Series, or the Fund's
shareholders upon (1) the transfer of the Fund's assets in exchange
solely for the Series Shares and the assumption by the Trust on behalf
of the Series of the Fund's liabilities or (2) the distribution of
Series Shares to the Fund's shareholders in exchange for their Fund
Shares. The opinion further provides, among other things, that (a) the
basis for federal income tax purposes of the Series Shares to be
received by each Fund shareholder will be the same as that of his or
her Fund Shares immediately prior to the Reorganization; and (b) each
Fund shareholder's holding period for his or her Series Shares will
include the Fund shareholder's holding period for his or her Fund
Shares, provided that said Fund Shares were held as capital assets on
the date of the exchange.
CONCLUSION. The Board of Trustees has concluded that the proposed
Plan of Reorganization to reorganize the Fund into a separate series
of a Massachusetts business trust is in the best interest of the
Fund's shareholders. The Trustees recommend that the Fund's
shareholders vote FOR the approval of the Plan of Reorganization as
described above. Such a vote encompasses approval of the
reorganization of the Fund to a separate series of a Massachusetts
business trust; temporary waiver of certain investment limitations of
the Fund to permit the Reorganization (see "Temporary Waiver of
Investment Restrictions" on page ); and authorization of
the Trust, as sole shareholder of the Series, to approve (i) the New
Management Contract, (ii) the New Sub-Advisory Agreements for the
Series between FMR and FMR U.K., FMR Far East, FIJ, FIIA and
FIIA(U.K)L, and (iii) the New Plan. If approved, the Plan of
Reorganization will take effect on the Closing Date. If the Plan of
Reorganization is not approved, the Fund will continue to operate as a
series of the Trust.
9. TO AMEND FIDELITY PURITAN FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE
AND ELIMINATE CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, modifications to the fund's investment objective
and elimination of certain investment policies. The proposal is
intended to describe the fund's investment approach more concisely,
and will allow the fund to more clearly communicate its investment
objective and strategies in conformity with the requirements of
revised Form N-1A (the form used by open-end investment companies like
the fund to register under the Investment Company Act of 1940 and the
Securities Act of 1933).
INVESTMENT OBJECTIVE. The fund's fundamental investment objective
currently reads as follows:
"The fund seeks to obtain as much income as possible, consistent with
the preservation and conservation of capital. While emphasis on income
is an important objective, this does not preclude growth in capital."
Because the fund's objective is fundamental, it cannot be modified
without a vote of the fund's shareholders.
If the proposal is approved, the fund's fundamental investment
objective would read as follows (additional language is ((underlined))
and deleted language is [bracketed]):
"The fund seeks [to obtain as much income as possible, consistent
with the preservation and conservation of capital. While emphasis on
income is an important objective, this does not preclude growth in
capital] ((income and capital growth consistent with reasonable
risk))."
Amending the fund's investment objective will allow the fund to
comply with the requirements of revised Form N-1A for concise,
understandable descriptions of its investment objective and
strategies, and will allow the fund to more clearly communicate its
investment objective and strategies to shareholders. The proposed
amendment of the fund's fundamental investment objective is not
expected to have any material effect on the way the fund is managed.
INVESTMENT POLICIES. The fund's fundamental investment policies
provide as follows:
"The fund invests in a broad list of securities diversified not only
in terms of companies and industries, but also generally in terms of
security, namely, bonds and preferred stocks as well as common stocks.
The proportions invested in each type of security are varied from time
to time in accordance with FMR's interpretation of economic conditions
and underlying security values."
Because the foregoing investment policies are fundamental, they
cannot be eliminated without a vote of the fund's shareholders.
If the proposal is approved, the fundamental investment policies
stated above would be eliminated. The eliminated policies are
currently described elsewhere in the fund's disclosure. Eliminating
the foregoing fundamental investment policies is not expected to
materially affect the way the fund is managed, and will conform the
fund's investment disclosure with other Fidelity funds with similar
investment disciplines.
CONCLUSION. The Board of Trustees has concluded that the proposed
modification of the fund's investment objective and elimination of the
foregoing fundamental investment policies are in the best interest of
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. If approved by shareholders, the proposal will become
effective when disclosure is revised to reflect the changes. If the
proposal is not approved by the fund's shareholders, the fund's
current fundamental investment objective and policies will remain
unchanged.
10. TO AMEND FIDELITY BALANCED FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE
AND ELIMINATE CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, modifications to the fund's investment objective
and elimination of certain investment policies. The proposal is
intended to describe the fund's investment approach more concisely,
and will allow the fund to more clearly communicate its investment
objective and strategies in conformity with the requirements of
revised Form N-1A (the form used by open-end investment companies like
the fund to register under the Investment Company Act of 1940 and the
Securities Act of 1933).
DISCUSSION OF PROPOSED MODIFICATIONS. The fund's investment objective
and certain investment policies currently read as follows:
"The fund seeks as much income as possible, consistent with
preservation of capital, by investing in a broadly diversified
portfolio of high-yielding securities, including common stocks,
preferred stocks, and bonds. While emphasis on income is an important
objective, this does not preclude growth in capital."
Because the fund's objective is fundamental, it cannot be modified
without a vote of the fund's shareholders.
If the proposal is approved, the fund's fundamental investment
objective would read as follows (additional language is ((underlined))
and deleted language is [bracketed]):
"The fund seeks [as much income as possible, consistent with
preservation of capital, by investing in a broadly diversified
portfolio of high-yielding securities, including common stocks,
preferred stocks, and bonds. While emphasis on income is an important
objective, this does not preclude growth in capital] ((income and
capital growth consistent with reasonable risk))."
As indicated above, if the proposal is approved, the fund's
fundamental investment objective would be amended and certain of its
fundamental investment policies would be eliminated. The eliminated
policies are currently described elsewhere in the fund's disclosure.
Amending the fund's investment objective and eliminating the
investment policies as proposed are not expected to materially affect
the way the fund is managed, and will conform the fund's investment
disclosure with other Fidelity funds with similar investment
disciplines. Amending the fund's investment objective and eliminating
the policies will allow the fund to comply with the requirements of
revised Form N-1A for concise, understandable descriptions of its
investment objective and strategies, and will allow the fund to more
clearly communicate its investment objective and strategies to
shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
modification of the fund's investment objective and elimination of the
foregoing fundamental investment policies are in the best interest of
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. If approved by shareholders, the proposal will become
effective when disclosure is revised to reflect the changes. If the
proposal is not approved by the fund's shareholders, the fund's
current fundamental investment objective and policies will remain
unchanged.
11. TO AMEND FIDELITY GLOBAL BALANCED FUND'S FUNDAMENTAL INVESTMENT
OBJECTIVE AND ELIMINATE CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE
FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, modifications to the fund's investment objective
and the elimination of certain investment policies. The proposal is
intended to describe the fund's investment approach more concisely,
and will allow the fund to more clearly communicate its investment
objective and strategies in conformity with the requirements of
revised Form N-1A (the form used by open-end investment companies like
the fund to register under the Investment Company Act of 1940 and the
Securities Act of 1933).
DISCUSSION OF PROPOSED MODIFICATIONS. The fund's investment objective
and certain investment policies currently read as follows:
"The fund seeks a high level of current income, with regard for both
the preservation of capital and the potential for capital growth."
Because the fund's objective is fundamental, it cannot be modified
without a vote of the fund's shareholders.
If the proposal is approved, the fund's fundamental investment
objective would read as follows (additional language is ((underlined))
and deleted language is [bracketed]):
"The fund seeks [a high level of current] income[, with regard for
both the preservation of capital] and [the potential for] capital
growth ((consistent with reasonable risk))."
As indicated above, if the proposal is approved, the fund's
fundamental investment objective would be amended and certain of its
fundamental investment policies would be eliminated. The eliminated
policies are currently described elsewhere in the fund's disclosure.
Amending the fund's investment objective and eliminating the
investment policies are not expected to materially affect the way the
fund is managed and will conform the fund's investment disclosure with
other Fidelity funds with similar investment disciplines. Amending the
fund's investment objective and eliminating the policies will allow
the fund to comply with the requirements of revised Form N-1A for
concise, understandable descriptions of its investment objective and
strategies, and will allow the fund to more clearly communicate its
investment objective and strategies to shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
modification of the fund's investment objective and elimination of the
foregoing fundamental investment policies are in the best interest of
the fund and its shareholders. The Trustees recommend voting FOR the
proposal. If approved by shareholders, the proposal will become
effective when disclosure is revised to reflect the changes. If the
proposal is not approved by the fund's shareholders, the fund's
current fundamental investment objective and policies will remain
unchanged.
12. TO ELIMINATE A FUNDAMENTAL INVESTMENT POLIC Y OF
FIDELITY LOW-PRICED STOCK FUND.
The Board of Trustees has approved, and recommends that shareholders
of the fund approve, a proposal that would eliminate a fundamental
investment policy. The elimination of this policy will allow the fund
to more clearly communicate its investment objective and strategies in
conformity with the requirements of revised Form N-1A (the form used
by open-end investment companies like the fund to register under the
Investment Company Act of 1940 and the Securities Act of 1933).
DISCUSSION OF PROPOSED MODIFICATIONS. The fund's investment objective
and an investment policy currently read as follows:
"The fund seeks capital appreciation by investing primarily in a
diversified portfolio of low-priced common stocks."
Because this investment policy is fundamental, it cannot be
eliminated without a vote of the fund's shareholders.
If the proposal is approved, the fund's fundamental investment
objective would remain unchanged but the fundamental investment policy
would be eliminated as follows (deleted language is [bracketed]):
"The fund seeks capital appreciation [by investing primarily in a
diversified portfolio of low-priced common stocks]."
As indicated above, if the proposal is approved, the fund's
fundamental investment objective of seeking capital appreciation would
not change. However, the fundamental investment policy stated
above would be eliminated. The eliminated policy is currently
described elsewhere in the fund's disclosure. Eliminating the policy
is not expected to materially affect the way the fund is managed.
Eliminating the policy will allow the fund to comply with the
requirements of revised Form N-1A for concise, understandable
descriptions of its investment objective and strategies, and will
allow the fund to more clearly communicate its investment objective
and strategies to shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the foregoing fundamental investment policy is in the
best interest of the fund and its shareholders. The Trustees recommend
voting FOR the proposal. If approved by shareholders, the proposal
will become effective when disclosure is revised to reflect the
changes. If the proposal is not approved by the fund's shareholders,
the fund's current fundamental investment policies will remain
unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 13 and 14 is to revise several of
the funds' investment limitations to conform to limitations which are
standard for similar types of funds managed by FMR. The Board of
Trustees asked FMR to analyze the various fundamental and
non-fundamental investment limitations of the Fidelity funds, and,
where practical and appropriate to a fund's investment objective and
policies, propose to shareholders adoption of standard fundamental
limitations and elimination of certain other fundamental limitations.
Generally, when fundamental limitations are eliminated, Fidelity's
standard non-fundamental limitations replace them. By making these
limitations non-fundamental, the Board of Trustees may amend a
limitation as they deem appropriate, without seeking shareholder
approval. The Board of Trustees would amend the limitations to
respond, for instance, to developments in the marketplace, or changes
in federal or state law. The costs of shareholder meetings called for
these purposes are generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect
the way a fund is currently managed. However, FMR is presenting them
to you for your approval because FMR believes that increased
standardization will help to promote operational efficiencies and
facilitate monitoring of compliance with fundamental and
non-fundamental investment limitations. Although adoption of a new or
revised limitation is not likely to have any impact on the current
investment techniques employed by a fund, it will contribute to the
overall objectives of standardization.
13. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER INVESTMENT COMPANIES
FROM THE LIMITATION FOR EACH FUND.
Each 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 each fund vote to replace
each fund's current fundamental investment limitation with the
following amended fundamental investment limitation governing
diversification (additional language is ((underlined))):
"The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities, ((or securities of other investment companies)))
if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer."
The percentage limits in the proposed fundamental limitation
concerning diversification are imposed on diversified investment
companies by the 1940 Act. 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, although they may do
so subject to the conditions of the SEC order and Board approval. The
Central Funds 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. Future amendments to the funds' fundamental
diversification limitations would continue to require shareholder
approval.
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.
14. TO AMEND FIDELITY BALANCED FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING CONCENTRATION.
The fund's current fundamental investment limitation concerning the
concentration of its investments within a single industry states:
"The fund may not purchase any security if, as a result, more than
25% of its total assets would be invested in the securities of
companies having their principal business activities in the same
industry, (this limitation does not apply to securities issued or
guaranteed by the United States government or its agencies or
instrumentalities)."
The Trustees recommend that shareholders of the fund vote to replace
this fundamental investment limitation with the following amended
fundamental investment limitation governing concentration:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the
fund's total assets would be invested in the securities of companies
whose principal business activities are in the same industry."
The primary purpose of the proposal is to revise the fund's
fundamental concentration limitation to conform to a limitation which
is expected to become standard for all funds managed by FMR. (See
"Adoption of Standardized Investment Limitations" on page .) If
the proposal is approved, future amendments to the fund's
fundamental concentration limitation would continue to
require shareholder approval . The proposed amended
limitation on concentration is not substantially different from the
current limitation and adoption of the proposed amended
limitation is not expected to affect the way the fund is managed.
CONCLUSION. The Board of Trustees has concluded that the proposal
will benefit the fund and its shareholders. The Trustees recommend
voting FOR the proposal. Upon shareholder approval, the amended
fundamental limitation will become effective when disclosure is
revised to reflect the changes. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees and average net assets of funds with investment objectives
similar to Fidelity Puritan Fund, Fidelity Balanced Fund, Fidelity
Global Balanced Fund and Fidelity Low-Priced Stock Fund and advised by
FMR is contained in the Table of Average Net Assets and Expense Ratios
in Exhibit 8 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, Ms.
Abigail Johnson, Richard A. Spillane Jr., Kevin E. Grant, Richard R.
Mace, Jr., Joel C. Tillinghast and Ms. Bettina Doulton are currently
officers of the trust and officers or employees of FMR or FMR Corp.
With the exception of Mr. Costello, 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, 1997 through March 31, 1999, no
transactions were entered into by Trustees and nominees as Trustee of
the trust involving more than 1% of the voting common, non-voting
common and equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FIMM
FIMM is a wholly owned subsidiary of FMR formed in 1997 to provide
portfolio management services to certain Fidelity funds and investment
advice with respect to fixed-income instruments.
Funds with investment objectives similar to Fidelity Puritan Fund and
Fidelity Balanced Fund for which FMR has entered into a sub-advisory
agreement with FIMM (the successor to FMR Texas), and the net assets
of each of these funds, are indicated in the Table of Average Net
Assets and Expense Ratios in Exhibit 8 beginning on page .
The Directors of FIMM are Edward C. Johnson 3d, Chairman, and Robert
C. Pozen, President. Mr. Johnson 3d also is President and a Trustee of
the trust and of other funds advised by FMR; Chairman, Chief Executive
Officer, President, and a Director of FMR Corp.; Chairman of the Board
and of the Executive Committee of FMR; a Director of FMR; and Chairman
and Director of FMR U.K. and FMR Far East. In addition, Mr. Pozen is
Senior Vice President and a Trustee of the trust and of other funds
advised by FMR; a Director of FMR Corp.; Director of FMR; and
President and Director of FMR U.K. and FMR Far East. Each of the
Directors is a stockholder of FMR Corp. The principal business address
of the Directors is 82 Devonshire Street, Boston, Massachusetts 02109.
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 Puritan Fund,
Fidelity Balanced Fund, Fidelity Global Balanced Fund and Fidelity
Low-Priced Stock 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 8
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.
ACTIVITIES AND MANAGEMENT OF FIJ, FIIA, AND FIIAL U.K.
FMR, on behalf of Fidelity Global Balanced Fund, has entered into a
sub-advisory agreement with FIJ and FIIA, both wholly owned
subsidiaries of Fidelity International Limited (FIL). FIIA in turn has
entered into a sub-advisory agreement with its U.K. subsidiary, FIIAL
U.K.
The sub-advisers provide research and investment recommendations with
respect to companies based outside of the United States. FIJ focuses
on companies primarily based in Japan and other parts of Asia. FIIA
focuses primarily on companies based in Hong Kong, Australia, New
Zealand, and Southeast Asia (other than Japan). FIIAL U.K. focuses
primarily on companies based in the U.K. and Europe. Open-end funds
with investment objectives similar to Fidelity Puritan Fund, Fidelity
Balanced Fund, Fidelity Global Balanced Fund and Fidelity Low-Priced
Stock Fund managed by FMR with respect to which FMR currently has
sub-advisory agreements, and the net assets of each of these funds,
are indicated in the Table of Average Net Assets and Expense Ratios in
Exhibit 8 beginning on page .
The Directors of FIJ are Bill Wilder, President, Arthur M. Jesson,
Edward C. Johnson 3d, Nobuhide Kamiyama, Noboru Kawai, Yasuo Kuramoto,
Takeshi Okazaki, Lawrence Repeta, and Hiroshi Yamashita. With
the exception of Mr. Edward C. Johnson 3d, the principal business
address of each of the Directors is Shiroyama JT Mori Building, 4-3-1
Toranomon, Minato-ku, Tokyo 105, Japan. The principal business address
of Mr. Edward C. Johnson 3d is 82 Devonshire Street, Boston,
Massachusetts 02109.
The Directors of FIIA are David J. Saul, President, Anthony Bolton,
Charles T.M. Collis, William R. Ebsworth, Brett Goodin, and Simon
Haslam. The principal business address of each of the Directors is
Pembroke Hall, 42 Crow Lane, Pembroke HM19, Bermuda.
The Directors of FIIAL U.K. are Anthony Bolton, Pamela Edwards, Simon
Haslam, and Sally Walden. The principal business address of each of
the Directors is 26 Lovat Lane, London, EC3R 8LL, England.
FIIA also is the investment adviser of Fidelity Advisor Emerging Asia
Fund, Inc. and Fidelity Advisor Korea Fund, Inc., closed-end
investment companies with net assets of approximately $70.3 billion
and $26.9 billion, respectively, as of October 31, 1998 and September
30, 1998, respectively. As compensation for its services to each
closed-end fund, FIIA receives 60% of the management fee paid by that
fund to FMR. The Emerging Asia Fund management fee has two components,
a basic fee and a performance adjustment. The basic fee is payable
monthly at an annual rate equal to 1.00% of the Emerging Asia Fund's
average daily net assets. The performance adjustment may increase or
decrease the basic fee by up to 0.25% annually, based on the Emerging
Asia Fund's performance (over a rolling performance period of up to 36
months) as compared to the MS Combined All Country Asia Free ex Japan
Index. The Korea Fund management fee is payable monthly at an annual
rate equal to 1.00% of Korea Fund's average daily net assets. At
FIIA's request, FIJ may provide sub-advisory services with respect to
either fund's investments. As compensation for these services, FIJ
would receive 50% of the fee paid to FIIA by that fund in respect of
the assets of the fund managed by FIJ on a discretionary basis and 30%
of the fee paid to FIIA in respect of the assets of that fund managed
by FIJ on a non-discretionary basis.
PRESENT MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other
services. Under its management contract with each fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of each fund in accordance with its
investment objective, policies, and limitations. FMR also provides
each fund with all necessary office facilities and personnel for
servicing each fund's investments, compensates all officers of each
fund and all Trustees who are "interested persons" of the trust or of
FMR, and all personnel of each fund or FMR performing services
relating to research, statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal and state laws;
developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposals 4
through 6.
In addition to the management fee payable to FMR, each 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 each fund's
current management contract provides that each fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders, the
trust, on behalf of each fund has entered into a revised transfer
agent agreement with FSC, pursuant to which FSC bears the costs of
providing these services to existing shareholders. Other expenses paid
by each fund include interest, taxes, brokerage commissions, and each
fund's proportionate share of insurance premiums and Investment
Company Institute dues. Each fund is also liable for such
non-recurring expenses as may arise, including costs of any litigation
to which each fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.
Transfer agent fees and pricing and bookkeeping fees, including
reimbursement for out-of-pocket expenses, paid to FSC by Fidelity
Puritan Fund, Fidelity Balanced Fund, Fidelity Global Balanced Fund
and Fidelity Low-Priced Stock Fund for fiscal 1998 amounted to the
following:
Fund Name Fees Paid to FSC
Fidelity Puritan Fund $ 45,046,000
Fidelity Balanced Fund $ 11,105,000
Fidelity Global Balanced Fund $ 280,853
Fidelity Low-Priced Stock Fund $ 21,733,000
FSC also received fees for administering each fund's securities
lending program. Securities lending fees are based on the number and
duration of individual securities loans. Securities lending fees for
fiscal 1998 for Fidelity Puritan Fund, Fidelity Balanced Fund,
Fidelity Global Balanced Fund and Fidelity Low-Priced Stock Fund were
$0, $10,000, $0, and $0, respectively.
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. Each
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered for Fidelity Puritan Fund,
Fidelity Balanced Fund, Fidelity Global Balanced Fund , and Fidelity
Low-Priced Stock Fund . Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
Sales charge revenue paid to FDC for fiscal 1998 amounted to
$9,911,000 on behalf of Fidelity Low-Priced Stock Fund of which
$9,890,000 was retained by FDC .
In addition, FDC received from Fidelity Balanced Fund and Fidelity
Global Balanced Fund fees pursuant to Distribution and Service Plans
under Rule 12b-1 in fiscal 1998 as follows:
Fund Name 12b-1 Fees Paid to FDC
Fidelity Balanced Fund $ 0
Fidelity Global Balanced Fund $ 0
FMR is each fund's manager pursuant to management contracts dated
August 1, 1994, which were approved by shareholders of the funds on
July 13, 1994. The management contracts were submitted to shareholders
in connection with a proposal to provide for lower fees when FMR's
assets under management exceed certain levels.
For the services of FMR under each management contract, Fidelity
Puritan Fund, Fidelity Balanced Fund and Fidelity Global Balanced Fund
pay FMR a monthly management fee which has two components: a group fee
rate and an individual fund fee rate.
For the services of FMR under the management contract, Fidelity
Low-Priced Stock Fund pays FMR a monthly management fee which has two
components: a basic fee, which is the sum of a group fee rate and an
individual fund fee rate, and a performance adjustment based on a
comparison of the fund's performance to that of the Russell 2000 Index
(Russell 2000).
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 $648 billion of group net assets - the approximate level for
July 1998 - was .2875%, which is the weighted average of the
respective fee rates for each level of group net assets up to $648
billion.
On January 1, 1996, FMR voluntarily modified the breakpoints in the
group fee rate schedules. The revised group fee rate schedules,
depicted below, provide for lower management fee rates as FMR's assets
under management increase.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
</TABLE>
The individual fund fee rate for Fidelity Puritan Fund and Fidelity
Balanced Fund is 0. 20 %. The individual fund fee rate for
Fidelity Global Balanced Fund is 0.45%. The individual fund fee rate
for Fidelity Low-Priced Stock Fund is 0.35%. Effective August 1,
1996, FMR voluntarily agreed to reduce the individual fund fee rate
for Fidelity Puritan Fund and Fidelity Balanced Fund from 0.20% to
0.15%, the rate currently in effect. Based on the average group
net assets of the funds advised by FMR for July 1998, each fund's
annual management fee (for Fidelity Puritan Fund, Fidelity Balanced
Fund, and Fidelity Global Balanced Fund) and basic fee (for Fidelity
Low-Priced Stock Fund) rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management/Basic Fee Rate
Puritan .2875% + .1500%* = .4375%
Balanced .2875% + .1500%* = .4375%
Global Balanced .2875% + .4500% = .7375%
Low-Priced Stock .2875% + .3500% = .6375%
</TABLE>
* If the voluntary reduction effective August 1, 1996 were not in
effect, the total management fee rate in this example would have been
.4875%.
One-twelfth of this annual management fee (for Fidelity Puritan Fund,
Fidelity Balanced Fund, and Fidelity Global Balanced Fund) and basic
fee (for Fidelity Low-Priced Stock Fund) rate is applied to each
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for Fidelity
Low-Priced Stock Fund is subject to upward or downward adjustment,
depending upon whether, and to what extent, the fund's investment
performance for the performance period exceeds, or is exceeded by, the
record of the Russell 2000 Index (the Index) over the same period. The
performance period consists of the most recent month plus the previous
35 months. Each percentage point of difference, calculated to the
nearest 1.00% (up to a maximum difference of +/-10.00 ) is multiplied
by a performance adjustment rate of 0.02%. Thus, the maximum
annualized adjustment rate is +/-0.20%. This performance comparison is
made at the end of each month. One twelfth (1/12) of this rate is then
applied to the fund's average net assets for the entire performance
period, giving a dollar amount which will be added to (or subtracted
from) the basic fee.
The fund's performance is calculated based on change in net asset
value (NAV). For purposes of calculating the performance adjustment,
any dividends or capital gain distributions paid by the fund are
treated as if reinvested in fund shares at the NAV as of the record
date for payment. The record of the Index is based on change in value
and is adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on the fund's
performance compared to the investment record of the Index, the
controlling factor is not whether the fund's performance is up or down
per se, but whether it is up or down more or less than the record of
the Index. Moreover, the comparative investment performance of the
fund is based solely on the relevant performance period without regard
to the cumulative performance over a longer or shorter period of time.
During fiscal 1998, FMR received $103,702,000 , $19,959,000, and
$555,880 for its services as investment adviser to Fidelity Puritan
Fund, Fidelity Balanced Fund and Fidelity Global Balanced Fund,
respectively. This fee was equivalent to .4416%, .4414%, and .7398%,
respectively, of the average net assets of Fidelity Puritan Fund,
Fidelity Balanced Fund and Fidelity Global Balanced Fund.
During fiscal 1998, FMR received $80,492,000 for its services as
investment adviser to Fidelity Low-Priced Stock Fund. This fee, which
includes both the basic fee and the performance adjustment, was
equivalent to .7430% of the average net assets of the fund. For 1998,
the upward performance adjustment amounted to $10,960,000 for the
fund.
FMR may, from time to time, agree to reimburse all or a portion of
each fund's total operating expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses). FMR retains the
ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal
year.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Puritan Fund and Fidelity Balanced Fund, FMR
has entered into a sub-advisory agreement with Fidelity Investments
Money Management, Inc. (FIMM) pursuant to which FIMM chooses certain
investments for each fund. Both sub-advisory agreements are dated
January 1, 1999.
Under the sub-advisory agreements, FMR pays FIMM fees equal to 50% of
the management fee payable to FMR under its management contract with
each fund, after payments by FMR pursuant to each fund's 12b-1 plan,
if any. The fees paid to FIMM are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to
time.
On behalf of Fidelity Global Balanced Fund, FMR has entered into
sub-advisory agreements with FMR U.K., FMR Far East, FIJ, and FIIA.
FIIA, in turn, has entered into a sub-advisory agreement with FIIAL
U.K. Pursuant to the sub-advisory agreements, FMR may receive
investment advice and research services outside the United States from
the sub-advisers. On behalf of Fidelity Global Balanced Fund, FMR may
also grant the sub-advisers 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 agreements, dated January 14,
1993, were approved by FMR as sole shareholder of the fund prior to
commencement of operations.
On behalf of Fidelity Puritan Fund, Fidelity Balanced Fund, Fidelity
Global Balanced Fund, and Fidelity Low-Priced Stock Fund, for
providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a
fee equal to 50% of its monthly management fee (including any
performance adjustment) with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIAL U.K. a fee equal to 110% of
FIIAL U.K.'s costs incurred in connection with providing discretionary
investment management services.
For providing investment advice and research services, the fees paid
to the sub-advisers for the fiscal year ended 1998 were as follows:
FMR U.K. FMR Far East FIIA FIIAL U.K. FIJ
Puritan $ 1,218,909 $ 1,152,604 $ 0 $ 0 $ 0
Balanced $ 127,073 $ 118,765 $ 0 $ 0 $ 0
Global Balanced $ 24,553 $ 23,256 $ 0 $ 0 $ 0
Low-Priced Stock $ 1,218,437 $ 1,164,998 $ 0 $ 0 $ 0
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.
The brokerage commissions paid to NFSC and FBS by each fund for
fiscal 1998 are listed in the following table:
Brokerage Commissions Paid to Brokerage Commissions Paid to
NFSC FBS
Puritan $ 1,721,000 $ 0
Balanced $ 878,000 $ 2,200
Global Balanced $ 3,900 $ 2,500
Low-Priced Stock $ 929,000 $ 39,000
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.,
P.O. Box 789, Boston, Ma 02109, whether other persons are beneficial
owners of shares for which proxies are being solicited and, if so, the
number of copies of the Proxy Statement and Annual Reports you wish to
receive in order to supply copies to the beneficial owners of the
respective shares.
EXHIBIT 1
FORM OF AMENDED AND RESTATED DECLARATION OF TRUST
[DATED SEPTEMBER 16, 1994]
The language to be added to the current Declaration of Trust is
underlined, and the language to be deleted is set forth in [brackets].
Headings that were underlined in the trust's current Declaration of
Trust remain underlined in this Exhibit.
AMENDED AND RESTATED DECLARATION OF TRUST,
MADE [SEPTEMBER 16, 1994]______, 1999 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 October 1, 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]trust under this Amended and Restated Declaration of
Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Fidelity Puritan Trust".
DEFINITIONS
Section 2. Wherever used [hererin, ]((herein,)) unless
otherwise required by the context or specifically provided:
(a) The [T]terms "Affiliated Person,"[,] "Assignment,"[,]
"Commission,"[,] "Interested Person,"[,] "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section 2(a)(42)
of the 1940 Act, whichever may be applicable), and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
[amended from time to time] ((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, [and includes]
((including such Class or Classes of Shares as the Trustees may from
time to time create and establish and including)) fractions of
[s]Shares as well as whole [s]Shares ((as)) consistent with the
requirements of Federal and/or [other]((state)) securities laws; [
and]
(h) "Series" refers to ((any)) series of Shares of the Trust
established in accordance with the provisions of Article III[.];
[(b)](i) [The] "Trust" refers to Fidelity Puritan Trust[.] ((and
reference to the Trust, when applicable to one or more Series of the
Trust, shall refer to any such Series;))
[(e)] (j) The "Trustees" refer to the individual trustees in
their capacity as trustees hereunder of the Trust and their successor
or successors for the time being in office as such trustee or
trustees; ((and))
[ (g)] (k) [ The] "1940 Act" refers to the
Investment Company Act of 1940, as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The [P]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))
[is] ((each)) [ unlimited ] ((Series,)) and
((Class thereof,)) [each] ((is unlimited. Each)) Share
shall be without par value and shall be fully paid and nonassessable.
The Trustees shall have full power and authority, in their sole
discretion ((,)) and without obtaining any prior
authorization or vote of the Shareholders ((of any Series or
Class)) of the Trust (((a))) to create and establish (and
to change in any manner) Shares ((or any Series or Classes
thereof)) with such preferences, voting powers,
rights ((,)) and privileges as the Trustees
may ((,)) from time to time((,))
determine[,](( ; (b))) to divide or combine the Shares ((or
any Series or Classes thereof)) into a greater or lesser
number[,] (( ; (c))) to classify or reclassify any issued
Shares into one or more Series ((or Classes)) of
Shares[,] (( ; (d))) to abolish any one or more Series
((or Classes )) of Shares[,] (( ;)) and
(((e))) to take such other action with respect to the Shares as
the Trustees may deem desirable.
ESTABLISHMENT OF SERIES 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 (( , securities,)) or ((other))
[securities ] ((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]((SECTION 5.)) All consideration received by the Trust
for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange, or liquidation of such
assets, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, shall be referred to
as "assets belonging to" that Series. In addition, any assets, income,
earnings, profits, and proceeds thereof, funds, or payments
[which]((that)) are not readily identifiable as belonging to any
particular Series ((or Class,)) shall be allocated by the Trustees
between and among one or more of the Series ((or Classes)) in such
manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series ((or Classes)) for all purposes[,] and
shall be referred to as assets belonging to that Series ((or Class)).
The assets belonging to a particular Series shall be so recorded upon
the books of the Trust ((or of its agent or agents))[,] and shall be
held by the Trustees in [T]trust for the benefit of the holders of
Shares of that Series.
The assets belonging to each particular Series shall be charged with
the liabilities of that Series and all expenses, costs, charges, and
reserves attributable to that Series,(( except that liabilities and
expenses may, in the Trustees' discretion, be allocated solely to a
particular Class and, in which case, shall be borne by that Class)).
Any general liabilities, expenses, costs, charges, or reserves of the
Trust [which]((that)) are not readily identifiable as belonging to any
particular Series ((or Class)) shall be allocated and charged by the
Trustees between or among any one or more of the Series ((or Classes))
in such manner as the Trustees, in their sole discretion, deem fair
and equitable ((and shall be referred to as "liabilities belonging to"
that Series or Class)). Each such allocation shall be conclusive and
binding upon the Shareholders of all Series(( or Classes)) for all
purposes. Any creditor of any Series may look only to the assets of
that Series to satisfy such creditor's debt.(( No Shareholder or
former Shareholder of any series shall have a claim on or any right to
any assets allocated or belonging to any other Series.))
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
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. 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. ]
((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.))
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]special [ M]meeting of
the Trust by a vote of two-thirds (((2/3))) of the
outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation,
retirement, [ 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))
number, ((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 ] ((1940)) [ 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]Trust, the [t]Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees,
without any further act or conveyance, and he shall be deemed a
Trustee hereunder. The ((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 AB SENCE 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 Truste es , in all
instances , shall act as principals[,] and
are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts
and to make and execute any and all contracts and instruments that
they may consider necessary or appropriate in connection with the
management of the Trust. ((Except as otherwise provided herein or
in the 1940 Act, )) [T]t he Trustees shall not in any
way be bound or limited by present or future laws or customs in regard
to trust investments, but shall have full authority and power to make
any and all investments [which ]((that)) they, in their
[uncontrolled] discretion, shall deem proper to accomplish the
purpose of this Trust. Subject to any applicable limitation in
[ the] ((this)) Declaration of Trust or the Bylaws of the
Trust, ((if any,)) the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property ((uninvested))[,] without, in any
event , being bound or limited by any present or future
law or custom in regard to investments by Trustees, and to sell,
exchange, lend, pledge, mortgage, hypothecate, write options
on , and lease any or all of the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ [a]((one or more)) bank((s,)) [or] trust
compan[y]((ies 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]Principal [ u]Underwriter in
the manner hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any [ agent,] ((investment))
[ custodian ] ((adviser, manager, custodian, underwriter, or
other agent)) or ((independent))
[ underwriter.] ((contractor)).
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4[(b) ]
hereof.
(j) To vote or give assent[,] or exercise any rights of
ownership[,] with respect to stock or other securities
or property; and to execute and deliver powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered , or other
negotiable form; or either in its own name or in the name of a
custodian or a nominee or nominees.[, subject in either case to
proper safeguards according to the usual practice of Massachusetts
trust companies or investment companies. ]
(m) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article III ((and
to establish Classes of such Series having relative rights, powers,
and duties as the Trustees may provide consistent with applicable
laws)).
(n) To allocate assets, liabilities , and expenses of
the Trust to a particular Series ((or Class, as appropriate,))
or to apportion the same between or among two or more
Series[,] ((or Classes, as appropriate,)) provided that
any liabilities or expenses incurred by a particular Series ((or
Class)) shall be payable solely out of the assets belonging to
that Series as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation , or merger of any corporation or concern,
any security of which is held in the Trust; to consent to any
contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with respect
to any security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy ,
including, but not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money, and to pledge,(( mortgage, or
hypothecate the assets of the Trust,)) subject to ((the)) applicable
requirements of the 1940 Act.[ The Trustees shall not pledge, mortgage
or hypothecate the assets of the Trust except that, to secure
borrowings, the Trustees may pledge securities. ]
(s) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the
Shares of any Shareholders whose investment is less than such minimum
upon giving notice to such Shareholder.
(((t) To operate as and carry on the business of an investment
company and to exercise all the powers necessary and appropriate to
the conduct of such operations.
(u) To interpret the investment policies, practices or limitations
of any Series.
(v) In general to carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any purpose or
the attainment of any object or the furtherance of any power
hereinbefore set forth, either alone or in association with others,
and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes,
objects or powers)).
[ (t)] (w) Notwithstanding any other provision hereof, to
invest all of the assets of any [s] Series in a single
open-end investment company, including investment by
means of transfer of such assets in exchange for an interest or
interests in such investment company.
((The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust or any Series or
Class thereof.))
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person of any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws[.] (( , if any.))
ACTION BY THE TRUSTEES
Section 3. [ The] (( Except as otherwise provided herein or in
the 1940 Act, the)) Trustees shall act by majority vote at a
meeting duly called or by unanimous written consent without a meeting
or by telephone consent provided a quorum of Trustees participate in
any such telephonic meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting ((at))
[of ] ((which)) the ((Trustees are present))
[ Trustees. ] ((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 [P]place of all meetings
of the Trustees shall be given by the party calling the meeting to
each Trustee by telephone ((, telefax,)) [or] telegram ((,
or other electro-mechanical means)) sent to his home or
business address at least twenty-four (((24))) hours in
advance of the meeting or by written notice mailed to his home or
business address at least seventy-two (((72))) hours in
advance of the meeting. Notice need not be given to any Trustee 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]state laws and regulations[, ] ; charges
of custodians, transfer agents , and
registrars[,] ; expenses of preparing and setting up in
type [P]prospectuses and [S]statements of
[ A]additional [ 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
provision(( s )) of this Article VII[, ] or
of the Bylaws, if any[;] . [and s] Such contract
may also provide for the repurchase or sale of Shares by such other
party as principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may , in their discretion
((and)) from time to time , enter into
[a] ((one or more)) transfer agency and Shareholder
service contract (( 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]((SECTION 5.)) Any contract entered into pursuant to
Sections 1 and 2 of this Article VII shall be consistent with and
subject to the requirements of Section 15 of the 1940 Act((, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretative
releases of the Commission ))([including any amendments thereof] or
other applicable Act of Congress hereafter enacted), with respect to
its continuance in effect, ((its amendment,)) its termination, and the
method of authorization and approval of such contract or renewal
thereof[, and no amendment to any contract, entered into pursuant to
Section 1 shall be effective unless assented to by a Majority
Shareholder Vote].
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
[Section 1]((SECTION 1)). The Shareholders shall have power to
vote [(i)](((a))) for the election of Trustees as provided in Article
IV, Section 2[, (ii)]((; (b))) for the removal of Trustees as provided
in Article IV, Section 3(d)[, (iii)]((; (c))) with respect to any
investment advisory or management contract as provided in Article VII,
Section((s)) 1 ((and 5))[, (iv)]((; (d) with respect to any
termination, merger, consolidation, reorganization, or sale of assets
of the Trust or any of its Series or Classes as provided in Article
XII, Section 4; (e))) with respect to the amendment of this
Declaration of Trust as provided in Article XII, Section 7[, (v)]((;
(f))) to the same extent as the shareholders of a Massachusetts
business corporation, as to whether or not a court action, proceeding
or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or the Shareholders, provided, however,
that a Shareholder of a particular Series shall not be entitled to
bring any derivative or class action on behalf of any other Series of
the Trust[,]; and [(vi)](((g))) with respect to such additional
matters relating to the Trust as may be required or authorized by law,
by this Declaration of Trust, or the Bylaws of the Trust, if any, or
any registration of the Trust with the [Securities and Exchange]
Commission [(the "Commission")] or any [S]state, as the Trustees may
consider desirable.
On any matter submitted to a vote of the Shareholders, all
[s]Shares shall be voted by individual Series, except ((as provided in
the following sentence and except)) [(i)](((a))) when required by the
1940 Act, Shares shall be voted in the aggregate and not by individual
Series; and [(ii)](((b))) when the Trustees have determined that the
matter affects only the interests of one or more Series, then only the
Shareholders of such Series shall be entitled to vote thereon.(( The
Trustees may also determine that a matter affects only the interests
of one or more Classes of a Series, in which case, any such matter
shall be voted on by such Class or Classes)) A Shareholder of each
Series ((or class thereof)) shall be entitled to one vote for each
dollar of net asset value (number of Shares owned times net asset
value per Share) of such Series[)]((or Class thereof))[,] on any
matter on which such Shareholder is entitled to vote, and each
fractional dollar amount shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election
of Trustees. Shares may be voted in person or by proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and
may take any action required or permitted by law, this Declaration of
Trust or any Bylaws of Trust((, 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 ((Commission or any rules or))
[ same] ((regulations)) [ may] ((adopted ))
[be ] ((or)) [ amended ] ((interpretative))
[ from ] ((releases)) [ time ]((of))
[to] ((the)) [ time,] (( 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]((SECTION 1)). The Trustees shall at all times employ a
bank((, a company that is a member of a national securities
exchange,)) [or] trust company((, or other entity permitted under the
1940 Act, as modified by or interpreted by any applicable order or
orders of the Commission or any rules or regulations adopted or
interpretative releases of the Commission thereunder,)) having
capital, surplus and undivided profits of at least two million dollars
($2,000,000), or such other amount [or such other entity]as shall be
allowed by the Commission or by the 1940 Act, as custodian with
authority as its agent, but subject to such restrictions, limitations
or other requirements, if any, as may be contained in the Bylaws of
the Trust((, if any:))
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed
to by the Trust and the custodian, if such procedures have been
authorized in writing by the Trust;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
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 [the]((such)) sub-custodian
and approved by the Trustees, provided that in every case such
sub-custodian shall be a bank((, a company that is a member of a
national securities exchange,)) [or] trust company((, or other entity
permitted under the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretative releases of the Commission
thereunder, ))having capital, [and]surplus and
[individual]((undivided)) profits of at least [2]((two)) million
dollars ($2,000,000) or such other [person]((amount)) as
[may]((shall)) be [permitted]((allowed)) by the Commission[,] or
[otherwise in accordance with]((by)) the 1940 Act[ as from time to
time amended].
CENTRAL [CERTIFICATE]DEPOSITORY SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of
1934[,] or such other person as may be permitted by the
Commission[,] or otherwise in accordance with the 1940
Act , [ as from time to time amended,] pursuant to
which system all securities of any particular class
or[.] series of any issuer deposited within the system
are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such
securities[,] ; provided that all such deposits shall be
subject to withdrawal only upon the order of the Trust ((or its
custodian, subcustodians, or other authorized agents)).
ARTICLE X
[DISTRIBUTIONS AND REDEMPTIONS]
DISTRIBUTIONS, REDEMPTIONS AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees.
(b) The Trustees shall have ((the)) power, to the fullest
extent permitted by the laws of Massachusetts, at any time to declare
and cause to be paid dividends on Shares of a particular Series, from
the assets belonging to that Series, which dividends, at the election
of the Trustees, may be paid daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, and may be payable in Shares of that
Series((, or Classes thereof,(( at the election
of each Shareholder of that Series.
((The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans, or related plans as
the Trustees shall deem appropriate.))
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute ((a stock
dividend)) pro rata among the Shareholders of a particular
Series ((, or Class thereof,)) as of the record date of
that Series ((or Class )) fixed as provided in ((Article
XII,)) Section 3[hereof a "stock dividend"] .
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular
Series ((or Class of a Series)) desires to dispose of his
Shares, he may deposit at the office of the transfer agent or other
authorized agent of that Series a written request or such other form
of request as the Trustees may , from time to
time , authorize, requesting that the Series purchase the
Shares in accordance with this Section 2; and the Shareholder so
requesting shall be entitled to require the Series to purchase, and
the Series or the principal underwriter 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]order of the Commission applicable to the Series. The
Trustees may delegate any of its powers and duties under this Section
3 with respect to appraisal of assets and liabilities. At any
time , the Trustees may cause the value per Share last
determined to be determined again in ((a)) similar manner and
may fix the time when such redetermined value shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify , but not later than the close of business
on the business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment until the
Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the
Net Asset Value per Share existing after the termination of the
suspension. ((In the event that any Series is divided into Classes,
the provisions of this Section, to the extent applicable as determined
in the discretion of the Trustees and consistent with applicable law,
may be equally applied to each such Class.))
ARTICLE XI
LIMITATION OF LIABILITY
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 , [O] or investment adviser of the
Trust, but nothing contained herein shall
[proTect ] ((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]Interested [ p]Persons of the Trust nor
are parties to the matter based upon a review of readily available
facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full
trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee or officer , and shall
inure to the benefit of the heirs, executors , and
administrators of such a person. Nothing contained herein shall affect
any rights to indemnification to which Trust personnel, other than
Trustees and officers, and other persons may be entitled by contract
or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit , or proceeding of the
character described in [ p]Paragraph (a) of this Section
2 may be paid by the applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on
behalf of such Covered Person that such amount will be paid over by
him to the applicable Series if it is ultimately determined that he is
not entitled to indemnification under this Section 2; provided,
however, that either [(a)] (((i))) such Covered Person
shall have provided appropriate security for such
undertaking[, ](( ;)) (b) (((ii))) the Trust is
insured against losses arising out of any such advance
payments ; or [(c)] (( (iii))) either a
majority of the Trustees who are neither interested persons of the
Trust nor parties to the matter, or independent legal counsel in a
written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a trial-type inquiry or
full investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section 2.
[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.
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)) [ partnership] ((other))
[ is] ((than)) [ created ]((a))
[hereby. ] ((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.
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 omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for
payment of any dividends, or the date for the allotment
of rights, or the date when any change or conversion or exchange of
Shares shall go into effect, as a record date for the determination of
the Shareholders entitled to notice of, and to vote at, any such
meeting, or entitled to receive payment of any such dividend, or to
any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of Shares, and in such case
such Shareholders and only such Shareholders as shall be Shareholders
of record on the date so fixed shall be entitled to such notice of,
and to vote at, such meeting, or to receive payment of such dividend,
or to receive such allotment or rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or aforesaid.
[TERMINATION OF TRUST]
DURATION; TERMINATION OF TRUST, A SERIES OR A CLASS; MERGERS, ETC.
[ Section 4. ]
[(a) ] ((SECTION 4.1.)) [ This ]((DURATION.
The)) Trust shall continue without limitation of
time , but subject to the provisions [of sub-section
(b)] of this [Section] ((Article)) [4.] ((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 ]
((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,))
[(ii) at any time sell and convert into money all of the assets
of the Trust or any affected Series. ]
(((i) the Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the
Trust or the Series or Class, and all of the powers of the Trustees
under this Declaration of Trust shall continue until the affairs of
the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or the Series or Class thereof;
collect its assets; sell, convey, assign, exchange, transfer, or
otherwise dispose of all or any part of the remaining Trust property
or Trust property allocated or belonging to such Series or Class to
one or more persons at public or private sale for consideration that
may consist in whole or in part of cash, securities, or other property
of any kind; discharge or pay its liabilities; and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer, or other disposition of
all or substantially all the Trust property or Trust property
allocated or belonging to such Series or Class (other than as provided
in (iii) below) shall require Shareholder approval in accordance with
Section 4.3 below; and))
[Upon making provision for the payment of all such liabilities in
either (i) or (ii), by such assumption or otherwise, the Trustees
shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected
Series then outstanding. ]
(((iii) after paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities, and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights; and))
[(c) Upon completion of the distribution of the remaining proceeds
or the remaining assets as provided in sub-section (b), the Trust or
any affected Series shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder and
the right, title and interest of all parties shall be cancelled and
discharged. ]
(((b) after termination of the Trust or the Series or Class and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust and
file with the Secretary of The Commonwealth of Massachusetts, as
appropriate, an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of all
Shareholders of the Trust or the terminated Series or Class shall
thereupon cease.
SECTION 4.3. MERGER, CONSOLIDATION, AND SALE OF ASSETS. Subject to
applicable Federal and state law and except as otherwise provided in
Section 4.4 below, the Trust or any Series thereof may merge or
consolidate with any other corporation, association, trust, or other
organization or may sell, lease, or exchange all or substantially all
of the Trust property or Trust property allocated or belonging to such
Series, including its good will, upon such terms and conditions and
for such consideration when and as authorized at any meeting of
Shareholders called for such purpose by a Majority Shareholder Vote of
the Trust or affected Series, as the case may be. Any such merger,
consolidation, sale, lease, or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to Massachusetts
law.
SECTION 4.4. INCORPORATION; REORGANIZATION. Subject to applicable
Federal and state law, the Trustees may without the vote or consent of
Shareholders cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, limited liability company, association, or
other organization to take over all of the Trust property or the Trust
property allocated or belonging to such Series or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust property or the
Trust property allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association, or organization in exchange for the shares or securities
thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such
corporation, trust, partnership, limited liability company,
association, or organization, or any corporation, partnership, limited
liability company, trust, association, or organization in which the
Trust or such Series holds or is about to acquire shares or any other
interest. Subject to applicable Federal and state law, the Trustees
may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
limited liability company, association, or other organization. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, limited liability
companies, associations, or other organizations and selling,
conveying, or transferring the Trust property or a portion of the
Trust property to such organization or entities; provided, however,
that the Trustees shall provide written notice to the affected
Shareholders of any transaction whereby, pursuant to this Section 4.4,
the Trust or any Series therof 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
[ d] Declaration of [ t]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 [d]Declaration of [t]Trust
shall be filed by the Trustees with the Secretary of
the ((The)) Commonwealth of Massachusetts and the Boston
City Clerk, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer or Trustee of the Trust as to
whether or not any such supplemental [d]Declarations of
[ t]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 [d]Declaration of [ t]Trust.
In this instrument or in any such supplemental
[d]Declaration of [ t]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
[ d]Declaration of [ t]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]Trust set forth in this instrument is
made in [t]The Commonwealth of Massachusetts, and it is
created under and is to be governed by and construed and administered
according to the laws of said Commonwealth. The Trust shall be of the
type commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such ((a trust, and the absence
of a specific reference herein to any such power, privilege, or
action shall not imply that the Trust may not exercise such power or
privilege or take such)) [trust.] ((actions.))
AMENDMENTS
[Section 7]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,]((Except as specifically provided herein,)) the
Trustees [shall]((may, without shareholder vote,)) amend or otherwise
supplement this [instrument,]((Declaration of Trust)) by making ((an
amendment,)) a [d]Declaration of [t]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. ](( 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]((SECTION 9)). Fidelity Management & Research Company
("FMR") has consented to the use by any Series of the Trust of the
identifying word "Fidelity" in the name of any Series of the Trust at
some future date. Such consent is conditioned upon the employment of
FMR ((or a subsidiary or affiliate thereof)) as investment adviser
of each Series of the Trust. As between the Trust and itself, FMR
controls the use of the name of the Trust insofar as such name
contains the identifying word "Fidelity." FMR may from time to
time use the identifying word "Fidelity" in other connections and for
other purposes, including, without limitation, in the names of other
investment companies, ((corporations,)) or businesses
[which ] ((that)) it may manage, advise, sponsor or own or
in which it may have a financial interest. FMR may require the Trust
or any Series thereof to cease using the identifying word "Fidelity"
in the name of the Trust or any Series thereof if the Trust or any
Series thereof ceases to employ FMR or a subsidiary or affiliate
thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
((SECTION 10. (a) The provisions of this Declaration of Trust are
severable, and, if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue
Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior
to such determination.
(b) If any provision of this Declaration Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Declaration of Trust
in any jurisdiction.))
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument [this] (( as))
[16th] ((of the)) [ day] ((date))
[ of] ((set forth)) [ September, ] ((above.))
[1994. ]
[SIGNATURE LINES OMITTED]
EXHIBIT 2
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY PURITAN TRUST:
FIDELITY PURITAN FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION] ((AGREEMENT AMENDED and RESTATED as of)) [made] this
1st day of _______[August, 1994] 19__, by and between Fidelity Puritan
Trust, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Puritan 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 [January 1, 1993] ((August 1, 1994)), to
a modification of said Contract in the manner set forth below. The
Modified Management Contract shall, when executed by duly authorized
officers of the Fund and the Adviser, take effect on the later of
August 1, ((1999)) [1994] or the first day of the month following
shareholder approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
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 [F]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 .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
102 - 138 .3100%
138 - 174 .3050%
[174 - 228] [.3000%]
[228 - 282] [.2950%]
[282 - 336] [.2900%]
[Over - 336] [.2850%]
((174 - 210)) ((.3000%))
((210 - 246)) ((.2950%))
((246 - 282)) ((.2900%))
((282 - 318)) ((.2850%))
((318 - 354)) ((.2800%))
((354 - 390)) ((.2750%))
((390 - 426)) ((.2700%))
((426 - 462)) ((.2650%))
((462 - 498)) ((.2600%))
((498 - 534)) ((.2550%))
((Over - 534)) ((.2500%))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
[0.20%]((0.15%)).
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 July
31, [1995]((2000)) and indefinitely thereafter, but only so long as
the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent[, such consent
on the part of the Fund to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio.] ((subject to the
provisions of Section 15 of the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Securities and
Exchange Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission)).
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment
of any penalty, by action of its Trustees or Board of Directors, as
the case may be, or with respect to the Portfolio by vote of a
majority of the outstanding voting securities of the Portfolio. This
Contract shall terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust
or other organizational document and agrees that the obligations
assumed by the Fund pursuant to this Contract shall be limited in all
cases to the Portfolio and its assets, and the Adviser shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio or any other Portfolios of the Fund. In
addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust or other organizational document are separate and
distinct from those of any and all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the [Securities and Exchange]Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
[signature lines omitted]
EXHIBIT 3
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY PURITAN TRUST:
FIDELITY BALANCED FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION]((AGREEMENT AMENDED and RESTATED as of)) [made] this
1st day of _______[August, 1994]((19__,)) by and between Fidelity
Puritan Trust, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Balanced 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 [September 29, 1989] ((August 1, 1994)),
to a modification of said Contract in the manner set forth below. The
Modified Management Contract shall when executed by duly authorized
officers of the Fund and the Adviser, take effect on the later of
August 1, ((1999))[1994] or the first day of the month following
approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
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 [F]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 .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
102 - 138 .3100%
138 - 174 .3050%
[174 - 228] [.3000%]
[228 - 282] [.2950%]
[282 - 336] [.2900%]
[Over 336] [.2850%]
((174 - 210)) ((.3000%))
((210 - 246)) ((.2950%))
((246 - 282)) ((.2900%))
((282 - 318)) ((.2850%))
((318 - 354)) ((.2800%))
((354 - 390)) ((.2750%))
((390 - 426)) ((.2700%))
((426 - 462)) ((.2650%))
((462 - 498)) ((.2600%))
((498 - 534)) ((.2550%))
((Over - 534)) ((.2500%))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
[0.20%]((0.15%)).
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 July
31, [1995]((2000)) 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 4
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY PURITAN TRUST:
FIDELITY GLOBAL BALANCED FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION]((AGREEMENT AMENDED and RESTATED as of)) [made]
((this)) ((1st day of ______)) [August, 1994]((19__,)) by and between
Fidelity Puritan Trust, a Massachusetts business trust which may issue
one or more series of shares of beneficial interest (hereinafter
called the "Fund"), on behalf of Fidelity Global Balanced 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 dated [January 14, 1993]((August 1, 1994)), to a
modification of said Contract in the manner set forth below. The
Modified Management Contract shall when executed by duly authorized
officers of the Fund and the Adviser, take effect on the later of
August 1, ((1999))[1994] or the first day of the month following
approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
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 [F]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 .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
102 - 138 .3100%
138 - 174 .3050%
[174 - 228] [.3000%]
[228 - 282] [.2950%]
[282 - 336] [.2900%]
[Over 336] [.2850%]
((174 - 210)) ((.3000%))
((210 - 246)) ((.2950%))
((246 - 282)) ((.2900%))
((282 - 318)) ((.2850%))
((318 - 354)) ((.2800%))
((354 - 390)) ((.2750%))
((390 - 426)) ((.2700%))
((426 - 462)) ((.2650%))
((462 - 498)) ((.2600%))
((498 - 534)) ((.2550%))
((Over - 534)) ((.2500%))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
0.45%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute
the Annual Management Fee Rate. One-twelfth of the Annual Management
Fee Rate shall be applied to the average of the net assets of the
Portfolio (computed in the manner set forth in the Fund's Declaration
of Trust or other organizational document) determined as of the close
of business on each business day throughout the month.
(c) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect, and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses,
which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase or sale of securities and
other investment instruments; (iii) fees and expenses of the Fund's
Trustees other than those who are "interested persons" of the Fund or
the Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related
to the registration and qualification of the Fund and the Portfolio's
shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy
material to shareholders of the Portfolio; (viii) all other expenses
incidental to holding meetings of the Portfolio's shareholders,
including proxy solicitations therefor; (ix) a pro rata share, based
on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management
Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto sent to
existing shareholders; and (xiii) such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or
proceedings to which the Portfolio is a party and the legal obligation
which the Portfolio may have to indemnify the Fund's Trustees and
officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other
services and activities do not, during the term of this Contract,
interfere, in a material manner, with the Adviser's ability to meet
all of its obligations with respect to rendering services to the
Portfolio hereunder. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Portfolio or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security[.] ((or other investment
instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 6, this Contract shall continue in force until July
31, [1995]((2000)) 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 5
UNDERLINED LANGUAGE WILL BE ADDED
[BRACKETED] LANGUAGE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY PURITAN TRUST:
LOW-PRICED STOCK FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[MODIFICATION]((AGREEMENT AMENDED and RESTATED as of)) [made] ((this
1st day of ______))[August, 1994] ((19__,)) by and between Fidelity
Puritan Trust, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Low-Priced Stock 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 dated [December 1, 1990]((August 1, 1994)), to a
modification of said Contract in the manner set forth below. The
Modified Management Contract shall when executed by duly authorized
officers of the Fund and the Adviser, take effect on the later of
August 1, ((1999))[1994] or the first day of the month following
approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of
the Portfolio in accordance with the investment objective, policies
and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time
(the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also
furnish for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the
investments of the Portfolio; and shall pay the salaries and fees of
all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Portfolio, including but not limited
to: (i) providing the Portfolio with office space, equipment and
facilities (which may be its own) for maintaining its organization;
(ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be
necessary or desirable; (iii) preparing all general shareholder
communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered,
maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the
development of and developing and implementing, if appropriate,
management and shareholder services designed to enhance the value or
convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Basic Fee
and a Performance Adjustment. The Performance Adjustment is added to
or subtracted from the Basic Fee depending on whether the Portfolio
experienced better or worse performance than the Russell 2000 Index of
small capitalization stocks (the "Index"). The Performance Adjustment
is not cumulative. An increased fee will result even though the
performance of the Portfolio over some period of time shorter than the
performance period has been behind that of the Index, and, conversely,
a reduction in the fee will be made for a month even though the
performance of the Portfolio over some period of time shorter than the
performance period has been ahead of that of the Index. The Basic Fee
and the Performance Adjustment will be computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of
the Group Fee Rate and the Individual Fund Fee Rate calculated to the
nearest millionth decimal place as follows:
(i) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investment
companies having Advisory and Service or Management Contracts with the
Adviser (computed in the manner set forth in the [F]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 .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
102 - 138 .3100%
138 - 174 .3050%
[174 - 228] [.3000%]
[228 - 282] [.2950%]
[282 - 336] [.2900%]
[Over 336] [.2850%]
((174 - 210)) ((.3000%))
((210 - 246)) ((.2950%))
((246 - 282)) ((.2900%))
((282 - 318)) ((.2850%))
((318 - 354)) ((.2800%))
((354 - 390)) ((.2750%))
((390 - 426)) ((.2700%))
((426 - 462)) ((.2650%))
((462 - 498)) ((.2600%))
((498 - 534)) ((.2550%))
((Over - 534)) ((.2500%))
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
.35%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner
set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day
throughout the month. The resulting dollar amount comprises the Basic
Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is
0.02% for each percentage point (the performance of the Portfolio and
the Index each being calculated to the nearest [percentage
point]((.01%))) that the Portfolio's investment performance for the
performance period was better or worse than the record of the Index as
then constituted. The maximum performance adjustment rate is 0.20%.
The performance period will commence on December 1, 1990. During the
first eleven months of the performance period for the Portfolio, there
will be no performance adjustment. Starting with the twelfth month of
the performance period, the performance adjustment will take effect.
Following the twelfth month a new month will be added to the
performance period until the performance period equals 36 months.
Thereafter the performance period will consist of the current month
plus the previous 35 months.
The Portfolio's investment performance will be measured by comparing
(i) the opening net asset value of one share of the Portfolio on the
first business day of the performance period with (ii) the closing net
asset value of one share of the Portfolio as of the last business day
of such period. In computing the investment performance of the
Portfolio and the investment record of the Index, distributions of
realized capital gains, the value of capital gains taxes per share
paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of
investment income on the part of the Portfolio, and all cash
distributions of the securities included in the Index, will be treated
as reinvested in accordance with Rule 205-1 or any other applicable
rules under the Investment Advisers Act of 1940, as the same from time
to time may be amended.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will 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 and
the performance period.
(e) In case of termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of
the number of business days during which it is in effect for that
month. The Basic Fee Rate will be computed on the basis of and applied
to net assets averaged over that month ending on the last business day
on which this Contract is in effect. The amount of this Performance
Adjustment to the Basic Fee will be computed on the basis of and
applied to net assets averaged over the 36-month period ending on the
last business day on which this Contract is in effect provided that if
this Contract has been in effect less than 36 months, the computation
will be made on the basis of the period of time during which it has
been in effect.
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 July
31,[1995]((2000)) 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 6
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY PURITAN TRUST: [FUND NAME]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") of
[Fund Name] (the "Portfolio"), a series of shares of Fidelity Puritan
Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with
respect to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest
("shares"). Under the agreement, the Distributor pays the expenses of
printing and distributing any prospectuses, reports and other
literature used by the Distributor, advertising, and other promotional
activities in connection with the offering of shares of the Portfolio
for sale to the public. It is recognized that the Adviser may use its
management fee revenues as well as past profits or its resources from
any other source, to make payment to the Distributor with respect to
any expenses incurred in connection with the distribution of Portfolio
shares, including the activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to
the approval of the Trustees, make payments to securities dealers and
other third parties who engage in the sale of shares or who render
shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions
and providing such other shareholder services as the Fund may
reasonably request.
4. The Portfolio will not make separate payments as a result of this
Plan to the Adviser, Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to
pay, a management fee to the Adviser. To the extent that any payments
made by the Portfolio to the Adviser, including payment of management
fees, should be deemed to be indirect financing of any activity
primarily intended to result in the sale of shares of the Portfolio
within the context of Rule 12b-1 under the Act, then such payments
shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of at
least a "majority of the outstanding voting securities of the
Portfolio" (as defined in the Act), the plan having been approved by a
vote of a majority of the Trustees of the Fund, including a majority
of Trustees who are not "interested persons" of the Fund (as defined
in the Act) and who have no direct or indirect financial interest in
the operation of this Plan or in any agreements related to this Plan
(the "Independent Trustees"), cast in person at a meeting called for
the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain
in effect from the date specified above until April 30, 2000 and from
year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of a majority of the Trustees
of the Fund, including a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on this Plan.
This Plan may be amended at any time by the Board of Trustees,
provided that (a) any amendment to authorize direct payments by the
Portfolio to finance any activity primarily intended to result in the
sale of shares of the Portfolio, or to increase materially the
amount spent by the Portfolio for distribution shall be effective only
upon approval by a vote of a majority of the outstanding voting
securities of the Portfolio, and (b) any material amendments of this
Plan shall be effective only upon approval in the manner provided in
the first sentence in this paragraph.
7. This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Trustees or by a
vote of a majority of the outstanding voting securities of the
Portfolio.
8. During the existence of this Plan, the Fund shall require the
Adviser and/or Distributor to provide the Fund, for review by the
Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of
shares of the Portfolio (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures
were made.
9. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any
specific level of expenses for activities primarily intended to result
in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set
forth in the Fund's Declaration of Trust or other organizational
document, any obligations assumed by the Portfolio pursuant to this
Plan and any agreements related to this Plan shall be limited in all
cases to the Portfolio and its assets, and shall not constitute
obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
EXHIBIT 7
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of the __ day of ____ 199_, by and between Fidelity Puritan Trust
(Puritan Trust), on behalf of Fidelity Global Balanced Fund (the
Fund), a separate series of Puritan Trust, and Fidelity Investment
Trust (Investment Trust), each a business trust duly formed under the
laws of the Commonwealth of Massachusetts.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise (a) the transfer of all of the assets of
the Fund to a series of Investment Trust (the Series) solely in
exchange for shares of beneficial interest of the Series (the Series
Shares) and the assumption by the Series of the Fund's liabilities;
and (b) the constructive distribution of such Series Shares by the
Fund to its shareholders (Fund Shareholder(s)) in complete liquidation
and termination of the Fund, in exchange for all of the Fund's
outstanding shares (Fund Shares). The Fund shall receive shares of the
Series equal to the number of Fund Shares on the Closing Date (as
defined below). Immediately thereafter, the Fund shall then distribute
to each Fund Shareholder one Series Share for each Fund Share held by
the shareholder on the Closing Date. The foregoing transactions are
referred to herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE FUND
Puritan Trust, on behalf of the Fund, represents and warrants as
follows:
(a) The Fund is a series of Puritan Trust, a business trust duly
formed, validly existing, and in good standing under the laws of the
Commonwealth of Massachusetts, and has the power to own all of its
properties and assets and to carry out its obligations under this
Agreement. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) The Fund is a series of Puritan Trust, which is duly registered
as an open-end management investment company under the Investment
Company Act of 1940 (the 1940 Act), as amended, and such registration
is in full force and effect;
(c) The Fund is not in, and the execution, delivery and performance
of this Agreement will not result in a violation of any provision of
the Amended and Restated Declaration of Trust or the Bylaws of Puritan
Trust, or, to the Fund's knowledge, of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Fund is
a party or by which the Fund is bound or result in the acceleration of
any obligation or the imposition of any penalty under any agreement,
judgment or decree to which the Fund is a party or is bound;
(d) The Fund has no material contracts or other commitments (other
than this Agreement) that will not be terminated without liability to
the Fund on or prior to the Closing Date;
(e) To the Fund's knowledge, no material legal, administrative, or
other proceeding or investigation of, or before, any court or
governmental body presently is pending or threatened against the Fund
or any of its properties or assets that assert liability on the part
of the Fund, except as previously disclosed in writing to Investment
Trust. The Fund knows of no facts that might form the basis for the
institution of such proceedings;
(f) The Fund has filed or will file all federal and state tax returns
that, to the knowledge of the Fund's officers, are required to be
filed by the Fund and has paid or will pay all federal and state taxes
shown to be due on said returns or provision shall have been made for
the payment thereof, and, to the best of the Fund's knowledge, no such
return is currently under audit and no assessment has been asserted
with respect to such returns;
(g) All of the issued and outstanding shares of the Fund are, and at
the Closing Date will be, duly and validly issued and outstanding and
fully paid and nonassessable as a matter of Massachusetts law (except
as disclosed in the Fund's Statement of Additional Information) and
have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of the Fund
will, at the Closing Date, be held by the persons and in the amounts
as certified in accordance with the provisions of this Agreement;
(h) The information to be furnished by the Fund for use in
applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and
shall comply in all material respects with federal securities and
other laws and regulations thereunder applicable thereto;
(i) At both the Valuation Time (as defined in Section 4) and the
Closing Date (as defined in Section 6), the Fund will have the full
right, power, and authority to sell, assign, transfer, and deliver its
portfolio securities and any other assets of the Fund to be
transferred to the Series pursuant to this Agreement. As of the
Closing Date, subject only to the delivery of the Fund's portfolio
securities and any such other assets as contemplated by this
Agreement, the Series will acquire the Fund's portfolio securities and
any such other assets subject to no encumbrances, liens, or security
interests (except for those that may arise in the ordinary course and
are disclosed to the Series) and without any restrictions upon the
transfer thereof;
(j) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of the Fund, and this Agreement
constitutes a valid and binding obligation of the Fund enforceable in
accordance with its terms, subject to shareholder approval;
(k) To the best knowledge of the Fund's management, there is no plan
or intention by any of the Fund's shareholders to sell, exchange or
otherwise dispose of any of the Series Shares to be received in the
Reorganization;
(l) The Fund shares are widely held and may be purchased and redeemed
upon request;
(m) Immediately following consummation of the Reorganization, the
Fund Shareholders will own all of the Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares
immediately prior to the Reorganization;
(n) Immediately following the consummation of the Reorganization,
Investment Trust will hold, on behalf of the Series, the same assets
and be subject to the same liabilities that the Fund held or was
subject to immediately prior thereto, except for assets used to pay
expenses incurred in connection with the Reorganization. Assets used
to pay expenses and all distributions (except for distributions and
redemptions arising in the ordinary course of the Fund's business as
an open-end investment company) made by the Fund immediately preceding
the Reorganization will, in the aggregate, constitute less than 1% of
the net assets of the Fund;
(o) At the time of the Reorganization, the Fund will not have
outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire shares
of beneficial interest in the Fund;
(p) The Fund's liabilities to be assumed by the Series in the
Reorganization were incurred by the Fund in the ordinary course of its
business and are associated with the assets to be transferred;
(q) Fund Shareholders each will pay their own expenses, if any,
incurred in connection with the Reorganization;
(r) The fair market value of the Fund's assets to be transferred by
the Fund to the Series will equal or exceed the Fund's liabilities to
be assumed by the Series plus the liabilities to which the transferred
assets are subject;
(s) The Fund is a regulated investment company as defined in Section
851 of the Code;
(t) The Fund is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the
meaning of Section 368(a)(3)(A) of the Code;
(u) To the Fund's knowledge, no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by the Fund of the transactions contemplated by this
Agreement, except such as shall have been obtained under the
Securities Act of 1933 (the 1933 Act), the Securities Exchange Act of
1934 (the 1934 Act), and the 1940 Act;
(v) The Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of July 31, 1998 and those
incurred in the ordinary course of the Fund's business as an
investment company since same date as determined above; and
(w) The Fund will be liquidated immediately after the Reorganization.
2. REPRESENTATIONS AND WARRANTIES OF INVESTMENT TRUST
Investment Trust represents and warrants as follows:
(a) Investment Trust is a business trust duly formed, validly
existing, and in good standing under the laws of the Commonwealth of
Massachusetts. It has all necessary federal, state, and local
authorizations to carry out its business as now being conducted and to
carry out this Agreement;
(b) Investment Trust is duly registered as an open-end management
investment company under the 1940 Act, and the Series is a duly
established and designated series of Investment Trust;
(c) Investment Trust is not in, and the execution, delivery and
performance of this Agreement will not result in a violation of any
provision of the Restated Declaration of Trust or Investment Trust's
Bylaws, or, to Investment Trust's knowledge, of any agreement,
indenture, instrument, contract, lease or other undertaking to which
Investment Trust is a party or by which Investment Trust is bound or
result in the acceleration of any obligation or the imposition of any
penalty under any agreement, judgment or decree to which Investment
Trust is a party or is bound;
(d) To Investment Trust's knowledge, no material legal,
administrative, or other proceeding or investigation of, or before,
any court or governmental body presently is pending or threatened
against Investment Trust or any of its properties or assets that
assert liability on the part of Investment Trust, except as previously
disclosed in writing to Investment Trust. Investment Trust knows of no
facts that might form the basis for the institution of such
proceedings;
(e) Investment Trust intends for the Series to be a regulated
investment company under Section 851 of the Code;
(f) Prior to the Closing Date, there shall be no issued and
outstanding Series Shares or any other securities issued by the Series
(except for the one share that may be issued to FMR); Series Shares
issued in connection with the transactions contemplated herein will be
duly and validly issued and outstanding, fully paid and non-assessable
under Massachusetts law on the Closing Date;
(g) The execution, delivery, and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Investment Trust, and, upon its proper
execution, this Agreement will constitute a valid and binding
obligation of Investment Trust enforceable against the Series in
accordance with its terms;
(h) As of the Closing Date, the Series Shares will have been duly
authorized and, when so issued and delivered, will be duly and validly
issued shares of the Series, fully paid and non-assessable under
Massachusetts law except that under Massachusetts law, shareholders of
a Massachusetts business trust, under certain circumstances, may be
held personally liable for obligations of Investment Trust;
(i) The fair market value of the Series Shares to be received by the
Fund Shareholders will be equal to the fair market value of their Fund
Shares surrendered in exchange therefor;
(j) Investment Trust has no plan or intention on behalf of the Series
to issue additional Series Shares following the Reorganization other
than in the ordinary course of the business of the Series as the
series of a registered open-end investment company;
(k) Investment Trust has no plan or intention to redeem or otherwise
reacquire any of the Series Shares issued to the Fund Shareholders
pursuant to the Reorganization other than through redemptions arising
in the ordinary course of the business of the Series as a series of a
registered open-end investment company;
(l) Following the Reorganization, Investment Trust, on behalf of the
Series, will continue the Fund's historic business;
(m) No consideration other than series shares will be issued in
exchange for the Fund shares in the Reorganization.
(n) At the time of the Reorganization, there will be no intercompany
indebtedness existing between the Series and the Fund that was issued,
acquired, or that will be settled at a discount.
(o) At the time of the Reorganization, the Series will be a regulated
investment company as defined in section 851 of the Code.
(p) Investment Trust has no plan or intention to sell or otherwise
dispose of any of the Fund's assets to be acquired by the Series in
the Reorganization, except for dispositions made in the ordinary
course of its business or dispositions necessary to maintain the
status of the Series as a regulated investment company under Section
851 of the Code;
(q) The information to be furnished by Investment Trust with respect
to the Series for use in applications for orders, registration
statements, proxy materials and other documents that may be necessary
in connection with the transactions contemplated hereby shall be
accurate and complete and shall comply in all material respects with
federal securities and other laws and regulations applicable thereto;
(r) Investment Trust, on behalf of the Series, shall use all
reasonable efforts to obtain the approvals and authorizations required
by the 1933 Act and the 1940 Act as it may deem appropriate in order
to operate after the Closing Date; and
(s) To Investment Trust's knowledge, no consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by the Series of the transactions
contemplated by this Agreement, except such as shall have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act.
(t) Investment Trust, on behalf of the Series, will use the Employer
Identification Number that was used by the Fund.
3. REORGANIZATION
(a) Subject to the requisite approval of the Fund Shareholders, if
applicable, and to the other terms and conditions contained herein,
the Fund agrees to assign, convey, transfer, and deliver to the Series
established by Investment Trust solely for the purpose of acquiring
all of the assets of the Fund (which Series has not issued any Series
Shares (except for one share that may be issued to FMR) or commenced
operations) as of the Closing Date all of the assets of the Fund of
any kind and nature existing on the Closing Date. The Series agrees in
exchange therefor (1) to assume all of the Fund's liabilities existing
on or after the Closing Date, whether or not determinable on the
Closing Date, and (2) to issue and deliver to the Fund the number of
full and fractional Series Shares equal to the value and number of
full and fractional shares of the Fund outstanding at the time of the
closing, as described in paragraph 6, as of the Closing Date provided
for in Section 6(a).
(b) The assets of the Fund to be acquired by the Series and allocated
thereto shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by the Fund, and
any deferred or prepaid expenses shown as an asset on the books of the
Fund on the Closing Date. The Fund will pay or cause to be paid to the
Series any dividend or interest payments received by it on or after
the Closing Date with respect to the assets transferred to the Series
hereunder, and the Series will retain any dividend or interest
payments received by it after the Valuation Time (as defined in
Section 4) with respect to the assets transferred hereunder without
regard to the payment date thereof. The liabilities of the Fund to be
assumed by the Series and allocated thereto, shall include (except as
otherwise provided herein) all of the Fund's liabilities, debts,
obligations, and duties,of whatever kind or nature, whether absolute,
accrued, contingent,or otherwise, whether or not determinable on the
Closing Date, and whether or not specifically referred to in this
Agreement.
(c) Immediately upon delivery to the Fund of the Series Shares, the
individual Trustees of Puritan Trust or any officer duly authorized by
them, on the Puritan Trust's behalf as the then sole shareholder of
the Series, shall approve (i) a Management Contract between Investment
Trust, on behalf of the Series, and FMR, (ii) Sub-Advisory Agreements
between FMR and Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research (Far East) Inc., Fidelity International
Investment Advisors, Fidelity International Investment Advisors (U.K.)
Limited, and Fidelity Investments Japan Limited (FIJ), (iii) a
Distribution and Service Plan under Rule 12b-1 under the 1940 Act
between Investment Trust, on behalf of the Series, and Fidelity
Distributors Corporation (FDC) substantively identical to the
contract, agreements and plan currently in effect with respect to the
Fund immediately prior to the Closing Date, except as to the parties
to such contract, agreement and plan, (iv) the independent
accountants who currently serve in that capacity for the Fund, and (v)
the adoption of revised fundamental policies described in Proposals 11
and 13 of the Proxy Statement.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), the Fund will
constructively distribute to the Fund Shareholders the Series Shares
pro rata in proportion to their respective shares of beneficial
interest of the Fund, such Fund Shareholders being shareholders of
record as determined as of the Valuation Time on the Closing Date in
accordance with the Puritan Trust Amended and Restated Declaration of
Trust, in liquidation of such Fund. Such distribution will be
accomplished by the Fund's transfer agent opening accounts on the
share records of the Series in the names of such Fund Shareholders and
transferring the Series Shares thereto. Each Fund Shareholder's
account shall be credited with the respective pro rata number of full
and fractional (rounded to the third decimal place) Series Shares due
that shareholder. All outstanding Fund Shares, including any
represented by certificates, shall simultaneously be canceled on the
Fund's share transfer records. The Series shall not issue certificates
representing Series Shares in connection with such distribution.
(e) Immediately after the distribution of the Series Shares as set
forth in Section 3(d), the Fund shall be liquidated and terminated,
and any such further actions shall be taken in connection therewith as
required by applicable law.
(f) Any transfer taxes payable upon issuance of Series Shares in a
name other than that of the registered holder on the Fund's books of
the Fund Shares constructively exchanged for the Series Shares shall
be paid by the person to whom such Series Shares are to be issued, as
a condition of such transfer.
(g) Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the date on which it is
liquidated.
4. VALUATION
(a) The valuation time shall be the close of business of the New York
Stock Exchange on the Closing Date (the Valuation Time)
(b) The value of the Fund's net assets to be acquired by the Series
hereunder shall be the net asset value per share computed as of the
Valuation Time, using the valuation procedures set forth in the Fund's
then current Prospectus and Statement of Additional Information.
(c) The number, value, and denomination of full and fractional Series
Shares to be issued in exchange for the Fund's net assets shall be
equal to the number, value, and denomination of full and fractional
Fund Shares outstanding on the Closing Date.
(d) All computations pursuant to this Section shall be made by
Fidelity Service Company, Inc. (FSC), a wholly-owned subsidiary of FMR
Corp., in accordance with its regular practice as pricing agent for
the Fund.
5. FEES; EXPENSES
(a) Investment Trust and the Fund each represents that there is no
person who dealt with it who by reason of such dealings is entitled to
any broker's or finder's fees or commissions arising out of the
transactions contemplated hereby.
(b) The Fund shall be responsible for all expenses, fees and other
charges in connection with the transactions contemplated by the
Agreement.
6. CLOSING DATE
(a) The transfer of the Fund's assets in exchange for the assumption
by the Series of the Fund's liabilities and the issuance of Series
Shares, as described above, together with related acts necessary to
consummate the same, (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Puritan Trust and
Investment Trust, 82 Devonshire Street, Boston, Massachusetts, on
December 29, 1999, or at such other place or date as the parties may
agree in writing (the Closing Date). All acts taking place at the
Closing shall be deemed to take place simultaneously as of the
Valuation Time or at such other time and/or place as the parties may
agree.
(b) In the event that, on the Closing Date (i) any of the markets for
securities held by the Fund are closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or reporting of trading on
said markets or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of the Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day
when such trading shall have been fully resumed and reporting shall
have been restored, or such other date as the parties may agree.
(c) The Fund shall deliver at the Closing a certificate of an
authorized officer stating that it has notified Brown Brothers
Harriman, as custodian for the Fund, of the Fund's reorganization to a
series of Investment Trust.
(d) Fidelity Service Company, Inc., as transfer agent for the Fund,
shall deliver at the Closing a certificate as to the conversion on its
books and records of each Fund Shareholder account to an account as a
holder of Series Shares. Investment Trust shall issue and deliver a
confirmation to the Fund evidencing the Series Shares to be credited
as of the Closing Date or provide evidence satisfactory to the Fund
that such Series Shares have been credited to the Fund's account on
the books of Investment Trust. At the Closing, each party shall
deliver to the other such bills of sale, checks, assignments, stock
certificates, receipts or other documents as such other party or its
counsel may reasonably request.
7. SHAREHOLDER MEETING AND TERMINATION OF THE FUND
(a) If required to do so pursuant to the terms of Puritan Trust's
Amended and Restated Declaration of Trust or otherwise by applicable
law, the Fund agrees to call a meeting of its shareholders (the
Shareholder's Meeting) to consider and act upon this Agreement. The
Fund shall take all other action necessary to obtain approval of the
transactions contemplated hereby.
(b) The Fund agrees that as soon as reasonably practicable after
distribution of the Series Shares, the Fund shall be liquidated and
terminated as a series of Puritan Trust pursuant to its Amended and
Restated Declaration of Trust, any further actions shall be taken in
connection therewith as required by applicable law, and on and after
the Closing Date the Fund shall not conduct any business except in
connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF INVESTMENT TRUST
The obligations of Investment Trust hereunder shall be subject to the
following conditions:
(a) That the Fund furnishes to Investment Trust a statement, dated as
of the Closing Date, signed by an officer of Puritan Trust, certifying
that as of the Valuation Time and the Closing Date all representations
and warranties of the Fund made in this Agreement are true and correct
in all material respects and that the Fund has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates;
(b) That the Fund furnishes Investment Trust with copies of the
resolutions, certified by an officer of Puritan Trust, evidencing the
adoption of this Agreement and, if applicable, the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of the Fund;
(c) That the Fund shall deliver to Investment Trust at the Closing a
statement of its assets and liabilities, together with a certificate
as to the aggregate asset value of the Fund's portfolio securities,
all as of the Valuation Time, certified on the Fund's behalf by its
Treasurer or Assistant Treasurer;
(d) That the Fund's custodian shall deliver to Investment Trust a
certificate identifying the assets of the Fund held by such custodian
as of the Valuation Time on the Closing Date and stating that at the
Valuation Time (i) the assets held by the custodian will be
transferred to the Series; (ii) the Fund's assets have been duly
endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the
custodian's knowledge, all necessary taxes in conjunction with the
delivery of the assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment
has been made;
(e) That the Fund's transfer agent shall deliver to Investment Trust
at the Closing a certificate setting forth the number of shares of the
Fund outstanding as of the Valuation Time and the name and address of
each holder of record of any such shares and the number of shares held
of record by each such shareholder;
(f) If applicable, that the Fund calls a Shareholder's Meeting to
consider and act upon this Agreement and that the Fund takes all other
action necessary to obtain approval of the transactions contemplated
hereby;
(g) That the Fund delivers to Investment Trust a certificate of an
officer of Puritan Trust, dated the Closing Date, that there has been
no material adverse change in the Fund's financial position since July
31, 1998, other than changes in the market value of its portfolio
securities, or changes due to net redemptions of its shares, dividends
paid, or losses from operations; and
(h) That all of the issued and outstanding shares of beneficial
interest of the Fund shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the
extent that any audit of the records of the Fund or its transfer agent
by Investment Trust or its agents shall have revealed otherwise, the
Fund shall have taken all actions that in the opinion of Investment
Trust are necessary to remedy any prior failure on the part of the
Fund to have offered for sale and sold such shares in conformity with
such laws.
9. CONDITIONS TO OBLIGATIONS OF THE FUND
The obligations of the Fund hereunder shall be subject to the
following conditions:
(a) That Investment Trust shall have executed and delivered to the
Fund an Assumption of Liabilities, certified by an officer of
Investment Trust, dated as of the Closing Date pursuant to which
Trust, on behalf of the Series, will assume all of the liabilities of
the Fund existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;
(b) That Investment Trust furnishes to the Fund a statement, dated as
of the Closing Date, signed by an officer of Trust, certifying that as
of the Valuation Time and the Closing Date all representations and
warranties of the Series made in this Agreement are true and correct
in all material respects, and Investment Trust has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That the Fund shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to the Fund and Investment Trust, to the effect
that the Series Shares are duly authorized and upon delivery to the
Fund as provided in this Agreement will be validly issued and will be
fully paid and nonassessable under Massachusetts law.
10. CONDITIONS TO OBLIGATIONS OF THE FUND AND INVESTMENT TRUST
The obligations of the Fund and Investment Trust hereunder shall be
subject to the following conditions:
(a) If applicable, that this Agreement shall have been adopted and
the transactions contemplated herein shall have been approved by the
requisite vote of the holders of the outstanding shares of beneficial
interest of the Fund;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Securities and Exchange Commission
and of state blue sky and securities authorities, including "no
action" positions of such federal or state authorities) deemed
necessary by Investment Trust or the Fund to permit consummation, in
all material respects, of the transactions contemplated hereby shall
have been obtained, except where failure to obtain any such consent,
order, or permit would not involve a risk of a material adverse effect
on the assets or properties of Investment Trust or the Fund, provided
that either party hereto may for itself waive any of such conditions;
(c) That all proceedings taken by either the Fund or the Series in
connection with the transactions contemplated by this Agreement and
all documents incidental thereto shall be satisfactory in form and
substance to it and its counsel, Kirkpatrick & Lockhart LLP;
(d) That Investment Trust shall have taken all necessary action so
that the Series shall be a series of a registered open-end investment
company under the 1940 Act immediately after the closing.
(e) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;
(f) That Investment Trust and the Fund shall have received an opinion
of Kirkpatrick & Lockhart LLP satisfactory to Investment Trust and the
Fund that for federal income tax purposes:
(i) The Reorganization will be a reorganization under Section
368(a)(1)(F) of the Code, and the Fund and the Series will each be
parties to the Reorganization under section 368(b) of the Code;
(ii) No gain or loss will be recognized by the Fund upon the
transfer of all of its assets to the Series in exchange solely for the
Series Shares and the assumption of the Fund's liabilities followed by
the distribution of those the Series Shares to the shareholders of the
Fund;
(iii) No gain or loss will be recognized by the Series on the
receipt of the Fund's assets in exchange solely for the the Series
Shares and the assumption of the Fund's liabilities;
(iv) The basis of the Fund's assets in the hands of the Series will
be the same as the basis of such assets in the Fund's hands
immediately prior to the Reorganization;
(v) The Series' holding period in the assets to be received from the
Fund will include the Fund's holding period in such assets;
(vi) A Fund Shareholder will recognize no gain or loss on the
exchange of his or her shares of beneficial interest in the Fund for
the Series Shares in the Reorganization;
(vii) A Fund Shareholder's basis in the the Series Shares to be
received by him or her will be the same as his or her basis in the
Fund Shares exchanged therefor; (viii) A Fund Shareholder's holding
period for his or her Series Shares will include the holding period of
the Fund Shares exchanged, provided that those Fund Shares were held
as capital assets on the date of the Reorganization.
(ix) The Reorganization will not result in the termination of the
Fund's taxable year, and the Fund's tax attributes enumerated in
Section 381(c) of the Code will be taken into account by the Series as
if there had been no conversion.
Notwithstanding anything herein to the contrary, neither the Fund nor
Investment Trust may waive the conditions set forth in this subsection
10(f).
11. COVENANTS OF THE FUND
(a) The Fund covenants to operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include the payment of customary
dividends and distributions.
(b) The Fund covenants that the Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
(c) The Fund covenants that it will assist Investment Trust in
obtaining such information as Investment Trust reasonably requests
concerning the beneficial ownership of Fund Shares.
(d) The Fund covenants that its liquidation and termination will be
effected in the manner provided in its Amended and Restated
Declaration of Trust in accordance with applicable law and, after the
Closing Date, the Fund will not conduct any business except in
connection with its liquidation and termination.
12. TERMINATION; WAIVER
(a) The parties hereto may terminate this Agreement by mutual
consent. In addition, either party may, at its option, terminate this
Agreement at or prior to the Closing Date because
(i) Of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) A condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
(b) In the event of any such termination, there shall be no liability
for damages on the part of Investment Trust or the Fund, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the appropriate
officers of Puritan Trust, Investment Trust, the Fund, or the Series;
provided, however, that following the shareholders' meeting, if any,
called by the Fund pursuant to Section 7 of this Agreement, no such
amendment may have the effect of changing the provisions for
determining the number of the Series Shares to be received by the Fund
shareholders under this Agreement to the detriment of such
shareholders without their further approval.
(c) Either party may waive any condition to its obligations
hereunder, provided that such waiver does not have any material
adverse effect on the interests of Fund Shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. LIMITATION OF LIABILITY
Copies of the Declarations of Trust of Investment Trust and Puritan
Trust, as restated and amended, are on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of
Investment Trust and Puritan Trust as trustees and not individually
and that the obligations of the Fund and the Series under this
instrument are not binding upon any of Puritan Trust's or Investment
Trust's Trustees, officers, or shareholders individually, but are
binding only upon the assets and property of such Fund or Series. The
Fund and Investment Trust each agrees that its obligations hereunder
apply only to such Fund and the Series, respectively, and not to its
shareholders individually or to the trustees of such Fund or Series.
15. ASSIGNMENT
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
[SIGNATURE LINES OMITTED]
EXHIBIT 8
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
(A)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
GROWTH
Select Portfolios:
Air Transportation ((pound)) 2/28/98 $ 62.7 0.60%
Automotive ((pound)) 2/28/98 62.2 0.59
Biotechnology ((pound)) 2/28/98 577.4 0.60
Brokerage and Investment 2/28/98 416.4 0.60
Management ((pound))
Business Services and 2/28/99 60.7 0.60(bold italic B)
Outsourcing ((pound)) **
Chemicals ((pound)) 2/28/98 83.4 0.60
Computers ((pound)) 2/28/98 658.0 0.60
Construction and Housing 2/28/98 26.0 0.60
((pound))
Consumer Industries ((pound)) 2/28/98 26.5 0.61
Cyclical Industries ((pound)) 2/28/98 3.6 0.00*
Defense and Aerospace 2/28/98 63.9 0.60
((pound))
Developing Communications 2/28/98 238.7 0.60
((pound))
Electronics ((pound)) 2/28/98 2,374.6 0.60
Energy ((pound)) 2/28/98 191.3 0.59
Energy Service ((pound)) 2/28/98 964.1 0.59
Environmental Services 2/28/98 27.8 0.60
((pound))
Financial Services ((pound)) 2/28/98 468.5 0.60
Food and Agriculture 2/28/98 247.0 0.60
((pound))
Gold ((pound)) 2/28/98 279.5 0.60
Health Care ((pound)) 2/28/98 1,590.8 0.60
Home Finance ((pound)) 2/28/98 1,334.7 0.60
Industrial Equipment 2/28/98 60.1 0.60
((pound))
Industrial Materials 2/28/98 29.9 0.60
((pound))
Insurance ((pound)) 2/28/98 110.4 0.60
Leisure ((pound)) 2/28/98 142.1 0.60
Medical Delivery ((pound)) 2/28/98 159.1 0.60
Medical Equipment and 2/28/99 22.2 0.60(bold italic B)
Systems ((pound)) **
Multimedia ((pound)) 2/28/98 59.1 0.60
Select Portfolios: - continued
Natural Gas ((pound)) 2/28/98 $ 82.3 0.59%
Natural Resources ((pound)) 2/28/98 6.4 0.00*
Paper and Forest Products 2/28/98 24.2 0.60
((pound))
Precious Metals and 2/28/98 194.7 0.60
Minerals ((pound))
Regional Banks ((pound)) 2/28/98 1,035.6 0.60
Retailing ((pound)) 2/28/98 152.9 0.60
Software and Computer 2/28/98 434.9 0.60
Services ((pound))
Technology ((pound)) 2/28/98 552.2 0.60
Telecommunications ((pound)) 2/28/98 413.4 0.60
Transportation ((pound)) 2/28/98 57.4 0.59
Utilities Growth ((pound)) 2/28/98 273.5 0.60
Magellan ((pound)) 3/31/98 61,521.2 0.43
Large Cap Stock ((pound)) 4/30/98 133.9 0.45
Mid Cap Stock ((pound)) 4/30/98 1,579.2 0.60
Small Cap Selector ((pound)) 4/30/98 727.3 0.67
Small Cap Stock ((pound))** 4/30/98 383.2 0.69*(bold italic B)
Contrafund II ((pound)) 6/30/98 226.3 0.59
Fidelity Fifty ((pound)) 6/30/98 180.5 0.43
Advisor Focus Funds:
Consumer Industries: ((pound))
Class A 7/31/98 1.3 0.59
Class T 7/31/98 10.7 0.59
Class B 7/31/98 2.2 0.59
Class C 7/31/98 0.5 0.59
Institutional Class 7/31/98 2.7 0.59
Cyclical Industries: ((pound))
Class A 7/31/98 0.4 0.59
Class T 7/31/98 2.7 0.59
Class B 7/31/98 0.5 0.59
Class C 7/31/98 0.1 0.59
Institutional Class 7/31/98 1.5 0.59
Advisor Focus Funds: -
continued
Financial Services: ((pound))
Class A 7/31/98 $ 12.6 0.59%
Class T 7/31/98 82.7 0.59
Class B 7/31/98 30.1 0.59
Class C 7/31/98 8.3 0.59
Institutional Class 7/31/98 3.9 0.59
Health Care: ((pound))
Class A 7/31/98 10.5 0.59
Class T 7/31/98 79.2 0.59
Class B 7/31/98 22.1 0.59
Class C 7/31/98 6.5 0.59
Institutional Class 7/31/98 7.1 0.59
Natural Resources: ((pound))
Class A 7/31/98 6.9 0.59
Class T 7/31/98 499.5 0.59
Class B 7/31/98 54.7 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 6.2 0.59
Technology: ((pound))
Class A 7/31/98 11.7 0.59
Class T 7/31/98 76.3 0.59
Class B 7/31/98 17.6 0.59
Class C 7/31/98 3.0 0.59
Institutional Class 7/31/98 5.2 0.59
Utilities Growth: ((pound))
Class A 7/31/98 1.4 0.59
Class T 7/31/98 13.9 0.59
Class B 7/31/98 5.9 0.59
Class C 7/31/98 1.6 0.59
Institutional Class 7/31/98 3.7 0.59
Blue Chip Growth ((pound)) 7/31/98 14,487.5 0.47
Dividend Growth ((pound)) 7/31/98 5,316.4 0.65
Low-Priced Stock ((pound)) 7/31/98 10,834.5 0.74
OTC Portfolio ((pound)) 7/31/98 4,213.9 0.50
Export and Multinational Fund 8/31/98 468.9 0.59
((pound))
Destiny I ((pound)) 9/30/98 $ 6,399.7 0.31%
Destiny II ((pound)) 9/30/98 4,058.8 0.45
Advisor Diversified
International ((rex-all)) **
Class A 10/31/99 1.1 0.74(bold italic B)
Class T 10/31/99 1.5 0.74(bold italic B)
Class B 10/31/99 1.1 0.74(bold italic B)
Class C 10/31/99 1.1 0.74(bold italic B)
Institutional Class 10/31/99 1.0 0.74(bold italic B)
Advisor Europe Capital
Appreciation ((rex-all)) **
Class A 10/31/99 0.5 0.74(bold italic B)
Class T 10/31/99 2.1 0.74(bold italic B)
Class B 10/31/99 0.7 0.74(bold italic B)
Class C 10/31/99 0.8 0.74(bold italic B)
Institutional Class 10/31/99 0.4 0.74(bold italic B)
Advisor Global Equity
((rex-all)) **
Class A 10/31/99 1.1 0.74(bold italic B)
Class T 10/31/99 1.2 0.74(bold italic B)
Class B 10/31/99 1.1 0.74(bold italic B)
Class C 10/31/99 1.1 0.74(bold italic B)
Institutional Class 10/31/99 1.1 0.74(bold italic B)
Advisor International Capital
Appreciation: ((rex-all)) **
Class A 10/31/98 0.6 0.73(dagger)
Class T 10/31/98 6.9 0.73(dagger)
Class B 10/31/98 2.3 0.73(dagger)
Class C 10/31/98 1.3 0.73(dagger)
Institutional Class 10/31/98 5.0 0.73(dagger)
Advisor Japan ((rex-all)) **
Class A 10/31/99 0.4 0.74(bold italic B)
Class T 10/31/99 0.4 0.74(bold italic B)
Class B 10/31/99 0.4 0.74(bold italic B)
Class C 10/31/99 0.4 0.74(bold italic B)
Institutional Class 10/31/99 0.4 0.74(bold italic B)
Advisor Latin America
((rex-all)) **
Class A 10/31/99 $ 0.4 0.74(bold italic B)%
Class T 10/31/99 0.4 0.74(bold italic B)
Class B 10/31/99 0.4 0.74(bold italic B)
Class C 10/31/99 0.4 0.74(bold italic B)
Institutional Class 10/31/99 0.4 0.74(bold italic B)
Advisor Overseas: ((epslon))
Class A 10/31/98 8.5 0.89
Class T 10/31/98 1,159.5 0.89
Class B 10/31/98 51.9 0.89
Class C 10/31/98 6.1 0.89
Institutional Class 10/31/98 47.3 0.89
Canada ((epslon)) 10/31/98 71.9 0.30
Capital Appreciation ((pound)) 10/31/98 2,379.7 0.44
Disciplined Equity ((pound)) 10/31/98 2,857.4 0.43
Diversified International 10/31/98 1,849.8 0.83
((epslon))
Emerging Markets ((epslon)) 10/31/98 390.9 0.74
Europe ((epslon)) 10/31/98 1,399.6 0.73
Europe Capital Appreciation 10/31/98 594.4 0.72
((epslon))
France ((epslon)) 10/31/98 12.5 0.73
Germany ((epslon)) 10/31/98 23.7 0.73
Hong Kong and China ((rex-all)) 10/31/98 154.3 0.74
International Value ((rex-all)) 10/31/98 454.5 0.82
Japan ((rex-all)) 10/31/98 238.4 1.01
Japan Small Companies 10/31/98 95.1 0.74
((rex-all))
Latin America ((epslon)) 10/31/98 594.2 0.75
Nordic ((epslon)) 10/31/98 104.3 0.74
Overseas ((epslon)) 10/31/98 3,862.7 0.90
Pacific Basin ((rex-all)) 10/31/98 206.8 1.11
Southeast Asia ((rex-all)) 10/31/98 235.6 1.16
Stock Selector ((pound)) 10/31/98 1,885.4 0.43
TechnoQuant Growth 10/31/98 67.4 0.39
United Kingdom ((epslon)) 10/31/98 7.5 0.74
Value ((pound)) 10/31/98 7,451.9 0.41
Worldwide ((epslon)) 10/31/98 1,169.1 0.74
Advisor Dividend Growth
((pound))**
Class A 11/30/99 $ 0.5 0.59(bold italic B)%
Class T 11/30/99 5.1 0.59(bold italic B)
Class B 11/30/99 3.4 0.59(bold italic B)
Class C 11/30/99 1.2 0.59(bold italic B)
Institutional Class 11/30/99 0.9 0.59(bold italic B)
Advisor Equity Growth:
((pound))
Class A 11/30/98 56.8 0.59
Class T 11/30/98 4,568.3 0.59
Class B 11/30/98 166.9 0.59
Class C 11/30/98 26.0 0.59
Institutional Class 11/30/98 1,004.7 0.59
Advisor Growth
Opportunities:((pound))
Class A 11/30/98 255.0 0.46
Class T 11/30/98 22,748.7 0.46
Class B 11/30/98 925.6 0.46
Class C 11/30/98 146.1 0.46
Institutional Class 11/30/98 493.0 0.46
Advisor Large Cap: ((pound))
Class A 11/30/98 3.1 0.59
Class T 11/30/98 59.5 0.59
Class B 11/30/98 27.5 0.59
Class C 11/30/98 1.5 0.59
Institutional Class 11/30/98 7.7 0.59
Advisor Mid Cap: ((pound))
Class A 11/30/98 8.2 0.59
Class T 11/30/98 357.3 0.59
Class B 11/30/98 73.2 0.59
Class C 11/30/98 6.5 0.59
Institutional Class 11/30/98 35.4 0.59
Advisor Retirement Growth
((pound))**
Class A 11/30/99 0.2 0.59(bold italic B)
Class T 11/30/99 0.5 0.59(bold italic B)
Class B 11/30/99 0.2 0.59(bold italic B)
Class C 11/30/99 0.2 0.59(bold italic B)
Institutional Class 11/30/99 0.2 0.59(bold italic B)
Advisor Small Cap: ((pound))**
Class A 11/30/98 $ 4.2 0.74(bold italic B)%
Class T 11/30/98 30.2 0.74(bold italic B)
Class B 11/30/98 9.5 0.74(bold italic B)
Class C 11/30/98 9.4 0.74(bold italic B)
Institutional Class 11/30/98 8.2 0.74(bold italic B)
Advisor Strategic
Opportunities: ((pound))
Class A 11/30/98 3.5 0.38
Class T 11/30/98 491.8 0.38
Class B 11/30/98 109.5 0.38
Initial Class 11/30/98 20.2 0.38
Institutional Class 11/30/98 4.7 0.38
Advisor TechnoQuant Growth:
((pound))
Class A 11/30/98 3.8 0.59
Class T 11/30/98 18.3 0.59
Class B 11/30/98 11.6 0.59
Class C 11/30/98 0.3 0.59
Institutional Class 11/30/98 1.3 0.59
Emerging Growth ((pound)) 11/30/98 2,172.0 0.79
Growth Company ((pound)) 11/30/98 10,377.6 0.42
New Millennium ((pound)) 11/30/98 1,525.9 0.62
Retirement Growth ((pound)) 11/30/98 4,376.5 0.40
Contrafund ((pound)) 12/31/98 33,442.4 0.45
Trend ((pound)) 12/31/98 1,354.1 0.39
Variable Insurance Products:
Growth
Initial Class 12/31/98 9,027.5 0.59
Service Class 12/31/98 50.6 0.59
Overseas ((epslon))
Initial Class 12/31/98 2,073.3 0.74
Service Class 12/31/98 15.9 0.74
Variable Insurance Products II:
Asset Manager: Growth
((pound))
Initial Class 12/31/98 495.2 0.59
Service Class 12/31/98 1.1 0.59
Variable Insurance Products
II: - continued
Contrafund ((pound))
Initial Class 12/31/98 $ 4,974.2 0.59%
Service Class 12/31/98 61.3 0.59
Variable Insurance Products
III:
Growth Opportunities ((pound))
Initial Class 12/31/98 1,296.4 0.59
Service Class 12/31/98 66.4 0.59
Mid Cap ((pound))**
Initial Class 12/31/98 0.5 0.59(bold italic B)
Service Class 12/31/98 0.5 0.59(bold italic B)
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of January 31, 1999, if fiscal year end figures are not yet
available.
(b) Average net assets are computed on the basis of average net assets
of each fund or class at the close of business on each business day
throughout its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due
from FMR pursuant to voluntary or state expense limitations. Funds so
affected are indicated by an (*). The ratio for certain multi-class
funds is presented gross of expense reductions for presentation
purposes.
(dagger) Annualized
** Less than a complete fiscal year
((bold italic B)) Based on estimated expenses for the first year
((rex-all)) Fidelity Management & Research Company (FMR) 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 (FIIA (U.K.)
L), with respect to the fund.
((epslon)) FMR has entered into sub-advisory agreements with the
following affiliates: FMR U.K., FMR Far East, FIIA, and FIIA (U.K.) L,
with respect to the fund.
((pound)) FMR has entered into sub-advisory agreements with FMR U.K.
and FMR Far East, with respect to the fund.
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT OBJECTIVE AND FUND FISCAL YEAR END (A) AVERAGE NET ASSETS RATIO OF NET ADVISORY FEES
(MILLIONS)(B) TO AVERAGE NET ASSETS PAID
TO FMR (C)
GROWTH AND INCOME
Capital & Income ((pound)) 4/30/98 $ 2,144.9 0.59%
Fidelity Fund ((pound)) 6/30/98 6,846.9 0.38
Balanced ((pound)) 7/31/98 4,522.1 0.44
Global Balanced ((rex-all)) 7/31/98 75.1 0.74
Growth & Income ((pound)) 7/31/98 39,193.8 0.49
Puritan (&) 7/31/98 23,485.5 0.44
Asset Manager ((pound)) 9/30/98 12,325.9 0.54
Asset Manager: Growth ((pound)) 9/30/98 4,852.5 0.59
Asset Manager: Income 9/30/98 715.4 0.44
((pound))
Advisor Balanced: (&)
Class A 10/31/98 16.2 0.44
Class B 10/31/98 53.9 0.44
Class T 10/31/98 2,956.4 0.44
Class C 10/31/98 30.0 0.44
Institutional Class 10/31/98 62.1 0.44
International Growth & Income 10/31/98 965.9 0.74
((rex-all))
Advisor Asset Allocation: **(&)
Class A 11/30/99 3.3 0.59(b)
Class B 11/30/99 0.6 0.59(b)
Class T 11/30/99 0.7 0.59(b)
Class C 11/30/99 0.6 0.59(b)
Institutional Class 11/30/99 0.6 0.59(b)
Advisor Equity Income:
((pound))
Class A 11/30/98 47.7 0.49
Class B 11/30/98 799.3 0.49
Class T 11/30/98 2,493.2 0.49
Class C 11/30/98 18.1 0.49
Institutional Class 11/30/98 484.1 0.49
Advisor Growth & Income:
((pound))
Class A 11/30/98 17.9 0.49
Class B 11/30/98 78.7 0.49
Class T 11/30/98 254.7 0.49
Class C 11/30/98 21.9 0.49
Institutional Class 11/30/98 85.6 0.49
Convertible Securities 11/30/98 1,041.0 0.52
((pound))
Equity-Income II ((pound)) 11/30/98 17,892.7 0.49
Variable Insurance Products:
Equity-Income
Initial Class 12/31/98 $ 10,951.9 0.49%
Service Class 12/31/98 111.6 0.49
Variable Insurance Products II:
Asset Manager ((pound))
Initial Class 12/31/98 4,632.2 0.54
Service Class 12/31/98 1.7 0.54
Asset Manager: Growth
((pound))
Initial Class 12/31/98 495.2 0.59
Service Class 12/31/98 1.1 0.59
Variable Insurance Products
III:
Balanced Portfolio ((pound))
Initial Class 12/31/98 255.6 0.44
Service Class 12/31/98 3.3 0.44
Growth & Income ((pound))
Initial Class 12/31/98 701.0 0.49
Service Class 12/31/98 6.5 0.49
Equity-Income ((pound)) 1/31/99 18,442.4 0.49
Utilities Fund ((pound)) 1/31/99 1,823.2 0.60
</TABLE>
(a) All fund data are as of the fiscal year end noted in the chart or
as of January 31, 1999, 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 (*). The ratio for certain multi-class
funds is presented gross of expense reductions for presentation
purposes.
** Less than a complete fiscal year
(sunburst) Average net assets for the period shown were less than
$100,000
(rex-all) Fidelity Management & Research Company (FMR) 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 (FIIA (U.K.)
L), with respect to the fund.
((pound)) FMR has entered into sub-advisory agreements with FMR U.K.
and FMR Far East, with respect to the fund.
(&) FMR has entered into sub-advisory agreements with Fidelity
Investments Money Management, Inc., FMR U.K. and FMR Far East, with
respect to the fund.
(b) Based on estimated expenses for the first year.
PUR-pxs-0599 CUSIP#316345206/FUND#304
1.718200.100 CUSIP#316345404/FUND#334
CUSIP#316345305/FUND#316
CUSIP#316345107/FUND#004
Vote this proxy card TODAY! Your prompt response will
s ave 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 PURITAN TRUST: FIDELITY PURITAN FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY PURITAN TRUST: FIDELITY PURITAN 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 14, 1999 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 , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316345107/fund# 004
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 [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E.
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
management contract for the
fund.
7. To approve a Distribution and FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Service Plan pursuant to
Rule 12b-1 for the fund.
9. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
fundamental investment
objective and eliminate
certain fundamental
investment policies.
13. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
</TABLE>
[PUR-PXC-599] cusip # 316345107/fund# 004
Vote this proxy card TODAY! Your prompt response will
save t he 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 PURITAN TRUST: FIDELITY BALANCED FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY PURITAN TRUST: FIDELITY BALANCED 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 14, 1999 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 , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316345206/fund# 304
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 [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E.
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
4. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
management contract for the
fund.
10. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
fundamental investment
objective and eliminate
certain fundamental
investment policies.
13. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
14. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
fundamental investment
limitation concerning
concentration.
</TABLE>
BAL-PXC-599 cusip # 316345206/fund# 304
Vote this proxy card TODAY! Your prompt response will
save t he 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 PURITAN TRUST: FIDELITY GLOBAL BALANCED FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY PURITAN TRUST: FIDELITY GLOBAL BALANCED 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 14, 1999 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 , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316345404/fund# 334
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 [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E.
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
5. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
management contract for the
fund.
8. To approve an Agreement and FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
Plan providing for the
reorganization of the fund
from a separate series of
one Massachusetts business
trust to another.
11. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
fundamental investment
objective and eliminate
certain fundamental
investment policies.
13. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
</TABLE>
GBL-PXC-599 cusip # 316345404/fund# 334
Vote this proxy card TODAY! Your prompt response will
save t he 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 PURITAN TRUST: FIDELITY LOW-PRICED STOCK FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Ralph F. Cox, or any one or more of
them, attorneys, with full power of substitution, to vote all shares
of FIDELITY PURITAN TRUST: FIDELITY LOW-PRICED STOCK 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 14, 1999 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 , 1999
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316345305/fund# 316
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 [ ] FOR all nominees listed [ ] WITHHOLD authority to 1.
specified below as Trustees: (except as marked to the vote for all nominees.
(01) Ralph F. Cox, (02) contrary below).
Phyllis Burke Davis, (03)
Robert M. Gates, (04) Edward
C. Johnson 3d, (05) E.
Bradley Jones, (06) Donald
J. Kirk, (07) Peter S.
Lynch, (08) William O.
McCoy, (09) Gerald C.
McDonough, (10) Marvin L.
Mann, (11) Robert C. Pozen,
and (12) Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) OF THE
NOMINEE(S) ON THE LINE
BELOW.)
</TABLE>
______________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
PricewaterhouseCoopers LLP
as independent accountants
of the fund.
3. To authorize the Trustees to FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
adopt an amended and
restated Declaration of Trust.
6. To approve an amended FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
management contract for the
fund.
7. To approve a Distribution and FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
Service Plan pursuant to
Rule 12b-1 for the fund.
12. To eliminate a fundamental FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
investment policy of the fund.
13. To amend the fund's FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
fundamental investment
limitation concerning
diversification to exclude
securities of other
investment companies from
the limitation.
</TABLE>
LPS-PXC-599 cusip # 316345305/fund# 316
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY PURITAN FUND
FIDELITY BALANCED FUND
FIDELITY GLOBAL BALANCED FUND
FIDELITY LOW-PRICED STOCK 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 on July 14, 1999. 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 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,
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 PricewaterhouseCoopers 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 each of Fidelity
Puritan Fund and Fidelity Balanced Fund.
5. To approve an amended management contract for Fidelity Global
Balanced Fund.
6. To approve an amended management contract for Fidelity Low-Priced
Stock Fund.
7. To approve a Distribution and Service Plan pursuant to Rule 12b-1
for each of Fidelity Puritan Fund and Fidelity Low-Priced Stock
Fund.
8. To approve an Agreement and Plan providing for the reorganization
of Fidelity Global Balanced Fund from a separate series of one
Massachusetts business trust to another.
9. To amend Fidelity Puritan Fund's fundamental investment objective
and eliminate certain fundamental investment policies of the fund.
10. To amend Fidelity Balanced Fund's fundamental investment objective
and eliminate certain fundamental investment policies of the fund.
11. To amend Fidelity Global Balanced Fund's fundamental investment
objective and eliminate certain fundamental investment policies of
the fund.
12. To eliminate a fundamental investment policy of Fidelity
Low-Priced Stock Fund.
13. To amend the fundamental investment limitation concerning
diversification to exclude securities of other investment
companies from the limitation for each fund.
14. To amend Fidelity Balanced Fund's fundamental investment
limitation concerning concentration.
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 ARE FIDELITY PURITAN FUND AND FIDELITY BALANCED FUND PROPOSING
AMENDED MANAGEMENT CONTRACTS? (PROPOSAL 4)
The amended management contracts would lower two components of the
management fee which Fidelity Management & Research Company (FMR)
receives from the funds. 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. First, the
amended management contract for each fund will reduce the Individual
Fund Fee rate from 0.20% to 0.15% of each fund's average net assets.
Second, the amended management contract modifies the Group Fee rate to
provide for lower management fees to be paid to FMR when FMR's assets
under management exceed certain levels. The proposed reduction in each
fund's Individual Fund Fee rate and the proposed modification to the
Group Fee rate would make each fund's management fee consistent with
that of other funds advised by FMR with comparable investment
disciplines. Each fund's amended management contract also allows FMR
and the trust, on behalf of each fund, to modify the funds' management
contracts subject to the requirements of the Investment Company Act of
1940 (1940 Act). Please refer to the proxy statement for specific
details of each fund's amended management contract proposal.
WHY IS FIDELITY GLOBAL BALANCED FUND PROPOSING AN AMENDED MANAGEMENT
CONTRACT? (PROPOSAL 5)
The amended management contract provides for lower management fees to
be paid to FMR when FMR's assets under management exceed certain
levels. The fund's amended management contract also allows FMR and
the trust, on behalf of the fund, to modify the fund's management
contract subject to the requirements of the 1940 Act. The amended
management contract will result in a management fee that is the same
as or lower than the fee payable under the fund's present contract.
WHY IS FIDELITY LOW-PRICED STOCK FUND PROPOSING AN AMENDED MANAGEMENT
CONTRACT? (PROPOSAL 6)
The amended management contract provides for lower management fees to
be paid to FMR when FMR's assets under management exceed certain
levels. The fund's amended management contract also allows FMR and
the trust, on behalf of the fund, to modify the fund's management
contract subject to the requirements of the 1940 Act.
In addition, the amended management contract revises its performance
adjustment calculation by rounding the investment performance of both
the fund and the comparative index to the nearest 0.01%, rather than
the nearest 1.00%. This reduces the chance of minor changes in
performance resulting in significant changes to the performance
adjustment, and ultimately the fund's management fee.
The proposed change to the fund's performance adjustment calculation
will either increase its management fee or reduce it, depending on the
performance of the fund and the relative performance of its respective
index. Please refer to the proxy statement for specific details of the
amended management contract proposal.
WHAT IS A DISTRIBUTION AND SERVICE PLAN, AND WHY IS FIDELITY
LOW-PRICED STOCK FUND PROPOSING TO ADOPT ONE? (PROPOSAL 7)
The Distribution and Service Plan (the Plan) was approved by the Board
of Trustees as provided for by Rule 12b-1 (the Rule) of the 1940 Act.
The Rule provides that a mutual fund acting as a distributor of its
shares must do so according to a written Plan describing all material
aspects of the proposed financing of distribution. The Plan is
designed to avoid legal uncertainties that may arise from ambiguities
within the Rule.
The Plan dictates that all expenses relating to the distribution of
fund shares shall be paid for by FMR, or Fidelity Distributors
Corporation (FDC), a wholly owned subsidiary of FMR, out of past
profits and other resources including management fees paid by a fund
to FMR. The Plan does not authorize payments by the fund other than
those that are to be made to FMR under its management contract.
WHY IS FIDELITY GLOBAL BALANCED FUND PROPOSING TO APPROVE AN AGREEMENT
AND PLAN OF REORGANIZATION FROM A SEPARATE SERIES OF ONE MASSACHUSETTS
BUSINESS TRUST TO ANOTHER? (PROPOSAL 8)
The Board is proposing to reorganize Fidelity Global Balanced Fund to
a separate series of another Massachusetts business trust to
consolidate and streamline the production and mailing of certain legal
documents. The proposed change will have no material effect on
shareholders or the management of the fund.
WHY ARE THE FUNDS PROPOSING TO ELIMINATE CERTAIN FUNDAMENTAL POLICIES?
(PROPOSALS 9, 10, 11 AND 12)
The primary purpose of these proposals is to eliminate certain
fundamental investment policies from each fund's investment objective.
Eliminating these policies is not expected to have any material effect
on the investment strategies or performance of the funds. Eliminating
the policies will allow the funds to more clearly communicate their
investment objectives and strategies in conformity with the
requirements of revised Form N-1A (the form used by open-end
investment companies, like the funds, to register under the 1940 Act
and the Securities Act of 1933). Form N-1A requires concise,
understandable descriptions of a fund's investment objective and
policies. Eliminating the policies also will allow the funds to more
clearly communicate their investment objectives and strategies to
shareholders.
WHAT IS THE BENEFIT OF AMENDING THE FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION TO EXCLUDE SECURITIES OF OTHER INVESTMENT
COMPANIES FROM THE LIMITATION FOR EACH FUND? (PROPOSAL 13)
This proposal would permit the funds, subject to the requirements of
the 1940 Act, to invest without limit in the securities of other
investment companies. As a result of an 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 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.
WHY IS FIDELITY BALANCED FUND PROPOSING TO AMEND ITS FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING CONCENTRATION? (PROPOSAL 14)
The primary purpose of this proposal is to revise the fund's
investment limitation to conform to a limitation that is expected to
become standard for all funds managed by FMR. The Board of Trustees
has concluded that this proposal will benefit the fund and its
shareholders, and adoption of this proposal is not expected to affect
the way the fund is managed, the investment performance of the fund,
or the securities or instruments in which the fund invests.
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 17, 1999.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card(s) 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 1-800-544-8888.
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."
