SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 33-14195)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 7 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT [x]
COMPANY ACT OF 1940
Amendment No. [ ]
Fidelity U.S. Investments-Bond Fund, L.P.
(Exact Name of Registrant as Specified in Certificate and Agreement of
Limited Partnership)
82 Devonshire St., Boston, MA 02109
(Address of Principal Executive Office)
Registrant's Telephone Number (617) 570-7000
Arthur S. Loring, Esq.
82 Devonshire Street,
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[] Immediately upon filing pursuant to paragraph (b)
[x] On ( October 14, 1994 ) pursuant to paragraph (b)
[] 60 days after filing pursuant to paragraph (a)
[] On ( ) pursuant to paragraph (a) of
Rule 485
Registrant elects to register an indefinite number of shares pursuant to
Regulation 24f-2 under the Investment Company Act of 1940.
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P.
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 a,b................ Cover Page
2 a.................. Summary of Fund Expenses
b,c................ Summary
3 a,b................ *
c.................. Fund Performance
4 a(i)............... The Fund is a Partnership
a(ii).............. The Fund's Investment Objective and Policies
b.................. The Fund's Investment Objective and Policies; The
Fund is a Partnership
5 a.................. The General Partners and the Fidelity Organization
b.................. The General Partners and the Fidelity Organization
c,d,e.............. Management, Distribution and Service Fees
f.................. Portfolio Transactions
6 a(i)............... The Fund is a Partnership
a(ii).............. *
a(iii)............. The Fund is a Partnership
b,c,d.............. *
e.................. How to Invest, How to Redeem
f,g................ Distributions and Taxes
7 a.................. Management, Distribution and Service Fees
b(i,ii)............ How to Invest
b(iii,iv).......... *
b(v)............... How to Invest
c.................. *
d.................. How to Invest
e.................. Management, Distribution and Service Fees
f.................. Management, Distribution and Service Fees
8 a.................. How to Redeem
b.................. *
c.................. How to Invest
d.................. How to Redeem
9 ................... *
* Not Applicable
Part B Statement of Additional Information Caption
10,11................ Cover Page
12 .................. *
13 a,b,c............. Investment Policies and Limitations
d................. *
14 a,b............... General Partners and Officers
c................. *
15 a,b............... *
c................. FMR, General Partners and Officers
16 a(i).............. FMR
a(ii)............. Contracts with Companies Affiliated with FMR
a(iii),(A),(B).... *
a(iii),(C),b...... Management Contracts
c................. *
d................. Contracts with Companies Affiliated with FMR
e................. *
f................. Distribution and Service Plan
g................. *
h................. Description of the Fund
i................. Contracts with Companies Affiliated with FMR
17 a,b,c,d........... Portfolio Transactions
18 a................. Description of the Fund
b................. *
19 a................. Additional Purchase and Redemption Information
b................. Valuation of Portfolio Securities
c,d............... *
20 .................. Taxes
21 a(i,ii)........... Contracts with Companies Affiliated with FMR
a(iii),b,c........ *
22 a................. *
b(i,ii)........... Fund Performance
b(iii,iv)......... *
23 .................. Financial Statements are filed herein as part of
the Statement of Additional Information.
* Not Applicable
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P. 82 Devonshire Street
Boston, Massachusetts 02109
PROSPECTUS
October 14, 1994
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P. (the Fund) seeks to provide a
high level of income, consistent with reasonable risk, free of U.S. federal
taxes and withholding requirements for qualifying non-U.S. investors by
investing in a broad range of debt securities (including bonds, short-term
securities and secured obligations including mortgage-related securities).
Under normal conditions, at least 65% of the Fund's assets will be invested
in U.S. government or U.S. corporate bonds.
This Prospectus is designed to provide investors with information that
they should know before investing. Please read and retain this document
for future reference.
A Statement of Additional Information (dated October 14, 1994
herein by reference. This free Statement is available upon request from
Fidelity Distributors Corporation, 82 Devonshire Street, Boston, MA 02109.
FIDELITY DISTRIBUTORS CORPORATION: INSTITUTIONAL CLIENT ADMINISTRATION:
Nationwide, toll free 800-843-3001
In Massachusetts, call collect 617-330-0586
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Summary of Fund Expenses
Summary
The Fund's Investment Objective and Policies
Portfolio Transactions
The Fund is a Partnership
The General Partners and The Fidelity Organization
Distributions and Taxes
Performance
Management, Distribution and Service Fees
How to Invest
Investor Accounts
How to Redeem
Summary of Partnership Agreement
Glossary
NRAB-1094
SUMMARY OF FUND EXPENSES
The purpose of the table below is to assist investors in understanding the
various costs and expenses that an investor in the Fund would bear directly
or indirectly. This standard format was developed for use by all mutual
funds to help investors make their investment decisions. This expense
information should be considered along with other important information in
this Prospectus such as the Fund's investment objectives and policies.
A. ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
Management Fee .50%
12b-1 Fee .25%
Other Expenses .37%
Total Operating Expenses 1.12%
B. EXAMPLE 1 YEAR 3 YEARS
You would pay the following expenses on a $1,000
investment assuming (1) a 5% annual return and
(2) redemption at the end of each time period: $11 $36
EXPLANATION OF TABLE
A. ANNUAL OPERATING EXPENSES. Management Fees are paid by the Fund to
Fidelity Management & Research Company (FMR) for managing its investments
and business affairs. The expense for Management Fee is based on an
average group fee plus an individual fund fee, annualized. 12b-1 fees of
up to .25% may be paid by the Fund to third parties who provide shareholder
support services or assist in distribution activities. The Fund incurs
Other Expenses for maintaining shareholder records, furnishing shareholder
statements and reports and other services. Management Fee and other
Expenses have been reflected in the share price and are not charged
directly to individual shareholder accounts. Please refer to the section
entitled "Management, Distribution and Services Fees," on page for
further information.
B. EXAMPLE OF EXPENSES. The hypothetical example illustrates the expenses
associated with a $1,000 investment over periods of 1 and 3 years, based on
the expenses in the table and an assumed annual rate of return of 5%. THE
RETURN OF 5% AND EXPENSES SHOULD NOT BE CONSIDERED INDICATIONS OF ACTUAL OR
EXPECTED FUND PERFORMANCE OR EXPENSES, BOTH OF WHICH MAY VARY.
SUMMARY
INVESTMENT OBJECTIVE AND POLICIES. Fidelity U.S. Investments - Bond Fund,
L.P. is designed solely for qualifying non-U.S. investors. The Fund will
invest in a broad range of debt securities (including bonds, short-term
securities and secured obligations including mortgage-related securities).
Under normal conditions, at least 65% of its assets will be invested in
U.S. government or U.S. corporate bonds. See "The Fund's Investment
Objective and Policies," page .
SUITABILITY. The Fund is designed solely for qualifying non-U.S. investors
who have a trust or agency relationship with a financial institution. U.S.
INVESTORS ARE NOT ELIGIBLE TO INVEST IN THIS FUND.
HOW TO INVEST. Investments may only be made by wire. Shares of the Fund
are continuously offered and may be purchased by the financial institution
acting on behalf of the non-U.S. investor at their net asset value per
share (NAV) next determined after an investment is received and accepted.
The minimum investment required to establish a new account in the Fund is
$25,000. After meeting the original investment requirement, an individual
investor must maintain a balance of at least $25,000 in the Fund. See "How
to Invest," page .
HOW TO REDEEM. Redemptions may be made by telephone by the financial
institution acting on behalf of the non-U.S. investor and are effected at
the NAV next determined after the transfer agent receives the redemption
request by the transfer agent. The proceeds from redemptions may only be
wired. Checks will not be issued. See "How to Redeem," page .
THE FUND IS A PARTNERSHIP. The Fund is an open-end diversified management
investment company organized as a limited partnership in the State of
Delaware on May 7, 1987. The partnership form permits the Fund to pass
through the exemption from U.S. federal income taxes and withholding
requirements, which would not be possible if the Fund were organized as a
corporation or business trust. Purchasers of shares must become partners
in the Fund. Each such partner is allocated his proportionate share of any
net income, gains or losses. See "The Fund is a Partnership," page ,
"Summary of Partnership Agreement," page and "Distributions and Taxes,"
page .
MANAGEMENT, DISTRIBUTION AND SERVICE FEES. Fidelity Management & Research
Company, 82 Devonshire Street, Boston, Massachusetts 02109, acts as
investment adviser to the Fund. FMR, one of the largest investment
management organizations in the United States, serves as investment adviser
to a number of investment companies whose net assets as of March 31, 1992
were in excess of $___ billion with over __ million shareholder accounts.
For managing the Fund's investments and business affairs, the Fund pays a
monthly management fee which has two components: a group fee rate and an
individual fund fee rate of .30% of the Fund's average net assets.
The Fund has adopted a Distribution and Service Plan (the Plan) with
Fidelity Distributors Corporation (Distributors), 82 Devonshire Street,
Boston, Massachusetts 02109. The Fund is authorized to pay a monthly
distribution fee at the annual rate of up to .25% of average net assets to
Distributors for compensation to third parties who provide shareholder
support services or assist in distribution activities.
Fidelity Investments Institutional Operations Company (FIIOC), 82
Devonshire Street, Boston, Massachusetts 02109, receives fees from the Fund
for acting as transfer agent, dividend disbursing agent, and shareholders'
servicing agent for the Fund.
Fidelity Service Company (Service), 82 Devonshire Street, Boston,
Massachusetts 02109 receives fees for determining the Fund's net asset
value and dividends and for maintaining its general accounting records.
Operating expenses also will include custodial, legal and accounting fees,
charges to register the Fund with federal and state governments and other
miscellaneous expenses. See "Management, Distribution and Service Fees,"
page .
RISK FACTORS. Fixed-income securities generally are considered to be
interest rate sensitive, which means their value moves inversely to
interest rates. Because of this, the value of the Fund's shares also will
fluctuate.
THE FUND'S INVESTMENT OBJECTIVE AND POLICIES
The Fund is designed solely for investors who are not treated as U.S.
citizens or residents or U.S. corporations, partnerships, trusts or estates
under the U.S. Internal Revenue Code of 1986 (the Code), and shares of the
Fund are offered exclusively to such qualifying non-U.S. investors. The
Fund seeks to provide a high level of income, consistent with reasonable
risk, free from U.S. federal income taxes and withholding requirements for
those investors who qualify as non-U.S. investors (as stated above) and
will, under normal circumstances, endeavor to have at least 80% of the
income qualify for this exemption. This requires the Fund to invest in
securities that produce income qualifying for the "portfolio interest"
exemption under the Code for interest derived from any debt obligations
issued after July 18, 1984 in registered form or for other exemptions from
U.S. federal income taxes and withholding requirements. There is a
substantial supply of debt obligations issued after July 18, 1984. For
more complete information about the types of debt securities that generate
"portfolio interest," see "Distributions and Taxes," page .
The Fund may not always achieve its objective, but it will follow the
investment style described in the following paragraphs. The Fund's
investment objective, policies and limitations, except as noted, are not
fundamental and can be changed without shareholder approval.
The Fund seeks to provide a high level of income, consistent with
reasonable risk, free of U.S. federal income taxes and withholding
requirements for qualifying non-U.S. investors by investing in a broad
range of debt securities (including bonds, short-term securities and
secured obligations including mortgage related securities). Under normal
conditions, at least 65% of the Fund's assets will be invested in U.S.
government or U.S. corporate bonds.
The Fund may invest up to 100% of its assets in investment grade
securities, which are considered to be those rated Baa or higher by Moody's
Investors Service, Inc. (Moody's) or BBB or higher by Standard & Poor's
Corporation (S&P) and unrated securities of similar quality as determined
by FMR.
The Fund may also invest up to 35% of total assets in lower-quality,
high-yielding securities (those rated Ba or B by Moody's or BB or B by S&P
and unrated securities of similar quality), commonly referred to as "junk
bonds". See the Glossary for further discussion of these investments.
The Fund may invest up to 35% of total assets in U.S. dollar-denominated
foreign securities. Investing in U.S. dollar-denominated foreign
securities may represent a greater degree of risk than investing in
domestic securities, because of the possibility of less publicly available
information, more volatile markets, less securities regulation, less
favorable tax provisions, (including the imposition of foreign withholding
taxes) war or expropriation. Investments in foreign securities also
involve the risk of possible adverse changes in investment or exchange
control regulations, expropriation or confiscatory taxation, limitation on
the removal of funds or other assets of the Fund, political or financial
instability or diplomatic and other developments which could affect such
investments. Interest received with respect to such securities generally
will be exempt from U.S. tax and withholding requirements for qualified
non-U.S. investors if the non-U.S. issuers of such securities are not
engaged in a trade or business in the United States (which results in
treatment of such interest as non-U.S. source income) or if the interest
qualifies as portfolio interest.
When market conditions warrant, the Fund may invest in short-term debt
obligations subject to certain tax restrictions including cash, commercial
paper or repurchase agreements. The Fund may purchase securities on a
delayed delivery basis, subject to certain tax restrictions. When the fund
agrees to purchase an obligation on a delayed delivery basis, it sets aside
securities or cash with its custodian equal to the payment due. The income
from certain short-term investments may not qualify as "portfolio interest"
income or other exempt income and, therefore, may be subject to U.S.
federal tax and withholding requirements.
The Fund will not limit the maturity of its investments, but generally will
invest in medium (having a maturity of between 3 and 10 years) to long-term
(having a maturity of greater than 10 years) securities. Medium to
long-term securities offer higher yields, but are subject to more price
fluctuation than short-term securities.
For further discussion on portfolio investments, see "Portfolio
Transactions," on page .
The Fund's share value and yield are not guaranteed by the U.S. government.
The value of any fixed-income security is principally influenced by two
factors: the public's perception of the issuer's ability to meet its
obligations for timely payment of interest and principal and the impact of
changes in interest rates. The value of the government securities the fund
invest in may be affected by the first factor (credit risk) if they are not
backed by the full faith and credit of the United States. Government
securities are, of course, subject to change in market value resulting from
changes in interest rates. Fixed-income securities generally are
considered to be interest rate sensitive, which means their value moves
inversely to interest rates. The value of the Fund's share price, yield
and total return will fluctuate and therefore your investment may be worth
more or less than your original cost when you redeem your shares. You
should also recognize that many securities can provide a higher yield than
government securities.
SECURITIES LENDING
Loans of securities of the Fund will be made in strictest conformity with
applicable federal and state rules and regulations. Since there may be
delays in recovery of loaned securities or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to firms deemed by FMR to be of good standing and will not be
made unless, in the judgment of FMR, the consideration to be earned from
such loans would justify the risk. Tax requirements may limit the volume
of securities lending by the Fund. Income earned through securities
lending may be subject to U.S. taxes and withholding requirements.
ABOUT MORTGAGE-RELATED SECURITIES
A mortgage-related security is an interest in a pool of mortgages. Most
mortgage-related securities are pass-through securities, which means that
they provide investors with payments consisting of both interest and
principal as the mortgages in the underlying mortgage pool are paid off.
The following types of mortgage-related securities, which represent the
majority of the mortgage securities currently available, are issued by
government-sponsored organizations formed to increase the availability of
mortgage credit.
(solid bullet) GINNIE MAES are mortgage-backed pass-through certificates
issued by the Government National Mortgage Association. Ginnie Maes are
interests in pools of mortgage loans insured by the Federal Housing
Administration or by the Farmer's Home Administration, or guaranteed by the
Veterans Administration. GNMA is a U.S. government corporation within the
Department of Housing and Urban Development. Ginnie Maes are backed by the
full faith and credit of the U.S. government, which means that the U.S.
government guarantees that interest and principal will be paid when due.
(solid bullet) FANNIE MAES and FREDDIE MACS are pass-through securities
issued by FNMA and FHLMC, respectively. FNMA and FHLMC, which guarantee
payment of interest and principal on Fannie Maes and Freddie Macs, are
federally chartered corporations supervised by the U.S. government and
acting as governmental instrumentalities under authority granted by
Congress. FNMA is authorized to borrow from the U.S. Treasury to meet its
obligations. Fannie Maes and Freddie Macs are not backed by the full faith
and credit of the U.S. government; however, their close relationship with
the U.S. government makes them high quality securities with minimal credit
risks. (Proposals have been submitted from time to time to convert FNMA
and FHLMC into private corporations, unaffiliated with the U.S. government.
It is uncertain what effect this would have on the Fund's investments.)
The following types of mortgage-related securities may be issued by
governmental or non-governmental entities, including banks and other
mortgage lenders. Non-governmental securities may offer a higher yield but
also may be subject to greater price fluctuation than government
securities. Payment of principal and interest on non-governmental
securities is contingent on the entity's ability to make payments.
(solid bullet) COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) are securities
collateralized by mortgages or mortgage-backed securities. CMOs are issued
in classes and series that have different maturities and often are retired
in sequence.
(solid bullet) REAL ESTATE MORTGAGE INVESTMENT CONDUITS (REMICS) are
private entities that hold a fixed pool of mortgage securities secured by
an interest in real property and that issue multiple classes of interests
therein which have different maturities and are retired in sequence.
(solid bullet) MORTGAGE-BACKED SECURITIES represent interests in pools of
mortgages where the cash flow generated from the mortgage collateral pool
is dedicated to bond repayment. Mortgage-backed bonds are general
obligations of their issuers, payable out of the issuers' general funds and
additionally secured by a first lien on a pool of single-family detached
properties.
Other types of mortgage-related securities can be expected to be developed
in the future, and the Fund may invest in them if FMR determines that such
investments are consistent with the Fund's investment objective and
policies. The Fund's Prospectus and Statement of Additional Information
will be amended prior to making any investment in such securities. The
Fund will not invest in any securities which would constitute "United
States real property interests" for U.S. federal income tax purposes
because the gains from the disposition of such securities generally are
taxable to non-U.S. investors.
Many issuers or servicers of mortgage-related securities guarantee timely
payment of interest and principal on the securities, whether or not
payments are made when due on the underlying mortgages. This kind of
guarantee generally increases the quality of a security, but the guarantee
does not mean that the security's market value and yield will not change.
Like other bond investments, the value of mortgage-related securities will
tend to rise when interest rates fall, and fall when rates rise. Their
value also may change because of changes in the market's perception of the
creditworthiness of the organization that issued or guarantees them. In
addition, the mortgage securities market in general may be adversely
affected by changes in governmental regulation or tax policies. FMR
believes that these securities are readily marketable based on the size of
the market and the number of trades transacted each day.
Mortgage-related securities, when they are issued, have stated maturities
of up to thirty years, depending on the length of the mortgages underlying
the securities. In practice, unscheduled or early payments of principal
and interest on the underlying mortgages may make the securities' effective
maturity shorter than their stated maturity. A security based on a pool of
thirty-year mortgages may have an average life of as short as two years.
The relationship between mortgage prepayments and interest rates may give
some high-yielding mortgage-related securities less potential for growth in
value than conventional bonds with comparable maturities.
Interest paid with respect to mortgage-backed pass-through certificates
issued by GNMA, FNMA and FHLMC qualifies for the portfolio interest
exemption if, in addition to the other requirements applicable to the
exemption, all the underlying mortgages are issued after July 18, 1984.
Income earned with respect to regular interests in REMICs should qualify
for the portfolio interest exemption, but income earned with respect to
residual interests (particularly "excess inclusion" income) may not qualify
for the exemption.
LIMITING INVESTMENT RISKS
While an investment in the Fund is not without risk, the Fund follows
certain limitations in managing its investments that may help to reduce
risk.
1. The Fund will not purchase a security if, as a result: (a) more than 5%
of its total assets would be invested in securities of any single issuer
(the Fund has the right to invest up to 25% of its total assets without
regard to this limitation), or (b) more than 25% of its assets would be
invested in securities of issuers in a particular industry. These
limitations do not apply to securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
2. The Fund may borrow money from banks solely for temporary or emergency
purposes, but not in an amount exceeding 33 1/3% of its total assets. The
Fund may borrow money only from a bank or engaging in reverse repurchase
agreements and may not purchase any security while borrowings representing
more than 5% of its net assets are outstanding. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. To this extent, purchasing securities when borrowings are
outstanding may involve an element of leverage.
3. The Fund temporarily may lend portfolio securities to broker-dealers and
institutions, but only when the loans are fully collateralized and the
income from such lending activities is exempt from U.S. federal income tax
and withholding requirements for non-U.S. investors.
4. The Fund may engage in repurchase agreements, but only with those
parties whose creditworthiness has been reviewed and found satisfactory by
FMR. For more information about repurchase agreements, see the Glossary on
page ___.
These limitations and the policies discussed in "The Fund's Investment
Objective and Policies" are considered at the time of purchase; the sale of
securities is not required in the event of a subsequent change in
circumstances. Additional limitations, including limitations on the Fund's
ability to borrow money, lend portfolio securities and engage in repurchase
agreements, may be imposed by tax requirements to the extent deemed
necessary so that income remains exempt from U.S. federal income tax and
withholding requirements. Except for the Fund's investment objective and
limitations 1 and 2, the policies described in this Prospectus are not
fundamental . Non-fundamental policies can be changed without shareholder
approval.
PORTFOLIO TRANSACTIONS
FMR choose broker-dealers by judging professional ability and quality of
services. The Fund's portfolio securities are generally traded in the
over-the-counter market through broker-dealers. A broker-dealer is a
securities firm or bank that makes a market by offering to buy at one price
and sell at a slightly higher price. The difference between the prices is
known as a spread. Since FMR trades a large number of securities,
including those of Fidelity's other funds, broker-dealers are willing to
work with the Fund on a more favorable spread than would be possible for
most individual investors.
The Fund has authorized FMR to allocate transactions to some broker-dealers
who help distribute the Fund's shares or the shares of Fidelity's other
funds to the extent permitted by law, and on an agency basis to an
affiliate, Fidelity Brokerage Services, Inc. (FBSI). FMR will also
allocate brokerage transactions to Fidelity Portfolio Services Ltd. (FPSL),
a wholly-owned subsidiary of Fidelity International Ltd. (FIL). FMR will
allocate such transactions if commissions are comparable to those charged
by non-affiliated qualified broker-dealers for similar services. Edward C.
Johnson, 3d, is Chairman of FIL. Mr. Johnson, 3d, together with various
trusts for the benefit of Johnson family members own directly or indirectly
more than 25% of the voting common stock of FIL.
Higher commissions may be paid to those firms that provide research
services to the extent permitted by law. FMR also is authorized to
allocate brokerage transactions to FBSI in order to secure from FBSI
research services produced by third party, independent entities. FMR may
use this research information in managing the Fund's assets, as well as
assets of other clients.
It is the policy of the Fund not to purchase or sell securities for trading
purposes as such activity may cause the Fund to be deemed to be engaged in
a trade or business in the United States for U.S. federal income tax
purposes. It is the policy of the Fund to purchase securities for
long-term investment to generate interest income rather than capital gain.
It is anticipated that the annual portfolio turnover rate for the Fund will
not exceed 100%. However, the Fund may make changes in its investments in
accordance with FMR's appraisal of the factors affecting the market and the
national economy in an effort to protect the Fund from losses in the value
of its investments, provided that such changes are consistent with tax
requirements. The tax requirements may, in effect, cause a Fund to refrain
from sales or purchases of particular securities under circumstances in
which a sale or purchase would otherwise be made.
THE FUND IS A PARTNERSHIP
The Fund is an open-end diversified management investment company organized
as a limited partnership in the State of Delaware on May 7, 1987, as
amended and restated on May 8, 1987. The partnership form permits the Fund
to pass through the exemption from U.S. federal income taxes and
withholding requirements, which would not be possible if the Fund were
organized as a corporation or business trust. Currently, the Fund expects
to issue only one class of shares, in the form of partnership interests,
although additional classes of shares may be added in the future.
Purchasers of shares must accordingly become partners in the Fund. Each
such partner is allocated his proportionate share of any net income, gains
or losses. The Fund is not required to hold annual shareholder meetings,
although special meetings may be required for purposes such as electing or
removing Managing General Partners, changing fundamental policies or
approving a management contract. Limited partners receive one vote for
each share they own. In the opinion of the Fund's Managing General
Partners, there is a remote chance that because the Fund is organized as a
limited partnership, a limited partner could be held liable in certain
circumstances for unpaid obligations of the Fund. The Managing General
Partners believe this liability is only theoretical.
THE GENERAL PARTNERS AND THE FIDELITY ORGANIZATION
The Fund has eleven Managing General Partners who supervise the Fund's
activities and review its contractual arrangements with companies that
provide the Fund with services. FMR, in addition to serving as investment
adviser, serves as a Non-Managing General Partner of the Fund. Under
Delaware law the General Partners may have personal liability for the
unpaid obligations of the Fund.
Fidelity Investments is one of the largest investment management
organizations in the U.S. and has its principal business address at 82
Devonshire Street, Boston, MA. It includes a number of different
companies, that provide a variety of financial products and services. The
Fund employs various Fidelity companies to perform certain activities
required for its operation.
FMR is the original Fidelity company, founded in 1946. It provides a
number of mutual funds and other clients with investment research and
portfolio management services. It maintains a large staff of experienced
investment personnel and a full complement of related support facilities.
As of March 31, 1992 FMR advised funds having more than __ million
shareholder accounts with a total value of more than $___ billion.
Distributors distributes shares for the Fidelity funds.
FMR Corp. is the ultimate parent company for FMR U.K. and FMR Far East
through ownership of voting common stock, members of the Edward C.
Johnson 3d family form a controlling group with respect to FMR Corp.
Changes may occur in the Johnson family group, through death or disability,
which would result in changes in each individual family members' holding of
stock. Such changes could result in one or more family members becoming
holders of over 25% of the stock. FMR Corp has received an opinion of
counsel that changes in the composition of the Johnson family group under
these circumstances would not result in the termination of the fund's
management or distribution contracts and, accordingly, would not require a
shareholder vote to continue operation under those contracts.
DISTRIBUTIONS AND TAXES
INCOME DISTRIBUTIONS. "Portfolio interest" and other net investment income
are credited to shareholder accounts daily and paid monthly.
CAPITAL GAIN DISTRIBUTIONS. The Fund intends to retain and not distribute
any realized capital gains. However, the Fund is authorized to make such
distributions from time to time at its discretion.
TAX STATUS OF THE FUND. The Fund intends to comply with the provisions of
the Internal Revenue Code of 1986, as amended, applicable to limited
partnerships and has obtained a ruling from the IRS that the Fund will be
classified as a partnership and that its general and limited partners will
be treated as partners for U.S. federal income tax purposes. The ruling
requires, among other things, that the General Partners in the aggregate
maintain at all times a minimum 1% interest in each item of partnership
income, gain, loss, deduction or credit. The Fund, in its Partnership
Agreement, requires its General Partners to maintain such 1% interest as
long as necessary to qualify the Fund as a partnership for U.S. tax
purposes. The ruling will not apply to a purchaser or assignee of a
Limited Partner's shares until such purchaser or assignee becomes a Limited
Partner.
As a partnership, the Fund is not subject to U.S. federal income tax, under
current law. However, under federal tax legislation enacted in 1987 with
respect to publicly traded partnerships, the Fund could be taxed as a
corporation in taxable years beginning after 1997 or earlier if it adds a
"substantial new line of business". The Managing General Partners intend
to avoid changes in Fund activities that might constitute addition of a
"substantial new line of business" and will determine at the appropriate
time whether the Fund may be continued in the same or alternate form after
1997.
The Fund may be subject to foreign withholding taxes on income from its
investments in foreign securities. Such taxes may be reduced or eliminated
under the terms of applicable U.S. income tax treaties or else non-U.S.
investors may be able to obtain a credit or other relief for the Fund's
payment of such taxes under the laws or treaties governing their own
countries.
As a partnership, the character of any income earned or capital gains
realized by the Fund flows through directly to its shareholders. To the
extent the Fund earns "portfolio interest" income or other exempt income or
realizes capital gains, qualifying non-U.S. investors who are not subject
to payment of U.S. federal income tax and withholding requirements on this
type of income are likewise not subject to payment of U.S. federal income
tax and withholding requirements on their allocated share of this type of
income from the Fund, subject to the conditions stated below.
CERTAIN TAX CONSIDERATIONS FOR NON-U.S. INVESTORS
Due to the structure of the Fund as a limited partnership based in the
United States and the reliance of the Fund primarily on the portfolio
interest exemption under the Code to eliminate U.S. federal income tax and
withholding requirements on distributions made to shareholders, certain
factors should be considered by prospective investors.
1. Trade or Business. A non-U.S. investor (i.e. an investor other than a
U.S. citizen or resident or a U.S. corporation, partnership, estate or
trust) who is engaged in a trade or business in the United States will be
subject to U.S. federal income tax on his allocable share of any ordinary
income and capital gains realized by the Fund to the extent such income and
gains are deemed to be effectively connected with the conduct of such trade
or business. If the Fund is not deemed to be engaged in a trade or
business in the United States, for non-U.S. investors not otherwise engaged
in a U.S. trade or business, qualifying income generated by the Fund will
not be subject to U.S. federal income tax and withholding requirements.
The Fund has obtained an opinion of its tax counsel to the effect that it
should not be deemed to be engaged in a trade or business in the U.S. if
the Fund follows certain policies and guidelines concerning its investment
activities. The Fund intends to comply with these policies and guidelines.
This opinion is based on counsel's interpretation of applicable court
decisions and other authorities and not on any specific U.S. Treasury
regulations because no such regulations have been promulgated. Although
both the Fund and its counsel believe that their position is fully
supported by applicable law, and that any non-U.S. investor of the Fund
should not be deemed to be engaged in a trade or business in the United
States solely by virtue of an investment in the Fund, there can be no
assurance that the IRS or a court of law would not take a contrary
position. A successful challenge of its position, however, to the effect
that the Fund is engaged in a U.S. trade or business would have material
adverse tax consequences for the Fund's shareholders with respect to their
shares. Such a determination would eliminate the application of the
"portfolio interest" exemption, and would render such interest income and
capital gains realized by the Fund subject to U.S. federal income tax and
withholding requirements, and might affect the tax status of any capital
gains realized by the shareholders on redemptions. Such a determination
also may cause shareholders that are foreign corporations to become subject
to a branch profits tax (in addition to the tax imposed on their allocable
shares of the Fund's ordinary income and capital gains) with respect to
their interests in the Fund. In addition, the Fund might be held liable
for penalties for failure to withhold tax.
2. U.S. Tax Withholding. Assuming that a non-U.S. investor is not engaged
in a trade or business in the United States, ordinary income realized by
the Fund and allocated to such investor will not be subject to U.S. federal
income tax (including withholding taxes), if (i) the ordinary income
consists of interest income which qualifies for the "portfolio interest"
exemption under Sections 871(h) and 881(c) of the Code or is otherwise
exempt from U.S. taxes, (ii) the non-U.S. investor has furnished a valid
and effective Form W-8 to the Fund and has renewed the Form W-8 as
necessary, (iii) the Fund has no actual knowledge that the investor is in
fact a U.S. person and (iv) with respect to portfolio interest, the Fund
has no actual knowledge that the investor is (a) a "10-percent shareholder"
(as defined in Section 871(h)(3) of the Code) of the issuer of any security
held by the Fund, (b) a controlled foreign corporation related to such
issuer, or (c) a bank deemed to be receiving such interest (other than
interest on an obligation of the U.S.) on an extension of credit made
pursuant to a loan agreement entered into in the ordinary course of its
trade or business.
A non-U.S. investor generally will not be subject to U.S. federal income
taxes (including withholding taxes) on his allocable share of net
short-term and long-term capital gains realized by the Fund or on any gain
realized by him in connection with a redemption of his shares of the Fund
provided that (i) such gains are not effectively connected with the conduct
by the investor of a trade or business in the U.S., (ii) in the case of an
individual the investor is not physically present in the U.S. for 183 days
or more during the taxable year, and (iii) the investor has furnished the
Fund with a valid and effective Form W-8 and has renewed the Form W-8 as
necessary (see "How to Invest" on page ).
Regardless of whether a valid and effective Form W-8 is furnished, non-U.S.
investors may be subject to the 30% U.S. withholding taxes on their
allocated shares of gross income realized by the Fund from sources other
than "portfolio interest" (or other exempt income) and net realized capital
gains unless such withholding taxes are reduced or eliminated under the
terms of an applicable U.S. income tax treaty and the investor complies
with all procedures for claiming the benefits of such a treaty. The Fund
will withhold amounts required by the Code with respect to non-qualifying
income, if any, and/or non-qualifying investors.
If a qualified non-U.S. investor's status changes, then the investor may be
subject to U.S. taxes and withholding at which time the investor should
consider whether the Fund continues to be an appropriate investment.
Because shareholders are limited partners of the Fund, each shareholder for
tax purposes will be allocated a proportionate share of each item of
income, gain, loss, deduction or credit realized by the Fund, whether or
not such income and gains have been distributed. Allocations are made in a
manner intended to comport with each holder's respective interest, as a
limited partner, in the Fund under the applicable U.S. Treasury
regulations. There can be no assurance, however, that the allocations made
by the Fund will be respected by the IRS and that additional income or
gains will not be reallocated to any particular shareholder. The Fund's
method of allocation may result in allocation of gains and losses to
shareholders for tax purposes which do not necessarily reflect actual gains
or losses realized by the Fund during such shareholders' period of
investment in the Fund. For example, discrepancies may be caused by the
fact that gains or losses allocable to particular shareholders may reflect
appreciation or depreciation in the assets of the Fund which occurred prior
to such shareholders' purchase of their shares of the Fund.
3. Returns Filed by the Fund. As a partnership, the Fund will be required
to file an annual return (Form 1065 and Schedule K-1) with the IRS and the
Commonwealth of Massachusetts which identifies each shareholder's allocated
share of the Fund's gross income and capital gains for the taxable year,
whether or not such income and capital gains have been distributed. The
Fund also will file an annual form (Form 1042S) with the IRS with respect
to each shareholder (which includes as an attachment the Form W-8 furnished
by the shareholder) indicating that no amount was withheld with respect to
U.S. source income allocated to such shareholder that qualified for the
portfolio interest exemption or any other applicable exemption under the
Code.
4. U.S. Federal Estate Tax. The value of Fund shares directly owned by an
individual non-U.S. investor upon the death of such individual may be
subject to U.S. estate taxes (and possibly state inheritance taxes),
subject to certain exemptions and to the terms of any applicable treaty
between the United States and the individual's country of residence.
The foregoing discussion is only a summary of certain important federal tax
considerations and does not address potential tax liability under any state
income tax laws or the tax laws of any country other than the United
States. Shareholders should consult their own tax advisers with respect to
the tax status of distributions from the Fund in their own countries,
states and localities. The foregoing discussion also assumes the investor
is not generally subject to U.S. tax or withholding requirements. Should
an investor become subject to U.S. tax or withholding requirements, the tax
consequences of owning, exchanging, or redeeming shares of the Fund will be
significantly different and investors in this circumstance should consult
their tax advisers. The discussion is based on current law, which is
subject to prospective or retroactive change by legislative, administrative
or judicial action.
PERFORMANCE
The Fund's performance may be quoted in advertising in terms of yield and
total return. Both types of performance are based on historical results
and are not intended to indicate future performance.
Yields for the Fund are computed by dividing the Fund's interest income for
a given 30-day or one month period, net of expenses, by the average number
of shares entitled to receive distributions during the period, dividing
this figure by the Fund's NAV at the end of the period and annualizing the
result (assuming compounding of income) in order to arrive at an annual
percentage rate. Because yield accounting methods differ from the methods
used for other accounting purposes, the Fund's yield may not equal the
income paid to your account or the income reported in the Fund's financial
statements.
Total returns are based on the overall dollar or percentage change in value
of a hypothetical investment in the Fund. The Fund's total return shows
its overall change in value, including changes in share price and assuming
all of the Fund's dividends and capital gain distributions are reinvested.
A cumulative total return reflects the Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire
period. Because average annual returns tend to smooth out variations in the
Fund's returns, you should recognize that they are not the same as actual
year-by-year results. To illustrate the components of overall performance,
the Fund may separate its cumulative and average annual returns into income
results and capital gain or loss. The Fund may quote its total returns on
a before-tax or after-tax basis.
MANAGEMENT, DISTRIBUTION AND SERVICE FEES
MANAGEMENT CONTRACT. For managing the Fund's investment and business
affairs, the Fund pays FMR a monthly fee at an annual rate made up of the
sum of two components:
1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. This rate cannot rise above .37% and it drops
(to as low as a marginal rate of .14%) as total assets in all these funds
rise. The effective group fee rate for August 1994 was . %.
2. An individual fund fee rate of .30%.
One-twelfth of this annual management fee rate is applied to the Fund's net
assets averaged over the most recent month, giving the dollar amount which
is the management fee for that month.
FMR may, from time to time, voluntarily agree to reimburse the Fund for
expenses above a specified percentage of average net assets. FMR retains
the ability to be repaid by the Fund for these expense reimbursements in
the amount that expenses fall below the limit prior to the end of the
fiscal year. Fee reimbursements by FMR to the Fund will increase the
Fund's yield, and reimbursement by the Fund will lower its yield and total
return. Reimbursements to the Fund but may represent income to the Fund
which would not qualify as portfolio interest or otherwise be exempt from
withholding.
DISTRIBUTION AND SERVICE PLAN. The Managing General Partners of the Fund
have adopted a Distribution and Service Plan (the Plan) for the Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the Rule).
The Rule provides in substance that a mutual fund may not engage directly
or indirectly in financing any activity that is intended primarily to
result in the sale of shares of the Fund except pursuant to a plan adopted
by the Fund under the Rule. The Managing General Partners have adopted the
Plan to allow the Fund and FMR to incur certain expenses that might be
considered to constitute direct or indirect payment by the Fund of
distribution expenses.
Under the Plan, the Fund is authorized to make payments to Distributors for
compensation to third parties who provide shareholder support services or
assist in distribution activities. The Fund is authorized to make payments
up to .25% annually of the average net asset value of the shares of the
Fund attributable to such third parties. Shareholder support services may
include among other things: services rendered in connection with the
distribution of Fund shares; processing purchase and redemption
transactions; assisting clients with various account activities; and
providing such other services as the Fund may reasonably request.
Amounts payable by the Fund under the Plan will be payable to Distributors
which will pay all fees received by third parties. The fees to be paid and
the basis on which payment will be made are determined by Distributors and
are reviewed by the Managing General Partners. Payments by the Fund will
be made from the Fund's net assets. Distributors is prepared to enter into
service contracts with third parties pursuant to the Plan.
The Plan also specifically recognizes that FMR, either directly or through
Distributors, may use its management fee revenue, past profits or other
resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Fund.
Under the Plan, if the payment by the Fund or FMR of management fees should
be deemed to be indirect financing of the distribution of the Fund's
shares, such payment is authorized by the Plan. In addition, the Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of the Fund or in other distribution activities.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or the Fund were prevented from
continuing these arrangements, it is expected that other arrangements would
be made for these services and that shareholders would not suffer adverse
financial consequences. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
TRANSFER AGENT. FIIOC acts as the Fund's transfer and income disbursing
agent and maintains its shareholder records. The Fund pays FIIOC fees
based on the type, size and number of accounts in the Fund and the number
of transactions made by shareholders of the Fund. In addition, FIIOC bears
the expense of typesetting, printing and mailing of Prospectuses,
Statements of Additional Information, reports, notices and statements to
shareholders.
Service calculates the Fund's daily share price and maintains its general
accounting records. The fees paid to Service by the Fund consist of an
annual base charge, which is related to fund asset size on a sliding scale,
plus fees for portfolio transactions and certain out-of-pocket expenses.
HOW TO INVEST
The Fund is designed solely for investors who are not treated as U.S.
citizens or residents or U.S. corporations, partnerships, trusts or estates
under the Code, and shares of the Fund are offered exclusively to such
non-U.S. investors.
An investment may be made only by financial institutions acting as trustee
or agent for the non-U.S. investor.
No investment in the Fund will be accepted without a Certificate of Foreign
Status on Form W-8, personally signed by the investor as the beneficial
owner of the shares. If a copy of the form W-8 is forwarded by a financial
institution, it must be accompanied by a Certificate of Financial
Institution. A new Form W-8 must be completed every three years. The Fund
will be required, under existing law, to withhold U.S. federal tax at the
applicable rate on distributions and proceeds of redemptions if the
investor fails to renew Form W-8. If a valid and effective Form W-8 is not
received by the Fund by December 31 of any year, shares held by the
shareholder will be redeemed by the Fund to satisfy the withholding
obligation.
Shares of the Fund are continuously offered and may be purchased at their
net asset value (NAV) next determined after an investment is received and
accepted. The Fund does not impose any sales charge in connection with
purchase of shares, although institutions may charge their clients fees in
connection with purchases and sales for the accounts of their clients
provided that the institution has not already received a third party
payment from Distributors as a Qualified Recipient. Investments may only
be made by wire for which the sending bank may charge a fee to the
shareholder. Investments are credited to an individual shareholder's
account as of the close of business on the day the investment is received
and accepted, after the declaration of the income distribution on that day.
Checks will not be accepted as a means of investment. If you have any
questions, call Client Administration (nationwide, toll free, 800-843-3001;
in Massachusetts, call collect, 617-330-0586).
MINIMUM INVESTMENT. The minimum investment required to establish a new
account is $25,000. After meeting the original investment requirement, an
individual investor must maintain a balance of at least $25,000 in the
Fund. Subsequent investments may be made in any amount by the financial
institution acting on behalf of the non-U.S. investor. If an account fails
to meet the above requirements due to redemption, it may be automatically
redeemed by the Fund. In such a case the investor will be notified and
allowed 30 days to make additional investments before the account is
closed.
INVESTMENT BY WIRE. An initial investment must be preceded by a completed
and signed application, Form W-8 and power of attorney, if applicable.
Redemptions will not be permitted until an application is on file. Prior
to making an initial investment by wire, the financial institution should
telephone Client Administration (nationwide, toll free, 800-843-3001; in
Massachusetts, call collect, 617-330-0586) to advise them of the investment
and to obtain an account number and instructions. Subsequent purchases of
shares may be made by the financial institution acting on behalf of the
non-U.S. investor by telephoning FIIOC, (nationwide, toll free,
800-544-9999; in Massachusetts, call collect 617-439-0324) before 4:00 p.m.
Eastern time. In order to allow FMR to manage the Fund most effectively,
financial institutions are strongly urged to initiate the purchase of
shares as early in the day as possible. FIIOC will promptly confirm the
purchase in writing, indicating the date, price, and number of shares
purchased.
In order to make investments that will immediately generate income, the
Fund must have federal funds available to it (i.e., monies credited to its
custodian bank by the Federal Reserve Bank). Investments in the Fund made
by wire are credited as of the day the order is placed if federal funds, or
monies immediately convertible to federal funds, are received prior to the
close of business on the following business day. It is recommended that
financial institutions wire funds early in the day to ensure proper credit
to the appropriate individual shareholder account.
Payments must be wired to: Fidelity Management Trust Company, 82 Devonshire
Street, Boston, MA
Reference should be made to:
1. Fidelity Management Trust Company
2. Fidelity U.S. Investments-Bond Fund, L.P.
3. Account registration
4. Account number
5. Wire order number.
SHARE PRICE. Shares of the Fund are sold without a sales charge. The NAV
is computed by adding the value of all portfolio holdings and other assets,
deducting liabilities, and then dividing the result by the number of shares
outstanding. The price of one share is its NAV, which Service calculates
at the close of the Fund's business day (normally 4:00 p.m. Eastern time.)
The Fund is open for business each day the New York Stock Exchange is open.
Bonds held by the Fund are valued at fair value based on quotations
supplied by a pricing service approved by the Fund's Managing General
Partners. Other portfolio securities and other assets are valued primarily
on the basis of market quotations or, if quotations are not available, by a
method that the Fund's Managing General Partners believe accurately
reflects fair value.
ADDITIONAL INFORMATION. The offering of shares of the Fund may be
suspended for a period of time, and the Fund reserves the right to reject
any specific purchase order. Purchase orders may be refused if, in FMR's
opinion, they are of a size that would disrupt management of the Fund.
How to Exchange
The exchange may be made by financial institutions acting as trustee or
agent for the non-U.S. investor.
Financial institutions may exchange shares for individual shareholders
between these two Funds only. Financial institutions may exchange all or
any part of the value of the individual shareholder's accounts on any
business day. Exchanges may be requested by telephone (between the hours
of 8:30 a.m. and 4:00 p.m. Eastern time) by the financial institution
acting on behalf of the individual and are effected at the net asset value
per share ("NAV") determined after receipt of the exchange request. This
policy allows shares to earn interest each day.
In order to allow FMR to manage the Funds most effectively, financial
institutions are strongly urged to initiate exchanges of shares as early in
the day as possible.
To exchange, the financial institution should call FIIOC:
Nationwide (toll
free).....................................................................
. 800 544-9999
Massachusetts (call
collect).............................................................. 617
439-0324
Financial institutions should note that as exchange transactions actually
involve the redemption of shares, all exchanges will be subject to
conditions described in "How to Redeem" below. Further, each exchange may
produce a loss or taxable gain if the individual shareholder is subject to
U.S. federal tax and withholding requirements. Too frequent use of the
exchange privilege may, together with other activities of the shareholder,
cause the shareholder to be deemed to be engaged in a trade or business in
the United States.
INVESTOR ACCOUNTS
FIIOC is the transfer, income disbursing and shareholder servicing agent
for the Fund. FIIOC maintains an account for each financial institution
acting as trustee or agent and each individual shareholder expressed in
terms of full and fractional shares of the Fund rounded to the nearest
1/1000th of a share. FIIOC also will maintain subaccounts for individual
shareholders (see "Subaccounting and Special Services" below).
The Fund does not issue share certificates, but FIIOC mails to individual
shareholders, at their address indicated on their applications, a
confirmation of each investment in, or redemption from their subaccounts.
Within ten days after the monthly income distribution payment (see
"Distributions and Taxes," page ), FIIOC will send individual
shareholders a statement setting forth the transactions in their account
for the preceding period and the period-end balance of full and fractional
shares held in the account.
The costs of the investors services described above are paid by the Fund.
SUBACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for banks, corporations and other institutions that wish to open
multiple accounts (a master account and subaccounts). A financial
institution wishing to utilize FIIOC's subaccounting facilities will be
required to enter into a separate agreement with FIIOC. Charges for this
service, if any, will be determined on the basis of the level of services
to be rendered. Subaccounts may be opened with the initial investment or
at a later date and may be established by the financial institution with
registration either by name or by number.
HOW TO REDEEM
Redemptions may be made only by financial institutions acting as trustee or
agent for the non-U.S. investor.
Financial institutions may redeem all or any part of the value of the
shareholder's accounts on any business day by instructing the Transfer
Agent to redeem the shareholder's shares as described below. Redemptions
may be requested by telephone (between the hours of 8:30 a.m. and 4:00 p.m.
Eastern time) by the financial institution acting on behalf of the non-U.S.
investor and are effected at the NAV next determined after receipt of the
redemption request. Financial institutions acting on behalf of individual
shareholders must designate on their applications the U.S. commercial bank
account into which they wish the proceeds of redemptions from the
individual shareholder accounts in the Fund to be deposited.
In order to allow FMR to manage the Fund most effectively, financial
institutions are strongly urged to initiate redemptions of shares as early
in the day as possible and to notify FIIOC at least one day in advance of
large redemptions.
REDEMPTIONS BY WIRE. Financial institutions acting on behalf of the
individual shareholders may redeem any amount from individual shareholder
accounts in the Fund by instructing FIIOC to have the proceeds from
redemptions wired directly to the designated U.S. bank account referred to
above. Checks will not be issued. To redeem by telephone the financial
institution should call FIIOC:
Nationwide (toll free)................800-544-9999
Massachusetts (call collect)..........617-367-6566
There is no charge imposed for the wiring of redemption proceeds. Proceeds
from redemptions are expected to be wired on the next business day
following the date of redemption.
The Fund reserves the right to take up to seven days to make payment. In
making redemption requests, the name(s) of the financial institution(s) and
registered individual shareholder(s) and the account number(s) must be
supplied. All account transactions by telephone will be recorded. Since
recordings may not be available, investors should verify the accuracy of
telephone transactions immediately upon receipt of their confirmation
statements. Fidelity will not be responsible for the authenticity of
telephone instructions or losses, if any, resulting from unauthorized
shareholder transactions. Fidelity has been informed, however, that the
SEC Staff is currently examining whether such responsibility may be
disclaimed.
SUMMARY OF PARTNERSHIP AGREEMENT
The full text of the Partnership Agreement is set forth in the Statement of
Additional Information. The following statements summarize and explain
certain provisions of the Partnership Agreement and are qualified in their
entirety by the terms of the Partnership Agreement.
VOTING RIGHTS OF PARTNERS. The Partners have rights required under the
Investment Company Act of 1940, as amended (the 1940 Act), for voting
security holders. At a meeting of Partners to be held after the Fund
commences operations, the Partners will vote upon the approval and election
of General Partners. Thereafter, the Fund will normally not conduct
meetings of the Partners for the purpose of approving and electing General
Partners, unless and until less than a majority of the General Partners
holding office have been approved and elected by the Partners. General
Partners and Limited Partners have one vote for each share held. Partners
may vote in person or by proxy. The presence in person or by proxy of more
than 50% of the outstanding shares constitutes a quorum at any meeting.
Limited Partners holding more than 10% of the outstanding shares may
require the calling of a special meeting of the Partners. Only holders of
shares who have become Limited Partners by the record date for a meeting of
Partners will be entitled to vote at the meeting.
GENERAL PARTNERS. The Fund has two classes of partners, General Partners
and Limited Partners. The General Partners consist of a number of
individual Managing General Partners, and one corporate Non-Managing
General Partner. The Managing General Partners have complete and exclusive
control over the management, conduct and operation of the Fund's business.
Under the terms of the Partnership Agreement, the Non-Managing General
Partner is permitted to participate in the management of the Fund only in
the event that no Managing General Partner remains to elect to continue the
business of the Fund and then only for the limited period of time (not in
excess of 90 days) necessary to convene a meeting of the Limited Partners
for the purpose of making such election. The Managing General Partners
will from time to time establish the number of persons to be elected as
Managing General Partners. The Managing General Partners may amend the
Partnership Agreement at any time. The Managing General Partners may
establish separate series of Fund assets with distinct investment policies
and separate identification, partnership shares, voting rights and
liabilities (currently the Fund has only one series).
The General Partners are not personally liable to any holder of shares or
Limited Partner for the repayment of any amounts standing in the account of
a holder of shares or Limited Partner, and any such repayment shall be
solely from the assets of the Fund. Generally, the General Partners do not
have liability to the Fund or the Limited Partners for any actions taken or
omitted except by reason of their willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
their office. The Partnership Agreement also provides that the General
Partners will not be liable to any holder of shares or Limited Partner by
reason of any change in any federal or state income tax laws applicable to
the Fund or its shareholders or any failure to withhold income tax under
Federal or state tax laws with respect to income allocated to Limited
Partners. A General Partner is entitled to indemnification from the Fund
against liabilities and expenses to which he may be subject in his capacity
as a General Partner provided that his actions do not constitute willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. Indemnification is limited
to the assets of the Fund.
LIABILITY OF LIMITED PARTNERS. Generally, Limited Partners are not
personally liable for obligations of the Fund unless they take part in the
control of the activities of the Fund. Under the terms of the Partnership
Agreement, the Limited Partners as such do not have the right to take part
in the control of the Fund's activities, but they may exercise the right to
vote on matters requiring approval under the 1940 Act and on certain other
matters. The Delaware Revised Uniform Limited Partnership Act (the
Delaware Act) provides that a limited partner of a partnership does not
participate in the control of the partner's business by virtue of the
limited partner's approval or disapproval by voting on any matter stated in
the partnership's Partnership Agreement. All matters on which Limited
Partners may vote are stated in the Fund's Agreement. No specific
statutory or other authority for the existence or exercise of some or all
of the Limited Partner's voting rights, however, exists in many other
states. As a result, to the extent that the Fund is subject to the
jurisdiction of courts in those other states, the courts may not apply
Delaware law, or, in applying Delaware law, may interpret the law to
subject the Limited Partners to liability as General Partners.
The contribution of each Limited Partner (being the original purchase price
paid for his shares and the purchase price of any shares subsequently
purchased due to reinvestment of distributions or otherwise) is subject to
the risks of the business of the Fund and the claims of the Fund's
creditors. Further, under Delaware law, to the extent that a distribution
to a Limited Partner from the Fund constitutes a return of all or any
portion of such Limited Partner's contribution (and such distribution is
made without violation of the Partnership Agreement or the Delaware Act),
such Limited Partner will be liable to the Fund for a period of one year
thereafter for the amounts returned, potentially with interest, but only to
the extent necessary to discharge the Fund's liability to creditors who
extended credit to the Fund during the period the Limited Partner's
contribution was held by the Fund. In addition, if a Limited Partner has
received a return of all or any part of his contribution in violation of
the Partnership Agreement or the Delaware Act, the Limited Partner will be
liable to the Fund for a period of six years thereafter for the amount
wrongfully returned, potentially with interest. Moreover, it is a
violation of the Delaware Act for a Limited Partner to receive, and a
Limited Partner may be liable for, a distribution from the Fund to the
extent that, at the time of the distribution, after giving effect to the
distribution, all liabilities of the Fund, other than liabilities to
partners on account of their interests in the Fund, exceed the fair value
of Fund assets. Each Limited Partner, by becoming a Limited Partner,
consents to pro-rata distributions to holders of shares, which may
constitute in whole or in part returns of contributions with respect to
such shares.
ADMISSION OF LIMITED PARTNERS. A purchaser of shares is required to
execute an application agreeing to be bound by the Partnership Agreement
and granting the power of attorney set forth in the application. Admission
of a purchaser as a Limited Partner requires the consent of the Managing
General Partners and the addition of the Limited Partners to the books and
records of the Fund. The partnership authorization referred to above will
be used to add the purchaser as a Limited Partner and for certain other
purposes, as set forth therein. The addition of the Limited Partner to the
books and records of the Fund shall evidence the consent of the Managing
General Partners to the admission of such purchaser. The Managing General
Partners, while recognizing that they have the right to withhold their
consent, have stated that they intend to give such consent as a matter of
course.
PROHIBITION OF ASSIGNMENT OF SHARES. A Limited Partner does not have the
right, except with the prior consent of the Managing General Partners, to
voluntarily transfer or assign his shares to any other person other than to
secure a loan. In the event that any person who is holding shares as
collateral becomes the owner of such shares due to foreclosure or
otherwise, such person shall have the right (upon presentation of
satisfactory evidence to the Managing General Partners of his right to
succeed to the interests of the Limited Partner) -- (1) to redeem the
shares, (2) to receive distributions with respect to such shares and (3) to
apply to become a substituted Limited Partner, which request may be
accepted or rejected by the Managing General Partners in their sole
discretion. In the event of the death or incompetency of a Limited Partner
(or, in the case of a Limited Partner that is a corporation or other
organization, the merger, dissolution or other termination of the existence
of such Limited Partner), the successor in interest of such Limited Partner
shall have the three rights mentioned above (upon the presentation of
evidence satisfactory to the Managing General Partners of his (or its)
right to succeed to the interests of the Limited Partner) upon compliance
with the conditions for the admission of a Limited Partner as described
above.
TERM OF EXISTENCE--DISSOLUTION. The Fund will continue until December 31,
2051, but shall be dissolved before that date if and when: (1) the Fund
disposes of all or substantially all of its assets; (2) Limited Partners
who are holders of a majority of the Fund's outstanding voting shares (of
all series), vote to dissolve the Fund; (3) the Managing General Partners
determine by majority vote to dissolve the Fund; (4) a Managing General
Partner retires, dies, becomes bankrupt, becomes incapacitated, resigns or
is removed, unless the remaining Managing General Partners elect to
continue the operations of the Fund or, if there is no remaining Managing
General Partner, unless the Limited Partners elect to continue the
operations of the Fund at a meeting called for that purpose by the
Non-Managing General Partner; or (5) the Non-Managing General Partner
withdraws and no successor Non-Managing General Partner is admitted by the
Managing General Partners unless the Managing General Partners elect to
continue the operations of the Fund and at least one Managing General
Partner assumes the obligation (if applicable) of the Non-Managing General
Partner to maintain a 1% share interest in the Fund. Notwithstanding the
foregoing, if the Fund were otherwise to dissolve because of the
retirement, death, dissolution, bankruptcy, removal or other withdrawal of
all General Partners, the Fund will not be dissolved if, within 90 days
following the date of withdrawal of the last remaining General Partner, all
Partners agree in writing to continue the operations of the Fund and to the
appointment of one or more successor Managing General Partners and a
successor Non-Managing General Partner.
Except by requiring the Fund to redeem shares as described under "How to
Redeem Shares," on page , Limited Partners have no right to the return
of any part of their contributions from the Fund until dissolution of the
Fund. Distributions by the Fund, whether upon redemption, dissolution or
otherwise, will be in proportion to the number of shares held without
regard to the dollar amount contributed to the Fund or the amount of any
profits of the Fund received.
GLOSSARY
REPURCHASE AGREEMENTS are transactions by which the Fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount. In the event of the bankruptcy of the
other party to t repurchase agreement the Fund could experience delays in
recovering cash. To the extent that, in the meantime, the value of the
securities purchased may have decreased, the Fund could experience a loss.
In all cases, the creditworthiness of the other party to a transaction is
reviewed and must be found satisfactory by FMR. Tax requirements may limit
the volume of repurchase agreements into which the Fund may enter.
COMMERCIAL PAPER consists of short-term promissory notes of large
corporations with excellent credit ratings issued to finance their current
operations. The Fund will invest only in commercial paper rated A-1 by S&P
or Prime-1 by Moody's. With respect to commercial paper which is not
rated, the Fund may invest only in the commercial paper of companies that
have an outstanding debt issue rated AAA or AA by S&P or Aaa or Aa by
Moody's. Commercial paper which is not rated is not necessarily of lower
quality than that which is rated, but may be less marketable and therefore
provide a higher yield. Tax requirements may limit the volume of
commercial paper which the Fund may purchase.
LOWER-QUALITY DEBT SECURITIES. The Fund may purchase debt securities rated
no lower than B by Moody's or S&P and unrated securities of similar
quality. Lower-rated debt securities (those rated Ba or by Moody's or BB
or by S&P) are considered to have poor protection of payment of principal
and interest. These securities (commonly referred to as "junk bonds") are
often considered to be speculative and involve greater risk of default or
price changes due to changes in the issuer's creditworthiness. Market
prices of these securities may fluctuate more than higher-rated securities
and may decline significantly in periods of general economic difficulty
which may follow periods of rising interest rates.
RATING SERVICE
SUMMARY OF BOND RATINGS* MOODY'S S&P
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa AA
Upper medium grade A A
Medium grade, speculative characteristics Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
*Please refer to the Fund's Statement of Additional Information for a more
complete discussion of these ratings.
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P.
(THE FUND)
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 14, 1994
This Statement is not a prospectus but should be read in conjunction with
the current Prospectus (dated October 14, 1994) . Please retain this
document for future reference. Additional copies of the Prospectus and
Statement of Additional Information are available upon request from
Fidelity Distributors Corporation, 82 Devonshire Street, Boston, MA.
(solid bullet) Nationwide (toll free)
800-843-3001
(solid bullet) In Massachusetts (call collect) 617-330-0586
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
FMR
General Partners and Officers
Management Contracts
Distribution and Service Plan
Contracts With Companies Affiliated With FMR
Description of the Fund
Appendix
Financial Statement
Partnership Agreement
Investment Adviser
Fidelity Management & Research Company (FMR)
Distributor
Fidelity Distributors Corporation (Distributors)
Transfer Agent
Fidelity Investments Institutional Operations Company (FIIOC)
NRAB-SAI-10-94
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the Fund's acquisition of
such security or other asset. Accordingly, any later increase or decrease
resulting from a change in values, net assets or other circumstances will
not be considered when determining whether the investment complies with the
Fund's investment policies and limitations.
The Fund's fundamental investment policies and limitations cannot be
changed without approval of a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the Fund.
However, except for the fundamental investment limitations set forth below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue bonds or any other class of security preferred over shares of the
Fund in respect of the Fund's assets and interest;
(2) (a) sell securities short, unless it owns, or by virtue of ownership
of other securities has the right to obtain, securities equivalent in kind
and amount to the securities sold, or (b) purchase securities on margin,
except that the Fund may obtain such short-term credits as are necessary
for the clearance of transactions. This limitation (2) shall not limit the
Fund's ability to take a short position in a futures contract or forward
contract, or to make initial and variation margin payments in connection
with purchases or sales of futures contracts or of options on futures
contracts;
(3) borrow money, except that the Fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (less liabilities other
than borrowings). Any borrowings that come to exceed 33 1/3% of the Fund's
total assets by reason of a decline in net assets will be reduced within
three days to the extent necessary to comply with the 33 1/3% limitation.
The Fund may borrow money only from a bank or by engaging in reverse
repurchase agreements and may not purchase any security while borrowings
representing more than 5% of its net assets are outstanding;
(4) underwrite securities issued by others (except to the extent that the
Fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(5) purchase or sell real estate (but this shall not prevent the Fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein and
participation interests in pools of real estate mortgage loans);
(6) make loans, except (a) by lending portfolio securities if, as a result
thereof, not more than 33 1/3% of the Fund's total assets (taken at current
value) would be subject to loan transactions, (b) through the purchase of a
portion of an issue of debt securities in accordance with its investment
objective, policies, and limitations, or (c) by engaging in repurchase
agreements, with respect to portfolio securities;
(7) purchase securities of other investment companies, except in the open
market where no commission except the ordinary broker's commission is paid,
or as a part of a merger or consolidation, and in no event will such
securities be purchased if, as a result, more than 10% of the value of the
total assets of the Fund would be invested in the securities of other
investment companies;
(8) purchase the securities of any issuer (other than obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities) if,
as a result, more than 25% of the Fund's total assets (taken at current
value) would be invested in the securities of issuers having their
principal business activities in the same industry; or
(9) purchase the securities of any issuer (other than obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities) if,
as a result, more than 5% of the value of its total assets would be
invested in the securities of any single issuer, or it would hold more than
10% of the outstanding voting securities of such issuer, except that up to
25% of the Fund's assets may be invested without regard to these
limitations.
Investment limitation (3) is construed in conformity with the Investment
Company Act of 1940 (the 1940 Act); and, accordingly, "three days" means
three business days, exclusive of Sundays and holidays.
To the extent that limitations (2) and (7) allow the Fund to engage in
certain activities, the Fund does not plan to do so in the coming year.
The following limitations are not fundamental, and may be changed without
shareholder approval.
(i) The Fund does not currently intend to 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 thereof, the
Fund would own more than 10% of the outstanding voting securities of such
issuer.
(ii) The Fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or its agencies or instrumentalities) if, as a result thereof, more than 5%
of the value of its total assets would be invested in the securities of
companies which, including predecessors, have a record of less than 3
years' continuous operation.
(iii) The Fund does not currently intend to purchase any security or enter
into a repurchase agreement if, as a result, more than 10% of its net
assets would be invested in repurchase agreements not entitling the holder
to payment of principal and interest within seven days and in securities
that are illiquid by virtue of legal or contractual restrictions on resale
or the absence of a readily available market.
(iv) The Fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the value of the Fund's net
assets. Included in that amount, but not to exceed 2% of the Fund's net
assets, may be warrants which are not listed on the New York Stock Exchange
or American Stock Exchange. Warrants acquired by the Fund in units or
attached to securities are not subject to this restriction.
(v) The Fund does not currently intend to invest in oil, gas, other mineral
exploration or development programs or leases, or other physical
commodities.
The Fund has no current intention of investing in futures and options and
other related instruments. As a matter of operating policy, the Fund,
under normal conditions, will limit reverse repurchase agreements to 5% of
its average net assets. The Fund does not intend to invest in reverse
repurchase agreements. Also, the Fund does not intend to purchase
securities on a delayed delivery basis in excess of 5% of its average net
assets. These restrictions are not fundamental and may be changed by the
Managing General Partners without shareholder approval.
AFFILIATED BANK TRANSACTIONS. Pursuant to exemptive orders issued by the
Securities and Exchange Commission (SEC), the Fund may engage in
transactions with banks that are, or may be considered to be, "affiliated
persons" of the Fund under the 1940 Act. Such transactions may only be
entered into pursuant to procedures established, and periodically reviewed,
by the Managing General Partners. These transactions may include
repurchase agreements with custodian banks; purchases, as principal, of
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); transactions in municipal securities;
and transactions in U.S. government securities with affiliated banks that
are primary dealers in these securities.
LOWER-RATED DEBT SECURITIES. The Fund may purchase debt securities rated
no lower than B by Moody's or S&P, and unrated securities of similar
quality. Lower-rated debt securities (those rated Ba or lower by Moody's
Investors Service, Inc. or BB or lower by Standard & Poor's Corporation)
are considered to have poor protection of payment of principal and
interest. These securities are often considered to be speculative and
involve greater risk of default or price changes due to changes in the
issuer's creditworthiness. Market prices of these securities may fluctuate
more than higher-rated debt securities and may decline significantly in
periods of general economic difficulty which may follow periods of rising
interest rates.
While the market for high yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
market in recent years has experienced a dramatic increase in the
large-scale use of such securities to fund highly leveraged corporate
acquisitions and restructurings. Accordingly, past experience may not
provide an accurate indication of future performance of the high yield bond
market, especially during periods of economic recession.
The market for lower-rated debt securities may be thinner and less active
than that for higher-rated debt securities, which can adversely affect the
prices at which these securities can be sold. If market quotations are not
available, these securities will be valued in accordance with procedures
established by the Fund's Managing General Partners, including the use of
outside pricing services. Judgment plays a greater role in valuing high
yield corporate debt securities than is the case for securities for which
more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services used by the Fund to value its
portfolio securities and the Fund's ability to dispose of these lower-rated
debt securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an integral part of managing any
securities of this type held in the Fund's portfolio. In considering
investments for the Fund, FMR will attempt to identify those high-yielding
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
The Fund may choose, at its expense or in conjunction with others, to
pursue litigation seeking to protect the interests of security holders if
it determines this to be in the best interest of Fund shareholders.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
requires savings and loan associations to dispose of their high yield bonds
no later than July 1, 1994. Qualified affiliates of savings and loan
associations may purchase and retain such securities, however, and savings
and loan associations may direct such securities by sale to their qualified
affiliates. FMR is unable at this time to predict what negative effect, if
any, this legislation may have on the market for high yield corporate debt
securities.
REPURCHASE AGREEMENTS are transactions by which the Fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed upon price and date within a number of days from the date of
purchase. The resale price reflects the purchase price plus an agreed upon
incremental amount which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the
seller to pay the agreed upon price, which obligation is in effect secured
by the value (at least equal to the amount of the agreed upon resale price
and marked to market daily) of the underlying security. The Fund may enter
into repurchase agreements only for defensive purposes or as an interim
investment. The Fund may engage in a repurchase agreement with respect to
any security in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delay and costs to the Fund in connection
with bankruptcy proceedings), it is the policy of the Fund to enter into
repurchase agreements only with those parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Tax requirements may limit
the volume of repurchase agreements into which the Fund may enter.
DELAYED-DELIVERY TRANSACTIONS. The Fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by the Fund to purchase or sell specific securities at a
predetermined price and/or yield, with payment and delivery taking place
after the customary settlement period for that type of security (and more
than seven days in the future). Typically, no interest accrues to the
purchaser until the security is delivered. The Fund may receive fees for
entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the Fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the Fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the Fund's other investments. If the Fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the Fund will set aside cash or
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the Fund has sold a security on a
delayed-delivery basis, the Fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the Fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The Fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements with banks subject to certain tax restrictions. In a reverse
repurchase agreement, the Fund sells a portfolio instrument to another
party, such as a bank or broker-dealer, in return for cash and agrees to
repurchase the instruments at a particular price and time. While a reverse
repurchase agreement is outstanding, the Fund will maintain cash and
appropriate liquid assets in a segregated custodial account to cover its
obligation under the agreement. The Fund will enter into reverse
repurchase agreements only with parties whose creditworthiness is deemed
satisfactory by FMR.
SECURITIES LENDING. The Fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows the Fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may
be delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the Securities and Exchange
Commission (SEC) staff that the Fund may engage in loan transactions only
under the following conditions: (1) the Fund must receive 100% collateral
in the form of cash or cash equivalents, (e.g., U.S. Treasury bills or
notes) from the borrower; (2) the borrower must increase the collateral
whenever the market value of the securities loaned (determined on a daily
basis) rises above the value of the collateral; (3) after giving notice,
the Fund must be able to terminate the loan at any time; (4) the Fund must
receive reasonable interest on the loan or a flat fee from the borrower, as
well as amounts equivalent to any dividends, interest or other
distributions on the securities loaned and to any increase in market value;
(5) the Fund may pay only reasonable custodian fees in connection with the
loan; and (6) the Managing General Partners must be able to vote proxies on
the securities loaned, either by terminating the loan or by entering into
an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which the Fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
FOREIGN SECURITIES. Investing in securities of issuers whose principal
business activities are outside the United States may involve significant
risks not present in domestic investments. For example, there is generally
less publicly available information about foreign companies, particularly
those not subject to the disclosure and reporting requirements of the U.S.
securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing and financial reporting requirements comparable to
those applicable to domestic issuers. Further, economies of particular
countries or areas of the world may differ favorably or unfavorably from
the economy of the U.S.
It is anticipated that in most cases the best available market for foreign
securities will be on exchanges or in over-the-counter markets located
outside the U.S. The Fund may invest in foreign securities that impose
restrictions on transfer within the United States or to United States
citizens. Foreign stock markets, while growing in volume and
sophistication, generally are not as developed as those in the U.S., and
securities of some foreign issuers (particularly those located in
developing countries) may be less liquid and more volatile than securities
of comparable U.S. companies. In addition, foreign brokerage commissions
generally are higher than commissions on securities traded in the U.S. and
may be non-negotiable. In general, there is less overall governmental
supervision and regulation of securities exchanges, brokers and listed
companies than in the U.S.
As a matter of operating policy, the Fund has no current intention of
conducting foreign currency exchange transactions or investing in non-U.S.
dollar-denominated foreign securities. However, this policy may be changed
by the Fund's Managing General Partners without shareholder approval or
notification.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Fund by FMR pursuant to authority contained in the Management
Contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. In selecting broker-dealers subject to
applicable limitations of the federal securities laws, FMR will consider
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis and the
reasonableness of any commissions. Commissions for foreign investments
traded on foreign exchanges will generally be higher than for U.S.
investments and may not be subject to negotiation.
The Fund may execute portfolio transactions with broker-dealers who provide
research and/or execution services to the Fund and/or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers is
generally made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and/or execution
services provided.
The receipt of research from brokers-dealers that execute transactions on
behalf of the Fund may be useful to FMR in rendering investment management
services to the Fund and/or its other clients, and conversely, such
research provided by broker-dealers who executed transaction orders on
behalf of other FMR clients may be useful to FMR in carrying out its
obligations to the Fund. The receipt of such research has not reduced
FMR's normal independent research activities; however, it enables FMR to
avoid the additional expenses that could be incurred if FMR tried to
develop comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and/or execution services. In order to cause
the Fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and/or research services provided by such executing
broker-dealers viewed in terms of a particular transaction or FMR's overall
responsibilities to the Fund and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and/or research services provided or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
transactions with brokerage firms that have provided assistance in the
distribution of shares of the fund or shares of other Fidelity funds to the
extent permitted by law. FMR may use research services provided by and
place agency transactions with Fidelity Brokerage Services, Inc. (FBSI), a
member of the New York Stock Exchange and subsidiary of FMR Corp., if the
commissions are fair and reasonable and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services. FMR may
also place agency transactions with Fidelity Portfolio Services, Ltd.
(FPSL), a wholly-owned subsidiary of Fidelity International Limited (FIL).
Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, together without
various trusts for the benefit of Johnson family members own directly or
indirectly more than 25% of the voting common stock of FIL. Section 11(a)
of the Securities Exchange Act of 1934 prohibits members of national
securities exchanges from executing exchange transactions for accounts
which they or their affiliates manage, except in accordance with
regulations of the SEC. Pursuant to such regulations, the Managing General
Partners have approved a written agreement which permits FBSI to effect
fund portfolio transactions on national securities exchanges and to retain
compensation in connection with such transactions.
The Managing General Partners periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the Fund and review the commissions paid by the Fund over
representative periods of time to determine whether they are reasonable in
relation to the benefits to the Fund.
From time to time the Managing General Partners will review whether the
recapture for the benefit of the Fund of some portion of the brokerage
commissions or similar fees paid by the Fund on portfolio transactions is
legally permissible and advisable. The Fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Managing General Partners
intend to continue to review whether recapture opportunities are available
and are legally permissible and, if so, to determine in the exercise of
their business judgment whether it would be advisable for the Fund to seek
such recapture.
Although the Managing General Partners and officers of the Fund are
substantially the same as the Trustees and officers of other funds managed
by FMR, investment decisions for the Fund are made independently from those
of other funds managed by FMR or accounts managed by FMR affiliates. It
sometimes happens that the same security is held in the portfolio of more
than one of these funds or accounts. Simultaneous transactions are
inevitable when several funds are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund.
When two or more funds or portfolios are simultaneously engaged in the
purchase or sale of the same security, the prices and amounts are allocated
in accordance with a formula considered by the officers of the funds
involved to be equitable to each fund or portfolio. In some cases this
system could have a detrimental effect on the price or volume of the
security as far as the Fund is concerned. In other cases, however, the
ability of the Fund to participate in volume transactions will produce
better executions and prices for the Fund. It is the current opinion of
the Managing General Partners that the desirability of retaining FMR as
investment adviser to the Fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
The net asset value per share (NAV) of the Fund is based primarily on
current valuations furnished by a pricing service which utilizes both
dealer-supplied valuations and electronic date processing techniques which
take into account appropriate factors such as institutional-size trading in
similar groups of securities, yield, quality, coupon rate, maturity, type
of issue, trading characteristics and other marketing data, without
exclusive reliance upon quoted prices or exchange or over-the-counter
prices, since such valuations are believed to reflect more accurately the
fair value of such securities. Use of the pricing service has been
approved by the Managing General Partners Securities and other assets of
the Fund for which quotations are not readily available are valued
primarily using dealer-supplied valuations at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Managing General Partners of the Fund.
Foreign securities are valued at the last sale price in the principal
market when they are traded, or, if last sale prices are unavailable, at
the last bid price available prior to the time the Portfolio's net asset
value is determined. Foreign security prices are furnished by quotation
services who express the value of securities in their local currency.
Fidelity Service Co. translates the value of foreign securities from the
local currency into U.S. dollars at currency exchange rates. Any changes
in the value of forward contracts due to exchange rate fluctuations are
included in the determination of net asset value.
PERFORMANCE
The Fund may quote its performance in various ways. All performance
information supplied in advertising is historical and is not intended to
indicate future returns. Share price, yield and total returns fluctuate in
response to market conditions and other factors, and the value of fund
shares when redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields used in advertising are computed by dividing
the Fund's investment income for a given 30 day or one month period, net of
expenses, by the average number of shares entitled to receive distributions
during the period, dividing this figure by the Fund's NAV at the end of the
period and annualizing the result (assuming compounding) in order to arrive
at an annual percentage rate. Income is calculated for purposes of yield
quotations in accordance with standardized methods applicable to all stock
and bond funds. In general, interest income is reduced with respect to
bonds trading at a premium over their par value by subtracting a portion of
the premium from income on a daily basis, and is increased with respect to
bonds trading at a discount by adding a portion of the discount to daily
income. Income is adjusted to reflect gains and losses from principal
repayments received with respect to mortgage-related securities and other
asset-backed securities. Capital gains and losses generally are excluded
from the calculation.
Income calculated for the purposes of determining yield differs from income
as determined for other accounting purposes. Because of the different
accounting methods used, and because of the compounding assumed in yield
calculations, the yield quoted for the Fund may differ from the rate of
distributions the Fund paid over the same period or the rate of income
reported in the Fund's financial statements.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of return, including the effect of reinvesting dividends and
capital gain distributions, and any change in the Fund's NAV over the
period. Average annual returns are calculated by determining the growth or
decline in value of a hypothetical historical investment over a stated
period, and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline in
value had been constant over the period. For example, a cumulative return
of 100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate that would equal 100% growth on a
compounded basis in ten years. Average annual returns covering periods of
less than one year are calculated by determining the Fund's total return
for the period, extending that return for a full year (assuming that
performance remains constant over the year), and quoting the result as an
annual return. Because it is unlikely that performance will in fact remain
exactly constant over the year, average annual returns covering periods of
less than one year should be viewed as strictly theoretical figures. While
average annual returns are a convenient means of comparing investment
alternatives, investors should realize that the Fund's performance is not
constant over time, but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual year-to-year
performance.
In addition to average annual returns, the Fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, and/or a
series of redemptions, over any time period. Total returns may be broken
down into their components of income and capital (including capital gains
and changes in share price) in order to illustrate the relationship of
these factors and their contributions to total return. After-tax total
returns adjust total return figures for payment of an assumed federal
and/or state tax rate. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
PERFORMANCE COMPARISONS. The Fund's performance may be compared in
advertising to the performance of other types of mutual funds in general or
to the performance of particular types of mutual funds, especially those
with similar investment objectives. This comparative performance may be
expressed as a ranking prepared by Lipper Analytical Services, Inc., an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. The Lipper performance analysis ranks funds
on the basis of total return, assuming reinvestment of distributions, but
does not take sales charges or redemption fees into consideration, and is
prepared without regard to tax consequences.
The Fund may quote the following indices of bond prices and yields as
prepared by Shearson Lehman Brothers Inc., a leading broker-dealer firm.
These indices are not managed for any investment goal. Their composition
may, however, be changed from time to time by Shearson Lehman Brothers Inc.
With the exception of the Lehman Brothers Mortgage Backed Securities Index,
each of the following indices has an intermediate component consisting of
issues with maturities between one and ten years and a long term component
consisting of issues with maturities of ten years or greater.
THE TREASURY BOND INDEX consists of all public obligations of the U.S.
Treasury. Flower bonds and foreign targeted issues are excluded.
The AGENCY BOND INDEX consists of all publicly issued debt of agencies of
the U.S. government, quasi-federal corporations, and corporate debt
guaranteed by the U.S. government. Mortgage backed securities are not
included.
The above two indices combine to form the GOVERNMENT BOND INDEX.
The CORPORATE BOND INDEX consists of all public, fixed rate,
non-convertible investment grade domestic corporate debt. Issues included
in this index are rated at least Baa by Moody's Investors Service or BBB by
Standard & Poor's Corporation, or, in the case of nonrated bonds, BBB by
Fitch Investors service. Collateralized Mortgage Obligations are not
included.
The MORTGAGE BACKED SECURITIES INDEX consists of all fixed rate,
securitized issues backed by mortgage pools of the Government National
Mortgage Association, the Federal Home Loan Mortgage Corporation, and the
Federal National Mortgage Association. Graduated Equity Mortgages are not
included in this index; however, Graduated Payment Mortgages are included.
The YANKEE BOND INDEX consists of all U.S. dollar denominated, SEC
registered, public, non-convertible debt issued or guaranteed by foreign
sovereign governments, foreign municipalities, foreign governmental
agencies or international agencies.
All of the above indices combine to form the AGGREGATE BOND INDEX.
The Fund also may quote the following indices of bond prices and yields
prepared by Salomon Brothers Inc, a leading broker-dealer firm. These
indices are not managed for any investment goal. Their composition may,
however, be changed from time to time by Salomon Brothers Inc.
The MORTGAGE PASS-THROUGH INDEX is a price index of approximately 120
mortgage-related securities, including Ginnie Maes, Fannie Maes, Freddie
Macs, conventional pass-through securities, and FHA project pools.
The LONG-TERM GOVERNMENT INDEX is a price index of all outstanding
government bonds with more than twelve years remaining until maturity,
which currently includes approximately thirty securities.
The HIGH-GRADE CORPORATE INDEX is a price index of approximately 800
triple-a or double-a rated corporate bonds with more than twelve years
remaining until maturity.
The GINNIE MAE, FANNIE MAE AND FREDDIE MAC INDEXES are indexes of bond
equivalent yields (adjusted for the different payment schedules of
pass-through securities and conventional bonds) for current coupon issues
(issues selling at par).
The NEW AAA RATED LONG INDUSTRIAL BOND INDEX is an index of yields of
newly-issued long term corporate bonds rated in the top categories by
Moody's and S&P.
The TEN-YEAR TREASURY NOTE INDEX is an index of yields of ten-year U.S.
Treasury issues selling at par.
Some of the performance indicators discussed above include securities that
are not eligible for purchase by the Fund.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Fund is open for business and its net asset value per share (NAV) is
calculated on every day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1992:
New Year's Day, Washington's Birthday (observed), Good Friday, Memorial Day
(observed), Independence Day (observed), Labor Day, Thanksgiving Day and
Christmas Day. Each year the NYSE may designate different dates for the
observance of these holidays as well as designate other holidays for
closing in the future. The close of the Fund's business day and the
determination of NAV will coincide with the close of business of the NYSE
(normally 4:00 p.m. Eastern time). When the NYSE is closed or when trading
is restricted for any reason other than its customary weekend or holiday
closings, or under emergency circumstances as determined by the SEC to
merit such action, the Fund will determine NAV at the close of business the
time of which will coincide with the closing of the NYSE. To the extent
that portfolio securities are traded in other markets on days the NYSE is
closed, the Funds' NAV may be affected on days when investors may not
purchase or redeem shares. The NAV of the Fund is determined by adding the
value of all securities and all other assets, subtracting liabilities, and
dividing by the number of shares outstanding.
If the Managing General Partners determine that existing conditions make
cash payment undesirable, redemption payments may be made in whole or in
part in securities or other property, valued for this purpose as they are
valued in computing the Fund's NAV. Shareholders receiving any such
securities or other property on redemption may realize a gain or loss for
tax purposes, if subject to U.S. federal tax and withholding requirements,
and will incur any costs of sale, as well as the associated inconveniences.
Under the 1940 Act, the right of redemption may be suspended or the date of
payment postponed for more than seven days at times when the NYSE is
closed, other than customary weekend and holiday closings, or when trading
on the NYSE is restricted, or under certain emergency circumstances as
determined by the SEC. In case of suspension of the right of redemption, a
financial institution acting on behalf of the individual shareholder may
either withdraw the request for redemption for the individual shareholder
or receive payment based on the net asset value determined after the
termination of the suspension. If a financial institution acting on behalf
of an institutional shareholder is unable to execute a transaction by
telephone (for example, during times of unusual market activity) consider
placing the order by mail or by calling your Institutional Sales
Representative.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, the Fund is required
to give shareholders at least 60 days' notice prior to terminating or
modifying the Fund's exchange privilege. Under the Rule, the 60 day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
exchange, or (ii) the Fund temporarily suspends the offering of shares as
permitted under the 1940 Act or by the SEC or because it is unable to
invest amounts effectively in accordance with its investment objective and
policies.
In its prospectus, the Fund has notified shareholders that it reserves the
right at any time without prior notice to refuse exchange purchases by any
person or group, if, in FMR's judgment, the Fund would be unable to invest
amounts effectively in accordance with its investment objective and
policies or would otherwise potentially be adversely affected.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a company organized in 1972.
FMR may not voluntarily resign as Non-Managing General Partner without
giving at least 90 days notice (unless a successor is appointed or FMR's
obliga tions are otherwise assumed). FMR will together with the Managing
General Partners own not less than 1% of the outstanding shares as long as
such ownership is required to maintain the Fund's status as a partnership.
All of the stock of FMR is owned by FMR Corp. Through ownership of voting
common stock and the execution of a shareholders' voting agreement, Edward
C. Johnson, 3d, John son family members, and various trusts for the
benefit of the Johnson family form a controlling group with respect to FMR
Corp. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions, Fidelity Service Co. (Service),
which is the transfer and shareholder servicing agent for certain of the
retail funds advised by FMR, Fidelity Investments Institutional Operations
Company (FIIOC), which performs shareholder servicing functions for certain
institutional customers, and Fidelity Investments Retail Services, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc. (both wholly owned
subsidiaries of FMR formed in 1986) supply investment research information
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K. and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas Inc., a wholly-owned subsidiary
of FMR formed in 1989, will supply portfolio management and research
services in connection with certain money market funds advised by FMR.
GENERAL PARTNERS AND OFFICERS
The Fund has 11 Managing General Partners who supervise Fund activities and
review contractual arrangements with companies that provide the Fund with
services. The Fund's Managing General Partners and executive officers are
listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. All
persons named as Managing General Partners also serve in similar capacities
for other funds advised by FMR. Unless otherwise noted, the business
address of each Managing General Partner and officer is 82 Devonshire
Street, Boston, MA 02109, which is also the address of FMR. The Managing
General Partners who are "interested persons" (as defined in the 1940 Act)
by virtue of their affiliation with the Fund or FMR, are indicated by an
asterisk (*).
*EDWARD C. JOHNSON 3d, Managing General Partner and President, is Chairman,
Chief 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 FMR Texas Inc. (1989), Fidelity Management & Research (U.K.)
Inc., and Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Managing General Partner and Senior Vice President, is
President of FMR; and President and a Director of FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is a
consultant to Western Mining Corporation (1994). Prior to February 1994, he
was President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Sanifill Corporation (non-hazardous
waste, 1993) and CH2M Hill Companies (engineering). In addition, he served
on the Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
P HYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in 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, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as
a Trustee of First Union Real Estate Investments, Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Managing General Partner (1990) is Vice Chairman of FMR
(1992). Prior to his retirement on May 31, 1990, he was a Director of FMR
(1989) and Executive Vice President of FMR (a position he held until March
31, 1991); Vice President of Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice
President of Fidelity Investments Corporate Services (1991-1992). He is a
Director of W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen
Corporation (engineering and construction). In addition, he serves as a
Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic
Deerfield (1989) and Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee of Corporate Property Investors, the EPS
Foundation at Trinity College, the Naples Philharmonic Center for the Arts,
and Rensselaer Polytechnic Institute, and he is a member of the Advisory
Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership
Funds.
M ARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice PresIdent of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company of
Vermont, American Software, Inc. (1989), and AppleSouth, Inc. (restaurants,
1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior
Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
JOHN H. COSTELLO, Assistant Treasurer, is an employee of FM R.
LEONARD M. RUSH, Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990) .
ARTHUR S. LORING, Secretary, is Senior Vice President (1993) and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of FDC.
THOMAS J. STEFFANCI, Vice President (1994), is Vice President of
Fidelity's fixed-income funds and Senior Vice President of FMR (1993).
Prior to joining FMR, Mr. Steffanci was Senior Managing Director of CMB
In vestment Counselors (1984-1990).FIDELITY MANAGEMENT & RESEARCH
COMPANY, Non-Managing General Partner, is the investment adviser of the
Fund and other investment companies.
The fees and expenses of the non-interested Managing General Partners are
paid by the Fund.
As of the date of this Statement of Additional Information, FMR together
with the General Partners owned 100% of the outstanding shares.
MANAGEMENT CONTRACTS
The Fund employs FMR to furnish investment advisory and other services.
Under its Management Contract with the Fund, FMR acts as investment adviser
and, subject to the supervision of the Managing General Partners, directs
investments in accordance with the Fund's investment objective, policies
and limitations. FMR also provides the Fund with all necessary office
facilities and personnel for servicing the Fund's investments, and
compensates of all officers of the Fund, all Managing General Partners who
are "interested persons" of the Fund or FMR, and all personnel of the Fund
or FMR performing services relating to research, statistical and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Managing General Partners, provides the management and administrative
services necessary for operation. These services include providing
facilities for maintaining the Fund's organization, supervising relations
with custodians, transfer and pricing agents, accountants, underwriters and
other persons dealing with the Fund, preparing all general shareholder
communications and conducting shareholder relations, maintaining the Fund's
records and the registration of the Fund's shares under federal and state
law, developing management and shareholder services for the Fund and
furnishing reports, evaluations and analyses on a variety of subjects to
the Fund's Managing General Partners.
In addition to the management fee payable to FMR and the fees payable to
Service and FIIOC (see "Contracts with Companies Affiliated with FMR"), the
Fund pays all its expenses, without limitation, that are not assumed by
those parties. The Fund pays for the typesetting, printing and mailing of
proxy material to existing shareholders, legal expenses and the fees of the
custodian, auditor and non-interested Managing General Partners. Other
charges paid by the Fund include interest, taxes, brokerage commissions,
the Fund's proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal and state
securities laws. In addition, the Fund is liable for insurance expenses.
The Fund is also liable for such nonrecurring or extraordinary expenses as
may arise, including those relating to litigation to which it is a party
and any obligation it may have to indemnify officers and Managing General
Partners of the Fund with respect to such litigation.
For the services of FMR under its Management Contract the Fund pays a
monthly management fee to FMR consisting of two elements: a group fee rate
and an individual fund fee rate. The group fee rate is based on the
average monthly 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 schedule shown below. Also, shown below is
the effective annual fee rate at various levels of total group net assets.
For example, the effective annual group fee rate at $150 billion of group
assets -- their approximate level for the month of March 1992 -- was
.1733%, which is the weighted average of the respective fee rates for each
level of group assets up to that level.
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual
(for each level) Fee Rate
0 - $3 billion .370% $ 0.5 billion .3700%
3 - 6 .340 10 .3340
6 - 9 .310 20 .2855
9 - 12 .280 30 .2520
12 - 15 .250 40 .2323
15 - 18 .220 50 .2188
18 - 21 .200 60 .2090
21 - 24 .190 70 .2017
24 - 30 .180 80 .1959
30 - 36 .175 90 .1910
36 - 42 .170 100 .1869
42 - 48 .165 110 .1835
48 - 66 .160 120 .1808
66 - 84 .155 130 .1780
84 - 120 .150 140 .1756
120-174 .145 150 .1736
Over 174 .140 160 .1718
170 .1702
180 .1687
190 .1672
200 .1658
Under the group fee rate structure, there is an individual fund fee rate
for most funds to recognize the different characteristics of the funds and
the differences in investment objectives and policies among the funds
advised by FMR. The individual fund fee rate is .30%. If average group
net assets remained at $___ billion, their level for March, 1992, the
annual management fee rate of the Portfolio would be calculated as follows:
Group Fee Rate + Individual Fund Fee Rate = Basic Fee Rate
.____% .30% .____%
One twelfth of the annual basic fee rate is then applied to the Portfolio's
average net assets for the current month, giving a dollar amount which is
the fee for that month.
To comply with the California Code of Regulations, FMR will reimburse the
Fund if and to the extent that the Fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the Fund's expenses for purposes of this regulation, the
Fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
The Fund's Management Contract has been approved by its Managing General
Partners and by the initial shareholder and will be submitted to the
shareholders of the Fund for approval at the first meeting of shareholders
held after the date hereof.
DISTRIBUTION AND SERVICE PLAN
As required by Rule 12b-1, the Managing General Partners carefully
considered all pertinent factors relating to the implementation of the
Distribution and Service Plan (The Plan) prior to their approval, and have
determined that there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders. In particular, the Managing General
Partners noted that payments under the Plan may provide additional
incentives to promote the sale of shares of the Fund, a fact which may
result in additional sales of the Fund's shares and an increase in the
Fund's assets. The Plan has been approved by the Fund's initial
shareholder, FMR, and will be submitted to the public shareholders of the
Fund at their first shareholder meeting.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FIIOC is transfer and shareholders' servicing agent for the Fund. The Fund
pays FIIOC a per account fee and a monetary transaction fee of $65 and $14,
respectively, or $60 and $12, respectively, depending on the nature of
services provided. Fees for certain institutional retirement plan accounts
are based on the NAV of all such accounts in the Fund.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing
and mailing Prospectuses, Statements of Additional Information, reports,
notices and statements to shareholders.
The Fund also has entered into an agreement with Service under which
Service performs the calculations necessary to determine the Fund's NAV and
dividends and maintains the Fund's accounting records. The fee rates are
based on the Fund's average net assets, specifically, .04% for the first
$500 million of average net assets and .02% for average net assets in
excess of $500 million. The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year.
The Fund has a General Distribution Agreement with Fidelity Distributors
Corporation (Distributors), a Massachusetts corporation organized July 18,
1960. Distributors, located at 82 Devonshire Street, Boston, MA, is a
broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. The General
Distribution Agreement calls for Distributors to use all reasonable
efforts, consistent with its other business, to secure purchasers for
shares of the Fund, which are continuously offered.
DESCRIPTION OF THE FUND
The Fund is organized as a Delaware limited partnership in order to permit
the character of income earned by the Fund to flow through to its non-U.S.
investors (referred to herein as shareholders or limited partners) without
becoming subject to U.S. tax. The Fund currently issues only one class of
shares in the form of partnership interests, and purchasers of shares of
the Fund offered hereby are required to become limited partners of the
Fund. The Fund's Partnership Agreement permits the Fund to issue
additional series, but only if such series will be treated as separate
partnerships for tax purposes. The form of Agreement of Limited
Partnership (the Partnership Agreement) is set forth herein on page ___.
CUSTODIAN. Fidelity Management Trust Company (FMTC), 82 Devonshire Street,
Boston, Massachusetts, is custodian of the assets of the Fund. The
custodian takes no part in determining the investment policies of the Fund
or in deciding which securities are purchased or sold by the Fund.
FMR, its officers and directors and its affiliated companies from time to
time have transactions with various banks, including custodian banks for
certain of the funds advised by FMR. Those transactions which have
occurred to date have included mortgages and personal and general business
loans. In the judgment of FMR, the terms and conditions of those
transactions were not influenced by existing or potential custodial or
other fund relationships.
AUDITOR. Price Waterhouse, 160 Federal Street, Boston, Massachusetts,
serves as the Fund's independent accountant, providing services including
(1) audit of annual financial statements and limited review of unaudited
semi-annual financial statements, (2) assistance and consultation in
connection with SEC filings and (3) review of the annual federal income tax
returns filed on behalf of the Fund.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
Aaa-- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa-- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long term risks appear somewhat
larger than in Aaa securities.
A-- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa-- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba-- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B-- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments of or maintenance
of other terms of the contract over any long period of time may be small.
Moody's applies numerical modifiers, 1,2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated 'AAA' has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt issues only in small
degree.
A - Debt rated 'A' has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions.
BBB - Debt rated 'BBB' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
categories.
BB - Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated 'B' has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal.
The 'B' rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied 'BB' or 'BB-' rating.
These ratings may be modified by the addition of a plus or minus to show
relative standing within the major rating categories.
FINANCIAL STATEMENT
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P.
(Delaware Limited Partnership)
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1994
ASSETS
CASH $100,140
TOTAL ASSETS 100,140
LIABILITIES 0
NET ASSETS $100,140
Net asset value, offering price, and redemption
price per share ($100,140 (divided by) 10,014 shares
outstanding) $ 10.00
The accompanying note is an integral part of the Statement of
Assets and Liabilities.
NOTE TO STATEMENT OF ASSETS AND LIABILITIES
NOTE 1. Fidelity U.S. Investments-Bond Fund, L.P. (the Fund) is a Delaware
Limited Partnership created under a Certificate of Limited Partnership
dated May 6, 1987, and Agreement of Limited Partnership dated May 7, 1987,
which was amended and restated May 8, 1987. The Managing General Partners
may establish separate series of the Fund and issue an unlimited number of
full and fractional shares. The Fund has had no operations since May 6,
1987 other than those related to organizational matters including the
issuance of 10,000 shares by the Fund to Fidelity Management & Research
Company (FMR), a wholly owned subsidiary of FMR Corp., Non-Managing General
Partner and investment adviser, on July 21, 1987. FMR will bear all
organizational expenses except the fees for registering and qualifying the
Fund and its shares for distribution under Federal and State securities
laws, which will be borne by the Fund and amortized over one year. The
Fund has entered into a management contract with FMR and into a servicing
and distribution contract with other affiliates of FMR which are described
under the headings "Management Contracts" and "Contracts with Companies
Affiliated with FMR" in the Statement of Additional Information. The
Managing General Partners have adopted a Distribution and Service Plan (the
Plan) pursuant to Rule 12b-1 of the Investment Company Act of 1940. The
Plan is described under the heading "Management, Distribution and Service
Fees" in the Prospectus.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Managing General Partner and Shareholder of Fidelity U.S.
Investments-Bond Fund, L.P.
In our opinion, the accompanying statement of assets and liabilities
presents fairly the financial position of Fidelity U.S. Investments-Bond
Fund, L.P. at August 31, 1994 in conformity with generally accepted
accounting principles. This financial statement is the responsibility of
the Fidelity U.S. Investments-Bond Fund, L.P.'s management; our
responsibility is to express an opinion on this financial statement based
on our audit. We conducted our audit in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE
Boston, Massachusetts
October 11, 1994
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P.
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (hereinafter as
it may from time to time be further amended or restated, the "Agreement")
is executed and delivered by and among the General Partners hereinafter
named (the "General Partners") and the persons who are from time to time
admitted as Limited Partners (the "Limited Partners") (the General Partners
and the Limited Partners being hereinafter collectively referred to as the
"Partners").
WHEREAS, Fidelity U.S. Investments-Bond Fund, L.P. (the "Fund") was
originally formed under the Delaware Revised Uniform Limited Partnership
Act (the "Partnership Act") pursuant to the filing of a Certificate of
Limited Partnership (the "Certificate") in the office of the Secretary of
State of the State of Delaware on May 7, 1987, and pursuant to an original
Agreement of Limited Partnership dated as of May 7, 1987 (the "Original
Agreement") among the General Partners and Arthur Loring as the "Initial
Limited Partner"; and
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in its entirety as hereinafter set forth and to continue the
activities of the Fund in accordance with the provisions of this Agreement;
NOW THEREFORE, the parties hereby agree as follows:
I. NAME.
The name of the limited partnership is "Fidelity U.S. Investments-Bond
Fund, L.P.". The Managing General Partners shall have the right at any
time to change the name of the Fund. In the event of any such change of
name, the Managing General Partners shall promptly advise the Limited
Partners of the new name of the Fund. The Managing General Partners may
also adopt (and change from time to time) trade names or designations for
any Series (as defined in Section II(c)) of the Fund.
II. CHARACTER OF ACTIVITIES OF THE FUND: INVESTMENT OBJECTIVES, OPERATING
POLICY; AND INVESTMENT AND OPERATING LIMITATIONS.
(a) Investment Objective. The principal activity of the Fund shall be to
invest and reinvest the assets of each Series (as defined in Section II(c))
in investment securities and other property.
(b) Operating Policy and Powers. The Fund will operate as an open-end
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act").
Subject to the limitations of the 1940 Act and the rules and regulations
thereunder, this Agreement, the Fund's operating policies and investment
and operating limitations as set forth, from time to time, in the Fund's
then current Prospectus ("Prospectus") relating to the offer and sale of
Shares (as defined in Section II(c)), the Managing General Partners (as
defined in Section V(a)) are authorized and empowered on behalf of the Fund
to do any and all acts necessary in pursuit of its objective and to carry
out the activities of the Fund, including, without limitation, the
following:
(1) To invest and reinvest cash and other property and to hold cash or
other property uninvested; to sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all assets of the Fund, and
to purchase, sell, exchange, lend, pledge, mortgage, hypothecate or
otherwise deal in options, stand-by commitments, futures contracts, forward
commitments, contracts of all kinds and any security, as defined in the
1940 Act, consistent with its investment objective;
(2) To adopt By-laws not inconsistent with this Agreement providing for the
conduct of the affairs of the Fund and to amend and repeal them to the
extent that they do not reserve that right to the Limited Partners (which
By-laws, as from time to time in effect, are incorporated herein by
reference and form a part of this Agreement);
(3) To elect and remove such officers and appoint and terminate such agents
as they consider appropriate;
(4) To engage professional advisors, investment advisors, depositaries,
custodians and/or administrators to supervise or administer the investments
or affairs of the Fund, or any Series, and, in general, to do such other
acts and incur such other expenses on behalf of the Fund or any Series, as
may be necessary or advisable in connection with the conduct of the affairs
of the Fund or such Series;
(5) To retain a transfer agent and Partner servicing agent, or both;
(6) To provide for the sale and distribution of shares or other interests
in the Fund or any Series through an underwriter or sales agent or by the
Fund itself, or otherwise;
(7) To set record dates;
(8) To delegate such authority as they consider desirable to any officers
of the Fund and to any agent, custodian or underwriter;
(9) To sell or exchange any or all of the assets of the Fund or any Series;
(10) 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 Managing
General Partners shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Managing General Partners shall deem proper;
(11) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(12) To hold any security or property in a form not indicating any
partnership, 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 investment companies;
(13) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Section II(c);
(14) To allocate assets, liabilities and expenses of the Fund to a
particular Series or to apportion the same between or among two or more
Series, provided that any liabilities or expenses incurred by or on behalf
of a particular Series shall be payable solely out of the assets belonging
to that Series as provided for in Section II(c);
(15) 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 by the Fund; 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 by the Fund;
(16) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Fund or any matter in controversy including, but not limited
to, claims for taxes;
(17) To make distributions of income and of capital gains to Partners in
the manner hereinafter provided;
(18) To borrow money and pledge assets of the Fund to secure borrowings
consistent with its investment objective;
(19) To establish, from time to time, a minimum total investment in the
Fund or Series, and to require the redemption of the Shares of any Partners
or holders of Shares whose investment is less than such minimum upon giving
notice to such Partner or holder;
(20) To lend portfolio securities in accordance with the policies of the
Securities and Exchange Commission with respect to the lending of
securities by investment companies under the 1940 Act; and
(21) To exercise any and all other powers which may be necessary or
appropriate to implement the foregoing purposes, policies and powers of the
Fund, including, without limitation, those generally granted to limited
partnerships under the Partnership Act.
(c) Shares; Series.
(1) The Managing General Partners may from time to time establish separate
series of Fund assets ("Series"). Each Series may, within the overall
scope of the Fund's objectives and activities have distinct investment
policies and separate identification. Each Series shall be represented by
a separate series of partnership interests, divided into such numbers of
whole and fractional shares of beneficial interest ("Shares"), as shall be
determined by the Managing General Partners. Each Share of each Series
shall be identical to each other share of such Series in all respects and
shall represent an equal and proportionate interest in the relevant Series
with each other Share of that Series outstanding. The Managing General
Partners
shall have full power and authority, in their sole discretion and without
obtaining any prior authorization or vote of the Limited Partners holding
Shares of any Series, 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 Managing General Partners may, from
time to time, determine, to divide or combine the Shares or any Series or
classes thereof into a greater or lesser number, to classify or reclassify
any issued Shares into one or more Series or classes of Shares, to abolish
any one or more Series or classes of Shares, and to take such other action
with respect to the Shares as the Managing General Partners may deem
desirable. The identification of each Series and the Shares thereof
existing from time to time, including the relative designations,
preferences, participating, optional or other special rights and powers
thereof, shall be set forth from time to time in the Prospectus.
(2) All consideration received by the Fund for the issue or sale of Shares
of a particular Series, together with all assets of the Series 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 particular Series. In
addition, any assets, income, earnings, profits and proceeds thereof,
funds, or payments which are not readily identifiable as belonging to any
particular Series shall be allocated by the Managing General Partners
between and among one or more of the Series in such manner as they, in
their sole discretion, deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Limited Partners or holders of Shares of
all Series for all purposes, and shall be assets belonging to that Series.
The assets belonging to a particular Series shall be so recorded upon the
books of the Fund, and shall be held by the Managing General Partners for
the benefit of the holders of Shares of that Series, and shall be charged
with the liabilities, expenses, costs, charges and reserves attributable to
that Series. Any general liabilities, expenses, costs, charges or reserves
of the Fund which are not readily identifiable as allocable to any
particular Series shall be allocated and charged by the Managing General
Partners between or among any one or more of the Series in such manner as
the Managing General Partners in their sole discretion deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Limited Partners or holders of Shares of the Series for all purposes. Any
creditor of any Series may look only to the assets of that Series to
satisfy such creditor's debt.
III. PLACE OF BUSINESS.
The principal place of business of the Fund shall be located at 82
Devonshire Street, Boston, Massachusetts 02109. The Managing General
Partners may from time to time change the location of the Fund's principal
place of business and establish additional places of business as they may
deem necessary or desirable for the conduct of the Fund's activities.
IV. CAPITAL CONTRIBUTIONS.
(a) General Partners' Contributions.
(1) Each of the initial General Partners has purchased the number of Shares
and has contributed the amount in cash to the Fund set forth on Schedule
"A" to this Agreement and incorporated herein by this reference.
(2) Notwithstanding anything to the contrary that may be expressed or
implied herein, the interests of all the General Partners, taken together,
in each material item of income, gain, loss, deduction or credit with
respect to any Series shall be equal to at least one percent of each such
item at all times during the existence of such Series as long as current
law, regulations, Internal Revenue Service policy, or interpretations
thereof, in the opinion of counsel, require the General Partners to
maintain such one percent interest in order to enable the Fund or Series to
qualify as a partnership for Federal income tax purposes. In determining
the General Partners' interests in such items, Shares of any Series owned
by the General Partners in the capacity of Limited Partners shall not be
taken into account. The Non-Managing General Partner, in its capacity as
such, shall purchase, as necessary, that number of Shares of each Series
which when added to all Shares of such Series owned by the Managing General
Partners will comply with the requirements of this Section.
(b) Limited Partners' Contributions. The Initial Limited Partner has
purchased the number of Shares set forth on Schedule "A" and has
contributed $10 in cash to the Fund for each Share purchased. Subsequently
admitted Limited Partners will contribute, with respect to each Share of
any Series purchased, the "Net Asset Value" thereof, as determined in
accordance with Section IV(d) hereof.
(c) Contributions. Contributions may be made only in cash (U.S. dollars)
or such other property which is approved by the Managing General Partners.
Shares shall be sold at the then applicable Net Asset Value determined in
accordance with Section IV(d) hereof.
(d) Determination of Net Asset Value. The term "Net Asset Value" of any
Series shall mean that amount by which the assets of that Series, exceed
its liabilities, all as determined, by or under the direction of the
Managing General Partners, in the manner set forth in the Fund's
Prospectus. Such value per Share shall be determined separately for each
Series of Shares and shall be determined on such days and at such times as
the Managing General Partners may determine. The Managing General Partners
may suspend the determination of Net Asset Value as permitted under the
1940 Act.
All determinations of Net Asset Value and appraisals of assets and
liabilities made in good faith by the Managing General Partners or their
delegates shall be binding and conclusive upon all Partners, holders of
Shares and other interested persons.
V. GENERAL PARTNERS.
(a) Identity and Number. The names and addresses of the General Partners
and the number of Shares initially owned by each of them, and the amount of
cash and/or description and the value of other property contributed by each
of them, are set forth on Schedule "A" to this Agreement. The General
Partners are listed separately as Managing General Partners ("Managing
General Partners") and the Non-Managing General Partner ("Non-Managing
General Partner"). The Managing General Partners shall determine the
number of persons to serve as General Partners. If at any time a Managing
General Partner resigns, is removed, dies, becomes bankrupt or
incapacitated, or retires, the Managing General Partners shall, within 90
days, call a meeting of Managing General Partners for the purpose of
determining whether to continue the Fund, without dissolution, and, in
their discretion (but subject to the requirements of Section V(j) hereof),
to elect an additional Managing General Partner or Managing General
Partners to serve until their successors are duly elected and admitted, or
for the purpose of reducing the number of Managing General Partners.
Pending such determination to continue the Fund, the Fund will continue
without dissolution.
(b) Managing General Partners and Non-Managing General Partners. Only
individuals may act as Managing General Partners, and all General Partners
who are individuals shall act as Managing General Partners. Any General
Partner which is a corporation, partnership, trust, joint venture or
association shall act as a Non-Managing General Partner. Except as
provided in Section V(c) hereof, a Non-Managing General Partner as such
shall take no part in the management, conduct or operation of the Fund's
affairs and shall have no authority to act on behalf of the Fund or to bind
the Fund.
(c) Management and Control. Subject to the terms of this Agreement and the
1940 Act, the Fund will be managed by the Managing General Partners, who
will have complete and exclusive control over the management, conduct and
operation of the Fund's affairs, and, except as otherwise specifically
provided in this Agreement, the Managing General Partners shall have the
rights, powers and authority, on behalf of the Fund and in its name, to
exercise all of the rights, powers and authority of partners of a
partnership without limited partners under the Partnership Act. Subject to
the provisions of the 1940 Act, the Managing General Partners may contract
on behalf of the Fund with one or more banks, trust companies or investment
advisers, or other persons (which may be affiliates of a General Partner)
for the performance of such functions as the Managing General Partners may
determine, but subject always to their continuing supervision, including,
but not by way of limitation, the investment and reinvestment of all or
part of the Fund's assets and execution of portfolio transactions,
investment advisory, statistical and research facilities and any or all
administrative functions. Subject to the provisions of the 1940 Act, a
Non-Managing General Partner or an affiliate of a General Partner may act
as an investment adviser to the Fund or any Series and shall be compensated
for such services in accordance with the terms of any investment advisory
agreement which may be executed by the Fund or any Series and the
Non-Managing General Partner or any such affiliate. The Managing General
Partners may also appoint agents to perform such duties on behalf of the
Fund as the Managing General Partners deem desirable. The Managing General
Partners shall devote themselves to the Fund's activities to the extent
they may determine necessary for the efficient conduct thereof, which it is
understood shall not, however, occupy their full time. General Partners
may also engage in other activities or businesses, whether or not similar
in nature to the activities of the Fund, subject to the limitations of the
1940 Act. In the event that no Managing General Partner shall remain for
the purpose of electing whether to continue the operation of the Fund as
provided in Section V(a), then the Non-Managing General Partner shall
promptly call a meeting of the Partners to be held within 90 days of the
date the last Managing General Partner ceased to act in such capacity for
the purpose of determining whether to elect one or more successor Managing
General Partners who, if elected, will continue the operation of the Fund.
For the period of time from the date when the last acting Managing General
Partner shall have ceased to serve in such capacity until the date of
admission of one or more successor Managing General Partners (if elected),
the Non-Managing General Partner shall continue the operations of the Fund
without dissolution and shall be permitted to engage in the management,
conduct and operation of the activities of the Fund and, otherwise, to
exercise during such period all of the powers of the Managing General
Partners hereunder. If at the meeting called by the Non-Managing General
Partner pursuant to the foregoing provisions of this Section V(c) the
Partners shall determine not to elect one or more successor Managing
General Partners, then the Fund shall dissolve in accordance with Section
XII hereof and the assets of the Fund shall be distributed on dissolution
pursuant to Section XIII hereof.
(d) Action by the Managing General Partners. Unless otherwise required by
the 1940 Act with respect to any particular action, the Managing General
Partners shall act only by the vote of a majority of the Managing General
Partners in attendance at a meeting, duly called, at which a quorum of the
Managing General Partners is present or by unanimous written consent
without a meeting or by telephone consent provided a quorum of Managing
General Partners participate in any such telephone meeting. At any meeting
of the Managing General Partners, a majority of the Managing General
Partners shall constitute a quorum. No single Managing General Partner
shall have authority to act on behalf of the Fund or to bind the Fund,
provided, however, the Managing General Partners by majority vote may
delegate, subject to the requirements of the 1940 Act, to any one or more
of their number their authority to approve particular matters or take
particular action on behalf of the Fund as may be provided in the By Laws.
The Managing General Partners may elect a Chairman who shall preside at
meetings and such other agents or officers of the Fund as they may deem
advisable to carry out its affairs.
The "Tax Matters Partner" and "Notice Partner" as defined in Sections
6321(a)(7) and (8) of the Internal Revenue Code (the "Code") are designated
on Schedule "A" and may change from time to time as determined by the
Managing General Partners. The "Tax Matters Partner" is authorized, at the
Fund's or affected Series' sole cost and expense, to represent and to
retain legal counsel and any other appropriate assistance, to represent the
Fund or affected Series, as the case may be, and each Limited Partner or
holder of Shares in connection with all examinations of the Fund's or
Series' affairs by tax authorities, including any resulting claim, action,
suit, or proceeding (as defined in Section V(n)). In connection with any
such claim, action, suit or proceeding involving tax issues, each Limited
Partner or holder of Shares agrees to cooperate with the Managing General
Partners and to do or refrain from doing any and all things reasonably
required by the Managing General Partners. The Managing General Partners
may take any other appropriate action with respect to any such tax matters,
including, but not limited to, settlement, compromise, arbitration of any
such examination or any resulting claim, action, suit or proceeding without
the consent of the Partners or holders of Shares and any such action shall
be binding on each Limited Partner or holder of Shares.
(e) Limitations on the Authority of the Managing General Partners. The
Managing General Partners shall have no authority without the vote or
written consent or ratification of all of the Limited Partners to:
(1) do any act in contravention of this Agreement;
(2) do any act which would make it impossible to carry on the ordinary
activities of the Fund; or
(3) possess Fund property, or assign their rights in specific Fund
property, for other than a Fund purpose.
However, nothing herein shall preclude dissolution of the Fund in
accordance with this Agreement.
(f) Management and Control by Non-Managing General Partner. Except as
otherwise provided in Section V(c) above, the Non-Managing General Partner
as such shall have no power to engage in the management, conduct or
operation of the Fund's activities nor to exercise any of the rights,
powers and authority of a Managing General Partner.
(g) Right of General Partners to Become Limited Partners. A General
Partner may also become a Limited Partner without obtaining the consent of
the Limited Partners and thereby become entitled to all the rights of a
Limited Partner to the extent of the Limited Partnership interest so
acquired. Such event shall not, however, be deemed to reduce or otherwise
affect any of the General Partner's liability hereunder as a General
Partner. Termination of a person's status as a General Partner shall not
affect his status, if any, as a Limited Partner. A General Partner shall
not be entitled to any special payment from the Fund as a result of
termination of his status as General Partner. A withdrawing General
Partner may, if he chooses to do so, redeem his Shares in accordance with
Section XI(a) below, or retain his Shares as a Limited Partner.
(h) Withdrawal of a Managing General Partner. A Managing General Partner
shall have no further right or power to act as General Partner (except to
execute any amendment to this Agreement to evidence his withdrawal) if he:
(1) dies, becomes bankrupt or is incapacitated;
(2) voluntarily withdraws upon not less than 90 days' written notice to the
other Managing General Partners, unless such notice is waived;
(3) is removed by the other Managing General Partners pursuant to a vote
taken at a meeting, duly held, of the Managing General Partners;
(4) is removed at any meeting of Partners called for such purpose by a vote
of two-thirds of the outstanding Shares of all Series voting as a single
class;
(5) fails to be elected at a meeting of Partners called for such purpose,
at which a quorum is present, provided that such withdrawal shall not occur
until his successor has been duly elected and admitted to the Fund as a
Managing General Partner or the number of Managing General Partners has
been reduced by the remaining Managing General Partners, and provided,
further, that the failure of any Managing General Partner to be reelected
shall not cause a dissolution of the Fund and the operations of the Fund
shall be continued by all remaining and successor Managing General
Partners.
(i) Termination of Status of a Non-Managing General Partner as a General
Partner. The interest of a Non-Managing General Partner as a General
Partner shall terminate and such Non-Managing General Partner shall have no
further power to act as a General Partner upon the occurrence of any of the
following events:
(1) voluntary withdrawal upon 90 days' written notice to the Managing
General Partners, provided that a Non-Managing General Partner shall not
voluntarily withdraw or otherwise terminate its status as a Non-Managing
General Partner until the earlier of (i) 90 days from the date such
Non-Managing General Partner gives the Managing General Partners written
notice of its intention to withdraw as a Non-Managing General Partner, (ii)
the date a successor Non-Managing General Partner, who has agreed to assume
the obligations of Section IV(a)(2), is elected by the Managing General
Partners or (iii) the date a Managing General Partner assumes the
obligations imposed by Section IV(a)(2);
(2) a Non-Managing General Partner is dissolved or otherwise terminates its
existence;
(3) a petition in bankruptcy is filed by a Non-Managing General Partner;
(4) an involuntary petition in bankruptcy is filed against a Non-Managing
General Partner and a trustee is appointed and confirmed after an
opportunity for a hearing;
(5) a Non-Managing General Partner makes an assignment for the benefit of
creditors of substantially all of its assets; or
(6) a Non-Managing General Partner is removed by the Managing General
Partners.
The retirement, dissolution, bankruptcy or other withdrawal of the
Non-Managing General Partner shall not dissolve the Fund, provided that the
Managing General Partners elect to continue the business and operations of
the Fund and a successor Non-Managing General Partner is elected by the
Managing General Partners or, if a Non-Managing Partner is not elected, a
Managing General Partner assumes the obligations imposed by Section
IV(a)(2).
(j) Additional or Successor Managing General Partners. Prior to the first
meeting of Partners the Managing General Partners named on Schedule "A"
hereof may elect additional Managing General Partners. Subject to the
requirements of the 1940 Act, between meetings of Partners, the Managing
General Partners also may elect Managing General Partners to fill vacancies
(whether or not created by an increase in the number of Managing General
Partners) in the number of Managing General Partners. The number of
Managing General Partners shall be fixed from time to time by the Managing
General Partners and, at or after the commencement of the business of the
Fund, shall be not less than one. Subject to the provisions of Section
V(h), each Managing General Partner, whether named in Schedule "A" or
hereafter becomes a Managing General Partner, shall serve as a Managing
General Partner until the next meeting of Partners called for the election
of Managing General Partners and until his respective successor is duly
elected and admitted. If at any time more than a majority of the Managing
General Partners serving as such shall not have been approved at a meeting
of Partners, then the Managing General Partners shall as promptly as
possible, and in any event within 60 days (unless the Securities and
Exchange Commission shall extend such period), cause a meeting of Partners
to be held for the purpose of electing Managing General Partners such that
at least a majority thereof shall have been elected by the Partners
consistent with the requirements of the 1940 Act.
(k) Liability to Limited Partners. The General Partners shall not be
personally liable for the repayment of any amounts standing in the account
of a Limited Partner or holder of Shares including, but not limited to,
contributions with respect to such Shares. Any such payment shall be
solely from the Fund's assets.
The General Partners shall not have any personal liability to any holder of
Shares or to any Limited Partner for any loss, damage, or any other costs
incurred by reason of (1) any failure to withhold income tax under Federal
or state tax laws with respect to income allocated to holders of Shares or
Limited Partners, (2) any change in Federal or state income tax laws, or in
interpretations thereof, as they apply to the Fund, the holders of Shares
or the Limited Partners, whether such change occurs through legislative,
judicial or administrative action, (3) any error of judgment, mistake of
fact or law, or (4) any other action, or failure to act or other matter,
unless the result of willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties. Any such loss, damage, or costs shall
be satisfied from the Fund's assets.
(l) Assignment or Transfer of General Partners' Shares. A General Partner
may not assign Shares which he holds in his capacity as a General Partner
to any party without the consent of a majority of the Managing General
Partners (exclusive of such General Partner proposing to assign his
Shares). Any assignee of such General Partner for which such consent has
been granted may not become a substituted General Partner except if elected
as such by the remaining Managing General Partners as provided in Section
V(j) hereof and shall otherwise hold such Shares as a Limited Partner.
(m) Reimbursement and Compensation. Managing General Partners (other than
those who are "interested persons" as defined under the 1940 Act) may
receive compensation for their services as Managing General Partners (as
determined by the Managing General Partners from time to time) and will be
reimbursed for all reasonable out-of-pocket expenses incurred in performing
their duties hereunder. Neither payment of compensation or reimbursement
of expenses to a General Partner nor payment of fees to any affiliate of a
General Partner for the performance of services to the Fund shall be deemed
a distribution for purposes of Section VII(b), nor shall such payment
affect such person's right to receive any distribution to which he would
otherwise be entitled to as an owner of Shares.
(n) Indemnification.
(1) Subject to the exceptions and limitations contained in subpart (2)
below:
(i) every person who is, or has been, a General Partner, an officer and/or
director of a corporate General Partner, an officer of the Fund, or an
agent of any of them (including persons who serve at the Fund's request as
directors, officers, or trustees of another organization in which the Fund
has any interest as a shareholder, creditor, or otherwise) ("Covered
Person") shall be indemnified by the Fund to the fullest extent permitted
by law against any 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 Covered Person, 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.
(2) No indemnification shall be provided hereunder to a Covered Person:
(i) who is finally adjudicated by a court or other body before which the
proceeding was brought (A) to be liable to the Fund or its Partners 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 Fund;
(ii) in the event of a settlement or other disposition not involving a
final adjudication as provided in subpart (2)(i), unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office by
A. the court or other body approving the settlement or other disposition;
B. vote of at least a majority of those Managing General Partners who are
neither interested persons of the Fund nor parties to the matter, based
upon a review of readily available facts (as opposed to a full trial-type
inquiry); or
C. 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 Partner may, by appropriate legal proceedings,
challenge any such determination by the Managing General Partners or
independent counsel.
(3) The rights of indemnification herein provided may be insured against by
policies maintained by the Fund, 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
occupy the position by virtue of which he was a Covered Person, and shall
inure to the benefit of the heirs, executors, and administrators of a
Covered Person. Nothing contained herein shall affect any rights of
indemnification to which Fund personnel, other than Covered Persons, and
other persons may be entitled by contract or otherwise under law.
(4) Expenses incurred in connection with the preparation and presentation
of a defense to any claim, action, suit, or proceeding of the character
described in subpart (1)(i) of this Section V(n) shall be paid by the Fund
from time to time in advance 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 Fund if it is ultimately determined
that he is not entitled to indemnification under this Section V(n);
provided, however, that either (i) such Covered Person provides appropriate
security for such undertaking, (ii) the Fund is insured against losses
arising out of any such advance payments, or (iii) either a majority of the
Managing General Partners who are neither interested persons of the Fund
nor parties to the matter, or independent legal counsel in a written
opinion, determine, based upon a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe that
such Covered Person will be found entitled to indemnification under this
Section V(n).
(5) The indemnification obligations of the Fund under this Section V(n)
shall be satisfied solely out of Fund assets and no Limited Partner shall
have any personal liability for the indemnification herein provided.
Further, to the extent that indemnification obligations hereunder relate to
one or less than all of the Series, then only the assets of the relevant
Series shall be available for the payment of indemnification claims.
VI. LIMITED PARTNERS.
(a) Identity, Number and Contributions. The name and address of the
Initial Limited Partner and the number of Shares owned by him are set forth
in Schedule "A" to this Agreement. Additional Limited Partners may be
admitted with respect to each Series and Shares of any Series may be sold
to Limited Partners in accordance with procedures established by the
Managing General Partners. No consent of any Limited Partners shall be
required in connection therewith. Any investor who purchases Shares,
irrespective of whether he, or his authorized representative, has executed
an "account application" or any other document related hereto, will be
deemed to have consented to, and will be bound by, the terms and conditions
of this Agreement, including the Power of Attorney set forth in Section
XIV(d). The Managing General Partners reserve the right, in their sole
discretion, to reject any purchaser of Shares as a Limited Partner. The
names, addresses, capital contributions and number (and identity by Series)
of Shares held by each Limited Partner shall be maintained in the books and
records of the Fund.
(b) No Power to Control Fund Operations. A Limited Partner shall have no
right to and shall take no part in the control of the Fund's operations and
shall have no right or authority to act for or bind the Fund, but may
exercise the rights and powers of a Limited Partner under this Agreement
and the Partnership Act.
(c) Voting Rights of Limited Partners. Under the circumstances provided in
this Agreement or requirement under the 1940 Act, the Limited Partners
shall have the right to vote (notwithstanding anything to the contrary in
Section XIV(c) of this Agreement) on the following material matters
relating to the activities of the Fund, which vote shall in any case be
taken at a meeting of the Partners called and held pursuant to the
provisions of Section X hereof and the By-laws, if any:
(1) The election of Managing General Partners of the Fund when so required
pursuant to Section V(j);
(2) The approval or termination of investment advisory or underwriting
contracts or distribution plans (which may be with the Non-Managing General
Partner or an affiliate of the Non-Managing General Partner);
(3) The approval or termination of the engagement of auditors;
(4) Any other matters that the 1940 Act requires be approved by the
Partners of the Fund, provided, however, that on any matter submitted to a
vote of the Limited Partners, all Shares shall be voted by individual
Series (it being the intent hereof that matters involving an individual
Series shall be voted on only by Partners holding Shares of that Series)
except, (i) when required by the 1940 Act, Shares shall be voted in the
aggregate as a single class and not by individual Series, and (ii) when the
Managing General Partners have determined that the matter at issue affects
the interests of more than one Series, then the Partners who are holders of
Shares of such affected Series shall be entitled to vote thereon as a
single class.
(d) Limitation of Limited Partners' Liability. No Limited Partner shall be
liable for the debts or obligations of the Fund; provided, however, that
the contribution of a Limited Partner shall be subject to the risks of the
operations of the Fund and subject to the claims of the Fund's creditors,
and provided further that, after any Limited Partner has received the
return of any part of his contribution, he will be liable to the Fund to
the extent required by the Partnership Act.
(e) Additional Contributions of Limited Partners; Assessments. No Limited
Partner shall be required to make any contributions to the Fund other than
the purchase price of his Share(s) at the Net Asset Value (including Shares
issued as provided in Section VII), and no Limited Partner shall be
required to lend monies to the Fund. No holder of any Share shall be
subject to additional assessments on or in respect of such Share.
(f) Death of a Limited Partner. The death of a Limited Partner shall not
dissolve or terminate the Fund. In the event of such death, the personal
representative of the deceased Limited Partner shall have the right to be
substituted as a Limited Partner only in accordance with the provisions of
Section IX(c), but shall have the right to have the Fund redeem his Shares
in accordance with Section XI(a) hereof.
VII. ALLOCATION AND DISTRIBUTION OF PROFITS AND LOSSES.
(a) Allocation of Income, Gains, Losses, Deductions and Credits for
Accounting Purposes. The net income, gains, losses, deductions and credits
of each Series shall be allocated equally among the outstanding Shares of
the Series on a basis determined by the Managing General Partners in a
manner as may be required for Federal income tax purposes.
The net income earned by each Series shall consist of the interest accrued
on its portfolio securities, less its expenses, since the most recent
determination of net income. Expenses of each Portfolio will be accrued on
a regular basis determined by the Managing General Partners. The Managing
General Partners are authorized to establish such reserves as may be
required, in their judgment, with respect to any anticipated or actual
liabilities of a Series, including liabilities relating to a Series'
obligation to indemnify any Partner hereunder. A holder of a Share of a
Series shall be allocated the proportionate part of such items actually
realized by the relevant Series for each full accrual period during which
such Share was owned by such holder. A person shall be deemed to be a
holder of a Share on a specific day if he is the record holder of such
Share on such day (regardless of whether or not such record holder has yet
been admitted as a substituted Limited Partner as herein provided).
(b) Distributions of Income and Gains. The Managing General Partners in
their sole discretion shall determine the amounts, if any, to be
distributed to holders of Shares of each Series, the record date(s) for
purposes of such distributions and the time or times when such
distributions shall be made. Such distributions of income shall be made in
additional full and fractional shares of the same Series valued at the Net
Asset Value on the applicable record date(s). With respect to capital and
other gains, the Managing General Partners may determine at least annually
what portion, if any, of each Series' capital and other gains will be
distributed and any such distribution may be in additional full and
fractional Shares of the same Series at the Net Asset Value on the record
date(s). If so provided in the Prospectus, distributions of income and
capital and other gains may be made in cash (U.S. dollars) to those holders
of Shares who have made a proper election in the manner set forth therein.
Notwithstanding the foregoing, the Managing General Partners shall not be
required to make any distribution of income or capital or other gains for
any taxable year. A person shall be deemed to be a holder of a Share if he
is the record holder of the Share on the record date established for the
payment of distributions (regardless of whether or not such record holder
has been admitted as a substituted Limited Partner as herein provided).
(c) Capital Accounts. In addition to any capital accounts required to be
maintained for accounting purposes in accordance with generally accepted
accounting principles, the Fund shall maintain a capital account for each
Partner in each Series for Federal income tax purposes ("Capital Account").
Each such Capital Account shall be maintained in accordance with the
requirements of Treasury Regulations. On a daily basis (or such other
basis as may be determined by the Managing General Partners), each such
Capital Account shall be credited with the Partner's capital contributions
and share of profits, shall be charged with such Partner's share of
operating losses, distributions and withholding taxes (if any) and shall
otherwise appropriately reflect transactions of the Series and the
Partners. Each Partner's Capital Account shall be adjusted to reflect any
purchases and redemptions of Shares by such Partner at such time as
determined by the Managing General Partners. Adjustments to Capital
Accounts to take into account allocations of gains and losses realized by
the Series for tax purposes shall be made in the manner described herein.
A substituted Limited Partner shall be deemed to succeed to the Capital
Account of the Partner whom such substituted Limited Partner replaced.
(d) Allocations for Tax Purposes.
(1) General. For each fiscal year, items of income, deduction, loss or
credit from normal operations (other than from the disposition of assets of
the Series) shall be allocated for Federal income tax purposes among the
Partners in proportion to the amounts allocated to them during such year
pursuant to Section VII(a) hereof. The Partners' Capital Accounts shall be
adjusted to reflect allocations of such items of income, deduction, loss or
credit.
(2) Special Allocations.
(i) Gains and losses realized from the disposition of assets of a Series
shall be allocated to the Partners for Federal income tax purposes in
accordance with each Partner's interest in that Series on the date of such
disposition. A Partner's interest in a Series for this purpose is his
percentage interest in the Series, as measured by a fraction, the numerator
of which is the Net Asset Value per Share of the Series (at the close of
trading on the day prior to the date of disposition of each Series asset)
multiplied by the number of Shares of the Series held by such Partner at
such time, and the denominator of which is the Net Asset Value of the
Series' aggregate assets at such time. Each day's net realized gains or
losses from the disposition of Series assets shall be allocated to the
Partners in proportion to each Partner's interest in that Series, and the
Partners' Capital Accounts shall be adjusted accordingly. Purchases of
Shares and partial or complete
redemptions of Shares shall be regarded as occurring at the time the Net
Asset Value per Share is determined, after adjustments to the Partners'
Capital Accounts for net realized gains and losses on such day have been
made.
(ii) In the event of a partial or complete redemption of Shares which
results in a distribution in excess of a Partner's tax basis in his Shares,
the Series may make an election to adjust the basis of Series assets under
Section 754 of the Code, and the Series may increase the tax basis of its
assets in accordance with Sections 734, 743(b) and 755 of the Code by the
difference between the amount of the distribution made to the redeeming
Partner in redemption of his Shares and his tax basis in his Shares.
(3) Minimum Gain Chargeback and Qualified Income Offset. Allocations
shall be made to the Capital Account as may, from time to time, be required
by Treasury Department Regulation Section 1.704-1 in respect of "Minimum
Gain Chargeback" and "Qualified Income Offset" items as such terms are
defined in such Regulation.
(e) Fiscal Year. The fiscal year of the Fund shall be the calendar year
for financial reporting and for Federal income tax purposes, unless the
Managing General Partners shall elect a different fiscal year for such
purposes.
VIII. RECORDS, STATEMENTS AND INCOME TAX INFORMATION.
(a) Records and Accounting. At all times during the continuance of the
Fund, books of account, which shall be adequate and appropriate for the
Fund's operations, shall be kept. Such books and records shall be kept on
a basis consistent with the accounting methods followed by the Fund for
Federal income tax purposes and, where deemed appropriate, in accordance
with generally accepted accounting principles and procedures applied in a
consistent manner. Such books and records shall include such separate and
additional accounts for each holder of Shares as shall be necessary to
reflect accurately the rights and interests of the respective holder of
Shares and shall specifically reflect the name and address of each Partner
and each other holder of Shares and the number of Shares of each Series
held by each for the purpose of determining recipients of distributions and
notices. The Fund shall make its books and records available to Limited
Partners, upon five days' notice, for any proper partnership purpose
provided for under the Partnership Act; however, the Managing General
Partners reserve the right to request a statement of the purposes for which
the examination is being requested.
(b) Income Tax Information. The Managing General Partners shall cause to
be transmitted to each Partner and to the appropriate governmental
authority such reports and information as shall be required by the 1940
Act, the Partnership Act, the Code or any other provision of law.
IX. PROHIBITION OF ASSIGNMENT OF SHARES OF LIMITED PARTNERSHIP INTEREST.
(a) Prohibition of Assignment. Except as otherwise provided in this
Section IX, no Limited Partner or holder of Shares shall have the right to
sell, assign, pledge, hypothecate or otherwise transfer or encumber
(collectively "transfer") all or any part of his Shares except with the
prior consent of the Managing General Partners, which consent may be
withheld in the Managing General Partners' sole discretion. Any transfer
in violation of this Section IX shall be void and shall not be recognized
by the Fund for any purpose. In the case of a transfer (other than as set
forth in subsections (b) and (c)) approved by the Managing General
Partners, the transferee shall be admitted as a substituted Limited Partner
upon his execution of an account application and Power of Attorney in a
form satisfactory to the Managing General Partners and upon the
satisfaction of such other conditions as may be specified by the Managing
General Partners. If a permitted transferee is not admitted as a
substituted Limited Partner, such transferee shall become a holder of
record of the subject Shares and shall be entitled to redeem such Shares in
accordance with the provisions of Section XI hereof and to receive
distributions in respect of such Shares as herein provided, but otherwise
shall have none of the rights of a Limited Partner (including the right to
vote on any matter or to inspect the books and records of the Partnership).
(b) Pledge of Shares. A Limited Partner may pledge his Shares as
collateral to a securities broker, bank or financial industry professional
if in the case of any proposed pledge the Limited Partner gives the Fund
prior written notice that such pledge is to be made. In the event that any
person who is holding Shares as collateral becomes the owner thereof due to
foreclosure or otherwise, such person shall not have the right to be
substituted as a Limited Partner without (i) the consent of the Managing
General Partners, which may be withheld in their sole discretion and, (ii)
if such consent is given, the execution of an account application and Power
of Attorney in a form satisfactory to the Managing General Partners and
satisfaction of such other conditions as may be specified by the Managing
General Partners. If a pledgee who has become the owner of Shares is not
admitted as substituted Limited Partner then, upon receipt by the Fund of
evidence satisfactory to the Managing General Partners of his ownership of
Shares, the pledgee shall become a holder of record of the subject Shares
(and his name shall be recorded on the books and records of the Fund
maintained for such purpose) and shall thereafter have the same rights as
specified in Section IX(a) with respect to a permitted transferee who is
not admitted as a substituted Limited Partner.
(c) Death, Incompetency or Termination of Existence of a Limited Partner.
In the event of the death or incompetency of a Limited Partner (or, in the
case of a Limited Partner that is a corporation, association, partnership,
joint venture, trust or other entity, the merger, dissolution or other
termination of existence of such Limited Partner) the successor in interest
of such Limited Partner shall not have the right to be substituted as a
Limited Partner without (i) the consent of the Managing General Partners
which may be withheld in their sole discretion and, (ii) if such consent is
given, the execution of an account application and Power of Attorney in a
form satisfactory to the Managing General Partners and the satisfaction of
such other conditions as may be specified by the Managing General Partners.
If such successor in interest is not admitted as a substituted Limited
Partner then, upon receipt by the Fund of evidence satisfactory to the
Managing General Partners of his right to succeed to the interests of the
deceased or incompetent Limited Partner, such successor shall become a
holder of record of the subject Shares (and his name shall be recorded on
the books and records of the Fund maintained for such purpose) and shall
thereafter have the same rights as specified in Section IX(a) with respect
to a permitted transferee who is not admitted as a substituted Limited
Partner.
X. MEETINGS OF PARTNERS.
(a) Meeting and Call. Meetings of Partners, or, as applicable, of Partners
holding Shares of any concerned Series, shall be held either within the
State of Delaware or such other places on the date, fixed, from time to
time, by the Managing General Partners for the transaction of such matters
as may be presented to the meeting and upon which Partners have the right
to vote hereunder. Meetings shall be called by the Managing General
Partners whenever the holders of Shares of at least 10 percent of all votes
entitled to be cast at such meeting shall make a duly authorized request
that such meeting be called or as otherwise may be required by this
Agreement, the 1940 Act or the Partnership Act.
(b) Notice or Actual or Constructive Waiver of Notice. Written or printed
notice of all meetings shall be given and shall state the time and place of
the meeting and the purpose or purposes for which the meeting is called;
and shall be given to each Partner, at least 10 days in advance of the
meeting, who is the record holder of Shares of the concerned Series as of
the record date fixed by the Managing General Partners for determining
Partners entitled to vote, either by mail at his address appearing on the
books of Fund or the address supplied by him for the purpose of notice or
by presenting it to him personally or by leaving it at his residence or
usual place of business before the date of the meeting. If mailed, notice
shall be deemed to be given when deposited in the United States mail with
postage thereon prepaid. Such notice of meeting of Partners may be waived
in writing, by a Partner before or after the meeting. Actual attendance or
representation at the meeting shall be deemed equivalent to the giving of
such notice to such Partner.
(c) Voting. All Shares of each Series have equal voting rights and each
Share has one vote. Each Partner shall have the right to vote the number
of Shares standing of record in such Partner's name as of the record date
set forth in the notice of meeting. A majority of the votes cast at a
meeting of Partners, duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter which may come
before a meeting, unless more than a majority of votes cast is required by
this Agreement or the 1940 Act, and a plurality of all the votes cast at a
meeting at which a quorum is present shall be sufficient to elect a General
Partner; provided that where any provision of law or this Agreement
requires or permits that the Partners who are holders of Shares of any
Series shall vote as a Series, then a majority of the Shares of that Series
voted on the matter shall decide that matter insofar as that Series is
concerned.
(d) Quorum. Except where a greater number is required under the terms of
this Agreement or the 1940 Act, a quorum shall consist of a majority of the
Shares entitled to vote at a meeting, whether present in person or
represented by proxy except where any provision of law permits or requires
the holders of a Series to vote as a Series, then a majority of the
aggregate number of Shares of that Series entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that
Series.
XI. RETURN OF CONTRIBUTIONS AND WITHDRAWAL OF PARTNERS.
(a) Redemption of Shares of Partnership Interest and Return of
Contributions. Except as otherwise provided herein and subject to
applicable law or regulations, any holder of Shares may redeem all or any
portion of his Shares at their Net Asset Value determined as of the date of
receipt by the Fund of a written request for redemption in proper form. In
addition, the Managing General Partners may involuntarily redeem any holder
of Shares whose investments fall below a specified minimum level
established by the Managing General Partners and set forth in the
Prospectus or for any reason the Managing General Partners, in their sole
discretion, deem appropriate.
A request for redemption shall be deemed not to be in proper form if it
does not comply with such requirements as are set forth in the Fund's
Prospectus.
The Managing General Partners reserve the right in their complete
discretion to redeem Shares in whole or in part either in cash (U.S.
dollars) or by the distribution of one or more securities of the relevant
Series in kind. For this purpose portfolio securities distributed in kind
shall be valued at their fair value as determined for purposes of computing
the redemption price.
The Managing General Partners may declare, with respect to any or all
Series, 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 Managing General Partners 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 Managing General Partners shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a holder of Shares 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.
Notwithstanding the foregoing, no Partner shall be entitled to receive the
return of any part of the contribution with respect to his Shares unless
all liabilities of the Fund, except obligations to General Partners and to
Limited Partners on account of their contributions, have been paid or there
remains property of the Fund or Series sufficient to pay them.
Any distribution to a Partner upon redemption pursuant to this Section
XI(a) shall constitute a return in full of the redeeming Partner's capital
contribution attributable to the Shares which are redeemed regardless of
the amount distributed with respect to such Shares, and such Partner shall
not be entitled to any other or additional distribution by reason of
Section 17-604 of the Partnership Act or otherwise. No consent of any of
the Partners shall be required for the redemption of any Shares or return
of the redeeming Partner's contribution.
The Managing General Partners may, but need not, cause this Agreement to be
amended to reflect the withdrawal of any Partner or the return, in whole or
in part, of the contribution of any Partner.
(b) Partial Returns of Contributions. Except upon dissolution of the Fund
or as provided in Section XI(a) hereof, no Partner has the right to redeem
his Shares or demand the return of any part of the contribution with
respect to his Shares. The Managing General Partners may, however, from
time to time, elect to make partial returns of contributions to Partners
who are the holders of Shares of any Series provided that:
(1) all liabilities of the relevant Series to persons other than Partners
(except those under Section V) have been paid or, in the judgment of the
Managing General Partners, there remains property of the Series sufficient
to pay them; and
(2) the consent, express or implied, of all Partners holding such Shares of
such Series is obtained.
For purposes of the foregoing provisions, the condition of subpart (2)
shall be deemed to have been satisfied if such distribution is made pro
rata to the holders of Shares of the relevant Series based upon the number
of Shares held by each such holder and in accordance with applicable tax
regulations. Each Limited Partner, by becoming a Limited Partner, consents
to any such pro rata distribution theretofore or thereafter made in
accordance with such provisions. Each General Partner, by becoming a
General Partner, consents to any such pro rata distribution theretofore or
thereafter made, authorized in accordance herewith. In the event subparts
(1) and (2) of the foregoing provisions are satisfied, the Managing General
Partners may, but need not, cause an appropriate amendment to this
Agreement to be executed.
XII. DISSOLUTION AND WINDING UP OF THE FUND.
(a) Term. The term of the Fund commenced on the date of initial filing of
the Certificate of Limited Partnership in the Office of the Secretary of
State of Delaware, and shall expire on December 31, 2051, on which date it
shall be dissolved, unless sooner dissolved as hereinafter provided.
(b) Dissolution of the Fund. The affairs of the Fund shall be wound up and
the Fund dissolved prior to the date of termination specified above, upon
the happening of any of the following events:
(1) The Fund disposes of all, or substantially all, of its assets;
(2) The Partners who are holders of a majority of the then outstanding
Shares of all Series, at a meeting called for the purpose, determine that
the Fund should be dissolved;
(3) The Managing General Partners determine by majority vote that the Fund
should be dissolved;
(4) A Managing General Partner resigns, is removed, dies, becomes bankrupt,
becomes incapacitated or retires, unless the remaining Managing General
Partners elect to continue the operations of the Fund. If the remaining
Managing General Partners so elect to continue the operations of the Fund,
they may, but need not, file an appropriate amendment to this Agreement
within 90 days after the event giving rise to such election;
(5) The Partners, at a meeting called by the Non-Managing General Partner
in accordance with the provisions of Section V(c), fail to elect one or
more successor Managing General Partners to continue the operations of the
Fund; or
(6) The Non-Managing General Partner withdraws and no successor
Non-Managing General Partner is admitted by the Managing General Partners
as provided in Section V(i), unless the Managing General Partners elect to
continue the operations of the Fund and at least one Managing General
Partner assumes the obligations of the Non-Managing General Partner under
Section IV(a)(2).
(c) Continuation of the Partnership Following Withdrawal of All General
Partners. Notwithstanding the provisions of Section XII(b) hereof, in the
event of the retirement, death, dissolution, bankruptcy, insanity, removal
or other withdrawal of all General Partners, the Fund shall not be
dissolved if, within 90 days following the date of withdrawal of the last
remaining General Partner, all Partners agree in writing to continue the
operations of the Fund and to the appointment, effective as of the date of
withdrawal of the last acting General Partner, of one or more successor
Managing General Partners and a successor Non-Managing General Partner.
XIII. DISTRIBUTION ON DISSOLUTION.
(a) Winding Up. Upon the dissolution of the Fund the Managing General
Partners or a liquidator appointed by the Managing General Partners, or, if
no Managing General Partners remain, a liquidator appointed by the
Non-Managing General Partner shall proceed to wind up the affairs of the
Fund and to liquidate its assets. The holders of Shares shall continue to
share profits and losses during dissolution in the same manner as before
dissolution. The proceeds from the liquidation of the assets of each
Series, after paying or providing for the payment of all liabilities of the
Series and the allowable costs of dissolution, shall be distributed, to the
extent permitted by the Partnership Act and applicable tax regulations, pro
rata among the holders of the Shares of the relevant Series in proportion
to the number of Shares. Notwithstanding the foregoing, upon the
dissolution and termination of the Fund the General Partners will
contribute to the Fund an amount equal to the lesser of (i) the deficit
balances, if any, in their Capital Accounts or (ii) the excess of 1.01
percent of the total capital contributions of the Limited Partners at the
time of dissolution of the Fund over the capital previously contributed by
the General Partners as long as current law, regulations, Internal Revenue
Service policy, or interpretations thereof, in the opinion of counsel,
require such contribution in order to enable the Fund or a Series to
qualify as a partnership for Federal income tax purposes.
(b) Accountant's Statement. Each of the Partners shall be furnished with
a statement prepared by the Fund's accountants which shall set forth the
assets and liabilities of the Fund as at the date of complete liquidation.
When the Managing General Partners have complied with the foregoing
distribution plan, the Limited Partners shall cease to be such, and the
Managing General Partners shall execute, acknowledge and cause to be filed
a Certificate of Cancellation of the Fund.
(c) Gains or Losses in Process of Liquidation. Any gain or loss on
disposition of the properties of any Series in the process of liquidation
shall be credited or charged equally among the outstanding Shares of the
Series in accordance with the allocation methods prescribed in Section VII
hereof. Any property distributed in kind in the liquidation shall be
valued and treated as though the property were sold and the cash proceeds
were distributed.
(d) Dissolution of Series. The dissolution of any Series shall be
accomplished in a manner consistent with the principles of this Section
XIII.
XIV. FUND DOCUMENTATION; AMENDMENT OF AGREEMENT; POWER OF ATTORNEY.
(a) Agreement and Other Documentation. The Managing General Partners have
caused the Certificate under the Partnership Act to be filed and recorded
in accordance with the Partnership Act in the Office of the Secretary of
the State of Delaware, and, to the extent believed required by local law,
in the appropriate place in each state in which the Fund may hereafter
establish a place of business. The Managing General Partners shall also
cause to be filed, recorded and published such statements of fictitious
business name and other notices, certificates, statements or other
instruments required by the provisions of any applicable law of the United
States or any state or other jurisdiction which governs the formation of
the Fund or the conduct of its business from time to time. (b) Amendment
of Certificate. The Certificate shall be amended upon the occurrence of
any event requiring amendment under the Partnership Act.
(c) Amendment of This Agreement. Except as otherwise required by this
Agreement, the Partnership Act or the 1940 Act, the Managing General
Partners may amend this Agreement with respect to all matters contained
herein. If any amendment requires the vote of the Partners, as specified
herein, under the Partnership Act or under the 1940 Act, upon the prior
affirmative vote of the Managing General Partners, such amendment shall be
voted upon as provided for in Section X hereof. Such amendments and
actions have the same force and effect as if they had received the
unanimous approval of the Partners, and any non-consenting Partner or
holder of Shares will be thereby bound. Notwithstanding the foregoing, no
such amendment shall affect the limited liability of the Limited Partners.
This Agreement need not be amended upon the admission or withdrawal of any
Limited Partners.
(d) Power of Attorney. Each of the Limited Partners by virtue of his
purchase of Shares and without the necessity of executing any
documentation, hereby makes, constitutes and appoints each person or party
who shall then be serving as a General Partner his true and lawful
attorney, for him and in his name, place and stead with full power of
substitution, to execute, acknowledge, make, swear to, verify, deliver,
record, file and/or publish: (a) this Agreement; (b) any Certificate of
Limited Partnership, and amendments to any such Certificate of Limited
Partnership; (c) any amendment to this Agreement or any other document to
reflect any action of the Partners provided for in this Agreement whether
or not such Limited Partner voted in favor of or otherwise consented to
such action; and (d) any other instrument, certificate or document,
provided such instrument, certificate or document is consistent with the
terms of this Agreement as then in effect.
Each Limited Partner acknowledges and agrees that the terms of this
Agreement permit certain amendments of this Agreement to be effected and
certain other actions to be taken or omitted by or with respect to the
Fund, in each case with the approval of less than all the Partners,
provided that the holders of a specified percentage of the Shares held by
the Partners shall have voted in favor of or otherwise consented to such
action or the Managing General Partners have so consented. Each Partner is
fully aware that he and each other Partner have granted this power of
attorney, and that all Partners will rely on the effectiveness of such
powers with a view to the orderly administration of the Fund's affairs.
The foregoing grant of authority (i) is a special power of attorney coupled
with an interest in favor of the General Partners and as such shall be
irrevocable and shall survive the death or insanity (or, in the case of a
Limited Partner that is a corporation, association, partnership, joint
venture, trust or other entity, shall survive the merger, dissolution or
other termination of the existence) of the Limited Partner, (ii) may be
exercised for the Limited Partner by a facsimile signature of any General
Partner of the Fund or by listing all the Limited Partners, including such
Limited Partner, or stating that all Limited Partners, while not
specifically named, are executing any instrument with a single signature or
facsimile of any General Partner acting as attorney-in-fact for all of
them, and (iii) shall survive the redemption by the Limited Partner of all
or any portion of his Shares.
(e) Power of Attorney by Additional Limited Partners. A similar power of
attorney may be one of the instruments which the General Partners, under
Section IX hereof, shall require a substituted Limited Partner to execute
as a condition of his admission. Such power of attorney may be set forth
on instructions distributed by the Fund to holders of Shares of any Series
from time to time.
(f) Technical Amendments. No vote, approval or other consent shall be
required of the Partners to amend this Agreement or the Certificate in any
of the following respects: (i) to reflect any change in the amount or
character of the contribution of any Limited Partner or General Partner;
(ii) to substitute or delete a Limited Partner; (iii) to admit any
additional Limited Partner; (iv) to reflect the retirement, resignation,
death, insanity or other withdrawal of a Managing General Partner; (v) to
reflect the termination of the status of a Non-Managing General Partner as
a General Partner; (vii) to change the name of the Fund or a Series; (viii)
to correct any false or erroneous statement, or to make a change in any
statement in order that such statement shall accurately represent the
agreement among the General and Limited Partners in this Agreement. Any
amendment reflecting the determination of the remaining General Partners to
continue the operations of the Fund upon the retirement, withdrawal, death,
dissolution, bankruptcy, insanity or removal of a General Partner need be
signed only by or on behalf of any one remaining Managing General Partner.
The execution of any such amendment on behalf of a Partner may be effected
by his attorney-in-fact.
XV. MISCELLANEOUS MATTERS.
(a) Use of the Name "Fidelity". Fidelity Management & Research Company
("FMR") has consented to the use by the Fund or any Series of the
identifying word "Fidelity" in the name of the Fund or any Series at some
future date. Such consent is conditioned upon the employment of FMR as
investment adviser of each Series. As between the Fund and FMR, FMR
controls the use of the name of the Fund 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 it may manage, advise, sponsor or own or
in which it may have a financial interest. FMR may require the Fund or any
Series thereof to cease using the identifying word "Fidelity" in the name
of the Fund or any Series thereof if the Fund or any Series thereof ceases
to employ FMR or a subsidiary or affiliate thereof as investment adviser.
(b) Custodian. All assets of the Fund shall be held by a Custodian meeting
the requirements of the 1940 Act, and may be registered in the name of the
Fund or such Custodian or a nominee. The terms of the Custodian Agreement
shall be determined by the Managing General Partners, which terms shall be
in accordance with the 1940 Act.
(c) Independent Activities. Each Partner reserves the right to conduct
activities similar to those conducted by the Fund.
(d) Interested Partners. The fact that a General Partner or one or more of
the Limited Partners is directly or indirectly interested in or connected
with any company or person with which or with whom the Fund may have
dealings, including, but not limited to, any company which renders
investment advisory, share transfer or related services, shall not preclude
such dealings or make them void or voidable, and the Fund or any of the
Partners shall not have any rights in or to such dealings or any profits
derived therefrom except any such rights as may inure under the 1940 Act.
(e) Tax Election. No election shall be made by any Partner to be excluded
from the application of the provisions of Subchapter K of the Code, or from
any similar provisions of state laws, and no such election shall be made by
the Fund.
(f) Insurance. The Managing General Partners shall procure and maintain
insurance concerning the Fund's activities in an amount and covering such
risks as may be appropriate in the judgment of the Managing General
Partners.
(g) Limitation of Liability. In connection with entering into any
contract, loan agreement, instrument or other document on behalf of the
Fund or Series with a third party, the Managing General Partners shall have
the absolute right to include therein provisions to the effect that such
contract, loan agreement, instrument or other document constitutes a
nonrecourse obligation of the Fund or Series only and that the Managing
General Partners shall have no liability thereon or thereunder, and in any
such case such third persons contracting with, extending credit to or
having claims against the Fund or Series shall look only to the assets of
the Fund or Series, as the case may be, for payment, and neither the
Partners, nor the Fund's officers, employees, agents or delegates, whether
past, present or future, shall be personally liable therefor.
(h) Notices. All notices required or permitted to be given under this
Agreement shall be in writing and shall be given to the parties at the
addresses set forth on Schedule "A" to this Agreement or the most recent
address provided by any holder of Shares and to the Fund, or at such other
address as any of the parties may hereafter specify in writing to the Fund.
(i) Captions. Paragraph titles or captions contained in this Agreement are
inserted only as a matter of convenience and for reference and in no way
define, limit, extend or describe the scope of this Agreement or the intent
of any provisions hereof.
(j) Variations in Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, singular or plural, as the
identity of the person or persons may require.
(k) Binding Agreement. This Agreement shall be binding on all of the
parties hereto, notwithstanding that all of the parties have not executed
the same.
(l) Benefit. Except as herein otherwise provided to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties
signatory hereto, and their respective heirs, executors, guardians,
representatives, successors and assigns.
(m) Nonrecourse Creditors. No creditor making a nonrecourse loan to the
Fund or any Series shall, by reason thereof, acquire any direct or indirect
interest in the profits, capital or property of the Fund or such Series
other than as a secured creditor.
(n) Agent for Service of Process. The Managing General Partners shall take
whatever action is necessary to designate an agent in Delaware upon whom
service of process upon the Fund may lawfully be made.
(o) Principles of Construction; Severability. This Agreement shall be
construed to the maximum extent possible to comply with all the provisions
of the 1940 Act and the Partnership Act. If, nevertheless, it shall be
determined by a court of competent jurisdiction that any provision or
wording of this Agreement shall be invalid or unenforceable under the 1940
Act, the Partnership Act or other applicable law, such invalidity or
unenforceability shall not invalidate the entire Agreement. In that case,
this Agreement shall be construed so as to limit any term or provision so
as to make it enforceable or valid within the requirements of such law,
and, in the event such term or provision cannot be so limited, this
Agreement shall be construed to omit such invalid or unenforceable
provision. References in this Agreement to the Fund's Prospectus shall be
understood to include any Prospectus for any one or more Series, and shall
include any Statement of Additional Information or other document
incorporated therein by reference. References in this Agreement to the
1940 Act shall be understood to include any exemptions from the provisions
of the 1940 Act that may be granted by the Securities and Exchange
Commission.
(p) Delaware Law. It is the intention of the parties that the internal
laws of the State of Delaware shall govern the validity of this Agreement,
the construction of its terms and the interpretation of the rights and
duties of the parties.
(q) Integrated Agreement. This Agreement constitutes the entire
understanding and agreement among the parties hereto with respect to the
subject matter hereof, and, except for any other written agreements and
representations which the Managing General Partners may require of the
Partners, there are no other agreements, understandings, restrictions,
representations or warranties among the parties other than those set forth
herein.
LG920410020
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements - A Statement of Assets and Liabilities for the
Fund is included in the Fund's Statement of Additional Information.
(b) Exhibits:
(1) (a) Certificate of Limited Partnership dated May 6, 1987 is
incorporated herein by reference to Exhibit 1 to the Registration Statement
No. 33-14195.
(b) First Amendment to Certificate of Limited Partnership dated July 28,
1987 is incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 1.
(c) Agreement of Limited Partnership dated May 7, 1987 is incorporated
herein by reference to Exhibit 1(c) to Post-Effective Amendment No. 1.
(d) Amended and Restated Agreement of Limited Partnership dated May 8,
1987 is incorporated herein by reference to Exhibit 1 to the Registration
Statement No. 33-14195.
(e) Amended and Restated Agreement of Limited Partnership dated July 31,
1987 is incorporated herein by reference to Exhibit 1(e) to Post-Effective
Amendment No. 1.
(f) Second Amendment to Certificate of Limited Partnership dated April
18, 1991 is incorporated herein by reference to Exhibit 1(f) to
Post-Effective Amendment No. 4.
(g) Third Amendment to Certificate of Limited Partnership dated April 16,
1992 is incorporated herein as Exhibit 1(g) to Post Effective Amendment No.
5.
(h) Fourth Amendment to Certificate of Limited Partnership dated April
16, 1992 is filed electronically herein.
(2) (a) Copies of the Bylaws of Fidelity U.S. Investments-Bond Fund, L.P.
are incorporated herein by reference to Exhibit 2 to the Registration
Statement No. 33-14195.
(b) Copies of the Amended and Restated Bylaws of Fidelity U.S.
Investments-Bond Fund, L.P. are incorporated herein by reference to Exhibit
2(b) to Pre-Effective Amendment No. 1.
(3) None.
(4) None.
(5) Amended Management Contract between Fidelity U.S. Investments-Bond
Fund, L.P. and Fidelity Management & Research Company dated April 16, 1992
is incorporated herein as Exhibit 5 to Post-Effective Amendment No. 5.
(6) (a) General Distribution Agreement between the Registrant and
Fidelity Distributors Corporation is incorporated herein by reference to
Exhibit 6(a) to Post-Effective Amendment No. 1.
(b) Amended General Distribution Agreement between the Registrant and
Fidelity Distributors Corporation is incorporated herein by reference to
Exhibit 6(b) to Post-Effective Amendment No. 3.
(7) None.
(8) None.
(9) (a) Master Service Agreement between Registrant, FMR Corp., and
Fidelity Service Co. is incorporated herein by reference to Exhibit 9(a) to
Post-Effective Amendment No. 1.
(b) Amendments to Schedule A and B of the Master Service Agreement dated
January 1, 1988 and March 1, 1988, respectively, are incorporated herein by
reference to Exhibit 9(b) to Post-Effective Amendment No. 3.
(c) Transfer Agent Agreement between Fidelity U.S. Investments-Bond
Fund, L.P. and Fidelity Investments Institutional Operations Company dated
January 1, 1988 is incorporated herein by reference to Exhibit 9(c) to
Post-Effective Amendment No. 3.
(10) Opinion and consent of counsel as to the legality of the securities
being registered is incorporated herein by reference to Exhibit 10 to
Pre-Effective Amendment No. 1.
(11) (a) Opinion of Price Waterhouse is incorporated herein as part of
the Financial Statements contained in the Statement of Additional
Information. Consent of Price Waterhouse is filed herein as Exhibit 11(a).
(b) Short form of opinion and consent of Gaston Snow & Ely Bartlett is
incorporated herein by reference to Exhibit 11(b) to Pre-Effective
Amendment No. 1.
(12) None.
(13) Written assurances that purchase representing initial capital was
made for investment purposes without any present intention of redeeming or
reselling is incorporated herein by reference to Exhibit 13 to
Pre-Effective Amendment No. 1.
(14) None.
(15) (a) Form of Distribution and Service Plan pursuant to Rule 12b-1
between Fidelity U.S. Investments-Bond Fund, L.P. and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 15(a) to
Pre-Effective Amendment No. 1.
(b) Form of Service agreements to be entered into between Fidelity
Distributors Corporation on behalf of the Registrant and the Qualified
Recipient are incorporated herein by reference to Exhibit 15(b) to
Post-Effective Amendment No. 1.
(16) Schedule for computation of each performance quotation provided in the
Registration Statement is incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 1.
Item 25. Persons Controlled by or Under Common Control with Registrant
The Board of Managing General Partners of Registrant is the same as the
Boards of other funds advised by FMR, each of which has Fidelity Management
& Research Company as its investment adviser. In addition, the officers of
these funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities
As of the effective date of this filing, the Fund has eleven (11) holders
of shares of beneficial interest.
Item 27. Indemnification
The Certificate and Agreement of Limited Partnership sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Managing General Partner or officer. It
states that the Registrant shall indemnify any present or past Managing
General Partner, officer and/or Director of a Corporate General Partner to
the fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action suit or
proceeding in which he is involved by virtue of his service as a partner,
officer, director of combination thereof. Additionally, amounts paid or
incurred in settlement of such matters are covered by this indemnification.
Indemnification will not be provided in certain circumstances, however.
These include instances of willful misfeasance, bad faith, gross
negligence, and reckless disregard of the duties involved in the conduct of
the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee, President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President None
Thomas W. Littauer Senior Vice President None
William J. Kearns Senior Vice President None
Harry Anderson Treasurer None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the fund's custodian
Fidelity Management Trust Company, 82 Devonshire Street, Boston, MA 02109,
and by the Fund's Transfer Agent, Fidelity Investment Institutional
Company, 82 Devonshire Street, Boston, MA 02109
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) The Fund undertakes to file a post-effective amendment, using
financial statements which need not be certified, within six months from
the commencement of operations of the Fund.
LG920640001
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 7 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 11 day of October 1994.
Fidelity U.S. Investments-Bond Fund, L.P.
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Managing General Partner October 11, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer October 11, 1994
Gary L. French
/s/J. Gary Burkhead Managing General Partner October 11, 1994
J. Gary Burkhead
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Ralph F. Cox * Managing General Partner October 11, 1994
</TABLE>
Ralph F. Cox
/s/Phyllis Burke Davis * Managing General Partner October 11, 1994
Phyllis Burke Davis
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Richard J. Flynn * Managing General Partner October 11, 1994
</TABLE>
Richard J. Flynn
<TABLE>
<CAPTION>
<S> <C> <C>
/s/E. Bradley Jones * Managing General Partner October 11, 1994
</TABLE>
E. Bradley Jones
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Donald J. Kirk * Managing General Partner October 11, 1994
</TABLE>
Donald J. Kirk
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Peter S. Lynch * Managing General Partner October 11, 1994
</TABLE>
Peter S. Lynch
/s/Edward H. Malone * Managing General Partner October 11, 1994
Edward H. Malone
/s/Marvin L. Mann_____* Managing General Partner October 11, 1994
Marvin L. Mann
/s/Gerald C. McDonough* Managing General Partner October 11, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Managing General Partner October 11, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as President and Board Member (collectively, the "Funds"), hereby
severally constitute and appoint J. Gary Burkhead, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
sign for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorney-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as a Board Member (collectively, the "Funds"), hereby severally
constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C.
Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each
of them singly, my true and lawful attorneys-in-fact, with full power of
substitution, and with full power to each of them, to sign for me and in my
name in the appropriate capacity, all Pre-Effective Amendments to any
Registration Statements of the Funds, any and all subsequent Post-Effective
Amendments to said Registration Statements, any Registration Statements on
Form N-14, and any supplements or other instruments in connection
therewith, and generally to do all such things in my name and behalf in
connection therewith as said attorneys-in-fact deem necessary or
appropriate, to comply with the provisions of the Securities Act of 1933
and Investment Company Act of 1940, and all related requirements of the
Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact or their substitutes may do or cause to be done
by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Special Situations Fund
Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P.
Fidelity Advisor Series VI Fidelity Trend Fund
Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities
Fidelity Contrafund Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Spartan U.S. Treasury Money Market
Fidelity Fixed-Income Trust Fund
Fidelity Government Securities Fund Variable Insurance Products Fund
Fidelity Hastings Street Trust Variable Insurance Products Fund II
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as a Board Member (collectively, the "Funds"), hereby severally
constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C.
Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each
of them singly, my true and lawful attorneys-in-fact, with full power of
substitution, and with full power to each of them, to sign for me and in my
name in the appropriate capacity, all Pre-Effective Amendments to any
Registration Statements of the Funds, any and all subsequent Post-Effective
Amendments to said Registration Statements, any Registration Statements on
Form N-14, and any supplements or other instruments in connection
therewith, and generally to do all such things in my name and behalf in
connection therewith as said attorneys-in-fact deem necessary or
appropriate, to comply with the provisions of the Securities Act of 1933
and Investment Company Act of 1940, and all related requirements of the
Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact or their substitutes may do or cause to be done
by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Marvin L. Mann October 20, 1993
Marvin L. Mann
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as a Board Member (collectively, the "Funds"), hereby severally
constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C.
Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each
of them singly, my true and lawful attorneys-in-fact, with full power of
substitution, and with full power to each of them, to sign for me and in my
name in the appropriate capacity, all Pre-Effective Amendments to any
Registration Statements of the Funds, any and all subsequent Post-Effective
Amendments to said Registration Statements, any Registration Statements on
Form N-14, and any supplements or other instruments in connection
therewith, and generally to do all such things in my name and behalf in
connection therewith as said attorneys-in-fact deem necessary or
appropriate, to comply with the provisions of the Securities Act of 1933
and Investment Company Act of 1940, and all related requirements of the
Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact or their substitutes may do or cause to be done
by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
EXHIBIT 1(h)
FOURTH AMENDMENT TO
CERTIFICATE OF LIMITED PARTNERSHIP OF
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P.
This Fourth Amendment to the certificate of Limited Partnership (the
"Certificate") of Fidelity U.S. Investments - Bond Fund, L.P. (the "Fund")
is being executed as of April 16, 1992 for the purpose of amending the
terms of the Certificate, as originally filed in the Office of the
Secretary of State of the State of Delaware on May 7, 1987 and amended on
July 28, 1987, further amended on April 18, 1991, and further amended April
16, 1992 to reflect (i) the withdrawal of a General Partner, (ii) the
admission of an additional General Partners and (iii) the continuation of
the business of the Fund.
NOW, THEREFORE, the undersigned hereby certify as follows:
1. The Certificate is hereby amended by deleting Section 3 and inserting
in lieu thereof the following new Section 3:
3. Name and Address of General Partners. The names and business addresses
of the General Partners of the Fund are as follows:
Edward C. Johnson, 3d
82 Devonshire Street
Boston, Massachusetts
J. Gary Burkhead
82 Devonshire Street
Boston, Massachusetts
Ralph F. Cox
200 Rivercrest Drive
Fort Worth, Texas
Phyllis Burke Davis
340 E. 64th Street
New York, New York
Richard J. Flynn
77 Fiske Hill
Sturbridge, Massachusetts
E. Bradley Jones
30195 Chagrin Boulevard, Suite 104W
Pepper Pike, Ohio
Donald J. Kirk
680 Steamboat Road, Apt. 1 - North
Greenwich, Connecticut
Peter S. Lynch
82 Devonshire Street
Boston, Massachusetts
Marvin L. Mann
55 Railroad Avenue
Greenwich , Connecticut
Gerald C. McDonough
135 Aspenwood Drive
Cleveland, Ohio
Edward H. Malone
5601 Turtle Bay Drive, #404
Naples, Florida
Thomas R. Williams
1320 First Atlanta Tower
2 Peachtree Street, N.W.
Atlanta, Georgia
Bertram H. Witham
89 Fox Hill Road
Stamford, Connecticut
Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
2. Except as amended pursuant to paragraph 1 hereof, the Certificate is
hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, the undersigned have duly executed this Fourth
Amendment to the Certificate as of the day and year first written above.
GENERAL PARTNERS
____________________________ ____________________________
Edward C. Johnson 3d E. Bradley Jones
Managing General Partner Managing General Partner
______________________________ _____________________________
J. Gary Burkhead Peter S. Lynch
Managing General Partner Managing General Partner
____________________________ _______________________________
Ralph F. Cox Gerald C. McDonough
Managing General Partner Managing General Partner
______________________________ ________________________________
Richard J. Flynn Edward H. Malone
Managing General Partner Managing General Partner
______________________________ _________________________________
Donald J. Kirk Thomas R. Williams
Managing General Partner Managing General Partner
FIDELITY MANAGEMENT & RESEARCH COMPANY
_______________________________
J. Gary Burkhead, President
LIMITED PARTNER
________________________________
Arthur S. Loring
ADDITIONAL GENERAL PARTNERS
_____________________________ ______________________
Phyllis Davis Burke Marvin L. Mann
Managing General Partner Managing General Partner
AMENDED SCHEDULE A
Fidelity U.S. Investments - Bond Fund, L.P.
October 14, 1993
Capital Contribution Number of Shares
Managing General Partners
Edward C. Johnson, 3d $10 1
82 Devonshire Street
Boston, Massachusetts
J. Gary Burkhead $10 1
82 Devonshire Street
Boston, Massachusetts
Ralph F. Cox $10 1
82 Devonshire Street
Boston, Massachusetts
Phyllis Burke Davis $10 1
340 E. 64th Street
New York, New York
Richard J. Flynn $10 1
77 Fiske Hill
Sturbridge, Massachusetts
E. Bradley Jones $10 1
30195 Chagrin Boulevard
Suite 104W
Pepper Pike, Ohio
Donald J. Kirk $10 1
680 Steamboad Road, Apt. 1 - North
Greenwich, Connecticut
Peter S. Lynch $10 1
82 Devonshire Street
Boston, Massachusetts
Gerald C. McDonough $10 1
135 Aspenwood Drive
Cleveland, Ohio
Edward H. Malone $10 1
5601 Turtle Bay Drive, #404
Naples, Florida
Marvin L. Mann $10 1
55 Railroad Avenue
Greenwich , Connecticut
Thomas R. Williams $10 1
1320 First Atlanta Tower
2 Peachtree Street, N.W.
Atlanta, Georgia
Non-Managing General Partner
Fidelity Management & $10 1
Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Limited Partner
Arthur S. Loring $10 1
82 Devonshire Street
Boston, Massachusetts
FIDELITY U.S. INVESTMENTS - BOND FUND, L.P.
Written Consent of Initial Shareholders in lieu of Special Meeting
October 14, 1993
The undersigned, being the shareholders of the outstanding shares of
Fidelity U.S. Investments - Bond Fund, L.P., a Delaware Limited Partnership
(the "Fund"), hereby consent to the taking of the action set forth below as
though said action had been taken at Special Meeting of Shareholders:
APPROVAL OF ADDITIONAL MANAGING GENERAL PARTNERS TO THE FUND
VOTED: That the Managing General Partners of the Fidelity U.S. Investments
- - Bond Fund, L.P., pursuant to Section V(j) of the Amended and Restated
Agreement of Limited Partnership do hereby elect to approve the admission
of the following Managing General Partners:
Phyllis Burke Davis
Marvin L. Mann
The undersigned, being the shareholders of the outstanding shares of
Fidelity U.S. Investments - Government Securities Fund, L.P., a Delaware
Limited Partnership (the "Fund"), hereby ascertain that Bertram H. Witham
retired as Managing General Partner effective September 1, 1993.
APPROVAL TO CONTINUE THE OPERATIONS OF THE FUND
VOTED: That as Bertram H. Witham has retired as Managing General Partner to
Fidelity Investments - Bond Fund, L.P., the remaining Managing General
Partners, pursuant to Section V(a) of the Amended and Restated Agreement of
Limited Partnership do hereby agree to continue the business of the
Partnership:
GENERAL PARTNERS
____________________________ ____________________________
Edward C. Johnson 3d E. Bradley Jones
Managing General Partner Managing General Partner
______________________________ _____________________________
J. Gary Burkhead Peter S. Lynch
Managing General Partner Managing General Partner
_____________________________ _______________________________
Ralph F. Cox Gerald C. McDonough
Managing General Partner Managing General Partner
______________________________ ________________________________
Richard J. Flynn Edward H. Malone
Managing General Partner Managing General Partner
______________________________ _________________________________
Donald J. Kirk Thomas R. Williams
Managing General Partner Managing General Partner
FIDELITY MANAGEMENT & RESEARCH COMPANY
_______________________________
J. Gary Burkhead, President
LIMITED PARTNER
________________________________
Arthur S. Loring
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 7 to the
registration statement on Form N-1A (the "Registration Statement") of our
report dated October 11, 1994, relating to the financial statements of
Fidelity U.S. Investments - Bond Fund, L.P. which is included in such
Statement of Additional Information. We also consent to the reference to
us under the heading "Auditor" in such Statement of Additional
Information.
PRICE WATERHOUSE
Boston, Massachusetts
October 11, 1994
