SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-15983)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 27 [X]
and
REGISTRATION STATEMENT (No. 811-5251)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 27 [X]
Fidelity Concord Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Arthur S. Loring, Secretary
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).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( x ) on ( September 6, 1997 ) pursuant to paragraph (a)(1) of Rule 485
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule on or before April 29, 1998.
FIDELITY CONCORD STREET TRUST
SPARTAN TOTAL MARKET INDEX FUND
SPARTAN EXTENDED MARKET INDEX FUND
SPARTAN INTERNATIONAL INDEX FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; Who May Want to Invest
3 a .............................. *
b .............................. *
c, d .............................. *
4 a i............................. Charter
ii........................... Investment Principles and Risks
b .............................. Investment Principles and Risks
c .............................. Who May Want to Invest; Investment Principles
and Risks
5 a .............................. Charter
b i............................. Charter; Doing Business with Fidelity
ii........................... Charter
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Charter
f .............................. Expenses; Breakdown of Expenses
g i............................. Charter
.
ii............................ *
..
5 A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... Charter
b ............................. Charter
c .............................. Transaction Details; Exchange Restrictions
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
h .............................. *
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Cover Page; Charter
b .............................. Expenses; How to Buy Shares; Transaction Details
c .............................. *
d .............................. How to Buy Shares
e .............................. *
f .............................. Breakdown of Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
SPARTAN(registered trademark)
INDEX
FUNDS
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the funds' Statement of Additional Information (SAI) dated
September __, 1997. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, call Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, Federal
Reserve Board, or any other agency, and are subject to investment risks,
including possible loss of principal amount invested.
statement becomes effective. This Prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
such state.
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
SIF-pro -0997
Each fund seeks a total return that corresponds to that of a specific
index.
SPARTAN TOTAL MARKET INDEX FUND seeks a total return that corresponds to
that of the Wilshire 5000 Equity Index (Wilshire 5000).
(fund number 397)
SPARTAN EXTENDED MARKET INDEX FUND seeks a total return that corresponds to
that of the Wilshire 4500 Equity Index (Wilshire 4500).
(fund number 398)
SPARTAN INTERNATIONAL INDEX FUND seeks a total return that corresponds to
that of the Morgan Stanley Capital International Europe, Australasia,
Far-East (EAFE(registered trademark)) Index.
(fund number 399)
PROSPECTUS
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109 SEPTEMBER __, 1997
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly
operating expenses.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking
money out and closing your
account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
APPENDIX
KEY FACTS
THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager. Bankers Trust Company (BT) is a
wholly owned subsidiary of Bankers Trust New York Corporation, the seventh
largest bank holding company in the United States. BT currently serves as
sub-adviser to each fund and manages each Fund's portfolio.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
SPARTAN TOTAL MARKET INDEX
GOAL: Total return that corresponds to that of the Wilshire 5000 Equity
Index.
STRATEGY: Invests in equity securities included in the Wilshire 5000.
SPARTAN EXTENDED MARKET INDEX
GOAL: Total return that corresponds to that of the Wilshire 4500 Equity
Index.
STRATEGY: Invests in equity securities included in the Wilshire 4500.
SPARTAN INTERNATIONAL INDEX
GOAL: Total return that corresponds to that of the Morgan Stanley Capital
International Europe, Australasia, Far East (EAFE) Index.
STRATEGY: Invests in international equity securities included in the EAFE.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who are willing to ride out
stock market fluctuations in pursuit of potentially high long-term returns.
The funds are designed for those who want to pursue growth of capital
through portfolios of securities that broadly represent a specific market
or markets. Spartan Total Market Index attempts to replicate the broad U.S.
market by investing in securities of companies in the Wilshire 5000.
Spartan Extended Market Index attempts to replicate the small- to
mid-capitalization market by investing in securities of companies in the
Wilshire 4500. Spartan International Index attempts to replicate the
international markets by investing in securities of companies in the EAFE.
The funds seek to keep expenses low as they attempt to match the return of
their indices.
Because the funds seek to track, rather than beat, the performance of a
specific market index, they are not managed in the same way as other mutual
funds. For these index funds, BT's approach to investing emphasizes
broad diversification and low portfolio turnover. BT generally will
not judge the merits of any particular stock as an investment. Therefore,
you should not expect to achieve the potentially greater results that could
be obtained by funds that aggressively seek growth or funds that attempt to
limit losses in a falling market.
The value of the funds' investments will vary from day to day, and
generally reflect market conditions, interest rates, and other company,
political, or economic news both here and abroad. In the short term, stock
prices can fluctuate dramatically in response to these factors. The
securities of small, less well-known companies may be more volatile than
those of larger companies. Over time, however, stocks have shown greater
growth potential than other types of securities. Investments in foreign
securities may involve risks in addition to those of U.S. investments,
including increased political and economic risk, as well as exposure to
currency fluctuations. When you sell your shares, they may be worth more or
less than what you paid for them. By themselves, the funds do not
constitute a balanced investment plan.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the GROWTH category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(solid bullet) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(right arrow) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or
sell shares of a fund. In addition, you may be charged an annual index
account fee if your account balance falls below $25,000. See "Transaction
Details," page , for an explanation of how and when these charges apply.
Maximum sales charge on purchases None
and reinvested distributions
Deferred sales charge on redemptions None
Exchange fee None
Redemption fee None
Purchase fee (as a % of amount invested)
Spartan Total Market Index 0.50
%
Spartan Extended Market Index 0.75
%
Spartan International Index 1.00
%
Annual index account fee (for accounts $10.0
under $25,000) 0
The purchase fee is paid to the fund, not Fidelity or BT , and is not
a sales charge.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays management fee s to FMR and BT . It also
incurs other expenses for services such as maintaining shareholder records
and furnishing shareholder statements and financial reports. A fund's
expenses are factored into its share price or dividends and are not charged
directly to shareholder accounts (see "Breakdown of Expenses" page
).
The following figures are based on estimated expenses of each fund
and are calculated as a percentage of average net assets of each
fund .
SPARTAN TOTAL MARKET INDEX
Management fee 0.25
%
12b-1 fee None
Other expenses (after reimbursement) 0.01
%
Total fund operating expenses 0.2 6
(after reimbursement) %
SPARTAN EXTENDED MARKET INDEX
Management fee 0.25
%
12b-1 fee None
Other expenses (after reimbursement) 0.01
%
Total fund operating expenses 0.2 6
(after reimbursement) %
SPARTAN INTERNATIONAL INDEX
Management fee 0.40
%
12b-1 fee None
Other expenses (after reimbursement) 0.01
%
Total fund operating expenses 0. 41
(after reimbursement) %
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of expenses
for portfolio management,
shareholder statements, tax
reporting, and other services.
As an investor, you pay some
of these costs directly (for
example, each fund's purchase
fee). Other costs are paid from
the fund's assets; their effect is
already factored into any
quoted share price or return.
(checkmark)
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
SPARTAN TOTAL MARKET INDEX
After 1 year $ 8
After 3 years $ 13
SPARTAN EXTENDED MARKET INDEX
After 1 year $ 10
After 3 years $ 1 6
SPARTAN INTERNATIONAL INDEX
After 1 year $ 14
After 3 years $ 2 3
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FMR has voluntarily agreed to reimburse Spartan Total Market Index, Spartan
Extended Market Index, and Spartan International Index, to the extent that
total operating expenses (with the exceptions noted below) exceed
0.25%, 0.25% and 0.35%, respectively, of its average net assets through
December 31, 1999. If these agreements were not in effect, the management
fee, other expenses and total operating expenses, as a percentage of
average net assets of each fund, based on estimated expenses, would be the
following amounts: 0. 25 %, 0. 35 % and 0. 60 % for Spartan
Total Market Index; 0.2 5 %, 0. 37 % and 0. 62 % for
Spartan Extended Market Index; and 0. 40 %, 0. 38 %, and
0. 78 % for Spartan International Index. Expenses eligible for
reimbursement do not include interest, taxes, brokerage commissions,
and other transaction costs or extraordinary expenses. In addition,
sub-advisory fees associated with securities lending are not eligible for
reimbursement.
PERFORMANCE
Mutual fund performance is commonly measured as total return. This section
would normally show how each fund has performed over time. Because each
fund was new when this prospectus was printed, their performance is not
included. Twice a year, you will receive a report detailing each fund's
recent strategies, performance, and holdings. For current performance or a
free annual report, call 1-800-544-8888.
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results. Average annual total returns covering periods
of less than one year assume that performance will remain constant for the
rest of the year.
UNDERSTANDING
PERFORMANCE
Because these funds invest in
stocks, their performance is
related to that of the segments
of the stock market in which
they invest. Historically, stock
market performance has been
characterized by volatility in
the short run and growth in the
long run. Investing in foreign
markets means assuming
greater risks than investing in
the United States due to
factors like changes in a
country's financial markets, its
local, political, and economic
climate, and the value of its
currency.
(checkmark)
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a widely
recognized, unmanaged index of common stocks.
WILSHIRE 5000 is an unmanaged, market capitalization-weighted index of
approximately 7,000 U.S. equity securities.
WILSHIRE 4500 is an unmanaged, market capitalization-weighted index of
approximately 6,500 U.S. equity securities. The Wilshire 4500 includes all
the stocks in the Wilshire 5000 except for stocks included in the S&P 500.
MSCI EAFE is an unmanaged index of over 1,000 foreign equity securities.
The charts on the following page present calendar year performance of the
Wilshire 5000, Wilshire 4500, and the MSCI EAFE. The charts illustrate the
volatility of the returns of the Wilshire 5000, Wilshire 4500 and the MSCI
EAFE. The charts measure total return based on the period's change in
price, dividends paid on stocks in the index, and for the MSCI EAFE Index
the effect of reinvesting dividends after adjustments for dividend
withholdings by foreign governments or tax credits.
Unlike each fund's returns, the total returns of each comparative index do
not include the effect of any brokerage commissions, transaction fees, or
other costs of investing.
Illustrations of fund performance may show moving averages over specified
periods.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Wilshire 5000 2.27% 17.94% 29.17% -6.18% 34.21% 8.97% 11.28% -0.06% 36.
45% 21.21%
Percentage (%)
Row: 1, Col: 1, Value: 2.27
Row: 2, Col: 1, Value: 17.94
Row: 3, Col: 1, Value: 29.17
Row: 4, Col: 1, Value: -6.18
Row: 5, Col: 1, Value: 34.21
Row: 6, Col: 1, Value: 8.970000000000001
Row: 7, Col: 1, Value: 11.28
Row: 8, Col: 1, Value: -0.06
Row: 9, Col: 1, Value: 36.45
Row: 10, Col: 1, Value: 21.21
(LARGE SOLID BOX) Wilshire
5000
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Wilshire 4500 -3.51% 20.54 23.94% -13.56% 43.45% 11.87% 14.57% -2.66% 33.
48% 17.18%
Percentage (%)
Row: 1, Col: 1, Value: -3.51
Row: 2, Col: 1, Value: 20.54
Row: 3, Col: 1, Value: 23.94
Row: 4, Col: 1, Value: -13.56
Row: 5, Col: 1, Value: 43.45
Row: 6, Col: 1, Value: 11.87
Row: 7, Col: 1, Value: 14.57
Row: 8, Col: 1, Value: -2.66
Row: 9, Col: 1, Value: 33.48
Row: 10, Col: 1, Value: 17.18
(LARGE SOLID BOX) Wilshire
4500
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
MSCI EAFE 24.63% 28.27% 10.53% -23.45% 12.13% -12.17% 32.56% 7.78
% 11.21% 6.05%
Percentage (%)
Row: 1, Col: 1, Value: 24.63
Row: 2, Col: 1, Value: 28.27
Row: 3, Col: 1, Value: 10.53
Row: 4, Col: 1, Value: -23.45
Row: 5, Col: 1, Value: 12.13
Row: 6, Col: 1, Value: -12.17
Row: 7, Col: 1, Value: 32.56
Row: 8, Col: 1, Value: 7.78
Row: 9, Col: 1, Value: 11.21
Row: 10, Col: 1, Value: 6.05
(LARGE SOLID BOX) MSCI EAFE
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
Fidelity Concord Street Trust, an open-end management investment company
organized as a Massachusetts business trust on July 21, 1987.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity or BT .
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs. BT,
the funds' sub-adviser, chooses the funds' investments. FMR supervises the
sub-adviser and, in conjunction with the Board of Trustees, reviews the
sub-advisers's performance of its duties.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Company, Inc. (FSC) performs transfer
agent servicing functions for each fund.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
BT AND ITS AFFILIATES
BT is the sub-adviser of each fund, and acts as each fund's custodian.
BT, a New York banking corporation with principal offices at 130 Liberty,
New York, New York 10006, is a wholly owned subsidiary of Bankers Trust New
York Corporation.
BT, subject to the supervision and direction of the Board of Trustees and
FMR, makes investment decisions for each fund, places orders to buy, sell
and lend the funds' investments and manages each fund in accordance with
its investment objectives and policies. BT may utilize the expertise of
any of its worldwide subsidiaries and affiliates to assist in its role as
sub-adviser. BT places orders for portfolio transactions with
broker-dealers and other firms of its choosing, which may include
affiliates of BT or FMR. A BT or FMR affiliate will be used in connection
with a fund's transactions only if BT believes that the affiliate's charge
for the transaction does not exceed usual and customary levels.
BT investment personnel may invest in securities for their own accounts
pursuant to a code of ethics that establishes procedures for personal
investing and restricts certain transactions.
BT may use FMR and BT broker-dealer affiliates and other firms that sell
fund shares to carry out a fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those of
other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The value of the funds' domestic and foreign investments varies in response
to many factors. Stock values fluctuate in response to the activities of
individual companies, and general market and economic conditions.
Investments in foreign securities may involve risks in addition to those of
U.S. investments, including increased political and economic risk, as well
as exposure to currency fluctuations. Investments in small-capitalization
stocks may involve greater risk than investing in medium and
large-capitalization stocks, since they can be subject to more abrupt or
erratic movements. Small-capitalization companies may have more limited
product lines, markets or financial resources.
When you sell your shares of a fund, they may be worth more or less than
what you paid for them.
SPARTAN TOTAL MARKET INDEX FUND seeks to provide investment results that
correspond to the total return of a broad range of United States stocks.
To achieve this objective, Spartan Total Market Index attempts to match the
total return of the Wilshire 5000. The Wilshire 5000 is a
capitalization-weighted index of approximately 7,000 common stocks of
companies headquartered in the United States.
The Wilshire 5000 comprises all stocks of companies headquartered in the
United States for which market prices are readily available. The Wilshire
5000 includes all of the stocks in the S&P 500 except for a small number of
foreign stocks that represent approximately 4% of the S&P 500. The domestic
S&P 500 stocks account for approximately 70% of the capitalization of the
Wilshire 5000.
SPARTAN EXTENDED MARKET INDEX FUND seeks to provide investment results that
correspond to the total return of stocks of mid- to small-capitalization
United States companies.
To achieve this objective, Spartan Extended Market Index attempts to match
the total return of the Wilshire 4500. The Wilshire 4500 is a
capitalization-weighted index of over 6500 common stocks of companies
headquartered in the United States. The Wilshire 4500 includes all stocks
in the Wilshire 5000 except for the stocks included in the S&P 500.
Although some of the companies in the Wilshire 4500 have large market
capitalizations, excluding the S&P 500 stocks makes the Wilshire 4500, on
average, more representative of medium- to small-capitalization stocks.
SPARTAN INTERNATIONAL INDEX FUND seeks to provide investment results that
correspond to the total return of foreign stock markets.
To achieve this objective, Spartan International Index attempts to match
the total return of the EAFE. The EAFE is a capitalization-weighted index
that currently includes stocks of companies located in 14 European
countries (Austria, Belgium, Denmark, Finland, France, Germany, Ireland,
Italy, the Netherlands, Norway, Spain, Sweden, Switzerland, and the United
Kingdom), Australia, New Zealand, Hong Kong, Japan, Malaysia, and
Singapore. The index returns, for periods after January 1, 1997, are
adjusted for tax withholding rates applicable to U.S.-based mutual funds
organized as Massachusetts business trusts.
The EAFE is designed to be representative of developed countries only, and
does not include most emerging market stocks. It is also important to note
that Japan, as the largest-capitalization country outside the U.S.,
currently represents approximately 30% of the EAFE and has represented over
60% of the EAFE in the past.
EACH OF THE FUNDS invests in a mix of securities designed to match its
index's performance. Under normal conditions each fund seeks to invest at
least 80% of its assets in the stocks included in its index.
BT may use statistical sampling techniques to attempt to replicate
the returns of the indices using a smaller number of securities. These
statistical sampling techniques take into account such factors as
capitalization, industry exposures, dividend yield, price/earnings ratio,
price/book ratio, earnings growth and, for Spartan International Index
Fund, country weightings and the effect of foreign taxes, and attempt to
match the investment characteristics of the indices and the funds.
The funds may not track their indexes perfectly. Differences between the
index and a fund's portfolio may cause differences in performance. In
addition, the funds' ability to replicate their indices' returns will
depend to some extent on the size and frequency of cash flows into and out
of the funds. Transactions by fund investors may have a greater impact on
Spartan International Index because they are effected at 4:00 p.m. Eastern
time, when most foreign markets are closed. As a result, the fund may not
be able to place trades to reflect shareholder transactions until foreign
markets re-open.
Even if the funds' investments match their indices exactly, their returns
could differ on a day-to-day basis because of differences in how the funds
and the indices are valued. The funds normally value all of their
investments at 4:00 p.m. Eastern time. The indices are valued by their
sponsors, who may use different closing prices , currency exchange
rates or dividend reinvestment assumptions than the funds do.
Each fund seeks to achieve a 98% or better correlation between its total
return and the total return of its index. BT uses an indexing
technique to structure the funds' portfolios similarly to that of their
indices. BT monitors correlation between the performance of the
funds and that of their indices on a monthly basis. Correlation is measured
by comparing the funds' monthly total returns to those of their indices
over the most recent 36-month period. In the unlikely event that a fund
cannot achieve a correlation of 98% or better, the Trustees will consider
alternative arrangements.
The funds may use various techniques, such as stock index futures, to match
the funds' performance to their indices.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies BT may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in a fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
BT may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to shareholders
twice a year. For a free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTIONS: With respect to 75% of total assets, each fund may not
purchase more than 10% of the outstanding voting securities of a single
issuer. This limitation does not apply to securities of other investment
companies.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. All of these
factors can make foreign investments, especially those in developing
countries, more volatile than U.S. investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also may
involve greater risk of loss if the counterparty defaults. Some
counterparties in these transactions may be less creditworthy than those in
U.S. markets.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, currency
exchange rates, or other factors that affect security values. These
techniques may involve derivative transactions such as buying and selling
options and futures contracts, entering into currency exchange contracts or
swap agreements, and purchasing indexed securities.
BT can use these practices in its efforts to track the returns of
each fund's index. If BT judges market conditions incorrectly or
employs a strategy that does not correlate well with a fund's investments,
these techniques could result in a loss, regardless of whether the intent
was to reduce risk or increase return. These techniques may increase the
volatility of a fund and may involve a small investment of cash relative to
the magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not perform as
promised.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
BT , under the supervision of the Board of Trustees and FMR ,
to be illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities and some other
securities may be subject to legal restrictions. Difficulty in selling
securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include securities of other investment companies.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income while maintaining a stable $1.00 share price.
The funds may also invest in similar money market funds managed by BT or
other investment managers. A major change in interest rates or a
default on a money market fund's investments could cause its share
price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any issuer. This limitation does not apply to U.S. Government
securities or to securities of other investment companies.
A fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
incom e. BT receives a portion of securities lending income as a
sub-advisory fee. Securities lending could result in a loss or a delay
in recovering a fund's securities. A fund may also lend money to other
funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
SPARTAN TOTAL MARKET INDEX FUND seeks to provide investment results that
correspond to the total return of a broad range of United States stocks.
SPARTAN EXTENDED MARKET INDEX FUND seeks to provide investment results that
correspond to the total return of stocks of mid-to small-capitalization
United States companies.
SPARTAN INTERNATIONAL INDEX FUND seeks to provide investment results that
correspond to the total return of foreign stock markets.
With respect to 75% of its total assets, each fund may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any one issuer and may not purchase more than 10% of the outstanding
voting securities of a single issuer. These limitations do not apply to
U.S. Government securities or to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government securities.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affair s. FMR and each fund pay fees to BT for
managing each fund's investments, administering its securities lending
program, and for custodial services. Each fund also pays OTHER
EXPENSES, which are explained on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
M anagement fee s are calculated and paid to FMR and BT
every month. Spartan Total Market Index, Spartan Extended Market Index
and Spartan International Index pay fees at the annual rates of
0.2 5 %, 0.2 5 % and 0. 40 %, respectively, of their average
net assets. These fees include management fees of 0.24%, 0.24% and
0.34%, respectively, payable to FMR, and estimated sub-advisory fees of
0.01%, 0.01% and 0.06% payable to BT (representing 40% of net income from
securities lending).
FMR has voluntarily agreed to limit each fund's total operating expenses
(excluding sub-advisory fees associated with securities lending, interest,
taxes, brokerage commissions and other transaction costs or extraordinary
expenses) to an annual rate of 0.25%, 0.25%, and 0.35% of average net
assets for Spartan Total Market Index, Spartan Extended Market Index and
Spartan International Index, respectively. These agreements will continue
until December 31, 1999.
FMR HAS SUB-ADVISORY AGREEMENTS with BT on behalf of each fund. BT is
compensated for providing investment management, securities lending and
custodial services to each fund. For such services, FMR pays BT fees at an
annual rate of 0.0125%, 0.0125% and 0.0650% of average net assets for
Spartan Total Market Index Fund, Spartan Extended Market Index Fund and
Spartan International Index Fund, respectively. In addition, each fund pays
BT securities lending fees equal to 40% of net income from each fund's
securities lending program. The remaining 60% of net income from each
fund's securities lending program goes to each fund. FMR also pays BT up to
$200,000 annually for sub-advisory and custodial services provided to
Spartan International Index Fund.
OTHER EXPENSES
While m anagement fee s a re a significant component of
the funds' annual operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions
and valuing each fund's investments .
To offset shareholder service costs, FSC also collects each fund's annual
index account fee of $10.00 per account.
The funds also pay other expenses, such as legal and audit fees;
proxy solicitation costs; and the compensation of trustees who are not
affiliated with Fidelity.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan recognizes
that FMR may use its management fee revenues, as well as its past profits
or its resources from any other source, to pay FDC for expenses incurred in
connection with the distribution of fund shares. FMR directly, or through
FDC, may make payments to third parties, such as banks or broker-dealers,
that engage in the sale of, or provide shareholder support services for
each fund. The Board of Trustees has authorized such payments.
The annualized portfolio turnover rate for each fund is not expected to
exceed 50% in its first fiscal period. These rates vary from year to year.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee for
this service. If you invest through FBSI, another financial institution, or
an investment professional, read their program materials for any special
provisions, additional service features or fees that may apply to your
investment in a fund. Certain features of the fund, such as the minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table on page .
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the funds through a retirement program, you may be subject
to additional fees. For more information, please refer to your program
materials, contact your employer, or call your retirement benefits number
or Fidelity directly, as appropriate.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 2 3 5
(solid bullet) Assets in Fidelity mutual
funds: over $4 41 billion
(solid bullet) Number of shareholder
accounts: over 31 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 270
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those with
self-employed income (and their eligible employees) with many of the
advantages of a 401(k) plan, but with fewer administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR EACH FUND: the
offering price and the net asset value (NAV). Each fund's shares are sold
without a sales charge, but each fund charges a purchase fee. Spartan Total
Market Index, Spartan Extended Market Index and Spartan International Index
charge purchase fees of 0.50%, 0.75% and 1.00%, respectively, of amounts
invested.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $25,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $25,000
TO ADD TO AN ACCOUNT $1,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $1,000
Through regular investment plans* $500
MINIMUM BALANCE $10,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $10,000
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
These minimums do not apply to assets held in employee benefit plans
(including Fidelity sponsored 403(b) arrangements but otherwise as defined
in the Employee Retirement Income Security Act of 1974, excluding SIMPLE
IRAs, SEP IRAs and The Fidelity Retirement Plan) having more than 50
eligible employees or a minimum of $1,000,000 in plan assets that have at
least some portion of its assets invested in mutual funds advised by FMR
and which are marketed and distributed directly to plan sponsors and
participants without any assistance or intervention from any intermediary
distribution channel. In addition, these minimums do not apply to assets
held in a Fidelity Regular IRA or Fidelity Rollover IRA purchased with the
proceeds of a distribution or transfer from an employee benefit plan as
described above provided that at the time of the distribution or transfer
the employee benefit plan satisfies the requirements described above.
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
SPARTAN TOTAL MARKET INDEX, SPARTAN
EXTENDED MARKET INDEX, AND SPARTAN
INTERNATIONAL INDEX CHARGE PURCHASE
FEES OF 0.50%, 0.75%, AND 1.00%, RESPECTIVELY, OF
AMOUNTS INVESTED.
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: Up to
$100,000.
</TABLE>
<TABLE>
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Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
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In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a
and check Fidelity Investor Center.
to a Fidelity Investor Call 1-800-544-9797 for
Center. Call the center nearest you.
1-800-544-9797 for the
center nearest you.
</TABLE>
<TABLE>
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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
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Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $10,000
worth of shares in the account to keep it open (except accounts not subject
to the investment minimums).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS
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Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request:
except retirement $100,000.
(small solid bullet) For Money Line transfers to
All account types your bank account; minimum:
$10; maximum: up to
$100,000.
(small solid bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(small solid bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (small solid bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (small solid bullet) At least one person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(small solid bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire redemption request
must be received and
accepted by Fidelity before 4
p.m. Eastern time for money
to be wired on the next
business day.
</TABLE>
<TABLE>
<CAPTION>
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544-5555
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more than
one account in the fund. Call 1-800-544-6666 if you need copies of
financial reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
</TABLE>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
<TABLE>
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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.
</TABLE>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in April and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but not yet
distributed income or capital gains, you will pay the full price for the
shares and then receive a portion of the price back in the form of a
taxable distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in
any year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of capital to
shareholders for tax purposes. To minimize the risk of a return of capital,
the funds may adjust their dividends to take currency fluctuations into
account, which may cause the dividends to vary. Any return of capital will
reduce the cost basis of your shares, which will result in a higher
reported capital gain or a lower reported capital loss when you sell your
shares. The statement you receive in January will specify if any
distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and
its investments and these taxes generally will reduce the fund's
distributions. However, an offsetting tax credit or deduction may be
available to you. If so, your tax statement will show more taxable income
or capital gains than were actually distributed by the fund, but will also
show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued on the basis of amortized cost. This method
minimizes the effect of changes in a security's market value. In addition,
if quotations are not readily available, or if the values have been
materially affected by events occurring after the closing of a foreign
market, assets are valued by a method that the Board of Trustees believes
accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) is its NAV adjusted to
reflect the purchase fee. Each fund's REDEMPTION PRICE (price to sell one
share) is its NAV.
A PURCHASE FEE of 0.50% for Spartan Total Market Index, 0.75% for Spartan
Extended Market Index, and 1.00% for Spartan International Index will be
charged based on the amount of your investment. This fee is not a sales
charge, and is paid to the fund rather than Fidelity or BT . The
purchase fee is designed to help defray the transaction costs, such as
brokerage commissions and currency exchange costs, incurred by the funds in
purchasing securities.
The purchase fee is charged on exchanges into each fund, but it does not
apply to shares that are acquired through reinvestment of dividends or
distributions, or to shares purchased in kind.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
EACH FUND CHARGES AN ANNUAL INDEX ACCOUNT FEE of $10.00 per account to
offset shareholder service costs if your account balance falls below
$25,000 at the time of the December distribution. The index account fee
does not apply to assets held in employee benefit plans (including Fidelity
sponsored 403(b) arrangements but otherwise as defined in the Employee
Retirement Income Security Act of 1974, excluding SIMPLE IRAs, SEP IRAs and
the Fidelity Retirement Plan) having more than 50 eligible employees or a
minimum of $1,000,000 in plan assets that have at least some portion of its
assets invested in mutual funds advised by FMR and which are marketed and
distributed directly to plan sponsors and participants without any
assistance or intervention from any intermediary distribution channel. In
addition, this fee does not apply to assets held in Fidelity Regular IRA or
Fidelity Rollover IRA purchased with proceeds of a distribution or transfer
from an employee benefit plan as described above provided that at the time
of the distribution or transfer the employee benefit plans satisfies the
requirements described above.
FSC deducts $10.00 from each account at the time the December distribution
is credited to each account. If the amount of the distribution is not
sufficient to pay the fee, the index account fee may be deducted directly
from your account balance.
IF YOUR ACCOUNT BALANCE FALLS BELOW $10,000 you will be given 30 days'
notice to reestablish the minimum balance (except accounts not subject to
the investment minimums). If you do not increase your balance, Fidelity
reserves the right to close your account and send the proceeds to you. Your
shares will be redeemed at the NAV on the day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be available for
sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose fees
of up to 1.00% on purchases, administrative fees of up to $7.50 and
redemption fees of up to 1.50% on exchanges. Check each fund's prospectus
for details.
APPENDIX
The Wilshire 5000 and the Wilshire 4500 are compiled by Wilshire Associates
Incorporated, which is neither an affiliate nor a sponsor of Spartan Total
Market Index or Spartan Extended Market Index.
Spartan International Index Fund is not sponsored, endorsed, sold or
promoted by Morgan Stanley & Co. Incorporated (Morgan Stanley). Morgan
Stanley makes no representation warranty, express or implied, to the owners
of the fund or any member of the public regarding the advisability of
investing securities generally or in the fund particularly or the ability
of the EAFE(registered trademark) Index to track general stock market
performance. Morgan Stanley is the licensor of certain trademarks, service
marks and trade names of Morgan Stanley and of the EAFE Index. Morgan
Stanley has no obligation to take the needs of the issuer of the fund or
the owners of the fund into consideration in determining, composing or
calculating the EAFE Index. Morgan Stanley is not responsible for and has
not participated in the determination of the timing of, prices at, or
quantities of the fund to be issued or in the determination or calculation
of the equation by which the fund is redeemable for cash. Morgan Stanley
has no obligation or liability to owners of the fund in connection with the
administration, marketing or trading the fund.
ALTHOUGH MORGAN STANLEY SHALL OBTAIN INFORMATION FOR INCLUSIONS IN OR FOR
USE IN THE CALCULATION OF THE INDEX FROM SOURCES WHICH MORGAN STANLEY
CONSIDERS RELIABLE, MORGAN STANLEY DOES NOT GUARANTEE THE ACCURACY AND/OR
THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN. MORGAN STANLEY
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE PRODUCT,
OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA
INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR
ANY OTHER USE. MORGAN STANLEY MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MORGAN
STANLEY HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Inclusion of a stock in an index does not imply that it is a good
investment.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY CONCORD STREET TRUST
SPARTAN TOTAL MARKET INDEX FUND
SPARTAN EXTENDED MARKET INDEX FUND
SPARTAN INTERNATIONAL INDEX FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page
12 ............................ Description of the Trust
13 a - c ............................ Investment Policies and Limitations
d ............................ *
14 a - c ............................ Trustees and Officers
15 a, b ............................ *
c ............................ Trustees and Officers
16 a i............................ FMR; Portfolio Transactions
ii........................... Trustees and Officers
.
iii.......................... Management Contracts
.
b ............................ Management Contracts
c, d ............................ Contracts with FMR Affiliates; Contracts with BT
Affiliates
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trust
i ............................ Contracts with FMR Affiliates
17 a ............................ Portfolio Transactions
b ............................ *
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trust
b ............................ *
19 a ............................ Additional Purchase, Exchange, and Redemption
Information
b ............................ Additional Purchase, Exchange, and Redemption
Information; Valuation
c ............................ *
20 ............................ Distributions and Taxes
21 a, b ............................ Contracts with FMR Affiliates
c ............................ *
22 ............................ *
23 ............................ *
</TABLE>
* Not Applicable
SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED JULY 8 , 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may any offers to buy be accepted prior to the time the
registration statement becomes effective. This Statement of Additional
Information does not constitute a prospectus.
SPARTAN TOTAL MARKET INDEX FUND,
SPARTAN EXTENDED MARKET INDEX FUND, AND
SPARTAN INTERNATIONAL INDEX FUND
FUNDS OF FIDELITY CONCORD STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER __, 1997
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated September __, 1997). Please
retain this document for future reference. To obtain an additional copy of
the Prospectus, please call Fidelity Distributors Corporation at
1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
BT
Trustees and Officers
Management Contracts
Distribution and Service Plans 21
Contracts with FMR Affiliates
Contracts with BT Affiliates
Description of the Trust
Appendix 24
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
Bankers Trust Company (BT)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
For more information on any Fidelity fund, including charges and
expenses, call or write for a free prospectus. Read it carefully before you
invest or send money.
SIF-ptb-0997
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 a 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 subsequent 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 funds' fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the
funds. However, except for the fundamental investment limitations listed
below, the investment policies and limitations described in this Statement
of Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF SPARTAN TOTAL MARKET INDEX FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities, or securities of
other investment companies) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of that
issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(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 its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
that amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitations does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its asset s in the securities of a
single open-end management investment company, with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to sell securities short, unless it
owns, or has the right to obtain, securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short;
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin;
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser. (This limitation does not apply to
purchase of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
INVESTMENT LIMITATIONS OF SPARTAN EXTENDED MARKET INDEX FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities, or securities of
other investment companies) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of that
issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(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 its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
that amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitations does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its asset s in the securities of a
single open-end management investment company, with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to sell securities short, unless it
owns, or has the right to obtain, securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short;
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin;
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser. (This limitation does not apply to
purchase of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
INVESTMENT LIMITATIONS OF SPARTAN INTERNATIONAL INDEX FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities, or securities of
other investment companies) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of that
issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(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 its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
that amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitations does not apply to purchases of debt securities or to repurchase
agreements.
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its asset s in the securities of a
single open-end management investment company, with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to sell securities short, unless it
owns, or has the right to obtain, securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short;
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin;
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowing representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser. (This limitation does not apply to
purchase of debt securities or to repurchase agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the funds' limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page
. For purposes of the funds' limitation on concentration in a single
industry, the funds' may use the industry definitions as defined by
Standard & Poor's.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies BT may employ in
pursuit of a fund's investment objective, and a summary of related risks.
BT may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve its
goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that BT will be able to anticipate these potential
events or counter their effects. These risks are magnified for investments
in developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, 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. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depositary Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depository banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by entering
into forward contracts to purchase or sell foreign currencies). Although
foreign exchange dealers generally do not charge a fee for such
conversions, they do realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency at one rate, while offering a
lesser rate of exchange should the counterparty desire to resell that
currency to the dealer. Forward contracts are customized transactions that
require a specific amount of a currency to be delivered at a specific
exchange rate on a specific date or range of dates in the future. Forward
contracts are generally traded in an interbank market directly between
currency traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and complete the
contemplated currency exchange. A fund may use currency forward contracts
for any purpose consistent with its investment objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A fund
may also use swap agreements, indexed securities, and options and futures
contracts relating to foreign currencies for the same purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a fund
against an adverse change in foreign currency values between the date a
security is purchased or sold and the date on which payment is made or
received. Entering into a forward contract for the purchase or sale of the
amount of foreign currency involved in an underlying security transaction
for a fixed amount of U.S. dollars "locks in" the U.S. dollar price of the
security. Forward contracts to purchase or sell a foreign currency may also
be used by a fund in anticipation of future purchases or sales of
securities denominated in foreign currency, even if the specific
investments have not yet been selected by BT .
A fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling. This type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a direct
hedge into U.S. dollars. Proxy hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.
A fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. This type of strategy, sometimes known as a
"cross-hedge," will tend to reduce or eliminate exposure to the currency
that is sold, and increase exposure to the currency that is purchased, much
as if a fund had sold a security denominated in one currency and purchased
an equivalent security denominated in another. Cross-hedges protect against
losses resulting from a decline in the hedged currency, but will cause a
fund to assume the risk of fluctuations in the value of the currency it
purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, a fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. A fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on BT 's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in currency
exchange rates and could result in losses to a fund if currencies do not
perform as BT anticipates. For example, if a currency's value rose
at a time when BT had hedged a fund by selling that currency in
exchange for dollars, a fund would not participate in the currency's
appreciation. If BT hedges currency exposure through proxy hedges, a
fund could realize currency losses from both the hedge and the security
position if the two currencies do not move in tandem. Similarly, if
BT increases a fund's exposure to a foreign currency and that
currency's value declines, a fund will realize a loss. There is no
assurance that BT 's use of currency management strategies will be
advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by a fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. Each fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when BT determines that such matters could
have a significant effect on the value of the fund's investment in the
company. The activities that a fund may engage in, either individually or
in conjunction with others, may include, among others, supporting or
opposing proposed changes in a company's corporate structure or business
activities; seeking changes in a company's directors or management; seeking
changes in a company's direction or policies; seeking the sale or
reorganization of the company or a portion of its assets; or supporting or
opposing third party takeover efforts. This area of corporate activity is
increasingly prone to litigation and it is possible that a fund could be
involved in lawsuits related to such activities. BT will monitor
such activities with a view to mitigating, to the extent possible, the risk
of litigation against a fund and the risk of actual liability if a fund is
involved in litigation. No guarantee can be made, however, that litigation
against a fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and options:
Asset Coverage for Futures and Options Positions, Combined Positions,
Correlation of Price Changes, Futures Contracts, Futures Margin Payments,
Limitations on Futures and Options Transactions, Liquidity of Options and
Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC
Options, Purchasing Put and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. A fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Index (S&P 500).
Futures can be held until their delivery dates, or can be closed out before
then if a liquid secondary market is available.
Examples of futures contracts in which Spartan International Index may
invest include CAC Futures 40 (France), DAX 30 (Germany), EuroTop 100
(United States), IBEX (Spain), FTSE 100 (United Kingdom), All Ordinary
(Australia), Hang Seng (Hong Kong), and Nikkei 225, Nikkei 300 and TOPIX
(Japan).
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund intends to file
a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets, before engaging in any purchases or sales of futures
contracts or options on futures contracts. The funds intend to comply with
Rule 4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option premiums.
BT also intends to follow certain other limitations on the funds'
futures and option activities. Each fund will not purchase any option if,
as a result, more than 5% of its total assets would be invested in option
premiums. Under normal conditions, the funds will not enter into any
futures contract or option if, as a result, the sum of (i) the current
value of assets hedged in the case of strategies involving the sale of
securities, and (ii) the current value of the indices or other instruments
underlying the funds' other futures or options positions, would exceed 35%
of the funds' total assets. These limitations do not apply to options
attached to, or acquired or traded together with, their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this SAI may be changed as regulatory agencies
permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
funds may purchase and sell currency futures and may purchase and write
currency options to increase or decrease their exposure to different
foreign currencies. A fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
a fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
OTHER INVESTMENT COMPANIES. The funds may purchase the shares of other
investment companies .
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a fund obtains
the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. A fund may also terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees and FMR ,
BT determines the liquidity of a fund's investments and, through
reports from FMR and/or BT , the Board monitors investments in
illiquid instruments. In determining the liquidity of a fund's investments,
BT may consider various factors, including (1) the frequency of
trades and quotations, (2) the number of dealers and prospective purchasers
in the marketplace, (3) dealer undertakings to make a market, (4) the
nature of the security (including any demand or tender features), and (5)
the nature of the marketplace for trades (including the ability to assign
or offset the fund's rights and obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days and over-the-counter options. Also, BT
may determine some restricted securities, emerging market securities and
swap agreements to be illiquid. However, with respect to over-the-counter
options a fund writes, all or a portion of the value of the underlying
instrument may be illiquid depending on the assets held to cover the option
and the nature and terms of any agreement the fund may have to close out
the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Indexed securities include commercial paper,
certificates of deposit, and other fixed-income securities whose values at
maturity or coupon interest rates are determined by reference to the
returns of the S&P 500, the Wilshire 5000, the Wilshire 4500, the EAFE or
comparable stock indices. Indexed securities can be affected by changes in
interest rates and the creditworthiness of their issuers as well as stock
prices, and may not track the indices as accurately as direct investments
in the indices.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the cost
of bank loans. A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment
to a lending fund could result in a lost investment opportunity or
additional borrowing costs.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. 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. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by BT or, under certain circumstances,
by FMR or an FMR-affiliate.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by BT or, under certain
circumstances, by FMR or an FMR-affiliate . Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A 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 and a subsidiary of FMR Corp. A fund will not lend securities
to BT or its affiliates.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. BT receives a
portion of securities lending income as a sub-adviser fee 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 BT to be of good standin g,
or under certain circumstances, by FMR or an FMR-affiliate.
Furthermore, they will only be made if, in BT 's judgment, the
consideration to be earned from such loans would justify the risk.
BT understands that it is the current view of the SEC Staff that a
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 Board of Trustees
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 a 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). If a fund cannot recover the loaned
securities on termination, a fund may sell the collateral and purchase a
replacement investment in the market. If the cash collateral is not
sufficient to cover the cost of replacing the loaned security, BT has
indemnified each fund against loss.
SHORT SALES "AGAINST THE BOX." If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expenses, in connection with opening,
maintaining, and closing short sales against the box.
SWAP AGREEMENTS. Under a typical equity swap agreement, a counterparty such
as a bank or broker-dealer agrees to pay a fund a return equal to the
dividend payments and increase in value, if any, of an index or group of
stocks and the fund agrees in return to pay a fixed or floating rate of
interest, plus any declines in value of the index. Swap agreements can also
have features providing for maximum or minimum exposure to the designated
index. Swap agreements can take many different forms and are known by a
variety of names. The fund is not limited to any particular form of swap
agreement if BT determines it is consistent with the fund's
investment objective and policies.
In order to track the return of the designated index effectively, a fund
would generally have to own other assets returning approximately the same
amount as the interest rate payable by the fund under the swap agreement.
In addition, if the counterparty's creditworthiness declined, the swap
would be likely to decline in value relative to the designated index,
impairing the fund's correlation with its applicable index. A fund expects
to be able to eliminate its exposure under swap agreements either by
assignment or other disposition of the swap agreement, or by entering into
an offsetting swap agreement with the same party or a similarly
creditworthy party.
The funds will maintain appropriate liquid assets in a segregated custodial
account to cover their obligations under swap agreements. If the funds
enter into swap agreements on a net basis, they will segregate assets with
a daily value at least equal to the excess, if any, of the funds' accrued
obligations under the swap agreements over the accrued amount the funds are
entitled to receive under the agreements. If the funds enter into swap
agreements on other than a net basis, they will segregate assets with a
value equal to the full amount of the funds' accrued obligations under the
agreements.
WARRANTS. Warrants are securities that give a fund the right to purchase
equity securities from the issuer at a specific price (the strike price)
for a limited period of time. The strike price of warrants typically is
much lower than the current market price of the underlying securities, yet
they are subject to similar price fluctuations. As a result, warrants may
be more volatile investments than the underlying securities and may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets
if the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to expiration date. These factors
can make warrants more speculative than other types of investments.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by BT pursuant to authority contained in the
management contract and sub-advisory agreement . BT is
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, BT considers 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 . Generally, commissions for investments traded on
foreign exchanges will be higher than for investments traded on U.S.
exchanges and may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or BT or t heir affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or sellers
of securities. In addition, such broker-dealers may furnish analyses and
reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy, and performance of accounts; effect securities
transactions, and perform functions incidental thereto (such as clearance
and settlement). The selection of such broker-dealers generally is made by
BT (to the extent possible consistent with execution considerations)
in accordance with a ranking of broker-dealers determined periodically by
BT 's investment staff based upon the quality of research and
execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to BT in rendering investment
management services to the funds or its other clients, and conversely, such
research provided by broker-dealers who have executed transaction orders on
behalf of other BT clients may be useful to BT in carrying
out its obligations to the funds. The receipt of such research has not
reduced BT 's normal independent research activities; however, it
enables BT to avoid the additional expenses that could be incurred
if BT 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 execution services. In order to cause
each fund to pay such higher commissions, BT must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or BT 's overall
responsibilities to the funds and its other clients. In reaching this
determination, BT will not attempt to place a specific dollar value
on the brokerage and research services provided, or to determine what
portion of the compensation should be related to those services.
BT is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. BT may use research services
provided by and place agency transactions with National Financial
Services Corporation (NFSC) and Fidelity Brokerage Services (FBS),
indirect subsidiaries of FMR Corp., and BT Brokerage Corporation, BT
Securities Corporation or BT Futures Corporation, subsidiaries of ________,
if the commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar services.
From September 1992 through December 1994, FBS operated under the name
Fidelity Brokerage Services Limited (FBSL). As of January 1995, FBSL was
converted to an unlimited liability company and assumed the name FBS.
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, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized NFSC to execute portfolio transactions on national
securities exchanges in accordance with approved procedures and applicable
SEC rules.
Each fund's Trustees periodically review BT's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
Each fund's annualized turnover rate for its first fiscal period is not
expected to exceed 50%.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each 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 Trustees 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 each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made by BT and are independent from those of other funds managed
by FMR or BT or accounts managed by FMR or BT affiliates. It
sometimes happens that the same security is held in the portfolio of more
than one of BT-managed funds or accounts. Simultaneous transactions
are inevitable when several funds and accounts are managed by the same
investment adviser, particularly when the same security is suitable for the
investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment manager and BT as sub-adviser to each fund outweighs any
disadvantages that may be said to exist from exposure to simultaneous
transactions.
VALUATION
Fidelity Service Company, Inc. (FSC) normally determines each fund's net
asset value per share (NAV) as of the close of the New York Stock Exchange
(NYSE) (normally 4:00 p.m. Eastern time). The valuation of portfolio
securities is determined as of this time for the purpose of computing each
fund's NAV.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which
the primary market is the United States are valued at last sale price or,
if no sale has occurred, at the closing bid price. Most equity securities
for which the primary market is outside the United States are valued using
the official closing price or the last sale price in the principal market
in which they are traded. If the last sale price (on the local exchange) is
unavailable, the last evaluated quote or last bid price normally is used.
Securities of other open-end investment companies are valued at their
respective NAVs.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets. Or,
fixed-income securities and convertible securities may also be valued on
the basis of information furnished by a pricing service that uses a
valuation matrix which incorporates both dealer-supplied valuations and
electronic data processing techniques. Use of pricing services has been
approved by the Board of Trustees. A number of pricing services are
available, and the funds may use various pricing services or discontinue
the use of any pricing service.
Futures contracts and options are valued on the basis of market quotations,
if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotations services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less for
which market quotations and information furnished by a pricing service
are not readily available are valued either at amortized cost or at
original cost plus accrued interest, both of which approximate current
value. In addition, securities and other assets for which there is no
readily available market value may be valued in good faith by a committee
appointed by the Board of Trustees. The procedures set forth above need not
be used to determine the value of the securities owned by a fund if, in the
opinion of a committee appointed by the Board of Trustees, some other
method would more accurately reflect the fair market value of such
securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return 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.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund 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 total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. Average
annual total returns covering periods of less than one year are calculated
by determining a fund's total return for the period, extending that return
for a full year (assuming that return remains constant over the year), and
quoting the result as an annual return. While average annual total returns
are a convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time, but
changes from year to year, and that average annual total returns represent
averaged figures as opposed to the actual year-to-year performance of the
fund.
In addition to average annual total returns, a 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, 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. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average.
INDEX RESULTS. The following table shows the record of the S&P 500, the
Wilshire 5000, the Wilshire 4500 and the EAFE over the ten years ended
May 31 , 1997. The funds may not always hold the same securities as
their indices. BT may use statistical sampling techniques to attempt
to replicate the returns of the indices using a smaller number of
securities. Index values are based on the prices of unmanaged groups of
stocks and, unlike the fund's returns, do not include the effect of
brokerage commissions or other costs of investing.
S&P 500 Wilshire 5000 Wilshire 4500 EAFE
1997 29.41 22.62 8.08 7.56
1996 28.44 31.33 37.01 10.67
1995 20.19 17.63 12.43 4.93
1994 4.26 4.46 5.44 13.57
1993 11.61 13.25 16.95 16.39
1992 9.85 11.11 14.42 (3.36)
1991 11.79 11.48 10.40 (5.36)
1990 16.62 12.64 4.08 2.42
1989 26.79 26.38 24.80 8.47
1988 -- -- -- --
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. In addition to the mutual fund rankings, a fund's performance
may be compared to stock, bond, and money market mutual fund performance
indices prepared by Lipper or other organizations. When comparing these
indices, it is important to remember the risk and return characteristics of
each type of investment. For example, while stock mutual funds may offer
higher potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The
total return of a benchmark index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike a fund's
returns, however, the index returns do not reflect brokerage commissions,
transaction fees, or other costs of investing directly in the securities
included in the index.
Spartan Total Market Index, Spartan Extended Market Index and Spartan
International Index may compare their performance to that of their
respective indices (the Wilshire 5000 for Spartan Total Market Index, the
Wilshire 4500 for Spartan Extended Market Index and the EAFE for Spartan
International Index) and the Standard & Poor's 500 Index. The index returns
for the EAFE for the periods after January 1, 1997, are adjusted for tax
withholding rates applicable to U.S.-based mutual funds organized as
Massachusetts business trusts. The performance of these indices over any
period since their inception may be quoted in fund advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of May 31, 1997, FMR advised over $ 29 billion in tax-free
fund assets, $ 95 billion in money market fund assets, $ 339
billion in equity fund assets and $ 71 billion in international fund
assets. The funds may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the largest
amount of equity fund assets under management by a mutual fund investment
adviser in the United States, making FMR America's leading equity (stock)
fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching and
managing investments abroad.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its NAV is calculated each day the New
York Stock Exchange (NYSE) is open for trading. The NYSE has designated the
following holiday closings for 1997: New Year's Day, Presidents' Day
(observed), Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day. Although FMR expects the
same holiday schedule to be observed in the future, the NYSE may modify its
holiday schedule at any time. In addition, the funds will not process wire
purchases and redemptions on days when the Federal Reserve Wire System is
closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
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 a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its 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
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each 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 effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
Each fund, in its discretion, may determine to issue its shares "in kind"
in exchange for securities held by the purchaser having a value, determined
in accordance with the fund's policies for valuation of portfolio
securities, equal to the purchase price of the fund shares issued. A fund
will accept for in kind purchases only securities of any issuer among those
comprising that index whose total return performance the fund seeks to
match. In addition, a fund generally will not accept securities of any
issuer unless they are liquid, have a readily ascertainable market value,
and are not subject to restrictions on resale. All dividends,
distributions, and subscription or other rights associated with the
securities become the property of the fund, along with the securities.
Shares purchased in exchange for securities in kind generally cannot be
redeemed for fifteen days following the exchange in order to allow time for
the transfer to settle. Purchases of shares of a fund through an in kind
exchange are not subject to the fund's purchase fee.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of each of Spartan Total Market Index Fund and Spartan
Extended Market Index Fund's income may qualify for the dividends-received
deduction available to corporate shareholders to the extent that each
fund's income is derived from qualifying dividends. Because each fund may
earn other types of income, such as interest, income from securities loans,
non-qualifying dividends, and short-term capital gains, the percentage of
dividends from the fund that qualifies for the deduction generally will be
less than 100%. Because Spartan International Index invests significantly
in foreign securities, corporate shareholders of this fund should not
expect fund dividends to qualify for the dividends-received deduction.
Gains (losses) attributable to foreign currency fluctuations are generally
taxable as ordinary income, and therefore will increase (decrease) dividend
distributions.
Short-Term capital gains are distributed as dividend income, but do no
qualify for the dividends-received deduction. Each fund will notify
corporate shareholders annually of the percentage of fund dividends that
qualify for the dividends-received deduction. Each fund will send each
shareholder a notice in January describing the tax status of dividend and
capital gain distributions for the prior year. A portion of each fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of Spartan
International Market Index's total assets are invested in securities of
foreign issuers, the fund may elect to pass through foreign taxes paid and
thereby allow shareholders to take a credit or deduction on their
individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. Each fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit a fund's investments
in such instruments.
If a fund purchases shares in certain foreign investment entities, defined
as passive foreign investment companies (PFICs) in the Internal Revenue
Code, it may be subject to U.S. federal income tax on a portion of any
excess distribution or gain from the disposition of such shares. Interest
charges may also be imposed on a fund with respect to deferred taxes
arising from such distributions or gains. Generally, each fund will elect
to mark-to-market any PFIC shares. Unrealized gains will be recognized as
income for tax purposes and must be distributed to shareholders as
dividends.
Each fund is treated as a separate entity from the other funds of Fidelity
Concord Street Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account s pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
BT
BT, a New York banking corporation with principal offices at 130 Liberty,
New York, New York 10006, is a wholly owned subsidiary of Bankers Trust New
York Corporation. BT was organized in ___. As of December 31, 1996 Bankers
Trust New York Corporation was the seventh largest bank holding company in
the United States with total assets of approximately $120 billion. BT is a
worldwide merchant bank that conducts a variety of general banking and
trust activities and is a major wholesale supplier of financial services to
the international and domestic institutional markets. Investment management
is a core business of BT with approximately $227 billion in assets under
management globally. Of that total, approximately $82 billion are in U.S.
equity index assets. When bond and international funds are included, BT
manages over $94 billion in total index assets. This makes BT one of the
nation's leading managers in index funds.
BT has been advised by counsel that, in counsel's opinion, BT currently may
perform the services for each fund described herein without violation of
the Glass-Steagall Act or other applicable banking laws or regulations.
State laws on this issue may differ from the interpretation of relevant
federal law and banks and financial institutions may be required to
register as dealers pursuant to state securities law.
BT investment personnel may invest in securities for their own accounts
pursuant to a code of ethics that establishes procedures for personal
investing and restricts certain transactions.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust 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 Trustees
also serve in similar capacities for other funds advised by FMR. The
business address of each Trustee and officer who is an "interested person"
(as defined in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee 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; and Chairman and a
Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is Vice
Chairman of FMR Corp.; President of Fidelity Investments Institutional
Services Company, (FIIS) Inc.; and President and a Director of FMR
Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994). Prior
to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993), CH2M Hill Companies (engineering), Rio Grande,
Inc. (oil and gas production), and Daniel Industries (petroleum measurement
equipment manufacturer). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (65), 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), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
ROBERT M. GATES (53), Trustee (1997). Consultant, author, and lecturer
(1993). Mr. Gates was Director of the Central Intelligence Agency (CIA)
from 1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to the
President of the United States and Deputy National Security Advisor. Mr.
Gates is currently a Trustee for the Forum For International Policy, a
Board Member for the Virginia Neurological Institute, and a Senior Advisor
of the Harvard Journal of World Affairs. In addition, Mr. Gates also serves
as a member of the corporate board for Lucas Varity PLC (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and TRW
Inc. (original equipment and replacement products).
E. BRADLEY JONES (69), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc.
(manufacturer of chemical products), and he previously served as a Director
of NACCO Industries, Inc. (mining and ma nufacturing , 1985-1995) ,
Hyster-Yale Materials Handling, Inc. (1985-1995) and Cleveland-Cliffs Inc
(mining), and as a Trustee of First Union Real Estate Investments. In
addition, he serves as a Trustee of the Cleveland Clinic Foundation,
where he has also been a member of the Executive Committee as well as
Chairman of the Board and President, a Trustee and member of the
Executive Committee of University School (Cleveland), and a Trustee of
Cleveland Clinic Florida.
DONALD J. KIRK (64), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (54), Trustee, is Vice Chairman and Director of FMR (1992).
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (63), Trustee (1997), is the Vice President of Finance for
the University of North Carolina (16-school system, 1995). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of
BellSouth Corporation (telecommunications, 1984) and President of BellSouth
Enterprises (1986). He is currently a Director of Liberty Corporation
(holding company, 1984), Weeks Corporation of Atlanta (real estate, 1994),
Carolina Power and Light Company (electric utility, 1996), and the
Kenan-Transport Co. (1996). Previously, he was a Director of First American
Corporation (bank holding company, 1979-1996). In addition, Mr. McCoy
serves as a member of the Board of Visitors for the University of North
Carolina at Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (67), Trustee and C hairman of the non-interested
Trustees, 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 Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (63), 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.
THOMAS R. WILLIAMS (68), 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., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM J. HAYES (62), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
ROBERT H. MORRISON (56), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (51), 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) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each Trustee of each fund for his or her services for the fiscal year ended
February 28, 1998 or calendar year ended December 31, 1996, as
applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
Compensation Compensation Compensation Compensation
from Spartan Total from Spartan from Spartan from the Fund
Market IndexB,+ Extended International Complex*,A
Market IndexB,+ IndexB,+
J. Gary Burkhead** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 52 32 32 137,700
Phyllis Burke Davis 52 32 32 134,700
Richard J. Flynn*** 0 0 0 168,000
Robert M. Gates**** 52 32 32 0
Edward C. Johnson 3d** 0 0 0 0
E. Bradley Jones 52 32 32 134,700
Donald J. Kirk 52 32 32 136,200
Peter S. Lynch** 0 0 0 0
William O. McCoy***** 52 32 32 85,333
Gerald C. McDonough 65 40 40 136,200
Edward H. Malone*** 0 0 0 136,200
Marvin L. Mann 52 32 32 134,700
Thomas R. Williams 52 32 32 136,200
</TABLE>
* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** Mr. Gates was elected to the Board of Trustees of Fidelity Concord
Street Trust on March 19, 1997
***** During the period from May 1, 1996 through December 31, 1996, William
O. McCoy served as a Member of the Advisory Board. Mr. McCoy was elected to
the Board of Trustees of Fidelity Concord Street Trust on March 19, 1997.
+ Estimated
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B Compensation figures include cash.
Under a retirement program adopted in July 1988 and modified in
November 1995 and November 1996, each non-interested Trustee who retired
before December 30, 1996 may receive payments from a Fidelity fund during
his or her lifetime based on his or her basic trustee fees and length of
service. The obligation of a fund to make such payments is neither secured
nor funded. A Trustee became eligible to participate in the program at the
end of the calendar year in which he or she reached age 72, provided that,
at the time of retirement, he or she had served as a Fidelity fund Trustee
for at least five years.
Under a deferred compensation plan adopted in September 1995 and amended in
November 1996 (the Plan), non-interested Trustees must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of,
their annual fees. Amounts deferred under the Plan are treated as though
equivalent dollar amounts had been invested in shares of a cross-section of
Fidelity Funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees under the
Plan will be directly linked to the investment performance of the Reference
Funds. Deferral of fees in accordance with the Plan will have a negligible
effect on a fund's assets, liabilities, and net income per share, and will
not obligate a fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each then-existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting and are treated as though
equivalent dollar amounts had been invested in shares of the Reference
Funds. The amounts ultimately received by the Trustees in connection with
the credits to their Plan accounts will be directly linked to the
investment performance of the Reference Funds. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
As of June 30 , 1997, FMR owned the majority of outstanding shares of
the funds. FMR Corp. is the ultimate parent company of FMR. By virtue of
his ownership interest in FMR Corp., as described in the "FMR" section on
page , Mr. Edward C. Johnson 3d, President and Trustee of the funds, may be
deemed to be a beneficial owner of these shares. As of the above date, with
the exception of Mr. Johnson 3d's deemed ownership of each fund's shares,
the Trustees, and officers of the funds owned, in the aggregate, less than
1% of each fund's total outstanding shares.
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
FMR is each fund's manager pursuant to management contracts dated _____,
1997 which were approved by FMR, the then sole shareholder on _____, 1997.
MANAGEMENT SERVICES. Each fund employs FMR to furnish investment advisory
and other services. BT is the sub-adviser of each fund and acts as each
fund's custodian. Under its management contract with each fund, FMR acts
as investment adviser. Under the sub-advisory agreement, and, subject to
the supervision of the Board of Trustees, BT directs the investments of
each fund in accordance with its investment objective, policies, and
limitations, administers the securities lending program of each fund and
provides custodial services to each fund. FMR provides each fund with all
necessary office facilities and personnel for servicing each fund's
investments, compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each fund
or FMR performing services relating to research, statistical, and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal
securities laws and making necessary filings under state securities laws;
developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fees payable to
FMR (a portion of such fees paid by FMR to BT for investment management and
custodial services pursuant to the sub-advisory agreement) and BT and the
fees payable to FSC, each fund pays all of its expenses, without
limitation, that are not assumed by those parties. Each fund pays BT
securities lending fees equal to 40% of the net income from each fund's
securities lending program pursuant to the sub-advisory agreement. Each
fund pays for the typesetting, printing, and mailing of its proxy materials
to shareholders, legal expenses, and the fees of the auditor and
non-interested Trustees. Although each fund's current management contract
provides that each fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and reports to
shareholders, the trust, on behalf of each fund has entered into a revised
transfer agent agreement with FSC, pursuant to which FSC bears the costs of
providing these services to existing shareholders. Other expenses paid by
each fund include interest, taxes, brokerage commissions, and each fund's
proportionate share of insurance premiums and Investment Company Institute
dues. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which each fund may be a party,
and any obligation it may have to indemnify its officers and Trustees with
respect to litigation.
MANAGEMENT FEES. For the services of FMR under each contract, Spartan Total
Market Index Fund, Spartan Extended Market Index Fund and Spartan
International Index Fund pay FMR and BT monthly management fees at the
annual rate of 0.25%, 0.25% and 0.40% of average net assets throughout the
month, respectively. These fees include management fees of 0.24%, 0.24%
and 0.34%, respectively, payable to FMR, and estimated sub-advisory fees of
0.01%, 0.01%, and 0.06%, respectively, payable to BT (representing 40% of
net income from securities lending). FMR has voluntarily agreed, subject
to revision or termination, to reimburse Spartan Total Market Index,
Spartan Extended Market Index and Spartan International Index if and to the
extent that their aggregate operating expenses, including management fees
(but excluding sub-advisory fees associated with securities lending,
interest, taxes, brokerage commissions, and other transaction costs or
extraordinary expenses), were in excess of annual rates of 0.25%, 0.25% and
0.35%, respectively, of average net assets of the funds through December
31, 1999.
SUB-ADVISER. Each fund and FMR have entered into sub-advisory agreements
with BT. Pursuant to the sub-advisory agreements, FMR has granted BT
investment management authority as well as the authority to buy and sell
securities.
Under the sub-advisory agreements FMR pays BT fees at an annual rate of
0.0125%, 0.0125% and 0.0650% of average net assets for Spartan Total Market
Index Fund, Spartan Extended Market Index Fund and Spartan International
Index Fund, respectively, for providing investment management and custodial
services to each fund. FMR also pays BT $35 per transaction, up to $200,000
annually, for sub-advisory and custodial services to Spartan International
Index Fund. In addition, as described above, for such services, under the
sub-advisory agreements each fund pays BT securities lending fees equal to
40% of net income from each fund's securities lending program.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) 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
primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect payment by
the funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan also
specifically recognizes that FMR, either directly or through FDC, 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 each fund. In addition, each 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 each fund, or to third parties, including banks, that render shareholder
support services.
Currently, the Board of Trustees has authorized such payments.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a fund other than those made to FMR
under its management contract with the fund. To the extent that each Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
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 clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
FSC, an affiliate of FMR, is transfer, dividend disbursing, and shareholder
servicing agent for each fund. FSC receives an annual account fee and an
asset-based fee each based on account size and fund type for each retail
account and certain institutional accounts. With respect to certain
institutional retirement accounts, FSC receives an annual account fee and
an asset-based fee based on account type or fund type. These annual account
fees are subject to increase based on postal rate changes. The asset-based
fees are subject to adjustment if the year-to-date total return of the S&P
500 exceeds a positive or negative 15%.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's NAV
and dividends, and maintains each fund's accounting records. The annual fee
rates for these pricing and bookkeeping services are based on each fund's
average net assets, specifically, 0.0600% (for Spartan Total Market Index
Fund and Spartan Extended Market Index Fund), and 0.0750% (for Spartan
International Index Fund) of the first $500 million of average net assets
and 0.0300% (for Spartan Total Market Index Fund and Spartan Extended
Market Index Fund) and 0.0375% (for Spartan International Index Fund) of
average net assets in excess of $500 million. The fee is limited to a
minimum of $60,000 and a maximum of $800,000 per year.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
CONTRACTS WITH BT AFFILIATES
BT is custodian of the assets of each fund. The custodian is responsible
for the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies. However, a fund may invest in
obligations of its custodian and may purchase securities from or sell
securities to the custodian. The Chase Manhattan Bank, headquartered in New
York, also may serve as a special purpose custodian of certain assets in
connection with repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR. In
the judgment of FMR, the terms and conditions of those transactions were
not influenced by existing or potential custodial or other fund
relationships.
BT's fees for custodial services to each fund are included in the fees
payable under the sub-advisory agreements.
In addition, under the sub-advisory agreement each fund pays BT a fee equal
to 40% of net income from each fund's securities lending program which in
part compensates BT for custodial services provided in connection with each
fund's securities lending program..
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Spartan Total Market Index Fund, Spartan Extended
Market Index Fund and Spartan International Index Fund are funds of
Fidelity Concord Street Trust, an open-end management investment company
organized as a Massachusetts business trust on July 21, 1987. In April
1997, the trust's name was changed from Fidelity Institutional Trust to
Fidelity Concord Street Trust. Currently, there are five funds of the
trust: Spartan Total Market Index Fund, Spartan Extended Market Index Fund,
Spartan International Index Fund, Fidelity U.S. Bond Index Fund (formerly
know as as Fidelity U.S. Bond Index Portfolio) and Spartan U.S. Equity
Index Fund (formerly known as Fidelity U.S. Equity Index Portfolio). The
Declaration of Trust permits the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote possibility
that one fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. The
Declaration of Trust also provides that each fund shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; the voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the heading "Shareholder
and Trustee Liability" above. Shareholders representing 10% or more of the
trust or a fund may, as set forth in the Declaration of Trust, call
meetings of the trust or a fund for any purpose related to the trust or
fund, as the case may be, including, in the case of a meeting of the entire
trust, the purpose of voting on removal of one or more Trustees. The trust
or any fund may be terminated upon the sale of its assets to another
open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the trust or the fund, as determined by the current value of
each shareholder's investment in the fund or trust. If not so terminated,
the trust and the funds will continue indefinitely. Each fund may invest
all of its assets in another investment company.
AUDITOR. _________________ serves as the independent accountant for
Spartan Total Market Index and Spartan Extended Market Index and
___________________ serves as the independent accountant for Spartan
International Index. The auditor examines financial statements for the
funds and provides other audit, tax, and related services.
APPENDIX
THE WILSHIRE 5000 EQUITY INDEX (Wilshire 5000) measures the performance of
all equity securities of U.S. headquartered issuers with readily available
price data. Over 7,000 security returns are used to adjust the Wilshire
5000 on the basis of weighted capitalization.
THE WILSHIRE 4500 EQUITY INDEX (Wilshire 4500) is based on the same
securities on which the Wilshire 5000 is based, excluding those securities
that compose the Standard & Poor's 500 Index (S&P 500(registered
trademark)). The S&P 500 includes common stocks of companies representing a
significant portion of the market value of all common stocks publicly
traded in the United States. Although some of the companies in the Wilshire
4500 have large market capitalizations, excluding the S&P 500 stocks makes
the Wilshire 4500, on average, more representative of
medium-to-small-capitalization stocks. The composition of the S&P 500 is
determined by Standard & Poor's and is based on such factors as the market
capitalization and trading activity of each stock and its adequacy as a
representation of stocks in a particular industry group. Standard & Poor's
may change the composition of the S&P 500 from time to time.
THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST
(EAFE(registered trademark)) INDEX is a market capitalization-weighted
index that tracks the daily price and total return performance of common or
ordinary shares in developed markets in Europe, Australia and the Far East.
Securities in the index are selected by Morgan Stanley Capital
International (MSCI), and are domiciled in 20 countries. To achieve a
proper balance between a high level of tracking, liquidity and restricted
float considerations, MSCI aims to capture 60% of each country's market
capitalization, and to assure that the index reflects the industry
characteristics of each country's overall market, MSCI aims to capture 60%
of the capitalization of each industry group, as defined by local practice.
From the universe of available stocks in each industry group, stocks are
selected up to approximately the 60% level, subject to liquidity, float and
cross-ownership considerations. In addition to market capitalization, a
stock's importance may be assessed by such measures as sales, net income,
and industry output. Maximization of liquidity is balanced by the
consideration of other factors such as overall industry representation.
Liquidity, measured by trading value as reported by the local exchange, is
assessed over time based on an absolute as well as relative basis. While a
hard-and-fast liquidity yardstick is not utilized, trading values are
monitored to establish a "normal" level across short-term market peaks and
troughs. Maximum float, or the percentage of a company's shares that are
freely tradable, is an important optimization parameter but not a
hard-and-fast rule for stock selection. While some exceptions are made,
index constituents are included at 100% of market capitalization. A
representative sample of large, medium and small companies is included in
the index.
Structural changes due to industry composition or regulations generally
take place every one year to 18 months. These are implemented on the first
business day in March, June, September and December of each year and are
announced at least two weeks in advance. Companies may be deleted because
they have diversified away from their industry classification, because the
industry has evolved in a different direction from the company's thrust, or
because a better industry representative exists in the form of a new issue
or existing company. New issues generally undergo a "seasoning" period of
one year to 18 months prior to eligibility for inclusion in the index. New
issues due to an initial public offering of significant size that change a
country's market and industry profiles, and generate strong investor
interest likely to assure a high level of liquidity, may be included in the
index immediately. The market capitalization of constituent companies is
weighted on the basis of their full market value, i.e., without adjustments
for "long term holdings" or partial foreign investment restrictions. To
address the issue of restriction on foreign ownership, an additional series
of "Free" indices are calculated for countries and markets with
restrictions on foreign ownership of shares. While some exceptions apply,
the index is computed using the last transaction price recorded on the
dominant stock exchange in each market. WM/Reuters Closing Spot Rates as of
4:00 p.m. London Time are used for currency conversions. Dividends are
recognized on the ex-dividend date and factored into the index return in
the form of a dividend receivable. Dividends are deemed to be received on
the payment date while the reinvestment of dividends occurs at the end of
the month in which the payment date falls.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial Statements and Financial Highlights for Fidelity
Institutional Trust on behalf of Spartan Total Market Index Fund, Spartan
Extended Market Index Fund, and Spartan International Index Fund will filed
by subsequent amendment.
(b) Exhibits:
(1)(a) Declaration of Trust dated as of July 21, 1987 was electronically
filed and is incorporated by reference as Exhibit 1 to Post-Effective
Amendment No. 17.
(b) Supplement to the Declaration of Trust dated November 30, 1988
was electronically filed and is incorporated by reference as Exhibit 1(a)
to Post-Effective Amendment No. 17.
(c) Supplement to the Declaration of Trust dated June 6, 1997 is
filed herein as Exhibit 1(c).
(d) Supplement to the Declaration of Trust dated May 13, 1997 is
filed herein as Exhibit 1(d).
(2) Bylaws of the Trust effective May 19, 1994 were electronically filed
and are incorporated herein by reference as Exhibit 2 to Union Street
Trust's Post-Effective Amendment No. 87.
(3) None.
(4) None.
(5)(a) Management Contract between the Registrant, on behalf of Fidelity
U.S. Bond Index Portfolio (currently known as Fidelity U.S. Bond Index
Fund), and Fidelity Management & Research Co. dated January 13, 1988 was
electronically filed and is incorporated herein by reference as Exhibit
5(a) to Post-Effective Amendment No. 19.
(b) Management Contract between the Registrant, on behalf of Fidelity
U.S. Equity Index Portfolio (currently known as Spartan U.S. Equity Index
Fund), and Fidelity Management & Research Company was electronically filed
and is incorporated herein by reference as Exhibit 5(b) to Post-Effective
Amendment No. 17.
(c) Form of Management Contract between the Registrant, on behalf of
Spartan Total Market Index Fund, and Fidelity Management & Research Company
is filed herein as Exhibit 5(c).
(d) Form of Management Contract between the Registrant, on behalf of
Spartan Extended Market Index Fund, and Fidelity Management & Research
Company is filed herein as Exhibit 5(d).
(e) Form of Management Contract between the Registrant, on behalf of
Spartan International Index Fund, and Fidelity Management & Research
Company, is filed herein as Exhibit 5(e).
(f) Form of Sub-Advisory Agreement and Appendix A between Fidelity
Management & Research Company, Bankers Trust, and the Registrant, on behalf
of Spartan Total Market Index Fund, is filed herein as Exhibit 5(f).
(g) Form of Sub-Advisory Agreement and Appendix A between Fidelity
Management & Research Company, Bankers Trust, and the Registrant, on behalf
of Spartan Extended Market Index Fund, is filed herein as Exhibit 5(g).
(h) Form of Sub-Advisory Agreement and Appendix A between Fidelity
Management & Research Company, Bankers Trust , and the Registrant, on
behalf of Spartan International Index Fund, is filed herein as Exhibit
5(h).
(6)(a) General Distribution Agreement between the Registrant, on behalf
of Fidelity U.S. Bond Index Portfolio (currently known as Fidelity U.S.
Bond Index Fund), and Fidelity Distributors Corporation dated January 13,
1988 was electronically filed and is incorporated herein by reference as
Exhibit 6(a) to Post-Effective Amendment No. 19.
(b) General Distribution Agreement between the Registrant, on behalf
of Fidelity U.S. Equity Index Portfolio (currently known as Spartan U.S.
Equity Index Fund), and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as Exhibit
6(b) to Post-Effective Amendment No. 17.
(c) Amendments to the General Distribution Agreement between the
Registrant, on behalf of Fidelity U.S. Bond Index Portfolio (currently
known as Fidelity U.S. Bond Index Fund) and Fidelity U.S. Equity Index
Portfolio (currently known as Spartan U.S. Equity Index Fund) and Fidelity
Distributors Corporation, dated March 14, 1996 and July 15, 1996, are
incorporated herein by reference to Exhibit 6(a) of Fidelity Court Street
Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(d) Form of General Distribution Agreement between the Registrant, on
behalf of Spartan Total Market Index Fund, and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(d) of
Post-Effective Amendment No. 66.
(e) Form of General Distribution Agreement between the Registrant, on
behalf of Spartan Extended Market Index Fund, and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(e) of
Post-Effective Amendment No. 26.
(f) Form of General Distribution Agreement between the Registrant, on
behalf of Spartan International Index Fund, and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(f) of
Post-Effective Amendment No. 26.
(7)(a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, as amended on November 16, 1995, is incorporated herein
by reference to Exhibit 7(a) of Fidelity Select Portfolio's (File No.
2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1, 1995, is
incorporated herein by reference to Exhibit 7(b) of Fidelity School Street
Trust's (File No. 2-57167) Post-Effective Amendment No. 47.
(8)(a) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and the Registrant, on behalf of Fidelity U.S.
Bond Index Portfolio (currently know as Fidelity U.S. Bond Index Fund), is
incorporated herein by reference to Exhibit 8(a) of Fidelity Hereford
Street Trust's Post-Effective Amendment No. 4 (File No. 33-52577).
(b) Appendix A, dated August 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the Registrant, on
behalf of Fidelity U.S. Bond Index Portfolio (currently known as Fidelity
U.S. Bond Index Fund), is incorporated herein by reference to Exhibit 8(b)
of Daily Money Fund's Post-Effective Amendment No. 40 (File No. 2-77909).
(c) Appendix B, dated July 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the Registrant, on
behalf of Fidelity U.S. Bond Index Portfolio (currently known as Fidelity
U.S. Bond Index Fund), is incorporated herein by reference to Exhibit 8(c)
of Fidelity Income Fund's Post-Effective Amendment No. 35 (File No.
2-92661).
(d) Custodian Agreement, Appendix A, and Appendix C, dated February 1,
1996, between State Street Bank and Trust Company and the Registrant, on
behalf of Fidelity U.S. Equity Index Portfolio (currently known as Spartan
U.S. Equity Index Fund), was electronically filed and is incorporated
herein by reference to Exhibit 8(b) of Post-Effective Amendment No. 22.
(e) Appendix B, dated May 16, 1996, to the Custodian Agreement, dated
February 1, 1996, between State Street Bank and Trust Company and the
Registrant, on behalf of Fidelity U.S. Equity Index Portfolio (currently
known as Spartan U.S. Equity Index Fund), is incorporated herein by
reference to Exhibit 8(b) of Fidelity Destiny Portfolio's Post-Effective
Amendment No. 62 (File No. 2-34099).
(f) Form of Custodian Agreement, Appendix A, and Appendix C between
Bankers Trust and the Registrant, on behalf of Spartan Total Market Index
Fund, Spartan Extended Market Index Fund and Spartan International Index is
filed herein as Exhibit 8(f).
(i) Fidelity Group Repo Custodian Agreement among The Bank of New York,
J. P. Morgan Securities, Inc., and the Registrant, on behalf of Fidelity
U.S. Bond Index Portfolio (currently known as Fidelity U.S. Bond Index
Fund) and Fidelity U.S. Equity Index Portfolio (currently known as Spartan
U.S. Equity Index Fund), dated February 12, 1996, is incorporated herein by
reference to Exhibit 8(d) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(j) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
The Bank of New York and the Registrant, on behalf of Fidelity U.S. Bond
Index Portfolio (currently known as Fidelity U.S. Bond Index Fund) and
Fidelity U.S. Equity Index Portfolio (currently known as Spartan U.S.
Equity Index Fund), dated February 12, 1996, is incorporated herein by
reference to Exhibit 8(e) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(k) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, on behalf of Fidelity
U.S. Bond Index Portfolio (currently known as Fidelity U.S. Bond Index
Fund) and Fidelity U.S. Equity Index Portfolio (currently known as Spartan
U.S. Equity Index Fund), dated November 13, 1995, is incorporated herein by
reference to Exhibit 8(f) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(l) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
Chemical Bank and the Registrant, on behalf of Fidelity U.S. Bond Index
Portfolio (currently known as Fidelity U.S. Bond Index Fund) and Fidelity
U.S. Equity Index Portfolio (currently known as Spartan U.S. Equity Index
Fund), dated November 13, 1995, is incorporated herein by reference to
Exhibit 8(g) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(m) Joint Trading Account Custody Agreement between The Bank of New
York and the Registrant, on behalf of Fidelity U.S. Bond Index Portfolio
(currently known as Fidelity U.S. Bond Index Fund) and Fidelity U.S. Equity
Index Portfolio (currently known as Spartan U.S. Equity Index Fund), dated
May 11, 1995, is incorporated herein by reference to Exhibit 8(h) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(n) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and the Registrant, on behalf of Fidelity U.S.
Bond Index Portfolio (currently known as Fidelity U.S. Bond Index Fund) and
Fidelity U.S. Equity Index Portfolio (currently known as Spartan U.S.
Equity Index Fund), dated July 14, 1995, is incorporated herein by
reference to Exhibit 8(i) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(o) Forms of Fidelity Group Repo Custodian Agreement and Schedule 1
among The Bank of New York, J. P. Morgan Securities, Inc., and the
Registrant, on behalf of Spartan International Index Fund, Spartan Total
Market Index Fund, and Spartan Extended Market Index Fund, are filed herein
as Exhibit 8(n).
(p) Forms of Fidelity Group Repo Custodian Agreement and Schedule 1
among Chemical Bank, Greenwich Capital Markets, Inc., and the Registrant,
on behalf of Spartan International Index Fund, Spartan Total Market Index
Fund, and Spartan Extended Market Index Fund are filed herein as Exhibit
8(o).
(q) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between The Bank of
New York and the Registrant, on behalf of Spartan International Index Fund,
Spartan Total Market Index Fund, and Spartan Extended Market Index Fund,
are filed herein as Exhibit 8(p).
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) None.
(13) Written assurances that purchase representing initial capital was
made for investment purposes without any present intention of redeeming a
reselling were electronically filed and are incorporated herein by
reference as Exhibit 13 to Post-Effective Amendment No. 17.
(14)(a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(h) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity Commonwealth
Trust's (File No. 2-52322) Post Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Commonwealth Trust's (File No.
2-52322) Post Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust
Basic Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Securities
Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) of Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement,
as currently in effect, is incorporated herein by reference to Exhibit
14(c) of Fidelity Securities Fund's (File No. 2-93601) Post Effective
Amendment No. 33.
(15)
(a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
U.S. Bond Index Portfolio (currently known as Fidelity U.S. Bond Index
Fund) is filed herein as Exhibit 15(a).
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
U.S. Equity Index Portfolio (currently known as Spartan U.S. Equity Index
Fund) is filed herein as Exhibit 15(b).
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Total Market Index Fund is filed herein as Exhibit 15(c).
(d) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Extended Market Index Fund is filed herein as Exhibit 15(d).
(e) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
International Index Fund is filed herein as Exhibit 15(e).
(16)(a) Schedules and data points for total return for Fidelity U.S.
Equity Index Portfolio (currently known as Spartan U.S. Equity Index Fund)
were electronically filed and incorporated herein by reference as Exhibit
16(a) to Post-Effective Amendment No. 20.
(b) Schedules and data points for 30-day yield for Fidelity U.S.
Bond Index Portfolio (currently known as Fidelity U.S. Bond Index Fund)
were electronically filed and incorporated herein by reference as Exhibit
16(b) to Post-Effective Amendment No. 20.
(c) Schedules and data points for moving averages for Fidelity U.S.
Equity Index Portfolio (currently known as Spartan U.S. Equity Index Fund)
were electronically filed and incorporated herein by reference as
Exhibit 16(c) to Post-Effective Amendment No. 20.
(17) Financial Data Schedules are filed herein for Fidelity U.S. Bond
Index Fund and Spartan U.S. Equity Index Fund, as Exhibit 27, respectively.
Financial Data Schedules for Spartan Extended Market Index Fund, Spartan
International Index Fund, and Spartan Total Market Index Fund will be filed
by subsequent amendment.
(18) Not Applicable.
Item 25. Persons Controlled by or Under Common Control with Registrant
Fidelity Management & Research Company, the investment adviser, owns a
majority of shares of the Registrant. All of the outstanding stock of
Fidelity Management & Research Company, a Massachusetts corporation, is
owned by FMR Corp., a Massachusetts corporation. FMR Corp. is controlled
by Edward C. Johnson 3d, by reason of his current ownership of more than
50% of the voting common stock of the company. Fidelity Management &
Research Company owns all of the outstanding voting securities of Fidelity
Distributors Corporation, a Massachusetts corporation. Fidelity Service
Company, Fidelity Investments Institutional Operations Company, and
Fidelity Investments Retail Services are divisions of FMR Corp. FMR Corp.
also owns all of the outstanding voting securities of FMR Investment
Management Service, Inc. and Fidelity International Investment Management,
Inc., Delaware corporations, and Fidelity Investors Credit Corp., a
Massachusetts corporation.
Item 26. Number of Holders of Securities
May 31, 1997
Title of Class Number of Record Holders
Fidelity U.S. Bond Index Fund 64,694
Spartan Extended Market Index Fund 1
Spartan International Index Fund 1
Spartan Total Market Index Fund 1
Spartan U.S. Equity Index Fund 884,295
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him or her in connection with any claim, action suit
or proceeding in which he or she is involved by virtue of his or her
service as a trustee, an officer, or both. 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.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to indemnify
and hold Service harmless against any losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names the Service and/or the
Registrant as a party and is not based on and does not result from
Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with Service's
performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from Service's acting upon any instruction(s) reasonably believed by it
to have been executed or communicated by any person duly authorized by the
Registrant, or as a result of Service's acting in reliance upon advice
reasonably believed by Service to have been given by counsel for the
Registrant, or as a result of Service's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
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 Board of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the
Board and Director of FMR, FMR Corp., FMR Texas
Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Chairman of the Board and Representative Director of
Fidelity Investments Japan Limited; President and
Trustee of funds advised by FMR.
Robert C. Pozen President and Director of FMR; President and Director
of FMR Texas Inc., FMR (U.K.) Inc., and FMR (Far
East) Inc.; General Counsel, Managing Director, and
Senior Vice President of FMR Corp.
J. Gary Burkhead President of FIIS; President and Director of FMR,
FMR Texas Inc., FMR (U.K.) Inc., and FMR (Far
East) Inc.; Managing Director of FMR Corp.; Senior
Vice President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
John Carlson Vice President of FMR.
Dwight D. Churchill Senior Vice President of FMR.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR
William Danoff Senior Vice President of FMR and of a fund advised by
FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Senior Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
Bruce Herring Vice President of FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Senior Vice President of FMR and of a fund advised by
FMR; Associate Director and Senior Vice President of
Equity funds advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by
FMR; Vice President of High Income funds advised by
FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Mark G. Lohr Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Charles Mangum Vice President of FMR.
Kevin McCarey Vice President of FMR.
Diane McLaughlin Vice President of FMR.
Neal P. Miller Vice President of FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Scott Orr Vice President of FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kennedy P. Richardson Vice President of FMR.
Mark Rzepczynski Vice President of FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Carol Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by
FMR; Senior Vice President and Director of
Operations and Compliance of FMR (U.K.) Inc.
Thomas Sprague Vice President of FMR.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Scott Stewart Vice President of FMR.
Cythia Straus Vice President of FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
(2) BANKERS TRUST
130 Liberty Street, New York, New York 10006
Bankers Trust serves as investment adviser to the Funds' Portfolios.
Bankers Trust, a New York banking corporation, is a wholly owned subsidiary
of Bankers Trust New York Corporation. Bankers Trust conducts a variety of
commercial banking and trust activities and is a major wholesale supplier
of financial services to the international institutional market. To the
knowledge of the Trust, none of the directors or officers of Bankers Trust,
except those set forth below, is or has been at anytime during the past two
fiscal years engaged in any other business, profession, vocation or
employment of a substantial nature, except that certain directors and
officers also hold various positions with and engage in business for
Bankers Trust New York Corporation. Set forth below are the names and
principal businesses of the directors and officers of Bankers Trust who are
or during the past two fiscal years have been engaged in any other
business, profession, vocation or employment of a substantial nature.
These persons may be contacted c/o Bankers Trust Company, 130 Liberty
Street, New York, New York 10006.
George B. Beitzel, International Business Machines Corporation, Old Orchard
Road, Armonk NY 10504. Director, Bankers Trust Company; Retired senior
vice president and Director International Business Machines Corporation;
Director, Computer Task Group; Director, Philips Petroleum Company;
Director, Caliber Systems, Inc. (formerly, Roadway Services Inc.);
Director, Rohm and Haas Company; Director, TIG Holdings; Chairman emeritus
of Amherst College; and Chairman of the Colonial Willimsburg Foundation.
Richard H. Daniel, Bankers Trust Company, 130 Liberty Street, New York, New
York 10006. Vice Chairman and chief financial officer, Bankers Trust
Company and Bankers Trust New York Corporation; Beneficial owner, general
partner, Daniel Brothers, Daniel Lingo & Assoc., Daniel Pelt & Assoc.;
Beneficial owner, Rhea C. Daniel Trust.
Philip A. Griffiths, Bankers Trust Company, 130 Liberty Street, New York,
New York 10006. Director, Institute for Advanced Study; Director, Bankers
Trust Company; Chairman, Committee on Science, Engineering and Public
Policy of the National Academies of Sciences and Engineering & Institute of
Medicine; and Chairman and member, Nominations Committee and Committee on
Science and Engineering Indicators, National Science Board; Trustee, North
Carolina School of Science and Mathematics and the Woodward Academy.
William R. Howell, J.C. Penney Company, Inc., P.O. Box 10001, Plano, TX
75301-0001. Chairman Emeritus, J.C. Penney Company, Inc.; Director,
Bankers Trust Company; Director, Exxon Corporation; Director, Halliburton
Company; Director, Exxon Corporation; Director Halliburton Company;
Director, Warner-Lamber Corporation; Director, The Williams Companies,
Inc.; and Director, National Retail Federation.
Vernon E. Jordan, Jr., Akin, Gump, Straus, Hauer & Field, LLP, 1333 New
Hampshire Ave., N.W., Washington DC 20036. Senior Partner, Akin, Gump,
Straus, Hauer & Field, LLP; Director, Bankers Trust Company; Director,
American Express Company; Director, Dow-Jones, Inc.; Director J.C. Penney
Company, Inc.; Director, Revlon Group Incorporated; Director, Ryder System,
Inc.; Director, Sara Lee Corporation; Director, Union Carbide Corporation;
Director, Xerox Corporation; Trustee, Brookings Institution; Trustee, The
Ford Foundation; and Trustee, Howard University.
David Marshall, 130 Liberty Street, New York, New York 10006. Chief
Information Officer and Executive Vice President, Bankers Trust New York
Corporation; Senior Managing Director, Bankers Trust Company.
Hamish Maxwell, Philip Morris Companies Inc., 120 Park Avenue, New York, NY
10006. Retired Chairman and Chief Executive Officer, Philip Morris
Companies Inc.; Director, Bankers Trust Company; Director, The News
Corporation Limited; Director, Sola International Inc.; and Chairman, WWP
Group pic.
Frank N. Newman, Bankers Trust Company, 130 Liberty Street, New York, New
York 10006. Chairman of the Board, Chief Executive Officer and President,
Bankers Trust New York Corporation and Bankers Trust Company; Director,
Bankers Trust Company; Director Dow-Jones Inc.; and Director Carnegie Hall.
N.J. Nicholas Jr., 745 Fifth Avenue, New York, NY 10020. Director, Bankers
Trust Company; Director, Boston Scientific Corporation; and Director, Xerox
Corporation.
Russell E. Palmer, The Palmer Group, 3600 Market Street, Suite 530,
Philadelphia, PA 10104. Chairman and Chief Executive Officer of the Palmer
Group; Director, Bankers Trust Company; Director, Allied-Signal Inc.
Director, Federal Home Loan Mortgage Corporation; Director, GTE
Corporation; Director, The May Department Stores Company; Director,
Safeguard Scientifics, Inc.; and Trustee, University of Pennsylvania.
Donald Staheli, Bankers Trust Company, 130 Liberty Street, New York, New
York 10006. Chairman of the Board and Chief Executive Office, Continental
Grain Company; Director, Bankers Trust Company; Director ContiFinancial
Corporation; Director, Prudential Life Insurance Company of America;
Director, Fresenius Medical Care, A.g.; Director, America-China Society;
Director, National Committee on United States-China Relations; Director,
New York City Partnership; Chairman, U.S.-China Business Council; Chairman,
Council on Foreign Relations; Chairman, National Advisor Council of Brigham
Young University's Marriott School of Management; Vice Chairman, The Points
of Light Foundation; and Trustee, American Graduate School of International
Management.
Patricia Carry Stewart, c/o Office of the Secretary, 130 Liberty Street,
New York, NY 10006. Director, Bankers Trust Company; Director, CVS
Corporation; Director, Community Foundation for Palm Beach and Martin
Counties; Trustee Emerita, Cornell University.
George J. Vojta, Bankers Trust Company, 130 Liberty Street, New York, NY
10006. Vice Chairman, Bankers Trust New York Corporation and Bankers Trust
Company; Director Bankers Trust Company; Director Alicorp S.A.; Director;
Northwest Airlines; Director, Private Export Funding Corp.; Director, New
York State Banking Board; Director, St. Lukes-Roosevelt Hospital Center;
Partner, New York City Partnership; and Chairman, Wharton Financial Center.
Paul A. Volcker, Bankers Trust Company, 130 Liberty Street, New York, New
York 10006. Director, Bankers Trust Company; Director, American Stock
Exchange; Director, Nestle S.A.; Director, Prudential Insurance Company;
Director, UAL Corporation; Chairman, Group of 30; North American Chairman,
Trilateral Commission; Co-Chairman, Bretton Woods Committee; Co-Chairman,
U.S./Hong Kong Economic Cooperation Committee; Director, American Council
on Germany; Director, Aspen Institute; Director, Council on Foreign
Relations; Director, The Japan Society; and Trustee, The American Assembly.
Melvin A. Yellin, Bankers Trust Company, 130 Liberty Street, New York, New
York 10006. Senior Managing Director and General Counsel of Bankers Trust
New York Corporation and Bankers Trust Company; Director, 1136 Tenants
Corporation; and Director, ABA Securities Association.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 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
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the respective
custodian for Spartan U.S. Equity Index Fund and Fidelity U.S. Bond Index
Fund: The Bank of New York, 110 Washington Street, New York, N.Y. or State
Street Bank and Trust Company, 40 Water Street, Boston, MA, or the
respective custodian and sub-adviser for Spartan Total Market Index Fund,
Spartan Extended Market Index Fund, and Spartan International Index Fund:
Bankers Trust, 130 Liberty Street, New York, New York 10006.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(1) The Registrant undertakes, so long as the staff of the Securities and
Exchange Commission continues to require such an undertaking in the
registration statement for a new portfolio, to file a Post-Effective
Amendment, using financial statements for Spartan Total Market Index Fund,
Spartan Extended Market Index Fund, and Spartan International Index Fund,
which need not be certified, within six months of the fund's effectiveness,
unless permitted by the SEC to extend this period.
(2) The Registrant undertakes for Spartan Total Market Index Fund, Spartan
Extended Market Index Fund, and Spartan International Index Fund: (1) to
call a meeting of shareholders for the purpose of voting upon the questions
of removal of a trustee or trustees, when requested to do so by record
holders of not less than 10% of its outstanding shares; and (2) to assist
in communications with other shareholders pursuant to Section 16(c)(1) and
(2), whenever shareholders meeting the qualifications set forth in Section
16(c) seek the opportunity to communicate with other shareholders with a
view toward requesting a meeting.
(3) The Registrant, on behalf of Fidelity U.S. Bond Index Fund, Spartan
U.S. Equity Index Fund, Spartan Total Market Index Fund, Spartan Extended
Market Index Fund, and Spartan International Index Fund, provided the
information required by Item 5A is contained in the annual report,
undertakes to furnish each person to whom a prospectus has been delivered,
upon their request and without charge, a copy of the Registrant's latest
annual report to shareholders.
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. 27 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 8th day of July 1997.
FIDELITY CONCORD STREET TRUST
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 Trustee July 8, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer July 8, 1997
Richard A. Silver
/s/J. Gary Burkhead Trustee July 8 , 1997
J. Gary Burkhead
/s/Ralph F. Cox ** Trustee July 8, 1997
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee July 8, 1997
Phyllis Burke Davis
/s/Robert M. Gates *** Trustee July 8, 1997
Robert M. Gates
/s/E. Bradley Jones ** Trustee July 8, 1997
E. Bradley Jones
/s/Donald J. Kirk ** Trustee July 8, 1997
Donald J. Kirk
/s/Peter S. Lynch ** Trustee July 8, 1997
Peter S. Lynch
/s/Marvin L. Mann ** Trustee July 8, 1997
Marvin L. Mann
/s/William O. McCoy ** Trustee July 8, 1997
William O. McCoy
/s/Gerald C. McDonough ** Trustee July 8, 1997
Gerald C. McDonough
/s/Thomas R. Williams ** Trustee July 8, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J.Gary Burkhead pursuant to a power of
attorney dated January 3, 1997 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
*** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated March 6, 1997 and filed herewith.
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 Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Concord Street Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Plans 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 Union Street Trust II
Fidelity Exchange Fund Fidelity Yen Performance Portfolio, L.P.
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, Form N-8B-2, or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, 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 deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorney-in-fact or
his substitutes may do or cause to be done by virtue hereof. This power of
attorney is effective for all documents filed on or after January 3, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d January 3, 1997
Edward C. Johnson 3d
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 Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Concord Street Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, 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 Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, 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
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the 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. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/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 Director, Trustee, or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Concord Street Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Director, Trustee, or General Partner
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, 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 capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, 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 the 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. This power of attorney is effective for
all documents filed on or after March 1, 1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
Exhibit 1(c)
THE COMMONWEALTH OF MASSACHUSETTS
WILLIAM GALVIN
SECRETARY OF THE COMMONWEALTH
STATE HOUSE - BOSTON, MA
SUPPLEMENT TO THE DECLARATION OF TRUST
We, J. Gary Burkhead, Senior Vice President and Arthur S. Loring, Secretary
of
FIDELITY CONCORD STREET TRUST
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
hereby certify that, in accordance with ARTICLE XII, SECTION 7 of the
Declaration of Trust of Fidelity Concord Street Trust (dated July 10,
1987), the following Amendments to said Declaration of Trust were duly
adopted by a majority shareholder vote at meetings duly called and held.
VOTED: That the Declaration of Trust dated July 10, 1987, be and hereby is,
amended as follows:
1. That Article VIII, Section 1 of the Declaration of Trust shall be, and
it hereby is, amended to read as follows:
"The Shareholders shall have power to vote (i) for the election of
Trustees as provided in Article IV, Section 2, (ii) for the removal of
Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII,
Section 1, (iv) with respect to the amendment of this Declaration of Trust
as provided in Article XII, Section 7, (v) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or not
a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, provided, however, that a Shareholder of a particular Series
shall not be entitled to bring any derivative or class action on behalf of
any other Series of the Trust, (vi) to amend the fundamental investment
policy of the Trust; and (vii) with respect to such additional matters
relating to the Trust as may be required or authorized by law, by this
Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any State, as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all Shares shall be voted
by individual Series, except (i) when required by the 1940 Act, Shares
shall be voted in the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects only the interests of
one or more Series, then only the Shareholders of such Series shall be
entitled to vote thereon. A Shareholder of each Series shall be entitled to
one vote for each dollar of net asset value (number of shares owned times
net asset value per share) of such Series, on any matter on which such
Shareholder is entitled to vote and each fractional dollar amount shall be
entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by
proxy. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this
Declaration of Trust or any Bylaws of the Trust to be taken by
Shareholders."
2. That Article IV, Section 4 of the Declaration of Trust shall be, and it
hereby is, amended to read as follows:
"In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason, exist,
the remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. An appointment of a Trustee may be made
by the Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall become
effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16 (a) of
the 1940 Act."
3. That Article V, Section 1 of the Declaration of Trust shall be, and it
hereby is, amended to read as follows:
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have the power and authority: . . .
(t) Notwithstanding any other provision hereof, to invest all of the
assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company."
The foregoing Amendments to the Declaration of Trust will become effective
June 6, 1997 when this Supplement is filed with the Commonwealth of
Massachusetts (Secretary of State's Office) and the City of Boston (Office
of the City Clerk).
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto
signed our names this 6th day of June, 1997.
/s/ J. Gary Burkhead /s/ Arthur S. Loring
J. Gary Burkhead Arthur S. Loring
Senior Vice President Secretary
Exhibit 1(d)
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
SECRETARY OF THE COMMONWEALTH
STATE HOUSE - BOSTON, MA
SUPPLEMENT TO THE DECLARATION OF TRUST
FIDELITY INSTITUTIONAL TRUST
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
We do hereby certify that, in accordance with ARTICLE XII, Section 7 of the
Declaration of Trust of FIDELITY INSTITUTIONAL TRUST, the following
Amendment to said Declaration of Trust was duly adopted by a majority vote
of the Board of Trustees at a meeting duly called and held on April 17,
1997.
VOTED: That the Declaration of Trust dated July 10, 1987 and Supplemented
December 1, 1988, and it hereby is, amended as follows:
That Article I, Section 1 of the Declaration of Trust shall be amended to
read as
follows:
"This Trust shall be known as 'Fidelity Concord Street Trust'."
That Article I, Section 2(b) of the Declaration of Trust shall be amended
to read as follows:
"The 'Trust' refers to Fidelity Concord Street Trust and
reference to the Trust, when applicable to one or more Series of the Trust,
shall refer to any such Series;"
The foregoing Supplement to the Declaration of Trust is effective April 29,
1997 so long as this Supplement is filed in accordance with Chapter 182,
Section 2, of the General Laws.
IN WITNESS whereof and under the penalties of perjury, we have hereunto
signed our names this 13th day of May, 1997.
/s/ J. Gary Burkhead /s/ Arthur S. Loring
J. Gary Burkhead Arthur S. Loring
Senior Vice President Secretary
Exhibit 5(c)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY CONCORD STREET TRUST
SPARTAN TOTAL MARKET INDEX FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ___ day of _____, 1997, by and between Fidelity
Concord Street Trust, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan Total Market Index Fund (hereinafter called
the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") as set forth
in its entirety below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, any
sub-advisers, custodians, depositories, transfer and pricing agents,
accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder
reports; (iv) conducting shareholder relations; (v) maintaining the Fund's
existence and its records; (vi) during such times as shares are publicly
offered, maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the development
of and developing and implementing, if appropriate, management and
shareholder services designed to enhance the value or convenience of the
Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee at the annual rate of 0.24% of the
average daily net assets of the Portfolio (computed in the manner set forth
in the Declaration of Trust) throughout the month; provided that in the
case of initiation or termination of this contract during any month, the
fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
6. Subject to the prior written approval of the Trustees of the Trust,
satisfaction of all applicable requirements under the 1940 Act, and such
other terms and conditions as the Trustees may impose, the Adviser may
appoint (and may from time to time remove) one or more unaffiliated persons
as agent to perform any or all of the services specified hereunder and to
carry out such provisions of this Agreement as the Adviser may from time to
time direct and may delegate to such unaffiliated persons the authority
vested in the Adviser pursuant to this Agreement to the extent necessary to
enable such persons to perform the services requested of such person by the
Adviser, provided however, that the appointment of any such agent shall not
relieve the Adviser of any of its liabilities hereunder.
7. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 7, this Contract shall continue in force until July 31, 1998
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 7, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
8. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
9. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY CONCORD STREET TRUST
on behalf of Spartan Total Market Index Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
Exhibit 5(d)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY CONCORD STREET TRUST
SPARTAN EXTENDED MARKET INDEX FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ___ day of _____, 1997, by and between Fidelity
Concord Street Trust, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan Extended Market Index Fund (hereinafter
called the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") as set forth
in its entirety below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, any
sub-advisers, custodians, depositories, transfer and pricing agents,
accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder
reports; (iv) conducting shareholder relations; (v) maintaining the Fund's
existence and its records; (vi) during such times as shares are publicly
offered, maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the development
of and developing and implementing, if appropriate, management and
shareholder services designed to enhance the value or convenience of the
Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee at the annual rate of 0.24% of the
average daily net assets of the Portfolio (computed in the manner set forth
in the Declaration of Trust) throughout the month; provided that in the
case of initiation or termination of this contract during any month, the
fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
6. Subject to the prior written approval of the Trustees of the Trust,
satisfaction of all applicable requirements under the 1940 Act, and such
other terms and conditions as the Trustees may impose, the Adviser may
appoint (and may from time to time remove) one or more unaffiliated persons
as agent to perform any or all of the services specified hereunder and to
carry out such provisions of this Agreement as the Adviser may from time to
time direct and may delegate to such unaffiliated persons the authority
vested in the Adviser pursuant to this Agreement to the extent necessary to
enable such persons to perform the services requested of such person by the
Adviser, provided however, that the appointment of any such agent shall not
relieve the Adviser of any of its liabilities hereunder.
7. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 7, this Contract shall continue in force until July 31, 1998
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 7, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
8. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
9. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY CONCORD STREET TRUST
on behalf of Spartan Extended Market Index Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
Exhibit 5(e)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY CONCORD STREET TRUST
SPARTAN INTERNATIONAL INDEX FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ___ day of _____, 1997, by and between Fidelity
Concord Street Trust, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan International Index Fund (hereinafter called
the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") as set forth
in its entirety below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, any
sub-advisers, custodians, depositories, transfer and pricing agents,
accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder
reports; (iv) conducting shareholder relations; (v) maintaining the Fund's
existence and its records; (vi) during such times as shares are publicly
offered, maintaining the registration and qualification of the Portfolio's
shares under federal and state law; and (vii) investigating the development
of and developing and implementing, if appropriate, management and
shareholder services designed to enhance the value or convenience of the
Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee at the annual rate of 0.34% of the
average daily net assets of the Portfolio (computed in the manner set forth
in the Declaration of Trust) throughout the month; provided that in the
case of initiation or termination of this contract during any month, the
fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
6. Subject to the prior written approval of the Trustees of the Trust,
satisfaction of all applicable requirements under the 1940 Act, and such
other terms and conditions as the Trustees may impose, the Adviser may
appoint (and may from time to time remove) one or more unaffiliated persons
as agent to perform any or all of the services specified hereunder and to
carry out such provisions of this Agreement as the Adviser may from time to
time direct and may delegate to such unaffiliated persons the authority
vested in the Adviser pursuant to this Agreement to the extent necessary to
enable such persons to perform the services requested of such person by the
Adviser, provided however, that the appointment of any such agent shall not
relieve the Adviser of any of its liabilities hereunder.
7. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 7, this Contract shall continue in force until July 31, 1998
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 7, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
8. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
9. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY CONCORD STREET TRUST
on behalf of Spartan International Index Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
Exhibit 5(f)
FORM OF
SUBADVISORY AGREEMENT
between
BANKERS TRUST COMPANY
and
SPARTAN TOTAL MARKET INDEX FUND
This Agreement is entered into as of the ___ day of _____, 1997, among
Fidelity Concord Street Trust, a Massachusetts business trust (the
"Trust"), on behalf of Spartan Total Market Index Fund, a series portfolio
of the Trust (the "Portfolio"), Fidelity Management & Research Company, a
Massachusetts corporation ("Manager"), and Bankers Trust Company, a New
York banking corporation ("Subadviser").
WHEREAS, the Trust, on behalf of the Portfolio, has entered into a
Management Contract, dated July __, 1997, with Manager (the "Management
Contract"), pursuant to which Manager has agreed to provide certain
management and administrative services to the Portfolio; and
WHEREAS, Manager desires to appoint Subadviser as investment subadviser to
provide the investment advisory and administrative services to the
Portfolio specified herein, and Subadviser is willing to serve the
Portfolio in such capacity; and
WHEREAS, the trustees of the Trust (the "Trustees"), including a majority
of the Trustees who are not "interested persons" (as such term is defined
below) of any party to this Agreement, and the sole shareholder of the
Portfolio, have each consented to such an arrangement;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
I. APPOINTMENT OF SUBADVISER; COMPENSATION
1.1 Appointment as Subadviser. Subject to and in accordance with the
provisions hereof, Manager hereby appoints Subadviser as investment
subadviser to perform the various investment advisory and other services to
the Portfolio set forth herein and, subject to the restrictions set forth
herein, hereby delegates to Subadviser the authority vested in Manager
pursuant to the Management Contract to the extent necessary to enable
Subadviser to perform its obligations under this Agreement.
1.2 Scope of Investment Authority. (a) The Subadviser is hereby
authorized, on a discretionary basis, to manage the investments and
determine the composition of the assets of the Portfolio, subject at all
times to (i) the supervision and control of the Trustees, (ii) the
requirements of the Investment Company Act of 1940, as amended (the
"Investment Company Act") and the rules thereunder, (iii) the investment
objective, policies and limitations, as provided in the Portfolio's
Prospectus and other governing documents, and (iv) such instructions,
policies and limitations relating to the Portfolio as the Trustees or
Manager may from time to time adopt and communicate in writing to
subadviser. Notwithstanding anything herein to the contrary, Subadviser is
not authorized to take any action, including the purchase and sale of
portfolio securities, in contravention of any restriction, limitation,
objective, policy or instruction described in the previous sentence.
(b) It is understood and agreed that, for so long as this Agreement shall
remain in effect, Subadviser shall retain discretionary investment
authority over the manner in which the Portfolio's assets are invested, and
Manager shall not have the right to overrule any investment decision with
respect to a particular security made by Subadviser, provided that the
Trustees and Manager shall at all times have the right to monitor the
Portfolio's investment activities and performance, require Subadviser to
make reports and give explanations as to the manner in which the
Portfolio's assets are being invested, and, should either Manager or the
Trustees become dissatisfied with Subadviser's performance in any way,
terminate this Agreement in accordance with the provisions of Section 9.2
hereof.
1.3 Appointment as Proxy Voting Agent. Subject to and in accordance with
the provisions hereof, the Trustees hereby appoint Subadviser as the
Portfolio's proxy voting agent, and hereby delegate to Subadviser
discretionary authority to vote all proxies solicited by or with respect to
issuers of securities in which the assets of the Portfolio may be invested
from time to time. Upon written notice to Subadviser, the Trustees may at
any time withdraw the authority granted to Subadviser pursuant to this
Section 1.3 to perform any or all of the proxy voting services contemplated
hereby.
1.4 Governing Documents. Manager will provide Subadviser with copies of
(i) the Trust's Declaration of Trust and By-laws, as currently in effect,
(ii) the Portfolio's currently effective prospectus and statement of
additional information, as set forth in the Trust's registration statement
under the Investment Company Act and the Securities Act of 1933, as
amended, (iii) any instructions, investment policies or other restrictions
adopted by the Trustees or Manager supplemental thereto, and (iv) the
Management Contract. Manager will provide Subadviser with such further
documentation and information concerning the investment objectives,
policies and restrictions applicable to the Portfolio as Subadviser may
from time to time reasonably request.
1.5 Subadviser's Relationship. Notwithstanding anything herein to the
contrary, Subadviser shall be an independent contractor and will have no
authority to act for or represent the Trust, the Portfolio or Manager in
any way or otherwise be deemed an agent of any of them, except to the
extent expressly authorized by this Agreement or in writing by the Trust or
Manager.
1.6 Compensation. Subadviser shall be compensated for the services it
performs on behalf of the Portfolio in accordance with the terms set forth
in Appendix A to this Agreement.
II. SERVICES TO BE PERFORMED BY SUBADVISER
2.1 Investment Advisory Services. (a) In fulfilling its obligations to
manage the assets of the Portfolio, Subadviser will:
(i) formulate and implement a continuous investment program for the
Portfolio, including, without limitation, implementation of a securities
lending program in accordance with the provisions of Article III hereof;
(ii) take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities and other investments,
including the selection of brokers or dealers, the placing of orders for
such purchases and sales in accordance with the provisions of paragraph (b)
below and assuring that such purchases and sales are properly settled and
cleared;
(iii) provide such reports with respect to the implementation of the
Portfolio's investment program as the Trustees or Manager shall reasonably
request; and
(iv) provide advice and assistance to Manager as to the determination of
the fair
value of certain securities where market quotations are not readily
available for purposes of calculating net asset value of the Portfolio in
accordance with valuation procedures and methods established by the
Trustees.
(b) The Subadviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers and dealers
selected by Subadviser. Such brokers and dealers may include brokers or
dealers that are "affiliated persons" (as such term is defined in the
Investment Company Act) of the Trust, the Portfolio, Manager or Subadviser,
provided that Subadviser shall only place orders on behalf of the Portfolio
with such affiliated persons in accordance with procedures adopted by the
Trustees pursuant to Rule 17e-1 under the Investment Company Act. The
Subadviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or other accounts
over which Subadviser or its affiliates exercise investment discretion.
The Subadviser is authorized to pay a broker or dealer who provided such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Subadviser and its affiliates have in respect to
accounts over which they exercise investment discretion. The Trustees
shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods were
reasonable in relation to the benefits to the Portfolio.
2.2. Administrative and Other Services. (a) Subadviser will, at its
expense, furnish (i) all necessary investment and management facilities,
including salaries of personnel required for it to execute its duties
faithfully, and (ii) administrative facilities, including bookkeeping,
clerical personnel and equipment necessary for the efficient conduct of the
investment affairs of the Portfolio (excluding determination of net asset
values and shareholder accounting services).
(b) Subadviser will maintain all accounts, books and records with respect
to the Portfolio as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act and the rules
thereunder. Subadviser agrees that such records are the property of the
Trust, and will be surrendered to the Trust promptly upon request. The
Manager shall be granted reasonable access to the records and documents in
Subadviser's possession relating to the Portfolios.
(c) Subadviser will vote the Portfolio's investment securities in the
manner in which Subadviser believes to be in the best interests of the
Portfolio, and shall review its proxy voting activities on a periodic basis
with the Trustees.
(d) Subadviser will provide custodian services to the Portfolio in
accordance with the provisions of a separate Custodian Agreement, dated as
of the date hereof, between the Trust, on behalf of the Portfolio, and
Subadviser.
III. SECURITIES LENDING
3.1. Appointment as Agent. For as long as this Agreement shall remain in
effect, Subadviser is hereby authorized as the Portfolio's agent to lend on
a disclosed basis the Portfolio's securities. Subadviser is further
authorized as the Portfolio's agent to sign agreements with borrowers,
ownership or other certificates as may be required by the Internal Revenue
Service or any other tax authorities, and to take any other actions
necessary to effect such loans.
3.2. Indemnification. (a) In the event that any securities lending
transaction is terminated and the loaned securities or any portion thereof
shall not have been returned to the Portfolio by or on behalf of the
borrower within the time specified by Subadviser's agreement with the
borrower (the "Delivery Date"), Subadviser shall, at its expense, within
one (1) business day after the Delivery Date replace the loaned securities
(or any portion thereof not so returned) with a like amount of the loaned
securities of the same issuer, class and denomination, and hold the
Portfolio, the Trustees and Manager harmless from any brokerage commission,
fees, taxes or other expenses incurred by Subadviser in the purchase of
such replacement securities. If Subadviser is unable to purchase such
replacement securities on the open market within [one business day] after
the Delivery Date (the "Reimbursement Date"), Subadviser shall credit the
Portfolio's account by the close of business on the Reimbursement Date with
an amount of cash in U.S. dollars equal to (i) if the Portfolio shall
continue to hold such unreturned loaned securities, the Market Value (as
defined below) of such unreturned loaned securities determined at the close
of business as of the Reimbursement Date, plus all financial benefits
derived from the beneficial ownership of the unreturned loaned securities
which have accrued on such securities whether or not received from
borrower, or (ii) if the Portfolio shall have sold such securities prior to
the Reimbursement Date, the sale proceeds received by the Portfolio in
respect of such sale, plus any interest, penalties, fees or other costs, if
any, incurred by the Portfolio as a result of a failure to settle such sale
on a timely basis. [The "Market Value" of any securities on any given day
shall be the fair market value of such security on such day, as determined
in accordance with the Portfolio's valuation procedures and methods, as
adopted by the Trustees.]
(b) In the event that Subadviser shall be required to make any payment to
the Portfolio or shall incur any loss or expense pursuant to paragraph (a)
above, it shall, to the extent of such payment or loss or expense, be
subrogated to, and succeed to, all of the Portfolio's rights against the
borrower and to the collateral involved. To the extent the collateral
consists of cash or securities issued or guaranteed by the United States
Government or its agencies, the Portfolio shall contemporaneously with any
such payment to the Portfolio by Subadviser surrender same to Subadviser
for its sole disposition.
3.3 Securities Lending Procedures. Subadviser's securities lending
activities on behalf of the Portfolio shall be governed by such procedures
as shall be adopted by the Trustees or Manager, as the same may be amended
from time to time.
IV. COMPLIANCE; CONFIDENTIALITY
4.1 Compliance. (a) Subadviser will comply with (i) all applicable
state and federal laws and regulations governing the performance of the
Subadviser's duties hereunder, (ii) the investment objective, policies and
limitations, as provided in the Portfolio's Prospectus and other governing
documents, and (iii) such instructions, policies and limitations relating
to the Portfolio as the Trustees or Manager may from time to time adopt and
communicate in writing to subadviser.
(b) Subadviser will adopt a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will
provide the Trust with a copy of such code of ethics, evidence of its
adoption and copies of any supplemental policies and procedures implemented
to ensure compliance therewith. Within [forty-five (45)] days of the end
of the last calendar quarter of each year while this Agreement is in
effect, the president or a vice president or managing director of
Subadviser shall certify to the Trust that Subadviser has complied with the
requirements of Rule 17j-1 during the previous year and that there has been
no violation of Subadviser's code of ethics or, if such violation has
occurred, that appropriate action was taken in response to such violation.
Upon the written request of the Manager, Subadviser shall permit the Trust,
or Manager, its employees or its agents to examine the reports required to
be made to Subadviser by Rule 17j-1 (c) (1).
4.2 Confidentiality. The parties to this Agreement agree that each shall
treat as confidential all information provided by a party to the others
regarding such party's business and operations, including without
limitation the investment activities or holdings of the Portfolio. All
confidential information provided by a party hereto shall be used by any
other parties hereto solely for the purposes of rendering services pursuant
to this Agreement and, except as may be required in carrying out the terms
of this Agreement, shall not be disclosed to any third party without the
prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided or
which thereafter becomes publicly available other than in contravention of
this Section 4.2 or which is required to be disclosed by any regulatory
authority in the lawful and appropriate exercise of its jurisdiction over a
party, any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
V. LIABILITY OF SUBADVISER
5.1 Liability; Standard of Care. Subject to the provisions of Section
3.2 hereof, neither Subadviser, nor any of its directors, officers or
employees, shall be liable to Manager or the Trust for any loss resulting
from Subadviser's acts or omissions as Subadviser to the Portfolio, except
to the extent any such losses result from bad faith, willful misfeasance,
reckless disregard or gross negligence on the part of the Subadviser or any
of its directors, officers or employees in the performance of the
Subadviser's duties and obligations under this Agreement.
5.2 Indemnification. (a) Subadviser agrees to indemnify and hold the
Trust harmless from any direct or indirect liabilities, losses or damages
(including reasonable attorneys fees) suffered by the Trust resulting from
bad faith, willful misfeasance, reckless disregard or gross negligence on
the part of the Subadviser or any of its directors, officers or employees
in the performance of the Subadviser's duties and obligations under this
Agreement.
(b) Subadviser hereby agrees to indemnify and hold Manager harmless from
any and all direct or indirect liabilities, losses or damages (including
reasonable attorneys fees) suffered by Manager resulting from (i)
Subadviser's breach of its duties hereunder or (ii) any instance in which
Subadviser fails to comply with the objectives, policies, restrictions or
instructions referred to in Section 1.2 hereof and Manager is for any
reason required by the Trustees to compensate the Portfolio for a resulting
loss, except to the extent such loss results from Manager's own willful
misfeasance, bad faith, reckless disregard or negligence in the performance
of Manager's duties and obligations under the Management Contract.
(c) Manager hereby agrees to indemnify and hold Subadviser harmless from
any and all direct or indirect liabilities, losses or damages (including
reasonable attorney's fees) suffered by Subadviser resulting from bad
faith, willful misfeasance, reckless disregard or gross negligence on the
part of Manager or any of its directors, officers or employees in the
performance of Manager's duties and obligations under this Agreement,
except to the extent such loss results from Subadviser's own willful
misfeasance, bad faith, reckless disregard or negligence in the performance
of Subadviser's duties and obligations under this Agreement.
VI. SUPPLEMENTAL ARRANGEMENTS; EXPENSES; INSURANCE
6.1 Supplemental Arrangements. Subject to the prior written consent of
the Trustees and Manager, Subadviser may enter into arrangements with other
persons affiliated with Subadviser to better fulfill its obligations under
this Agreement for the provision of certain personnel and facilities to
Subadviser, provided that such arrangements do not rise to the level of an
advisory contract subject to the requirements of Section 15 of the
Investment Company Act.
6.2 Expenses. It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by Subadviser
hereunder or by Manager under the Management Agreement. Subadviser
expressly agrees to pay the cost of all custody services required by the
Portfolio. Expenses paid by the Portfolios will include, but not be
limited to, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trustees other than
those who are "interested persons" of the Trust, Manager or Subadviser;
(iv) legal and audit expenses; (v) registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (viii) expenses of printing and
mailing reports and notices and proxy material to shareholders of the
Portfolio; (viii) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (ix)
insurance premiums for fidelity bond and other coverage; (x) investment
management fees; (xi) expenses of typesetting for printing prospectuses and
statements of additional information and supplements thereto; (xii)
expenses of printing and mailing prospectuses and statements of additional
information and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Portfolio is a party and any legal
obligation that the Portfolio may have to indemnify the Trustees, officers
and/or employees or agents with respect thereto. Subadviser shall not
cause the Trust or the Portfolios to incur any expenses, other than those
reasonably necessary for Subadviser to fulfill its obligations under this
Agreement, unless Subadviser has first notified Manager of its intention to
do so.
6.3 Insurance. Subadviser shall maintain for the duration hereof, with
an insurer acceptable to Manager, a blanket bond and professional liability
(errors and omissions) insurance in amounts reasonably acceptable to
Manager. Subadviser agrees that such insurance shall be considered primary
and Subadviser shall assure that such policies pay claims prior to similar
policies that may be maintained by Manager. In the event Subadviser fails
to have in force such insurance, that failure will not exclude Subadviser
responsibility to pay up to the limit Subadviser would have had to pay had
said insurance been in force.
VII. CONFLICTS OF INTEREST
7.1 Conflicts of Interest. It is understood that the Trustees, officers,
agents and shareholders of the Trust are or may be interested in Subadviser
as directors, officers, stockholders or otherwise; that directors,
officers, agents and stockholders of Subadviser are or may be interested in
the Trust as trustees, officers, shareholders or otherwise; that Subadviser
may be interested in the Trust; and that the existence of any such dual
interest shall not affect the validity of this Agreement or of any
transactions hereunder except as otherwise provided in the Trust's
Declaration of Trust and the Articles of Incorporation of Subadviser,
respectively, or by specific provisions of applicable law.
VIII. REGULATION
8.1 Regulation. Subadviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services provided
pursuant to this Agreement any information, reports or other material which
any such body by reason of this Agreement may reasonably request or require
pursuant to applicable laws and regulations.
IX. DURATION AND TERMINATION OF AGREEMENT
9.1 Effective Date; Duration; Continuance. (a) This Agreement shall
become effective on _________, 1997.
(b) Subject to prior termination pursuant to Section 9.2 below, this
Agreement shall continue in force until ________, and indefinitely
thereafter, but only so long as the continuance after such date shall be
specifically approved at least annually by vote of the Trustees or by a
vote of a majority of the outstanding voting securities of the Portfolio,
provided that in either event such continuance shall also be approved by
the vote of a majority of the Trustees who are not "interested persons" (as
such term is defined in the Investment Company Act) of any party to this
Agreement cast in person at a meeting called for the purpose of voting on
such approval.
(c) The required shareholder approval of this Agreement or any
continuance of this Agreement shall be effective with respect to the
Portfolio if a majority of the outstanding voting securities of the series
(as defined in Rule 18f-2(h) under the Investment Company Act) of shares of
the Portfolio votes to approve this Agreement or its continuance.
9.2 Termination and Assignment. This Agreement may be terminated at any
time, upon sixty days' written notice, without the payment of any penalty,
(i) by the Trustees, (ii) by the vote of a majority of the outstanding
voting securities of the Portfolio; (iii) by Manager, or (iv) by
Subadviser.
(b) This Agreement will terminate automatically, without the payment of
any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act) or (ii) in the event the Management Contract is
terminated for any reason.
9.3 Definitions. The terms "registered investment company," "vote of a
majority of the outstanding voting securities," "assignment," and
"interested persons," when used herein, shall have the respective meanings
specified in the Investment Company Act as now in effect or as hereafter
amended.
X. REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Representations of the Portfolio. The Trust, on behalf of the
Portfolio, represents and warrants that:
(i) the Trust is a business trust established pursuant to the laws of the
[Commonwealth of Massachusetts];
(ii) the Trust is duly registered as an investment company under the
Investment Company Act and the Portfolio is a duly constituted series
portfolio thereof;
(iii) the execution, delivery and performance of this Agreement are
within the Trust's powers, have been and remain duly authorized by all
necessary action (including without limitation all necessary approvals and
other actions required under the Investment Company Act) and will not
violate or constitute a default under any applicable law or regulation or
of any decree, order, judgment, agreement or instrument binding on the
Trust or the Portfolio;
(iv) no consent (including, but not limited to, exchange control
consents) of any applicable governmental authority or body is necessary,
except for such consents as have been obtained and are in full force and
effect, and all conditions of which have been duly complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against the Trust and the Portfolio in accordance with its
terms.
10.2 Representations of the Manager. The Manager represents, warrants
and agrees that:
(i) Manager is a corporation established pursuant to the laws of the
Commonwealth of Massachusetts;
(ii) Manager is duly registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act");
(iii) Manager has been duly appointed by the Trustees and Shareholders of
the Portfolio to provide investment services to the Portfolio as
contemplated by the Management Contract.
(iv) the execution, delivery and performance of this Agreement are within
Manager's powers, have been and remain duly authorized by all necessary
corporate action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement
or instrument binding on Manager;
(v) no consent (including, but not limited to, exchange control consents)
of any applicable governmental authority or body is necessary, except for
such consents as have been obtained and are in full force and effect, and
all conditions of which have been duly complied with; and
(vi) this Agreement constitutes a legal, valid and binding obligation
enforceable against Manager.
10.3 Representations of Subadviser. Subadviser represents, warrants and
agrees that:
(i) Subadviser is a [New York banking corporation] established pursuant
to the laws of the State of New York;
(ii) Subadviser is duly registered as an "investment adviser" under the
Advisers Act; or is a "bank" as defined in Section 202 (a) (2) of the
Advisers Act or an "insurance company" as defined in Section 202 (a) (2) of
the Advisers Act.
(iii) the execution, delivery and performance of this Agreement are within
Subadviser's powers, have been and remain duly authorized by all necessary
corporate action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement
or instrument binding on Subadviser;
(iv) no consent (including, but not limited to, exchange control consents)
of any applicable governmental authority or body is necessary, except for
such consents as have been obtained and are in full force and effect, and
all conditions of which have been duly complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against Subadviser.
10.4 Covenants of the Subadviser. (a) Subadviser will promptly notify
the Trust and Manager in writing of the occurrence of any event which could
have a material impact on the performance of its obligations pursuant to
this Agreement, including without limitation:
(i) the occurrence of any event which would disqualify Subadviser from
serving as an investment adviser of a registered investment company
pursuant to Section 9 (a) of the Investment Company Act or otherwise;
(ii) any material change in the Subadviser's overall business activities
that may have a material adverse affect on the Subadviser's ability to
perform under its obligations under this Agreement;
(iii) any event that would constitute a change in control of Subadviser;
(iv) any change in the portfolio manager of the Portfolio; and
(v) the existence of any pending or threatened audit, investigation,
complaint, examination or other inquiry (other than routine banking
examinations) relating to the Portfolio conducted by any state or federal
governmental regulatory authority.
(b) Subadviser agrees that it will promptly supply Manager with copies of
any material changes to any of the documents provided by Subadviser
pursuant to Section 4.1.
XI. MISCELLANEOUS PROVISIONS
11.1 Use of Subadviser's Name. Neither the Trust nor Manager will use
the name of Subadviser, or any affiliate of Subadviser, in any prospectus,
advertisement sales literature or other communication to the public without
prior review and approval by Subadviser, which approval will not be
unreasonably withheld or delayed.
11.2 Use of Trust or Manager's Name. Subadviser will not use the name of
Manager, the Trust or the Portfolio in any prospectus, advertisement, sales
literature or other communication to the public without prior review and
approval by Manager, which approval will not be unreasonably withheld or
delayed.
11.3 Amendments. This Agreement may only be amended with the prior
written consent of each of the parties hereto and if such amendment is
specifically approved (i) by the vote of a majority of the outstanding
voting securities of the Portfolio, and (ii) by the vote of a majority of
the Trustees who are not interested persons (as such term is defined in the
Investment Company Act) of any person to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. The required
shareholder approval shall be effective with respect to the Portfolio if a
majority of the outstanding voting securities of the Portfolio vote to
approve the amendment.
11.4 Entire Agreement. This Agreement contains the entire understanding
and agreement of the parties with respect to the subject hereof.
11.5 Captions. The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not constitute a part
of the Agreement.
11.6 Notices. All notices required to be given pursuant to this
Agreement shall be delivered or mailed to the last known business address
of the Trust, Manager or Subadviser, as the case may be, in person or by
registered mail or a private mail or delivery service providing the sender
with notice of receipt. Notice shall be deemed given on the date delivered
or mailed in accordance with this Section 11.6.
11.7 Severability. Should any portion of this Agreement, for any reason,
be held to be void at law or in equity, the Agreement shall be construed,
insofar as is possible, as if such portion had never been contained herein.
11.8 Governing Law. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the Commonwealth of
Massachusetts (without giving effect to the choice of law provisions
thereof), or any of the applicable provisions of the Investment Company
Act. To the extent that the laws of the Commonwealth of Massachusetts, or
any of the provisions in this Agreement, conflict with applicable
provisions of the Investment Company Act, the latter shall control.
11.9 Limitation of Liability. The Declaration of Trust establishing the
Trust, dated __________, a copy of which, together with all amendments, is
on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Fidelity Concord Street Trust"
refers to the Trustees under the declaration collectively as Trustees, but
not as individuals or personally, and no Trustee, shareholder, officer,
employee or agent of the Trust shall be held to any personal liability, nor
shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
Portfolio thereof, but only the assets belonging to the Trust, or to the
particular portfolio with which the obligee or claimant dealt, shall be
liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
Fidelity Concord Street Trust, on behalf of Spartan Total Market Index Fund
By:___________________________
Name:
Title:
Fidelity Management & Research Company
By:___________________________
Name:
Title:
Bankers Trust Company
By:___________________________
Name:
Title:
APPENDIX A
Pursuant to Section 1.6 of the Subadvisory Agreement among Fidelity
Concord Street Trust (the "Trust"), on behalf of Spartan Total Market Index
Fund (the "Portfolio"), Fidelity Management and Research Company
("Manager") and Bankers Trust Company ("Subadviser"), Subadviser shall be
compensated for the services it performs on behalf of the Portfolio as
follows:
1. Fees Payable by Manager. Manager will pay Subadviser a monthly fee
computed at an annual rate (the "Subadviser Percentage Fee") of 0.0X% (X
basis points) of the average daily net assets of the Portfolio (computed in
the manner set forth in the Trust's Declaration of Trust) throughout the
month.
Subadviser's fee shall be computed monthly, and within five business days
of the end of each calendar month Manager shall transmit to Subadviser the
fee for the previous month. Payment shall be made in federal funds wired
to a bank account designated by Subadviser. If this Agreement becomes
effective or terminates before the end of any month, the fee (if any) for
the period from the effective date to the end of such month or from the
beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to
the full month in which such effectiveness or termination occurs.
Subadviser agrees to look exclusively to Manager for the payment of
Subadviser's fees arising under this paragraph 1.
2. Fees Payable by Trust. The Trust, on behalf of the Portfolio, shall
pay the sub-adviser a securities lending fee equal to 40% of the net return
to the fund from loans of portfolio securities, payable monthly and
calculated in the fashion described below.
The net return to the fund from loans of portfolio securities shall be,
with respect to each loan, (1) the amount earned by the fund from holding
the security and lending it to another party, less (2) the return the fund
would have earned if it had not lent the security.
For loans against cash collateral, the amount in clause (1) shall include
(a) the return to the fund (including income, gains, or losses) from
investment of the cash collateral, less (b) any rebate fee or similar fee
payable to the borrowing party. For loans against identified collateral,
the amount in clause (1) shall include any securities lending fees earned
by the fund with respect to each loan. The amounts in clauses (1) and (2)
shall in each case be net of any withholding taxes.
If the subadviser earns additional fees with respect to investment of
collateral for securities loans (such as management or other fees from an
investment company in which collateral may be invested), the amount of such
other fees shall be added to the amount earned by the fund under clause
(1), but shall also be subtracted from the securities lending fees due to
the sub-advisor for that period.
[Securities lending fees shall be accrued daily and paid monthly on the
first business day of each month.]
If the net return to the fund from loans of portfolio securities is a
negative amount, the securities lending fee for that period shall be zero,
and the 40% of the negative amount will be carried forward and applied
against future securities lending fees.
Exhibit 5(g)
FORM OF
SUBADVISORY AGREEMENT
between
BANKERS TRUST COMPANY
and
SPARTAN EXTENDED MARKET INDEX FUND
This Agreement is entered into as of the ___ day of _____, 1997, among
Fidelity Concord Street Trust, a Massachusetts business trust (the
"Trust"), on behalf of Spartan Extended Market Index Fund, a series
portfolio of the Trust (the "Portfolio"), Fidelity Management & Research
Company, a Massachusetts corporation ("Manager"), and Bankers Trust
Company, a New York banking corporation ("Subadviser").
WHEREAS, the Trust, on behalf of the Portfolio, has entered into a
Management Contract, dated July __, 1997, with Manager (the "Management
Contract"), pursuant to which Manager has agreed to provide certain
management and administrative services to the Portfolio; and
WHEREAS, Manager desires to appoint Subadviser as investment subadviser to
provide the investment advisory and administrative services to the
Portfolio specified herein, and Subadviser is willing to serve the
Portfolio in such capacity; and
WHEREAS, the trustees of the Trust (the "Trustees"), including a majority
of the Trustees who are not "interested persons" (as such term is defined
below) of any party to this Agreement, and the sole shareholder of the
Portfolio, have each consented to such an arrangement;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
I. APPOINTMENT OF SUBADVISER; COMPENSATION
1.1 Appointment as Subadviser. Subject to and in accordance with the
provisions hereof, Manager hereby appoints Subadviser as investment
subadviser to perform the various investment advisory and other services to
the Portfolio set forth herein and, subject to the restrictions set forth
herein, hereby delegates to Subadviser the authority vested in Manager
pursuant to the Management Contract to the extent necessary to enable
Subadviser to perform its obligations under this Agreement.
1.2 Scope of Investment Authority. (a) The Subadviser is hereby
authorized, on a discretionary basis, to manage the investments and
determine the composition of the assets of the Portfolio, subject at all
times to (i) the supervision and control of the Trustees, (ii) the
requirements of the Investment Company Act of 1940, as amended (the
"Investment Company Act") and the rules thereunder, (iii) the investment
objective, policies and limitations, as provided in the Portfolio's
Prospectus and other governing documents, and (iv) such instructions,
policies and limitations relating to the Portfolio as the Trustees or
Manager may from time to time adopt and communicate in writing to
subadviser. Notwithstanding anything herein to the contrary, Subadviser is
not authorized to take any action, including the purchase and sale of
portfolio securities, in contravention of any restriction, limitation,
objective, policy or instruction described in the previous sentence.
(b) It is understood and agreed that, for so long as this Agreement shall
remain in effect, Subadviser shall retain discretionary investment
authority over the manner in which the Portfolio's assets are invested, and
Manager shall not have the right to overrule any investment decision with
respect to a particular security made by Subadviser, provided that the
Trustees and Manager shall at all times have the right to monitor the
Portfolio's investment activities and performance, require Subadviser to
make reports and give explanations as to the manner in which the
Portfolio's assets are being invested, and, should either Manager or the
Trustees become dissatisfied with Subadviser's performance in any way,
terminate this Agreement in accordance with the provisions of Section 9.2
hereof.
1.3 Appointment as Proxy Voting Agent. Subject to and in accordance with
the provisions hereof, the Trustees hereby appoint Subadviser as the
Portfolio's proxy voting agent, and hereby delegate to Subadviser
discretionary authority to vote all proxies solicited by or with respect to
issuers of securities in which the assets of the Portfolio may be invested
from time to time. Upon written notice to Subadviser, the Trustees may at
any time withdraw the authority granted to Subadviser pursuant to this
Section 1.3 to perform any or all of the proxy voting services contemplated
hereby.
1.4 Governing Documents. Manager will provide Subadviser with copies of
(i) the Trust's Declaration of Trust and By-laws, as currently in effect,
(ii) the Portfolio's currently effective prospectus and statement of
additional information, as set forth in the Trust's registration statement
under the Investment Company Act and the Securities Act of 1933, as
amended, (iii) any instructions, investment policies or other restrictions
adopted by the Trustees or Manager supplemental thereto, and (iv) the
Management Contract. Manager will provide Subadviser with such further
documentation and information concerning the investment objectives,
policies and restrictions applicable to the Portfolio as Subadviser may
from time to time reasonably request.
1.5 Subadviser's Relationship. Notwithstanding anything herein to the
contrary, Subadviser shall be an independent contractor and will have no
authority to act for or represent the Trust, the Portfolio or Manager in
any way or otherwise be deemed an agent of any of them, except to the
extent expressly authorized by this Agreement or in writing by the Trust or
Manager.
1.6 Compensation. Subadviser shall be compensated for the services it
performs on behalf of the Portfolio in accordance with the terms set forth
in Appendix A to this Agreement.
II. SERVICES TO BE PERFORMED BY SUBADVISER
2.1 Investment Advisory Services. (a) In fulfilling its obligations to
manage the assets of the Portfolio, Subadviser will:
(i) formulate and implement a continuous investment program for the
Portfolio, including, without limitation, implementation of a securities
lending program in accordance with the provisions of Article III hereof;
(ii) take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities and other investments,
including the selection of brokers or dealers, the placing of orders for
such purchases and sales in accordance with the provisions of paragraph (b)
below and assuring that such purchases and sales are properly settled and
cleared;
(iii) provide such reports with respect to the implementation of the
Portfolio's investment program as the Trustees or Manager shall reasonably
request; and
(iv) provide advice and assistance to Manager as to the determination of
the fair
value of certain securities where market quotations are not readily
available for purposes of calculating net asset value of the Portfolio in
accordance with valuation procedures and methods established by the
Trustees.
(b) The Subadviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers and dealers
selected by Subadviser. Such brokers and dealers may include brokers or
dealers that are "affiliated persons" (as such term is defined in the
Investment Company Act) of the Trust, the Portfolio, Manager or Subadviser,
provided that Subadviser shall only place orders on behalf of the Portfolio
with such affiliated persons in accordance with procedures adopted by the
Trustees pursuant to Rule 17e-1 under the Investment Company Act. The
Subadviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or other accounts
over which Subadviser or its affiliates exercise investment discretion.
The Subadviser is authorized to pay a broker or dealer who provided such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Subadviser and its affiliates have in respect to
accounts over which they exercise investment discretion. The Trustees
shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods were
reasonable in relation to the benefits to the Portfolio.
2.2. Administrative and Other Services. (a) Subadviser will, at its
expense, furnish (i) all necessary investment and management facilities,
including salaries of personnel required for it to execute its duties
faithfully, and (ii) administrative facilities, including bookkeeping,
clerical personnel and equipment necessary for the efficient conduct of the
investment affairs of the Portfolio (excluding determination of net asset
values and shareholder accounting services).
(b) Subadviser will maintain all accounts, books and records with respect
to the Portfolio as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act and the rules
thereunder. Subadviser agrees that such records are the property of the
Trust, and will be surrendered to the Trust promptly upon request. The
Manager shall be granted reasonable access to the records and documents in
Subadviser's possession relating to the Portfolios.
(c) Subadviser will vote the Portfolio's investment securities in the
manner in which Subadviser believes to be in the best interests of the
Portfolio, and shall review its proxy voting activities on a periodic basis
with the Trustees.
(d) Subadviser will provide custodian services to the Portfolio in
accordance with the provisions of a separate Custodian Agreement, dated as
of the date hereof, between the Trust, on behalf of the Portfolio, and
Subadviser.
III. SECURITIES LENDING
3.1. Appointment as Agent. For as long as this Agreement shall remain in
effect, Subadviser is hereby authorized as the Portfolio's agent to lend on
a disclosed basis the Portfolio's securities. Subadviser is further
authorized as the Portfolio's agent to sign agreements with borrowers,
ownership or other certificates as may be required by the Internal Revenue
Service or any other tax authorities, and to take any other actions
necessary to effect such loans.
3.2. Indemnification. (a) In the event that any securities lending
transaction is terminated and the loaned securities or any portion thereof
shall not have been returned to the Portfolio by or on behalf of the
borrower within the time specified by Subadviser's agreement with the
borrower (the "Delivery Date"), Subadviser shall, at its expense, within
one (1) business day after the Delivery Date replace the loaned securities
(or any portion thereof not so returned) with a like amount of the loaned
securities of the same issuer, class and denomination, and hold the
Portfolio, the Trustees and Manager harmless from any brokerage commission,
fees, taxes or other expenses incurred by Subadviser in the purchase of
such replacement securities. If Subadviser is unable to purchase such
replacement securities on the open market within [one business day] after
the Delivery Date (the "Reimbursement Date"), Subadviser shall credit the
Portfolio's account by the close of business on the Reimbursement Date with
an amount of cash in U.S. dollars equal to (i) if the Portfolio shall
continue to hold such unreturned loaned securities, the Market Value (as
defined below) of such unreturned loaned securities determined at the close
of business as of the Reimbursement Date, plus all financial benefits
derived from the beneficial ownership of the unreturned loaned securities
which have accrued on such securities whether or not received from
borrower, or (ii) if the Portfolio shall have sold such securities prior to
the Reimbursement Date, the sale proceeds received by the Portfolio in
respect of such sale, plus any interest, penalties, fees or other costs, if
any, incurred by the Portfolio as a result of a failure to settle such sale
on a timely basis. [The "Market Value" of any securities on any given day
shall be the fair market value of such security on such day, as determined
in accordance with the Portfolio's valuation procedures and methods, as
adopted by the Trustees.]
(b) In the event that Subadviser shall be required to make any payment to
the Portfolio or shall incur any loss or expense pursuant to paragraph (a)
above, it shall, to the extent of such payment or loss or expense, be
subrogated to, and succeed to, all of the Portfolio's rights against the
borrower and to the collateral involved. To the extent the collateral
consists of cash or securities issued or guaranteed by the United States
Government or its agencies, the Portfolio shall contemporaneously with any
such payment to the Portfolio by Subadviser surrender same to Subadviser
for its sole disposition.
3.3 Securities Lending Procedures. Subadviser's securities lending
activities on behalf of the Portfolio shall be governed by such procedures
as shall be adopted by the Trustees or Manager, as the same may be amended
from time to time.
IV. COMPLIANCE; CONFIDENTIALITY
4.1 Compliance. (a) Subadviser will comply with (i) all applicable
state and federal laws and regulations governing the performance of the
Subadviser's duties hereunder, (ii) the investment objective, policies and
limitations, as provided in the Portfolio's Prospectus and other governing
documents, and (iii) such instructions, policies and limitations relating
to the Portfolio as the Trustees or Manager may from time to time adopt and
communicate in writing to subadviser.
(b) Subadviser will adopt a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will
provide the Trust with a copy of such code of ethics, evidence of its
adoption and copies of any supplemental policies and procedures implemented
to ensure compliance therewith. Within [forty-five (45)] days of the end
of the last calendar quarter of each year while this Agreement is in
effect, the president or a vice president or managing director of
Subadviser shall certify to the Trust that Subadviser has complied with the
requirements of Rule 17j-1 during the previous year and that there has been
no violation of Subadviser's code of ethics or, if such violation has
occurred, that appropriate action was taken in response to such violation.
Upon the written request of the Manager, Subadviser shall permit the Trust,
or Manager, its employees or its agents to examine the reports required to
be made to Subadviser by Rule 17j-1 (c) (1).
4.2 Confidentiality. The parties to this Agreement agree that each shall
treat as confidential all information provided by a party to the others
regarding such party's business and operations, including without
limitation the investment activities or holdings of the Portfolio. All
confidential information provided by a party hereto shall be used by any
other parties hereto solely for the purposes of rendering services pursuant
to this Agreement and, except as may be required in carrying out the terms
of this Agreement, shall not be disclosed to any third party without the
prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided or
which thereafter becomes publicly available other than in contravention of
this Section 4.2 or which is required to be disclosed by any regulatory
authority in the lawful and appropriate exercise of its jurisdiction over a
party, any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
V. LIABILITY OF SUBADVISER
5.1 Liability; Standard of Care. Subject to the provisions of Section
3.2 hereof, neither Subadviser, nor any of its directors, officers or
employees, shall be liable to Manager or the Trust for any loss resulting
from Subadviser's acts or omissions as Subadviser to the Portfolio, except
to the extent any such losses result from bad faith, willful misfeasance,
reckless disregard or gross negligence on the part of the Subadviser or any
of its directors, officers or employees in the performance of the
Subadviser's duties and obligations under this Agreement.
5.2 Indemnification. (a) Subadviser agrees to indemnify and hold the
Trust harmless from any direct or indirect liabilities, losses or damages
(including reasonable attorneys fees) suffered by the Trust resulting from
bad faith, willful misfeasance, reckless disregard or gross negligence on
the part of the Subadviser or any of its directors, officers or employees
in the performance of the Subadviser's duties and obligations under this
Agreement.
(b) Subadviser hereby agrees to indemnify and hold Manager harmless from
any and all direct or indirect liabilities, losses or damages (including
reasonable attorneys fees) suffered by Manager resulting from (i)
Subadviser's breach of its duties hereunder or (ii) any instance in which
Subadviser fails to comply with the objectives, policies, restrictions or
instructions referred to in Section 1.2 hereof and Manager is for any
reason required by the Trustees to compensate the Portfolio for a resulting
loss, except to the extent such loss results from Manager's own willful
misfeasance, bad faith, reckless disregard or negligence in the performance
of Manager's duties and obligations under the Management Contract.
(c) Manager hereby agrees to indemnify and hold Subadviser harmless from
any and all direct or indirect liabilities, losses or damages (including
reasonable attorney's fees) suffered by Subadviser resulting from bad
faith, willful misfeasance, reckless disregard or gross negligence on the
part of Manager or any of its directors, officers or employees in the
performance of Manager's duties and obligations under this Agreement,
except to the extent such loss results from Subadviser's own willful
misfeasance, bad faith, reckless disregard or negligence in the performance
of Subadviser's duties and obligations under this Agreement.
VI. SUPPLEMENTAL ARRANGEMENTS; EXPENSES; INSURANCE
6.1 Supplemental Arrangements. Subject to the prior written consent of
the Trustees and Manager, Subadviser may enter into arrangements with other
persons affiliated with Subadviser to better fulfill its obligations under
this Agreement for the provision of certain personnel and facilities to
Subadviser, provided that such arrangements do not rise to the level of an
advisory contract subject to the requirements of Section 15 of the
Investment Company Act.
6.2 Expenses. It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by Subadviser
hereunder or by Manager under the Management Agreement. Subadviser
expressly agrees to pay the cost of all custody services required by the
Portfolio. Expenses paid by the Portfolios will include, but not be
limited to, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trustees other than
those who are "interested persons" of the Trust, Manager or Subadviser;
(iv) legal and audit expenses; (v) registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (viii) expenses of printing and
mailing reports and notices and proxy material to shareholders of the
Portfolio; (viii) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (ix)
insurance premiums for fidelity bond and other coverage; (x) investment
management fees; (xi) expenses of typesetting for printing prospectuses and
statements of additional information and supplements thereto; (xii)
expenses of printing and mailing prospectuses and statements of additional
information and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Portfolio is a party and any legal
obligation that the Portfolio may have to indemnify the Trustees, officers
and/or employees or agents with respect thereto. Subadviser shall not
cause the Trust or the Portfolios to incur any expenses, other than those
reasonably necessary for Subadviser to fulfill its obligations under this
Agreement, unless Subadviser has first notified Manager of its intention to
do so.
6.3 Insurance. Subadviser shall maintain for the duration hereof, with
an insurer acceptable to Manager, a blanket bond and professional liability
(errors and omissions) insurance in amounts reasonably acceptable to
Manager. Subadviser agrees that such insurance shall be considered primary
and Subadviser shall assure that such policies pay claims prior to similar
policies that may be maintained by Manager. In the event Subadviser fails
to have in force such insurance, that failure will not exclude Subadviser
responsibility to pay up to the limit Subadviser would have had to pay had
said insurance been in force.
VII. CONFLICTS OF INTEREST
7.1 Conflicts of Interest. It is understood that the Trustees, officers,
agents and shareholders of the Trust are or may be interested in Subadviser
as directors, officers, stockholders or otherwise; that directors,
officers, agents and stockholders of Subadviser are or may be interested in
the Trust as trustees, officers, shareholders or otherwise; that Subadviser
may be interested in the Trust; and that the existence of any such dual
interest shall not affect the validity of this Agreement or of any
transactions hereunder except as otherwise provided in the Trust's
Declaration of Trust and the Articles of Incorporation of Subadviser,
respectively, or by specific provisions of applicable law.
VIII. REGULATION
8.1 Regulation. Subadviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services provided
pursuant to this Agreement any information, reports or other material which
any such body by reason of this Agreement may reasonably request or require
pursuant to applicable laws and regulations.
IX. DURATION AND TERMINATION OF AGREEMENT
9.1 Effective Date; Duration; Continuance. (a) This Agreement shall
become effective on _________, 1997.
(b) Subject to prior termination pursuant to Section 9.2 below, this
Agreement shall continue in force until ________, and indefinitely
thereafter, but only so long as the continuance after such date shall be
specifically approved at least annually by vote of the Trustees or by a
vote of a majority of the outstanding voting securities of the Portfolio,
provided that in either event such continuance shall also be approved by
the vote of a majority of the Trustees who are not "interested persons" (as
such term is defined in the Investment Company Act) of any party to this
Agreement cast in person at a meeting called for the purpose of voting on
such approval.
(c) The required shareholder approval of this Agreement or any
continuance of this Agreement shall be effective with respect to the
Portfolio if a majority of the outstanding voting securities of the series
(as defined in Rule 18f-2(h) under the Investment Company Act) of shares of
the Portfolio votes to approve this Agreement or its continuance.
9.2 Termination and Assignment. This Agreement may be terminated at any
time, upon sixty days' written notice, without the payment of any penalty,
(i) by the Trustees, (ii) by the vote of a majority of the outstanding
voting securities of the Portfolio; (iii) by Manager, or (iv) by
Subadviser.
(b) This Agreement will terminate automatically, without the payment of
any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act) or (ii) in the event the Management Contract is
terminated for any reason.
9.3 Definitions. The terms "registered investment company," "vote of a
majority of the outstanding voting securities," "assignment," and
"interested persons," when used herein, shall have the respective meanings
specified in the Investment Company Act as now in effect or as hereafter
amended.
X. REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Representations of the Portfolio. The Trust, on behalf of the
Portfolio, represents and warrants that:
(i) the Trust is a business trust established pursuant to the laws of the
[Commonwealth of Massachusetts];
(ii) the Trust is duly registered as an investment company under the
Investment Company Act and the Portfolio is a duly constituted series
portfolio thereof;
(iii) the execution, delivery and performance of this Agreement are
within the Trust's powers, have been and remain duly authorized by all
necessary action (including without limitation all necessary approvals and
other actions required under the Investment Company Act) and will not
violate or constitute a default under any applicable law or regulation or
of any decree, order, judgment, agreement or instrument binding on the
Trust or the Portfolio;
(iv) no consent (including, but not limited to, exchange control
consents) of any applicable governmental authority or body is necessary,
except for such consents as have been obtained and are in full force and
effect, and all conditions of which have been duly complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against the Trust and the Portfolio in accordance with its
terms.
10.2 Representations of the Manager. The Manager represents, warrants
and agrees that:
(i) Manager is a corporation established pursuant to the laws of the
Commonwealth of Massachusetts;
(ii) Manager is duly registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act");
(iii) Manager has been duly appointed by the Trustees and Shareholders of
the Portfolio to provide investment services to the Portfolio as
contemplated by the Management Contract.
(iv) the execution, delivery and performance of this Agreement are within
Manager's powers, have been and remain duly authorized by all necessary
corporate action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement
or instrument binding on Manager;
(v) no consent (including, but not limited to, exchange control consents)
of any applicable governmental authority or body is necessary, except for
such consents as have been obtained and are in full force and effect, and
all conditions of which have been duly complied with; and
(vi) this Agreement constitutes a legal, valid and binding obligation
enforceable against Manager.
10.3 Representations of Subadviser. Subadviser represents, warrants and
agrees that:
(i) Subadviser is a [New York banking corporation] established pursuant
to the laws of the State of New York;
(ii) Subadviser is duly registered as an "investment adviser" under the
Advisers Act; or is a "bank" as defined in Section 202 (a) (2) of the
Advisers Act or an "insurance company" as defined in Section 202 (a) (2) of
the Advisers Act.
(iii) the execution, delivery and performance of this Agreement are within
Subadviser's powers, have been and remain duly authorized by all necessary
corporate action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement
or instrument binding on Subadviser;
(iv) no consent (including, but not limited to, exchange control consents)
of any applicable governmental authority or body is necessary, except for
such consents as have been obtained and are in full force and effect, and
all conditions of which have been duly complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against Subadviser.
10.4 Covenants of the Subadviser. (a) Subadviser will promptly notify
the Trust and Manager in writing of the occurrence of any event which could
have a material impact on the performance of its obligations pursuant to
this Agreement, including without limitation:
(i) the occurrence of any event which would disqualify Subadviser from
serving as an investment adviser of a registered investment company
pursuant to Section 9 (a) of the Investment Company Act or otherwise;
(ii) any material change in the Subadviser's overall business activities
that may have a material adverse affect on the Subadviser's ability to
perform under its obligations under this Agreement;
(iii) any event that would constitute a change in control of Subadviser;
(iv) any change in the portfolio manager of the Portfolio; and
(v) the existence of any pending or threatened audit, investigation,
complaint, examination or other inquiry (other than routine banking
examinations) relating to the Portfolio conducted by any state or federal
governmental regulatory authority.
(b) Subadviser agrees that it will promptly supply Manager with copies of
any material changes to any of the documents provided by Subadviser
pursuant to Section 4.1.
XI. MISCELLANEOUS PROVISIONS
11.1 Use of Subadviser's Name. Neither the Trust nor Manager will use
the name of Subadviser, or any affiliate of Subadviser, in any prospectus,
advertisement sales literature or other communication to the public without
prior review and approval by Subadviser, which approval will not be
unreasonably withheld or delayed.
11.2 Use of Trust or Manager's Name. Subadviser will not use the name of
Manager, the Trust or the Portfolio in any prospectus, advertisement, sales
literature or other communication to the public without prior review and
approval by Manager, which approval will not be unreasonably withheld or
delayed.
11.3 Amendments. This Agreement may only be amended with the prior
written consent of each of the parties hereto and if such amendment is
specifically approved (i) by the vote of a majority of the outstanding
voting securities of the Portfolio, and (ii) by the vote of a majority of
the Trustees who are not interested persons (as such term is defined in the
Investment Company Act) of any person to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. The required
shareholder approval shall be effective with respect to the Portfolio if a
majority of the outstanding voting securities of the Portfolio vote to
approve the amendment.
11.4 Entire Agreement. This Agreement contains the entire understanding
and agreement of the parties with respect to the subject hereof.
11.5 Captions. The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not constitute a part
of the Agreement.
11.6 Notices. All notices required to be given pursuant to this
Agreement shall be delivered or mailed to the last known business address
of the Trust, Manager or Subadviser, as the case may be, in person or by
registered mail or a private mail or delivery service providing the sender
with notice of receipt. Notice shall be deemed given on the date delivered
or mailed in accordance with this Section 11.6.
11.7 Severability. Should any portion of this Agreement, for any reason,
be held to be void at law or in equity, the Agreement shall be construed,
insofar as is possible, as if such portion had never been contained herein.
11.8 Governing Law. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the Commonwealth of
Massachusetts (without giving effect to the choice of law provisions
thereof), or any of the applicable provisions of the Investment Company
Act. To the extent that the laws of the Commonwealth of Massachusetts, or
any of the provisions in this Agreement, conflict with applicable
provisions of the Investment Company Act, the latter shall control.
11.9 Limitation of Liability. The Declaration of Trust establishing the
Trust, dated __________, a copy of which, together with all amendments, is
on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Fidelity Concord Street Trust"
refers to the Trustees under the declaration collectively as Trustees, but
not as individuals or personally, and no Trustee, shareholder, officer,
employee or agent of the Trust shall be held to any personal liability, nor
shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
Portfolio thereof, but only the assets belonging to the Trust, or to the
particular portfolio with which the obligee or claimant dealt, shall be
liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
Fidelity Concord Street Trust, on behalf of Spartan Extended Market Index
Fund
By:___________________________
Name:
Title:
Fidelity Management & Research Company
By:___________________________
Name:
Title:
Bankers Trust Company
By:___________________________
Name:
Title:
APPENDIX A
Pursuant to Section 1.6 of the Subadvisory Agreement among Fidelity
Concord Street Trust (the "Trust"), on behalf of Spartan Extended Market
Index Fund (the "Portfolio"), Fidelity Management and Research Company
("Manager") and Bankers Trust Company ("Subadviser"), Subadviser shall be
compensated for the services it performs on behalf of the Portfolio as
follows:
1. Fees Payable by Manager. Manager will pay Subadviser a monthly fee
computed at an annual rate (the "Subadviser Percentage Fee") of 0.0X% (X
basis points) of the average daily net assets of the Portfolio (computed in
the manner set forth in the Trust's Declaration of Trust) throughout the
month.
Subadviser's fee shall be computed monthly, and within five business days
of the end of each calendar month Manager shall transmit to Subadviser the
fee for the previous month. Payment shall be made in federal funds wired
to a bank account designated by Subadviser. If this Agreement becomes
effective or terminates before the end of any month, the fee (if any) for
the period from the effective date to the end of such month or from the
beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to
the full month in which such effectiveness or termination occurs.
Subadviser agrees to look exclusively to Manager for the payment of
Subadviser's fees arising under this paragraph 1.
2. Fees Payable by Trust. The Trust, on behalf of the Portfolio, shall
pay the sub-adviser a securities lending fee equal to 40% of the net return
to the fund from loans of portfolio securities, payable monthly and
calculated in the fashion described below.
The net return to the fund from loans of portfolio securities shall be,
with respect to each loan, (1) the amount earned by the fund from holding
the security and lending it to another party, less (2) the return the fund
would have earned if it had not lent the security.
For loans against cash collateral, the amount in clause (1) shall include
(a) the return to the fund (including income, gains, or losses) from
investment of the cash collateral, less (b) any rebate fee or similar fee
payable to the borrowing party. For loans against identified collateral,
the amount in clause (1) shall include any securities lending fees earned
by the fund with respect to each loan. The amounts in clauses (1) and (2)
shall in each case be net of any withholding taxes.
If the subadviser earns additional fees with respect to investment of
collateral for securities loans (such as management or other fees from an
investment company in which collateral may be invested), the amount of such
other fees shall be added to the amount earned by the fund under clause
(1), but shall also be subtracted from the securities lending fees due to
the sub-advisor for that period.
[Securities lending fees shall be accrued daily and paid monthly on the
first business day of each month.]
If the net return to the fund from loans of portfolio securities is a
negative amount, the securities lending fee for that period shall be zero,
and the 40% of the negative amount will be carried forward and applied
against future securities lending fees.
Exhibit 5(h)
FORM OF
SUBADVISORY AGREEMENT
between
BANKERS TRUST COMPANY
and
SPARTAN INTERNATIONAL INDEX FUND
This Agreement is entered into as of the ___ day of _____, 1997, among
Fidelity Concord Street Trust, a Massachusetts business trust (the
"Trust"), on behalf of Spartan International Index Fund, a series portfolio
of the Trust (the "Portfolio"), Fidelity Management & Research Company, a
Massachusetts corporation ("Manager"), and Bankers Trust Company, a New
York banking corporation ("Subadviser").
WHEREAS, the Trust, on behalf of the Portfolio, has entered into a
Management Contract, dated July __, 1997, with Manager (the "Management
Contract"), pursuant to which Manager has agreed to provide certain
management and administrative services to the Portfolio; and
WHEREAS, Manager desires to appoint Subadviser as investment subadviser to
provide the investment advisory and administrative services to the
Portfolio specified herein, and Subadviser is willing to serve the
Portfolio in such capacity; and
WHEREAS, the trustees of the Trust (the "Trustees"), including a majority
of the Trustees who are not "interested persons" (as such term is defined
below) of any party to this Agreement, and the sole shareholder of the
Portfolio, have each consented to such an arrangement;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
I. APPOINTMENT OF SUBADVISER; COMPENSATION
1.1 Appointment as Subadviser. Subject to and in accordance with the
provisions hereof, Manager hereby appoints Subadviser as investment
subadviser to perform the various investment advisory and other services to
the Portfolio set forth herein and, subject to the restrictions set forth
herein, hereby delegates to Subadviser the authority vested in Manager
pursuant to the Management Contract to the extent necessary to enable
Subadviser to perform its obligations under this Agreement.
1.2 Scope of Investment Authority. (a) The Subadviser is hereby
authorized, on a discretionary basis, to manage the investments and
determine the composition of the assets of the Portfolio, subject at all
times to (i) the supervision and control of the Trustees, (ii) the
requirements of the Investment Company Act of 1940, as amended (the
"Investment Company Act") and the rules thereunder, (iii) the investment
objective, policies and limitations, as provided in the Portfolio's
Prospectus and other governing documents, and (iv) such instructions,
policies and limitations relating to the Portfolio as the Trustees or
Manager may from time to time adopt and communicate in writing to
subadviser. Notwithstanding anything herein to the contrary, Subadviser is
not authorized to take any action, including the purchase and sale of
portfolio securities, in contravention of any restriction, limitation,
objective, policy or instruction described in the previous sentence.
(b) It is understood and agreed that, for so long as this Agreement shall
remain in effect, Subadviser shall retain discretionary investment
authority over the manner in which the Portfolio's assets are invested, and
Manager shall not have the right to overrule any investment decision with
respect to a particular security made by Subadviser, provided that the
Trustees and Manager shall at all times have the right to monitor the
Portfolio's investment activities and performance, require Subadviser to
make reports and give explanations as to the manner in which the
Portfolio's assets are being invested, and, should either Manager or the
Trustees become dissatisfied with Subadviser's performance in any way,
terminate this Agreement in accordance with the provisions of Section 9.2
hereof.
1.3 Appointment as Proxy Voting Agent. Subject to and in accordance with
the provisions hereof, the Trustees hereby appoint Subadviser as the
Portfolio's proxy voting agent, and hereby delegate to Subadviser
discretionary authority to vote all proxies solicited by or with respect to
issuers of securities in which the assets of the Portfolio may be invested
from time to time. Upon written notice to Subadviser, the Trustees may at
any time withdraw the authority granted to Subadviser pursuant to this
Section 1.3 to perform any or all of the proxy voting services contemplated
hereby.
1.4 Governing Documents. Manager will provide Subadviser with copies of
(i) the Trust's Declaration of Trust and By-laws, as currently in effect,
(ii) the Portfolio's currently effective prospectus and statement of
additional information, as set forth in the Trust's registration statement
under the Investment Company Act and the Securities Act of 1933, as
amended, (iii) any instructions, investment policies or other restrictions
adopted by the Trustees or Manager supplemental thereto, and (iv) the
Management Contract. Manager will provide Subadviser with such further
documentation and information concerning the investment objectives,
policies and restrictions applicable to the Portfolio as Subadviser may
from time to time reasonably request.
1.5 Subadviser's Relationship. Notwithstanding anything herein to the
contrary, Subadviser shall be an independent contractor and will have no
authority to act for or represent the Trust, the Portfolio or Manager in
any way or otherwise be deemed an agent of any of them, except to the
extent expressly authorized by this Agreement or in writing by the Trust or
Manager.
1.6 Compensation. Subadviser shall be compensated for the services it
performs on behalf of the Portfolio in accordance with the terms set forth
in Appendix A to this Agreement.
II. SERVICES TO BE PERFORMED BY SUBADVISER
2.1 Investment Advisory Services. (a) In fulfilling its obligations to
manage the assets of the Portfolio, Subadviser will:
(i) formulate and implement a continuous investment program for the
Portfolio, including, without limitation, implementation of a securities
lending program in accordance with the provisions of Article III hereof;
(ii) take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities and other investments,
including the selection of brokers or dealers, the placing of orders for
such purchases and sales in accordance with the provisions of paragraph (b)
below and assuring that such purchases and sales are properly settled and
cleared;
(iii) provide such reports with respect to the implementation of the
Portfolio's investment program as the Trustees or Manager shall reasonably
request; and
(iv) provide advice and assistance to Manager as to the determination of
the fair
value of certain securities where market quotations are not readily
available for purposes of calculating net asset value of the Portfolio in
accordance with valuation procedures and methods established by the
Trustees.
(b) The Subadviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers and dealers
selected by Subadviser. Such brokers and dealers may include brokers or
dealers that are "affiliated persons" (as such term is defined in the
Investment Company Act) of the Trust, the Portfolio, Manager or Subadviser,
provided that Subadviser shall only place orders on behalf of the Portfolio
with such affiliated persons in accordance with procedures adopted by the
Trustees pursuant to Rule 17e-1 under the Investment Company Act. The
Subadviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or other accounts
over which Subadviser or its affiliates exercise investment discretion.
The Subadviser is authorized to pay a broker or dealer who provided such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Subadviser and its affiliates have in respect to
accounts over which they exercise investment discretion. The Trustees
shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods were
reasonable in relation to the benefits to the Portfolio.
2.2. Administrative and Other Services. (a) Subadviser will, at its
expense, furnish (i) all necessary investment and management facilities,
including salaries of personnel required for it to execute its duties
faithfully, and (ii) administrative facilities, including bookkeeping,
clerical personnel and equipment necessary for the efficient conduct of the
investment affairs of the Portfolio (excluding determination of net asset
values and shareholder accounting services).
(b) Subadviser will maintain all accounts, books and records with respect
to the Portfolio as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act and the rules
thereunder. Subadviser agrees that such records are the property of the
Trust, and will be surrendered to the Trust promptly upon request. The
Manager shall be granted reasonable access to the records and documents in
Subadviser's possession relating to the Portfolios.
(c) Subadviser will vote the Portfolio's investment securities in the
manner in which Subadviser believes to be in the best interests of the
Portfolio, and shall review its proxy voting activities on a periodic basis
with the Trustees.
(d) Subadviser will provide custodian services to the Portfolio in
accordance with the provisions of a separate Custodian Agreement, dated as
of the date hereof, between the Trust, on behalf of the Portfolio, and
Subadviser.
III. SECURITIES LENDING
3.1. Appointment as Agent. For as long as this Agreement shall remain in
effect, Subadviser is hereby authorized as the Portfolio's agent to lend on
a disclosed basis the Portfolio's securities. Subadviser is further
authorized as the Portfolio's agent to sign agreements with borrowers,
ownership or other certificates as may be required by the Internal Revenue
Service or any other tax authorities, and to take any other actions
necessary to effect such loans.
3.2. Indemnification. (a) In the event that any securities lending
transaction is terminated and the loaned securities or any portion thereof
shall not have been returned to the Portfolio by or on behalf of the
borrower within the time specified by Subadviser's agreement with the
borrower (the "Delivery Date"), Subadviser shall, at its expense, within
one (1) business day after the Delivery Date replace the loaned securities
(or any portion thereof not so returned) with a like amount of the loaned
securities of the same issuer, class and denomination, and hold the
Portfolio, the Trustees and Manager harmless from any brokerage commission,
fees, taxes or other expenses incurred by Subadviser in the purchase of
such replacement securities. If Subadviser is unable to purchase such
replacement securities on the open market within [one business day] after
the Delivery Date (the "Reimbursement Date"), Subadviser shall credit the
Portfolio's account by the close of business on the Reimbursement Date with
an amount of cash in U.S. dollars equal to (i) if the Portfolio shall
continue to hold such unreturned loaned securities, the Market Value (as
defined below) of such unreturned loaned securities determined at the close
of business as of the Reimbursement Date, plus all financial benefits
derived from the beneficial ownership of the unreturned loaned securities
which have accrued on such securities whether or not received from
borrower, or (ii) if the Portfolio shall have sold such securities prior to
the Reimbursement Date, the sale proceeds received by the Portfolio in
respect of such sale, plus any interest, penalties, fees or other costs, if
any, incurred by the Portfolio as a result of a failure to settle such sale
on a timely basis. [The "Market Value" of any securities on any given day
shall be the fair market value of such security on such day, as determined
in accordance with the Portfolio's valuation procedures and methods, as
adopted by the Trustees.]
(b) In the event that Subadviser shall be required to make any payment to
the Portfolio or shall incur any loss or expense pursuant to paragraph (a)
above, it shall, to the extent of such payment or loss or expense, be
subrogated to, and succeed to, all of the Portfolio's rights against the
borrower and to the collateral involved. To the extent the collateral
consists of cash or securities issued or guaranteed by the United States
Government or its agencies, the Portfolio shall contemporaneously with any
such payment to the Portfolio by Subadviser surrender same to Subadviser
for its sole disposition.
3.3 Securities Lending Procedures. Subadviser's securities lending
activities on behalf of the Portfolio shall be governed by such procedures
as shall be adopted by the Trustees or Manager, as the same may be amended
from time to time.
IV. COMPLIANCE; CONFIDENTIALITY
4.1 Compliance. (a) Subadviser will comply with (i) all applicable
state and federal laws and regulations governing the performance of the
Subadviser's duties hereunder, (ii) the investment objective, policies and
limitations, as provided in the Portfolio's Prospectus and other governing
documents, and (iii) such instructions, policies and limitations relating
to the Portfolio as the Trustees or Manager may from time to time adopt and
communicate in writing to subadviser.
(b) Subadviser will adopt a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will
provide the Trust with a copy of such code of ethics, evidence of its
adoption and copies of any supplemental policies and procedures implemented
to ensure compliance therewith. Within [forty-five (45)] days of the end
of the last calendar quarter of each year while this Agreement is in
effect, the president or a vice president or managing director of
Subadviser shall certify to the Trust that Subadviser has complied with the
requirements of Rule 17j-1 during the previous year and that there has been
no violation of Subadviser's code of ethics or, if such violation has
occurred, that appropriate action was taken in response to such violation.
Upon the written request of the Manager, Subadviser shall permit the Trust,
or Manager, its employees or its agents to examine the reports required to
be made to Subadviser by Rule 17j-1 (c) (1).
4.2 Confidentiality. The parties to this Agreement agree that each shall
treat as confidential all information provided by a party to the others
regarding such party's business and operations, including without
limitation the investment activities or holdings of the Portfolio. All
confidential information provided by a party hereto shall be used by any
other parties hereto solely for the purposes of rendering services pursuant
to this Agreement and, except as may be required in carrying out the terms
of this Agreement, shall not be disclosed to any third party without the
prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided or
which thereafter becomes publicly available other than in contravention of
this Section 4.2 or which is required to be disclosed by any regulatory
authority in the lawful and appropriate exercise of its jurisdiction over a
party, any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
V. LIABILITY OF SUBADVISER
5.1 Liability; Standard of Care. Subject to the provisions of Section
3.2 hereof, neither Subadviser, nor any of its directors, officers or
employees, shall be liable to Manager or the Trust for any loss resulting
from Subadviser's acts or omissions as Subadviser to the Portfolio, except
to the extent any such losses result from bad faith, willful misfeasance,
reckless disregard or gross negligence on the part of the Subadviser or any
of its directors, officers or employees in the performance of the
Subadviser's duties and obligations under this Agreement.
5.2 Indemnification. (a) Subadviser agrees to indemnify and hold the
Trust harmless from any direct or indirect liabilities, losses or damages
(including reasonable attorneys fees) suffered by the Trust resulting from
bad faith, willful misfeasance, reckless disregard or gross negligence on
the part of the Subadviser or any of its directors, officers or employees
in the performance of the Subadviser's duties and obligations under this
Agreement.
(b) Subadviser hereby agrees to indemnify and hold Manager harmless from
any and all direct or indirect liabilities, losses or damages (including
reasonable attorneys fees) suffered by Manager resulting from (i)
Subadviser's breach of its duties hereunder or (ii) any instance in which
Subadviser fails to comply with the objectives, policies, restrictions or
instructions referred to in Section 1.2 hereof and Manager is for any
reason required by the Trustees to compensate the Portfolio for a resulting
loss, except to the extent such loss results from Manager's own willful
misfeasance, bad faith, reckless disregard or negligence in the performance
of Manager's duties and obligations under the Management Contract.
(c) Manager hereby agrees to indemnify and hold Subadviser harmless from
any and all direct or indirect liabilities, losses or damages (including
reasonable attorney's fees) suffered by Subadviser resulting from bad
faith, willful misfeasance, reckless disregard or gross negligence on the
part of Manager or any of its directors, officers or employees in the
performance of Manager's duties and obligations under this Agreement,
except to the extent such loss results from Subadviser's own willful
misfeasance, bad faith, reckless disregard or negligence in the performance
of Subadviser's duties and obligations under this Agreement.
VI. SUPPLEMENTAL ARRANGEMENTS; EXPENSES; INSURANCE
6.1 Supplemental Arrangements. Subject to the prior written consent of
the Trustees and Manager, Subadviser may enter into arrangements with other
persons affiliated with Subadviser to better fulfill its obligations under
this Agreement for the provision of certain personnel and facilities to
Subadviser, provided that such arrangements do not rise to the level of an
advisory contract subject to the requirements of Section 15 of the
Investment Company Act.
6.2 Expenses. It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by Subadviser
hereunder or by Manager under the Management Agreement. Subadviser
expressly agrees to pay the cost of all custody services required by the
Portfolio. Expenses paid by the Portfolios will include, but not be
limited to, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trustees other than
those who are "interested persons" of the Trust, Manager or Subadviser;
(iv) legal and audit expenses; (v) registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Trust and the Portfolio's shares for distribution
under state and federal securities laws; (viii) expenses of printing and
mailing reports and notices and proxy material to shareholders of the
Portfolio; (viii) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (ix)
insurance premiums for fidelity bond and other coverage; (x) investment
management fees; (xi) expenses of typesetting for printing prospectuses and
statements of additional information and supplements thereto; (xii)
expenses of printing and mailing prospectuses and statements of additional
information and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Portfolio is a party and any legal
obligation that the Portfolio may have to indemnify the Trustees, officers
and/or employees or agents with respect thereto. Subadviser shall not
cause the Trust or the Portfolios to incur any expenses, other than those
reasonably necessary for Subadviser to fulfill its obligations under this
Agreement, unless Subadviser has first notified Manager of its intention to
do so.
6.3 Insurance. Subadviser shall maintain for the duration hereof, with
an insurer acceptable to Manager, a blanket bond and professional liability
(errors and omissions) insurance in amounts reasonably acceptable to
Manager. Subadviser agrees that such insurance shall be considered primary
and Subadviser shall assure that such policies pay claims prior to similar
policies that may be maintained by Manager. In the event Subadviser fails
to have in force such insurance, that failure will not exclude Subadviser
responsibility to pay up to the limit Subadviser would have had to pay had
said insurance been in force.
VII. CONFLICTS OF INTEREST
7.1 Conflicts of Interest. It is understood that the Trustees, officers,
agents and shareholders of the Trust are or may be interested in Subadviser
as directors, officers, stockholders or otherwise; that directors,
officers, agents and stockholders of Subadviser are or may be interested in
the Trust as trustees, officers, shareholders or otherwise; that Subadviser
may be interested in the Trust; and that the existence of any such dual
interest shall not affect the validity of this Agreement or of any
transactions hereunder except as otherwise provided in the Trust's
Declaration of Trust and the Articles of Incorporation of Subadviser,
respectively, or by specific provisions of applicable law.
VIII. REGULATION
8.1 Regulation. Subadviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services provided
pursuant to this Agreement any information, reports or other material which
any such body by reason of this Agreement may reasonably request or require
pursuant to applicable laws and regulations.
IX. DURATION AND TERMINATION OF AGREEMENT
9.1 Effective Date; Duration; Continuance. (a) This Agreement shall
become effective on _________, 1997.
(b) Subject to prior termination pursuant to Section 9.2 below, this
Agreement shall continue in force until ________, and indefinitely
thereafter, but only so long as the continuance after such date shall be
specifically approved at least annually by vote of the Trustees or by a
vote of a majority of the outstanding voting securities of the Portfolio,
provided that in either event such continuance shall also be approved by
the vote of a majority of the Trustees who are not "interested persons" (as
such term is defined in the Investment Company Act) of any party to this
Agreement cast in person at a meeting called for the purpose of voting on
such approval.
(c) The required shareholder approval of this Agreement or any
continuance of this Agreement shall be effective with respect to the
Portfolio if a majority of the outstanding voting securities of the series
(as defined in Rule 18f-2(h) under the Investment Company Act) of shares of
the Portfolio votes to approve this Agreement or its continuance.
9.2 Termination and Assignment. This Agreement may be terminated at any
time, upon sixty days' written notice, without the payment of any penalty,
(i) by the Trustees, (ii) by the vote of a majority of the outstanding
voting securities of the Portfolio; (iii) by Manager, or (iv) by
Subadviser.
(b) This Agreement will terminate automatically, without the payment of
any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act) or (ii) in the event the Management Contract is
terminated for any reason.
9.3 Definitions. The terms "registered investment company," "vote of a
majority of the outstanding voting securities," "assignment," and
"interested persons," when used herein, shall have the respective meanings
specified in the Investment Company Act as now in effect or as hereafter
amended.
X. REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Representations of the Portfolio. The Trust, on behalf of the
Portfolio, represents and warrants that:
(i) the Trust is a business trust established pursuant to the laws of the
[Commonwealth of Massachusetts];
(ii) the Trust is duly registered as an investment company under the
Investment Company Act and the Portfolio is a duly constituted series
portfolio thereof;
(iii) the execution, delivery and performance of this Agreement are
within the Trust's powers, have been and remain duly authorized by all
necessary action (including without limitation all necessary approvals and
other actions required under the Investment Company Act) and will not
violate or constitute a default under any applicable law or regulation or
of any decree, order, judgment, agreement or instrument binding on the
Trust or the Portfolio;
(iv) no consent (including, but not limited to, exchange control
consents) of any applicable governmental authority or body is necessary,
except for such consents as have been obtained and are in full force and
effect, and all conditions of which have been duly complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against the Trust and the Portfolio in accordance with its
terms.
10.2 Representations of the Manager. The Manager represents, warrants
and agrees that:
(i) Manager is a corporation established pursuant to the laws of the
Commonwealth of Massachusetts;
(ii) Manager is duly registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act");
(iii) Manager has been duly appointed by the Trustees and Shareholders of
the Portfolio to provide investment services to the Portfolio as
contemplated by the Management Contract.
(iv) the execution, delivery and performance of this Agreement are within
Manager's powers, have been and remain duly authorized by all necessary
corporate action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement
or instrument binding on Manager;
(v) no consent (including, but not limited to, exchange control consents)
of any applicable governmental authority or body is necessary, except for
such consents as have been obtained and are in full force and effect, and
all conditions of which have been duly complied with; and
(vi) this Agreement constitutes a legal, valid and binding obligation
enforceable against Manager.
10.3 Representations of Subadviser. Subadviser represents, warrants and
agrees that:
(i) Subadviser is a [New York banking corporation] established pursuant
to the laws of the State of New York;
(ii) Subadviser is duly registered as an "investment adviser" under the
Advisers Act; or is a "bank" as defined in Section 202 (a) (2) of the
Advisers Act or an "insurance company" as defined in Section 202 (a) (2) of
the Advisers Act.
(iii) the execution, delivery and performance of this Agreement are within
Subadviser's powers, have been and remain duly authorized by all necessary
corporate action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement
or instrument binding on Subadviser;
(iv) no consent (including, but not limited to, exchange control consents)
of any applicable governmental authority or body is necessary, except for
such consents as have been obtained and are in full force and effect, and
all conditions of which have been duly complied with; and
(v) this Agreement constitutes a legal, valid and binding obligation
enforceable against Subadviser.
10.4 Covenants of the Subadviser. (a) Subadviser will promptly notify
the Trust and Manager in writing of the occurrence of any event which could
have a material impact on the performance of its obligations pursuant to
this Agreement, including without limitation:
(i) the occurrence of any event which would disqualify Subadviser from
serving as an investment adviser of a registered investment company
pursuant to Section 9 (a) of the Investment Company Act or otherwise;
(ii) any material change in the Subadviser's overall business activities
that may have a material adverse affect on the Subadviser's ability to
perform under its obligations under this Agreement;
(iii) any event that would constitute a change in control of Subadviser;
(iv) any change in the portfolio manager of the Portfolio; and
(v) the existence of any pending or threatened audit, investigation,
complaint, examination or other inquiry (other than routine banking
examinations) relating to the Portfolio conducted by any state or federal
governmental regulatory authority.
(b) Subadviser agrees that it will promptly supply Manager with copies of
any material changes to any of the documents provided by Subadviser
pursuant to Section 4.1.
XI. MISCELLANEOUS PROVISIONS
11.1 Use of Subadviser's Name. Neither the Trust nor Manager will use
the name of Subadviser, or any affiliate of Subadviser, in any prospectus,
advertisement sales literature or other communication to the public without
prior review and approval by Subadviser, which approval will not be
unreasonably withheld or delayed.
11.2 Use of Trust or Manager's Name. Subadviser will not use the name of
Manager, the Trust or the Portfolio in any prospectus, advertisement, sales
literature or other communication to the public without prior review and
approval by Manager, which approval will not be unreasonably withheld or
delayed.
11.3 Amendments. This Agreement may only be amended with the prior
written consent of each of the parties hereto and if such amendment is
specifically approved (i) by the vote of a majority of the outstanding
voting securities of the Portfolio, and (ii) by the vote of a majority of
the Trustees who are not interested persons (as such term is defined in the
Investment Company Act) of any person to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. The required
shareholder approval shall be effective with respect to the Portfolio if a
majority of the outstanding voting securities of the Portfolio vote to
approve the amendment.
11.4 Entire Agreement. This Agreement contains the entire understanding
and agreement of the parties with respect to the subject hereof.
11.5 Captions. The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not constitute a part
of the Agreement.
11.6 Notices. All notices required to be given pursuant to this
Agreement shall be delivered or mailed to the last known business address
of the Trust, Manager or Subadviser, as the case may be, in person or by
registered mail or a private mail or delivery service providing the sender
with notice of receipt. Notice shall be deemed given on the date delivered
or mailed in accordance with this Section 11.6.
11.7 Severability. Should any portion of this Agreement, for any reason,
be held to be void at law or in equity, the Agreement shall be construed,
insofar as is possible, as if such portion had never been contained herein.
11.8 Governing Law. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the Commonwealth of
Massachusetts (without giving effect to the choice of law provisions
thereof), or any of the applicable provisions of the Investment Company
Act. To the extent that the laws of the Commonwealth of Massachusetts, or
any of the provisions in this Agreement, conflict with applicable
provisions of the Investment Company Act, the latter shall control.
11.9 Limitation of Liability. The Declaration of Trust establishing the
Trust, dated __________, a copy of which, together with all amendments, is
on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Fidelity Concord Street Trust"
refers to the Trustees under the declaration collectively as Trustees, but
not as individuals or personally, and no Trustee, shareholder, officer,
employee or agent of the Trust shall be held to any personal liability, nor
shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
Portfolio thereof, but only the assets belonging to the Trust, or to the
particular portfolio with which the obligee or claimant dealt, shall be
liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
Fidelity Concord Street Trust, on behalf of Spartan International Index
Fund
By:___________________________
Name:
Title:
Fidelity Management & Research Company
By:___________________________
Name:
Title:
Bankers Trust Company
By:___________________________
Name:
Title:
APPENDIX A
Pursuant to Section 1.6 of the Subadvisory Agreement among Fidelity
Concord Street Trust (the "Trust"), on behalf of Spartan International
Index Fund (the "Portfolio"), Fidelity Management and Research Company
("Manager") and Bankers Trust Company ("Subadviser"), Subadviser shall be
compensated for the services it performs on behalf of the Portfolio as
follows:
1. Fees Payable by Manager. Manager will pay Subadviser a monthly fee
computed at an annual rate (the "Subadviser Percentage Fee") of 0.0X% (X
basis points) of the average daily net assets of the Portfolio (computed in
the manner set forth in the Trust's Declaration of Trust) throughout the
month.
Subadviser's fee shall be computed monthly, and within five business days
of the end of each calendar month Manager shall transmit to Subadviser the
fee for the previous month. Payment shall be made in federal funds wired
to a bank account designated by Subadviser. If this Agreement becomes
effective or terminates before the end of any month, the fee (if any) for
the period from the effective date to the end of such month or from the
beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to
the full month in which such effectiveness or termination occurs.
Subadviser agrees to look exclusively to Manager for the payment of
Subadviser's fees arising under this paragraph 1.
2. Fees Payable by Trust. The Trust, on behalf of the Portfolio, shall
pay the sub-adviser a securities lending fee equal to 40% of the net return
to the fund from loans of portfolio securities, payable monthly and
calculated in the fashion described below.
The net return to the fund from loans of portfolio securities shall be,
with respect to each loan, (1) the amount earned by the fund from holding
the security and lending it to another party, less (2) the return the fund
would have earned if it had not lent the security.
For loans against cash collateral, the amount in clause (1) shall include
(a) the return to the fund (including income, gains, or losses) from
investment of the cash collateral, less (b) any rebate fee or similar fee
payable to the borrowing party. For loans against identified collateral,
the amount in clause (1) shall include any securities lending fees earned
by the fund with respect to each loan. The amounts in clauses (1) and (2)
shall in each case be net of any withholding taxes.
If the subadviser earns additional fees with respect to investment of
collateral for securities loans (such as management or other fees from an
investment company in which collateral may be invested), the amount of such
other fees shall be added to the amount earned by the fund under clause
(1), but shall also be subtracted from the securities lending fees due to
the sub-advisor for that period.
[Securities lending fees shall be accrued daily and paid monthly on the
first business day of each month.]
If the net return to the fund from loans of portfolio securities is a
negative amount, the securities lending fee for that period shall be zero,
and the 40% of the negative amount will be carried forward and applied
against future securities lending fees.
FORM OF
CUSTODIAN AGREEMENT
Dated as of: _____________
Between
Each of the Investment Companies
Listed on Appendix "A" Attached Hereto
and
Bankers Trust Company
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 2
2.03 Security Purchases 2
2.04 Exchanges of Securities 3
2.05 Sales of Securities 4
2.06 Depositary Receipts 4
2.07 Exercise of Rights; Tender Offers 5
2.08 Stock Dividends, Rights, Etc. 5
2.09 Options 5
2.10 Futures Contracts 5
2.11 Borrowing 6
2.12 Interest Bearing Deposits 6
2.13 Foreign Exchange Transactions 7
2.14 Securities Loans 7
2.15 Collections 8
2.16 Dividends, Distributions and Redemptions 8
2.17 Proceeds from Shares Sold 8
2.18 Proxies, Notices, Etc. 9
2.19 Bills and Other Disbursements 9
2.20 Nondiscretionary Functions 9
2.21 Bank Accounts 9
2.22 Deposit of Fund Assets in Securities Systems 10
2.23 Other Transfers 11
2.24 Establishment of Segregated Account 12
2.25 Custodian's Books and Records . 12
2.26 Opinion of Fund's Independent Certified Public
Accountants 13
2.27 Reports of Independent Certified Public Accountants 13
2.28 Overdraft Facility 13
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
14
3.01 Proper Instructions and Special Instructions 14
3.02 Authorized Persons 14
3.03 Persons Having Access to Assets of the Portfolios 15
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 15
IV. SUBCUSTODIANS 15
4.01 Domestic Subcustodians 15
4.02 Foreign Subcustodians and Interim Subcustodians 16
4.03 Special Subcustodians 17
4.04 Termination of a Subcustodian 17
4.05 Certification Regarding Foreign Subcustodians 18
V. STANDARD OF CARE; INDEMNIFICATION 18
5.01 Standard of Care 18
5.02 Liability of Custodian for Actions of Other Persons 19
5.03 Indemnification 20
5.04 Investment Limitations 21
5.05 Fund's Right to Proceed 21
VI. COMPENSATION 22
VII. TERMINATION 22
7.01 Termination of Agreement as to One or More Funds 22
7.02 Termination as to One or More Portfolios 23
VIII. DEFINED TERMS 24
IX. MISCELLANEOUS 25
9.01 Execution of Documents, Etc 25
9.02 Representative Capacity; Nonrecourse Obligations 25
9.03 Several Obligations of the Funds and the Portfolios 25
9.04 Representations and Warranties 26
9.05 Entire Agreement 26
9.06 Waivers and Amendments 26
9.07 Interpretation 27
9.08 Captions 27
9.09 Governing Law 27
9.10 Notices 27
IX. MISCELLANEOUS 28
9.11 Assignment 28
9.12 Counterparts 28
9.13 Confidentiality; Survival of Obligations 28
APPENDICES
Appendix "A" - List of Funds and Portfolios
Appendix "B" - List of Additional Custodians, Special Subcustodians and
Foreign Subcustodians
Appendix "C" - Procedures Relating to Custodian's Security Interest
CUSTODIAN AGREEMENT
AGREEMENT made as of the [DATE] between each of the Investment Companies
Listed on Appendix "A" hereto, as the same may be amended from time to time
(each a "Fund" and collectively the "Funds") and Bankers Trust Company (the
"Custodian").
W I T N E S S E T H
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio
of cash, securities and other assets (all such existing and additional
series now or hereafter listed on Appendix "A" being hereinafter referred
to individually, as a "Portfolio," and collectively, as the "Portfolios");
and
WHEREAS, each Fund desires to appoint the Custodian as custodian on behalf
of each of its Portfolios in accordance with the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations thereunder, under the terms and conditions set forth in
this Agreement, and the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, each Fund hereby employs and appoints
the Custodian as a custodian, subject to the terms and provisions of this
Agreement. Each Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by each
of its Portfolios from time to time during the term of this Agreement and
shall specify to which of its Portfolios such cash, securities and other
assets are to be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article
IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of each Fund's Portfolios delivered to the
Custodian and, on behalf of such Portfolios, the Custodian shall, from time
to time, accept delivery of cash, securities and other assets for
safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of each Fund's
Portfolios either: (i) by physical possession of the share certificates or
other instruments representing such securities in registered or bearer
form; or (ii) in book-entry form by a Securities System (as hereinafter
defined) in accordance with the provisions of Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of
either of them, unless specifically directed by Proper Instructions to hold
such registered securities in so-called street name; provided that, in any
event, all such securities and other assets shall be held in an account of
the Custodian containing only assets of a Portfolio, or only assets held by
the Custodian as a fiduciary or custodian for customers; and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein.
(c) Notwithstanding the provisions of the foregoing paragraphs of this
Section 2.02, the Custodian is hereby authorized to maintain the shares of
certain open-end mutual funds (the "Cash Management Funds") managed by
either Fidelity Management & Research Company ("FMR") or its affiliates or
successors or the Custodian owned by the Portfolios in book entry form
directly with the transfer agent or a designated sub-transfer agent of each
such Cash Management Fund ("Cash Management Fund Transfer Agent"), subject
to and in accordance with the following provisions:
i. Such Cash Management Fund shares shall be maintained in separate
custodian accounts for each such Portfolio in the Custodian's name or
nominee, as custodian for such Portfolio.
ii. The Custodian will implement appropriate control procedures (the
"Control Procedures") to ensure that (i) that only authorized personnel of
the Custodian will be authorized to give instructions to a Cash
Management Fund Transfer Agent in connection with a Portfolio's purchase
or sale of Cash Management Fund shares, (ii) trade instructions sent to
a Cash Management Fund Transfer Agent are properly acknowledged by the
Cash Management Fund Transfer Agent, and (iii) the Cash Management Fund
Transfer Agent's records of each Portfolio's daily trade activity in Cash
Management Fund shares are properly reconciled with the Custodian's
records.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions
(as hereinafter defined), the Custodian shall pay for and receive
securities purchased for the account of a Portfolio, provided that payment
shall be made by the Custodian only upon receipt of the securities: (a) by
the Custodian; (b) by a clearing corporation of a national securities
exchange of which the Custodian is a member; or (c) by a Securities System.
Notwithstanding the foregoing, upon receipt of Proper Instructions: (i) in
the case of a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the securities underlying such repurchase agreement have been
transferred by book-entry into the Account (as hereinafter defined)
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require that the
Securities System may make payment of such funds to the other party to the
repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of
time deposits, call account deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts or options,
pursuant to Sections 2.09, 2.10, 2.12 and 2.13 hereof, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; (iii) in the case
of the purchase of securities, the settlement of which occurs outside of
the United States of America, the Custodian may make payment therefor and
receive delivery of such securities in accordance with local custom and
practice generally accepted by Institutional Clients (as hereinafter
defined) in the country in which the settlement occurs, but in all events
subject to the standard of care set forth in Article V hereof; (iv) in the
case of the purchase of securities in which, in accordance with standard
industry custom and practice generally accepted by Institutional Clients
with respect to such securities, the receipt of such securities and the
payment therefor take place in different countries, the Custodian may
receive delivery of such securities and make payment therefor in accordance
with standard industry custom and practice for such securities generally
accepted by Institutional Clients, but in all events subject to the
standard of care set forth in Article V hereof; and (v) in the case of the
purchase of Cash Management Fund Shares, the Custodian shall pay for and
receive Cash Management Fund shares purchased for the account of a
Portfolio, provided that (a) the Custodian shall only send instructions to
purchase such shares to the Cash Management Fund's transfer agent in
accordance with the Control Procedures ("Purchase Instructions") upon
receipt of Proper Instructions from the Fund, and (b) the Custodian shall
release funds to the Cash Management Fund Transfer Agent only after
receiving acknowledgment from the Cash Management Fund Transfer Agent that
it has received the Purchase Instructions. For purposes of this Agreement,
an "Institutional Client" shall mean a major commercial bank, corporation,
insurance company, or substantially similar institution, which, as a
substantial part of its business operations, purchases or sells securities
and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities in temporary
form for definitive securities; surrender securities for transfer into the
name of the Custodian, a Portfolio or a nominee of either of them, as
permitted by Section 2.02(b); and surrender securities for a different
number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the
securities to be issued will be delivered to the Custodian or a nominee of
the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for
the account of a Portfolio, but only against payment therefor in the form
of: (a) cash, certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the Custodian with a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities,
the settlement of which occurs outside of the United States of America,
such securities shall be delivered and paid for in accordance with local
custom and practice generally accepted by Institutional Clients in the
country in which the settlement occurs, but in all events subject to the
standard of care set forth in Article V hereof; (ii) in the case of the
sale of securities in which, in accordance with standard industry custom
and practice generally accepted by Institutional Clients with respect to
such securities, the delivery of such securities and receipt of payment
therefor take place in different countries, the Custodian may deliver such
securities and receive payment therefor in accordance with standard
industry custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of care
set forth in Article V hereof; (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing agent,
against delivery to the Custodian of a receipt for such securities,
provided that the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or the return of, such securities by
the broker or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or inability
to perform of such broker or its clearing agent; and (iv) in the case of
Cash Management Fund shares, the Custodian shall release Cash Management
Fund shares sold for the account of a Portfolio, provided that (a) the
Custodian shall only send instructions to sell such shares to the Cash
Management Fund Transfer Agent in accordance with the Control Procedures
("Sell Instructions") upon receipt of Proper Instructions from the fund's
trading operations, and (b) such Sell Instructions shall be properly
confirmed by the Cash Management Fund Transfer Agent.
Section 2.06. Depository Receipts. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"),
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
securities in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time to
time designate. Upon receipt of Proper Instructions, the Custodian shall
surrender ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof, or to the
agent of such issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall promptly notify each applicable Fund of such
action in writing by facsimile transmission or in such other manner as such
Fund and the Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and,
upon receipt of Proper Instructions, take action with respect to the same
as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, a Fund on behalf of any
applicable Portfolio relating to compliance with the rules of the Options
Clearing Corporation or of any registered national securities exchange or
similar organization(s), the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the purchase or
writing of an option on a security or securities index by the applicable
Portfolio; (b) deposit and maintain in a segregated account, securities
(either physically or by book-entry in a Securities System), cash or other
assets; and (c) pay, release and/or transfer such securities, cash or other
assets in accordance with notices or other communications evidencing the
expiration, termination or exercise of such options furnished by the
Options Clearing Corporation, the securities or options exchange on which
such options are traded, or such other organization as may be responsible
for handling such option transactions. Each Fund, on behalf of its
applicable Portfolios, and the broker-dealer shall be responsible for the
sufficiency of assets held in any segregated account established in
compliance with applicable margin maintenance requirements and the
performance of other terms of any option contract.
Section 2.10. Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among
a Fund, on behalf of any applicable Portfolio, the Custodian and any
futures commission merchant (a "Procedural Agreement"), the Custodian
shall: (a) receive and retain confirmations, if any, evidencing the
purchase or sale of a futures contract or an option on a futures contract
by the applicable Portfolio; (b) deposit and maintain in a segregated
account, cash, securities and other assets designated as initial,
maintenance or variation "margin" deposits intended to secure the
applicable Portfolio's performance of its obligations under any futures
contracts purchased or sold or any options on futures contracts written by
the Portfolio, in accordance with the provisions of any Procedural
Agreement designed to comply with the rules of the Commodity Futures
Trading Commission and/or any commodity exchange or contract market (such
as the Chicago Board of Trade), or any similar organization(s), regarding
such margin deposits; and (c) release assets from and/or transfer assets
into such margin accounts only in accordance with any such Procedural
Agreements. Each Fund, on behalf of its applicable Portfolios, and such
futures commission merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance with applicable margin
maintenance requirements and the performance of any futures contract or
option on a futures contract in accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by the
applicable Fund on behalf of such Portfolio and the Custodian, as
collateral for borrowings effected by such Portfolio, provided that such
borrowed money is payable by the lender (a) to or upon the Custodian's
order, as Custodian for such Portfolio, and (b) concurrently with delivery
of such securities.
Section 2.12. Interest Bearing Deposits. Upon receipt of Proper
Instructions directing the Custodian to purchase interest bearing fixed
term and call deposits (hereinafter referred to collectively, as "Interest
Bearing Deposits") for the account of a Portfolio, the Custodian shall
purchase such Interest Bearing Deposits in the name of the Portfolio with
such banks or trust companies (including, to the extent permitted by
applicable law, the Custodian, any Subcustodian or any subsidiary or
affiliate of the Custodian) (hereinafter referred to as "Banking
Institutions") and in such amounts as the applicable Fund may direct
pursuant to Proper Instructions. Such Interest Bearing Deposits may be
denominated in U.S. Dollars or other currencies, as the applicable Fund on
behalf of its Portfolio may determine and direct pursuant to Proper
Instructions. The Custodian shall include in its records with respect to
the assets of each Portfolio appropriate notation as to the amount and
currency of each such Interest Bearing Bank Deposit, the accepting Banking
Institution and all other appropriate details, and shall retain such forms
of advice or receipt evidencing such account, if any, as may be forwarded
to the Custodian by the Banking Institution. The responsibilities of the
Custodian to each Fund for Interest Bearing Deposits accepted on the
Custodian's books in the United States on behalf of the Fund's Portfolios
shall be that of a U.S. bank for a similar deposit. With respect to
Interest Bearing Deposits other than those accepted on the Custodian's
books, (a) the Custodian shall be responsible for the collection of income
as set forth in Section 2.15 and the transmission of cash and instructions
to and from such accounts; and (b) the Custodian shall have no duty with
respect to the selection of the Banking Institution or, so long as the
Custodian acts in accordance with Proper Instructions, for the failure of
such Banking Institution to pay upon demand. Upon receipt of Proper
Instructions, the Custodian shall take such reasonable actions as the
applicable Fund deems necessary or appropriate to cause each such Interest
Bearing Deposit Account to be insured to the maximum extent possible by all
applicable deposit insurers including, without limitation, the Federal
Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other Than as Principal. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the applicable Fund may
determine and direct pursuant to Proper Instructions. The Custodian shall
be responsible for the transmission of cash and instructions to and from
the currency broker or Banking Institution with which the contract or
option is made, the safekeeping of all certificates and other documents and
agreements evidencing or relating to such foreign exchange transactions and
the maintenance of proper records as set forth in Section 2.25. The
Custodian shall have no duty with respect to the selection of the currency
brokers or Banking Institutions with which a Fund deals on behalf of its
Portfolios or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such brokers or Banking Institutions to
comply with the terms of any contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal. To the
extent permitted by applicable law, however, if the Custodian has made
available to a Fund its services as a principal in foreign exchange
transactions, upon receipt of Proper Instructions, the Custodian shall
enter into foreign exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on behalf of and for the
account of a Portfolio of such Fund with the Custodian as principal. The
Custodian shall be responsible for the selection of the currency brokers or
Banking Institutions and the failure of such currency brokers or Banking
Institutions to comply with the terms of any contract or option.
(c) Payments. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio,
deliver securities of such Portfolio to the borrower thereof prior to
receipt of the collateral, if any, for such borrowing; provided that, in
cases of loans of securities secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the Securities
System deliver the securities of the Portfolio to the borrower thereof only
upon receipt of the collateral for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to each Fund with
respect to portfolio securities and other assets of each of such Fund's
Portfolios; (b) promptly credit to the account of each applicable Portfolio
all income and other payments relating to portfolio securities and other
assets held by the Custodian hereunder upon Custodian's receipt of such
income or payments or as otherwise agreed in writing by the Custodian and
the applicable Fund; (c) promptly endorse and deliver any instruments
required to effect such collections; (d) promptly execute ownership and
other certificates and affidavits for all federal, state and foreign tax
purposes in connection with receipt of income, capital gains or other
payments with respect to portfolio securities and other assets of each
applicable Portfolio, or in connection with the purchase, sale or transfer
of such securities or other assets; and [ (e) promptly file any
certificates or other affidavits for the refund or reclaim of foreign taxes
paid, and promptly notify each applicable Fund of any changes to law,
interpretative rulings or procedures regarding such reclaims, and otherwise
use all available measures customarily used to minimize the imposition of
foreign taxes at source, and promptly inform each applicable Fund of
alternative means of minimizing such taxes of which the Custodian shall
become aware (or with the exercise of reasonable care should have become
aware); ] provided, however, that with respect to portfolio securities
registered in so-called street name, the Custodian shall use its best
efforts to collect amounts due and payable to each Fund with respect to its
Portfolios. The Custodian shall promptly notify each applicable Fund in
writing by facsimile transmission or in such other manner as each such Fund
and the Custodian may agree in writing if any amount payable with respect
to portfolio securities or other assets of the Portfolios of such Fund(s)
is not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect to
portfolio securities or other assets that are in default.
Section 2.16. Dividends, Distributions and Redemptions. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the
applicable Fund or Funds in such Proper Instructions; or (b) upon receipt
of Special Instructions, as otherwise directed by the applicable Fund or
Funds, for the purpose of the payment of dividends or other distributions
to shareholders of each applicable Portfolio, and payment to shareholders
who have requested repurchase or redemption of their shares of the
Portfolio(s) (collectively, the "Shares"). For purposes of this Agreement,
a "Distribution Account" shall mean an account established at a Banking
Institution designated by the applicable Fund on behalf of one or more of
its Portfolios in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Funds, and shall promptly credit such funds to the
account(s) of the applicable Portfolio(s). The Custodian shall promptly
notify each applicable Fund of Custodian's receipt of cash in payment for
Shares issued by such Fund by facsimile transmission or in such other
manner as the Fund and Custodian may agree in writing. Upon receipt of
Proper Instructions, the Custodian shall: (a) deliver all federal funds
received by the Custodian in payment for Shares in payment for such
investments as may be set forth in such Proper Instructions and at a time
agreed upon between the Custodian and the applicable Fund; and (b) make
federal funds available to the applicable Fund as of specified times agreed
upon from time to time by the applicable Fund and the Custodian, in the
amount of checks received in payment for Shares which are deposited to the
accounts of each applicable Portfolio.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to each
applicable Fund, in the most expeditious manner practicable, all forms of
proxies, all notices of meetings, and any other notices or announcements
affecting or relating to securities owned by one or more of the applicable
Fund's Portfolios that are received by the Custodian, any Subcustodian, or
any nominee of either of them, and, upon receipt of Proper Instructions,
the Custodian shall execute and deliver, or cause such Subcustodian or
nominee to execute and deliver, such proxies or other authorizations as may
be required. Except as directed pursuant to Proper Instructions, neither
the Custodian nor any Subcustodian or nominee shall vote upon any such
securities, or execute any proxy to vote thereon, or give any consent or
take any other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of each Portfolio held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian shall
open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio,
and shall be subject only to the draft or order of the Custodian; provided
however, that such Bank Accounts in countries other than the United States
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
The responsibilities of the Custodian to each applicable Fund for deposits
accepted on the Custodian's books in the United States shall be that of a
U.S. bank for a similar deposit. The responsibilities of the Custodian to
each applicable Fund for deposits accepted on any Subcustodian's books
shall be governed by the provisions of Section 5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution other
than the Custodian or any Subcustodian, provided that such account(s) shall
be in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or order of
the Custodian; provided however, that such Bank Accounts may be held in an
account of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the applicable Fund deems necessary
or appropriate to cause each deposit account established by the Custodian
pursuant to this Section 2.21 to be insured to the maximum extent possible
by all applicable deposit insurers including, without limitation, the
Federal Deposit Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by a
Portfolio in: (a) The Depository Trust Company; (b) the Participants Trust
Company; (c) any book-entry system as provided in (i) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115; or (d) any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which each
applicable Fund has previously approved by Special Instructions (as
hereinafter defined) (each of the foregoing being referred to in this
Agreement as a "Securities System"). Use of a Securities System shall be
in accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held hereunder
in a Securities System, provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which Account
shall not contain any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers and shall be so designated
on the books and records of the Securities System.
(B) The Securities System shall be obligated to comply with the
Custodian's directions with respect to the securities held in such Account
and shall not be entitled to a lien against the assets in such Account for
extensions of credit to the Custodian other than for payment of the
purchase price of such assets.
(C) Each Fund hereby designates the Custodian as the party in whose name
any securities deposited by the Custodian in the Account are to be
registered.
(D) The books and records of the Custodian shall at all times identify
those securities belonging to each Portfolio which are maintained in a
Securities System.
(E) The Custodian shall pay for securities purchased for the account of a
Portfolio only upon (w) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(x) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Portfolio. The Custodian
shall transfer securities sold for the account of a Portfolio only upon (y)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio and shall be
maintained for such Portfolio by the Custodian. The Custodian shall
deliver to each applicable Fund on the next succeeding business day daily
transaction reports which shall include each day's transactions in the
Securities System for the account of each applicable Portfolio. Such
transaction reports shall be delivered to each applicable Fund or any agent
designated by such Fund pursuant to Proper Instructions, by computer or in
such other manner as such Fund and the Custodian may agree in writing.
(F) The Custodian shall, if requested by a Fund pursuant to Proper
Instructions, provide such Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(G) Upon receipt of Special Instructions, the Custodian shall terminate
the use of any Securities System (except the federal book-entry system) on
behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of any Portfolio
maintained with such Securities System.
Section 2.23. Other Transfers.
(a) Upon receipt of Proper Instructions, the Custodian shall transfer to
or receive from a third party that has been appointed to serve as an
additional custodian of one or more Portfolios (an "Additional Custodian")
securities, cash and other assets of such Portfolio(s) in accordance with
such Proper Instructions. Each Additional Custodian shall be identified as
such on Appendix B, as the same may be amended from time to time in
accordance with the provisions of Section 9.06(c).
(b) Upon receipt of Special Instructions, the Custodian shall make such
other dispositions of securities, funds or other property of a Portfolio in
a manner or for purposes other than as expressly set forth in this
Agreement, provided that the Special Instructions relating to such
disposition shall include a statement of the purpose for which the delivery
is to be made, the amount of funds and/or securities to be delivered, and
the name of the person or persons to whom delivery is to be made, and shall
otherwise comply with the provisions of Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a Portfolio,
into which account or accounts may be transferred cash and/or securities or
other assets of such Portfolio, including securities maintained by the
Custodian in a Securities System pursuant to Section 2.22 hereof, said
account or accounts to be maintained: (a) for the purposes set forth in
Sections 2.09, 2.10 and 2.11 hereof; (b) for the purposes of compliance by
the Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the SEC
relating to the maintenance of segregated accounts by registered investment
companies; or (c) for such other purposes as set forth, from time to time,
in Special Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by a Fund in the preparation of reports
to such Fund's shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other assets held for
the accounts of each Portfolio as required by the rules and regulations of
the SEC applicable to investment companies registered under the 1940 Act,
including: (a) journals or other records of original entry containing a
detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification numbers,
if any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in physical
possession, (iii) securities borrowed, loaned or collateralizing
obligations of each Portfolio, (iv) monies borrowed and monies loaned
(together with a record of the collateral therefor and substitutions of
such collateral), (v) dividends and interest received, (vi) the amount of
tax withheld by any person in respect of any collection made by the
Custodian or any Subcustodian, and (vii) the amount of reclaims or refunds
for foreign taxes paid; and (c) cancelled checks and bank records related
thereto. The Custodian shall keep such other books and records of each
Fund as such Fund shall reasonably request. All such books and records
maintained by the Custodian shall be maintained in a form acceptable to the
applicable Fund and in compliance with the rules and regulations of the
SEC, including, but not limited to, books and records required to be
maintained by Section 31(a) of the 1940 Act and the rules and regulations
from time to time adopted thereunder. All books and records maintained by
the Custodian pursuant to this Agreement shall at all times be the property
of each applicable Fund and shall be available during normal business hours
for inspection and use by such Fund and its agents, including, without
limitation, its independent certified public accountants. Notwithstanding
the preceding sentence, no Fund shall take any actions or cause the
Custodian to take any actions which would cause, either directly or
indirectly, the Custodian to violate any applicable laws, regulations or
orders.
Section 2.26. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as a Fund may request to
obtain from year to year favorable opinions from such Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1A and
the Fund's Form N-SAR or other periodic reports to the SEC and with respect
to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants. At
the request of a Fund, the Custodian shall deliver to such Fund a written
report prepared by the Custodian's independent certified public accountants
with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by any Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. To the extent permitted by applicable
law, in the event that the Custodian is directed by Proper Instructions to
make any payment or transfer of funds on behalf of a Portfolio for which
there would be, at the close of business on the date of such payment or
transfer, insufficient funds held by the Custodian on behalf of such
Portfolio, the Custodian may, in its discretion, provide an overdraft (an
"Overdraft") to the applicable Fund on behalf of such Portfolio, in an
amount sufficient to allow the completion of such payment. Any Overdraft
provided hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by the applicable Fund and the Custodian; and (b) shall
accrue interest from the date of the Overdraft to the date of payment in
full by the applicable Fund on behalf of the applicable Portfolio at a rate
agreed upon in writing, from time to time, by the Custodian and the
applicable Fund. The Custodian and each Fund acknowledge that the purpose
of such Overdrafts is to temporarily finance the purchase or sale of
securities for prompt delivery in accordance with the terms hereof, or to
meet emergency expenses not reasonably foreseeable by such Fund. The
Custodian shall promptly notify each applicable Fund in writing (an
"Overdraft Notice") of any Overdraft by facsimile transmission or in such
other manner as such Fund and the Custodian may agree in writing. At the
request of the Custodian, each applicable Fund, on behalf of one or more of
its Portfolios, shall pledge, assign and grant to the Custodian a security
interest in certain specified securities of the applicable Portfolio, as
security for Overdrafts provided to such Portfolio, under the terms and
conditions set forth in Appendix "C" attached hereto. Notwithstanding
anything herein to the contrary, except to the extent expressly provided
for in Appendix C, the Custodian hereby waives and agrees that it shall not
claim, assert or enforce a lien, encumbrance or security interest in any of
the assets of the Portfolios.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the applicable Fund by one or more
Authorized Persons (as hereinafter defined); (ii) a telephonic or other
oral communication by one or more Authorized Persons; or (iii) a
communication effected directly between an electro-mechanical or electronic
device or system (including, without limitation, computers) by or on behalf
of the applicable Fund by one or more Authorized Persons; provided,
however, that communications of the types described in clauses (ii) and
(iii) above purporting to be given by an Authorized Person shall be
considered Proper Instructions only if the Custodian reasonably believes
such communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the applicable Fund by tested telex or
in writing in the manner set forth in clause (i) above, but the lack of
such confirmation shall in no way affect any action taken by the Custodian
in reliance upon such oral instructions prior to the Custodian's receipt of
such confirmation. Each Fund and the Custodian are hereby authorized to
record any and all telephonic or other oral instructions communicated to
the Custodian. Proper Instructions may relate to specific transactions or
to types or classes of transactions, and may be in the form of standing
instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the applicable Fund or any other
person designated by the Treasurer of such Fund in writing, which
countersignature or confirmation shall be (i) included on the same
instrument containing the Proper Instructions or on a separate instrument
relating thereto, and (ii) delivered by hand, by facsimile transmission, or
in such other manner as the applicable Fund and the Custodian agree in
writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the applicable Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, each Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of such Fund, a certificate setting forth:
(a) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of such Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes the name(s) of a person previously
authorized by a Fund to give Proper Instructions or to issue Special
Instructions, such persons shall no longer be considered an Authorized
Person or authorized to issue Special Instructions for that Fund.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of any Fund shall
have physical access to the assets of any Portfolio of that Fund held by
the Custodian nor shall the Custodian deliver any assets of a Portfolio for
delivery to an account of such person; provided, however, that nothing in
this Section 3.03 shall prohibit (a) any Authorized Person from giving
Proper Instructions, or any person authorized to issue Special Instructions
from issuing Special Instructions, so long as such action does not result
in delivery of or access to assets of any Portfolio prohibited by this
Section 3.03; or (b) each Fund's independent certified public accountants
from examining or reviewing the assets of the Portfolios of the Fund held
by the Custodian. Each Fund shall deliver to the Custodian a written
certificate identifying such Authorized Persons, Trustees, officers,
employees and agents of such Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to
act on behalf of a Portfolio. (For purposes of this Agreement, all duly
appointed Domestic Subcustodians, Foreign Subcustodians, Interim
Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of one
or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"); provided, that, the Custodian shall notify each applicable
Fund in writing of the identity and qualifications of any proposed Domestic
Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and such Fund may, in its sole discretion, by
written notice to the Custodian executed by an Authorized Person disapprove
of the appointment of such Domestic Subcustodian. If, following notice by
the Custodian to each applicable Fund regarding appointment of a Domestic
Subcustodian and the expiration of thirty (30) days after the date of such
notice, such Fund shall have failed to notify the Custodian of its
disapproval thereof, the Custodian may, in its discretion, appoint such
proposed Domestic Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from time
to time, appoint: (i) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of one or more Portfolios as a subcustodian for
purposes of holding cash, securities and other assets of such Portfolios
and performing other functions of the Custodian in countries other than the
United States of America (a "Foreign Subcustodian"); provided, that, prior
to the appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees or
other governing body or entity of each applicable Fund on behalf of its
applicable Portfolio(s) (which approval may be withheld in the sole
discretion of such Board of Trustees or other governing body or entity)
with respect to (i) the identity and qualifications of any proposed Foreign
Subcustodian, (ii) the country or countries in which, and the securities
depositories or clearing agencies, if any, through which, any proposed
Foreign Subcustodian is authorized to hold securities and other assets of
the applicable Portfolio(s), and (iii) the form and terms of the
subcustodian agreement to be entered into between such proposed Foreign
Subcustodian and the Custodian. Each such duly approved Foreign
Subcustodian and the countries where and the securities depositories and
clearing agencies through which they may hold securities and other assets
of the applicable Portfolios shall be listed on Appendix "B" attached
hereto, as it may be amended, from time to time, in accordance with the
provisions of Section 9.05(c) hereof. Each Fund shall be responsible for
informing the Custodian sufficiently in advance of a proposed investment by
one of its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian, including obtaining approval as provided in
this Section 4.02(a). The Custodian shall not amend any subcustodian
agreement entered into with a Foreign Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
which materially affect a Fund's rights or the Foreign Subcustodian's
obligations or duties to a Fund under such agreement, except upon prior
approval pursuant to Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the applicable Fund in writing by facsimile
transmission or in such other manner as such Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person designated by the applicable Fund in such
Special Instructions to hold such security or other asset. (Any Person
appointed as a subcustodian pursuant to this Section 4.02(b) is hereinafter
referred to as an "Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of one or more Portfolios,
appoint one or more banks, trust companies or other entities designated in
such Special Instructions to act as a subcustodian for purposes of: (i)
effecting third-party repurchase transactions with banks, brokers, dealers
or other entities through the use of a common custodian or subcustodian;
(ii) establishing a joint trading account for the applicable Portfolio(s)
and other registered open-end management investment companies for which
Fidelity Management & Research Company serves as investment adviser,
through which such Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to certain
variable rate demand note securities; and (iv) effecting any other
transactions designated by each applicable Fund in Special Instructions.
(Each such designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix "B" attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by each applicable Fund, provided that such
agreement shall in all events comply with the provisions of the 1940 Act
and the rules and regulations thereunder and the terms and provisions of
this Agreement. The Custodian shall not amend any subcustodian agreement
entered into with a Special Subcustodian, or agree to change or permit any
changes thereunder, or waive any rights under such agreement, except upon
prior approval pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use
its best efforts to cause each Interim Subcustodian and Special
Subcustodian to, perform all of its obligations in accordance with the
terms and conditions of the subcustodian agreement between the Custodian
and such Subcustodian. In the event that the Custodian is unable to cause
such Subcustodian to fully perform its obligations thereunder, the
Custodian shall forthwith, upon the receipt of Special Instructions,
terminate such Subcustodian with respect to each applicable Fund and, if
necessary or desirable, appoint a replacement Subcustodian in accordance
with the provisions of Section 4.01 or Section 4.02, as the case may be.
In addition to the foregoing, the Custodian (A) may, at any time in its
discretion, upon written notification to each applicable Fund, terminate
any Domestic Subcustodian, Foreign Subcustodian or Interim Subcustodian,
and (B) shall, upon receipt of Special Instructions, terminate any
Subcustodian with respect to each applicable Fund, in accordance with the
termination provisions under the applicable subcustodian agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of a Fund, the Custodian shall deliver to such Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian for such Fund and its Portfolios; (ii) the
countries in which and the securities depositories and clearing agents
through which each such Foreign Subcustodian is then holding cash,
securities and other assets of any Portfolio of such Fund; and (iii) such
other information as may be requested by such Fund to ensure compliance
with Rule 17f-5 under the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to each Fund for all loss, damage and
expense suffered or incurred by such Fund or its Portfolios resulting from
the failure of the Custodian to exercise such reasonable care and
diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, securities depository or securities
system utilized by any such Subcustodian, or any nominee of the Custodian
or any Subcustodian (individually, a "Person") is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason
of: (i) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or of any foreign
country, or political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian, unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the applicable Person, or (B) a malfunction or failure of equipment
operated or utilized by the applicable Person other than a malfunction or
failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to any Fund or Portfolio,
(i) the Custodian shall, (ii) the Custodian shall cause any applicable
Domestic Subcustodian or Foreign Subcustodian to, and (iii) the Custodian
shall use its best efforts to cause any applicable Interim Subcustodian or
Special Subcustodian to, use all commercially reasonable efforts and take
all reasonable steps under the circumstances to mitigate the effects of
such event and to avoid continuing harm to the Funds and the Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive and act
upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant
to the advice of (i) counsel for the applicable Fund or Funds, or (ii) at
the expense of the Custodian, such other counsel as the applicable Fund(s)
and the Custodian may agree upon; provided, however, with respect to the
performance of any action or omission of any action upon such advice, the
Custodian shall be required to conform to the standard of care set forth in
Section 5.01(a).
(e) Expenses of the Funds. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to each applicable Fund
for all reasonable costs and expenses incurred by such Fund in connection
with any claim by such Fund against the Custodian arising from the
obligations of the Custodian hereunder, including, without limitation, all
reasonable attorneys' fees and expenses incurred by such Fund in asserting
any such claim, and all expenses incurred by such Fund in connection with
any investigations, lawsuits or proceedings relating to such claim;
provided, that such Fund has recovered from the Custodian or such claim.
(f) Liability for Past Records. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by a Fund, insofar as such
loss, damage or expense arises from the performance of the Custodian's
duties hereunder by reason of the Custodian's reliance upon records that
were maintained for such Fund by entities other than the Custodian prior to
the Custodian's appointment as custodian for such Fund.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian shall
be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by a Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Subcustodian
for which the Custodian would otherwise be liable, the Custodian shall
promptly reimburse such Fund in the amount of any such loss, damage or
expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary, the Custodian shall not be liable to a Fund for any loss,
damage or expense suffered or incurred by such Fund or any of its
Portfolios resulting from the actions or omissions of an Interim
Subcustodian unless such loss, damage or expense is caused by, or results
from, the negligence, misfeasance or misconduct of the Custodian; provided,
however, in the event of any such loss, damage or expense, the Custodian
shall take all reasonable steps to enforce such rights as it may have
against such Interim Subcustodian to protect the interests of the Funds and
the Portfolios.
(c) Special Subcustodians and Additional Custodians. Notwithstanding the
provisions of Section 5.01 to the contrary and except as otherwise provided
in any subcustodian agreement to which the Custodian, a Fund and any
Special Subcustodian or Additional Custodian are parties, the Custodian
shall not be liable to a Fund for any loss, damage or expense suffered or
incurred by such Fund or any of its Portfolios resulting from the actions
or omissions of a Special Subcustodian or Additional Subcustodian, unless
such loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against any Special
Subcustodian or Additional Custodian to protect the interests of the Funds
and the Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section 5.01 to
the contrary, the Custodian shall not be liable to a Fund for any loss,
damage or expense suffered or incurred by such Fund or any of its
Portfolios resulting from the use by the Custodian of a Securities System,
unless such loss, damage or expense is caused by, or results from, the
negligence, misfeasance or misconduct of the Custodian; provided, however,
that in the event of any such loss, damage or expense, the Custodian shall
take all reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Funds and the Portfolios.
(e) Reimbursement of Expenses. Each Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of its
obligations under this Section 5.02; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, each Fund severally and not jointly agrees to indemnify and
hold harmless the Custodian and its nominees from all loss, damage and
expense (including reasonable attorneys' fees) suffered or incurred by the
Custodian or its nominee caused by or arising from actions taken by the
Custodian on behalf of such Fund in the performance of its duties and
obligations under this Agreement; provided, however, that such indemnity
shall not apply to loss, damage and expense occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian or its nominee.
In addition, each Fund agrees severally and not jointly to indemnify any
Person against any liability incurred by reason of taxes assessed to such
Person, or other loss, damage or expenses incurred by such Person,
resulting from the fact that securities and other property of such Fund's
Portfolios are registered in the name of such Person; provided, however,
that in no event shall such indemnification be applicable to income,
franchise or similar taxes which may be imposed or assessed against any
Person.
(b) Notice of Litigation, Right to Prosecute, Etc. No Fund shall be
liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified such Fund in writing of the commencement of any
litigation or proceeding brought against such Person in respect of which
indemnity may be sought under this Section 5.03. With respect to claims in
such litigation or proceedings for which indemnity by a Fund may be sought
and subject to applicable law and the ruling of any court of competent
jurisdiction, such Fund shall be entitled to participate in any such
litigation or proceeding and, after written notice from such Fund to any
Person, such Fund may assume the defense of such litigation or proceeding
with counsel of its choice at its own expense in respect of that portion of
the litigation for which such Fund may be subject to an indemnification
obligation; provided, however, a Person shall be entitled to participate in
(but not control) at its own cost and expense, the defense of any such
litigation or proceeding if such Fund has not acknowledged in writing its
obligation to indemnify the Person with respect to such litigation or
proceeding. If such Fund is not permitted to participate or control such
litigation or proceeding under applicable law or by a ruling of a court of
competent jurisdiction, such Person shall reasonably prosecute such
litigation or proceeding. A Person shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or proceeding
without providing each applicable Fund with adequate notice of any such
settlement or judgment, and without each such Fund's prior written consent.
All Persons shall submit written evidence to each applicable Fund with
respect to any cost or expense for which they are seeking indemnification
in such form and detail as such Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase,
sale or exchange of securities made by or for a Portfolio, the Custodian
shall not be liable to the applicable Fund and such Fund agrees to
indemnify the Custodian and its nominees, for any loss, damage or expense
suffered or incurred by the Custodian and its nominees arising out of any
violation of any investment or other limitation to which such Fund is
subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, each Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System, or other Person for
loss, damage or expense caused such Fund by such Subcustodian, Securities
System, or other Person, and shall be entitled to enforce the rights of the
Custodian with respect to any claim against such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that such Fund has
not been made whole for any such loss or damage. If the Custodian makes
such Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon such Fund's election to enforce
any rights of the Custodian under this Section 5.05, such Fund shall
reasonably prosecute all actions and proceedings directly relating to the
rights of the Custodian in respect of the loss, damage or expense incurred
by such Fund; provided that, so long as such Fund has acknowledged in
writing its obligation to indemnify the Custodian under Section 5.03 hereof
with respect to such claim, such Fund shall retain the right to settle,
compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by such Fund without the Custodian's
consent and provided further, that if such Fund has not made an
acknowledgment of its obligation to indemnify, such Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with each Fund and take all
actions reasonably requested by such Fund in connection with such Fund's
enforcement of any rights of the Custodian. Each Fund agrees to reimburse
the Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of its
obligations under this Section 5.05; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the
Custodian in an amount, and at such times, as may be agreed upon in
writing, from time to time, by the Custodian and such Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement as to One or More Funds. With
respect to each Fund, this Agreement shall continue in full force and
effect until the first to occur of: (a) termination by the Custodian by an
instrument in writing delivered or mailed to such Fund, such termination to
take effect not sooner than ninety (90) days after the date of such
delivery; (b) termination by such Fund by an instrument in writing
delivered or mailed to the Custodian, such termination to take effect not
sooner than thirty (30) days after the date of such delivery; or (c)
termination by such Fund by written notice delivered to the Custodian,
based upon such Fund's determination that there is a reasonable basis to
conclude that the Custodian is insolvent or that the financial condition of
the Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodian's receipt of such notice
or at such later time as such Fund shall designate. In the event of
termination pursuant to this Section 7.01 by any Fund (a "Terminating
Fund"), each Terminating Fund shall make payment of all accrued fees and
unreimbursed expenses with respect to such Terminating Fund within a
reasonable time following termination and delivery of a statement to the
Terminating Fund setting forth such fees and expenses. Each Terminating
Fund shall identify in any notice of termination a successor custodian or
custodians to which the cash, securities and other assets of its Portfolios
shall, upon termination of this Agreement with respect to such Terminating
Fund, be delivered. In the event that no written notice designating a
successor custodian shall have been delivered to the Custodian on or before
the date when termination of this Agreement as to a Terminating Fund shall
become effective, the Custodian may deliver to a bank or trust company
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities and other
assets of such Terminating Fund's Portfolios held by the Custodian and all
instruments held by the Custodian relative thereto and all other property
of the Terminating Fund's Portfolios held by the Custodian under this
Agreement. Thereafter, such bank or trust company shall be the successor
of the Custodian with respect to such Terminating Fund under this
Agreement. In the event that securities and other assets of such
Terminating Fund's Portfolios remain in the possession of the Custodian
after the date of termination hereof with respect to such Terminating Fund
owing to failure of the Terminating Fund to appoint a successor custodian,
the Custodian shall be entitled to compensation for its services in
accordance with the fee schedule most recently in effect, for such period
as the Custodian retains possession of such securities and other assets,
and the provisions of this Agreement relating to the duties and obligations
of the Custodian and the Terminating Fund shall remain in full force and
effect. In the event of the appointment of a successor custodian, it is
agreed that the cash, securities and other property owned by a Terminating
Fund and held by the Custodian, any Subcustodian or nominee shall be
delivered to the successor custodian; and the Custodian agrees to cooperate
with such Terminating Fund in the execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. This Agreement
may be terminated as to one or more of a Fund's Portfolios (but less than
all of its Portfolios) by delivery of an amended Appendix "A" deleting such
Portfolios pursuant to Section 9.05(b) hereof, in which case termination as
to such deleted Portfolios shall take effect thirty (30) days after the
date of such delivery. The execution and delivery of an amended Appendix
"A" which deletes one or more Portfolios shall constitute a termination of
this Agreement only with respect to such deleted Portfolio(s), shall be
governed by the preceding provisions of Section 7.01 as to the
identification of a successor custodian and the delivery of cash,
securities and other assets of the Portfolio(s) so deleted, and shall not
affect the obligations of the Custodian and any Fund hereunder with respect
to the other Portfolios set forth in Appendix "A," as amended from time to
time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Additional Custodian 2.23(a)
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Cash Management Funds 2.02(c)
Cash Management Fund Transfer Agent 2.02(c)
Control Procedures 2.02(c)
Distribution Account 2.16
Domestic Subcustodian 4.01
FMR 2.02(c)
Foreign Subcustodian 4.02(a)
Fund Preamble
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
Purchase Instructions 2.03(v)
SEC 2.22
Securities System 2.22
Sell Instructions 2.05(iv)
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
Terminating Fund 7.01
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by each Fund. Upon request, each Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations to such Fund under this Agreement or any applicable
subcustodian agreement with respect to such Fund, provided that the
exercise by the Custodian or any Subcustodian of any such rights shall in
all events be in compliance with the terms of this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to each applicable Fund or to such
other parties as such Fund(s) may designate in such Proper Instructions,
all such documents, instruments or agreements as may be reasonable and
necessary or desirable in order to effectuate any of the transactions
contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY
OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH FUND
IS ON FILE WITH THE SECRETARY OF THE STATE OF THE FUND'S FORMATION, AND
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE
TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT
ARE NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR
PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND
PROPERTY OF EACH FUND'S RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES THAT
NO SHAREHOLDER, TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD
PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY FUND ARISING
OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Funds and the Portfolios. WITH
RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS PORTFOLIOS
ARISING OUT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE
OBLIGATIONS ARISING UNDER SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF,
THE CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION
SOLELY TO THE ASSETS AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION
RELATES AS THOUGH EACH FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY
SEPARATE WRITTEN INSTRUMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of Each Fund. Each fund hereby
severally and not jointly represents and warrants that each of the
following shall be true, correct and complete with respect to each Fund at
all times during the term of this Agreement: (i) the Fund is duly organized
under the laws of its jurisdiction of organization and is registered as an
open-end management investment company under the 1940 Act; and (ii) the
execution, delivery and performance by the Fund of this Agreement are (w)
within its power, (x) have been duly authorized by all necessary action,
and (y) will not (A) contribute to or result in a breach of or default
under or conflict with any existing law, order, regulation or ruling of any
governmental or regulatory agency or authority, or (B) violate any
provision of the Fund's corporate charter, Declaration of Trust or other
organizational document, or bylaws, or any amendment thereof or any
provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to each Fund that each of the following
shall be true, correct and complete at all times during the term of this
Agreement: (i) the Custodian is duly organized under the laws of its
jurisdiction of organization and qualifies to act as a custodian to
open-end management investment companies under the provisions of the 1940
Act; and (ii) the execution, delivery and performance by the Custodian of
this Agreement are (w) within its power, (x) have been duly authorized by
all necessary action, and (y) will not (A) contribute to or result in a
breach of or default under or conflict with any existing law, order,
regulation or ruling of any governmental or regulatory agency or authority,
or (B) violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and the
Custodian, on the other, with respect to the subject matter hereof and
accordingly, supersedes as of the effective date of this Agreement any
custodian agreement heretofore in effect between each Fund and the
Custodian.
Section 9.06. Waivers and Amendments. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by
the party against which enforcement of such waiver, amendment or
termination is sought; provided, however: (a) Appendix "A" listing the
Portfolios of each Fund for which the Custodian serves as custodian may be
amended from time to time to add one or more Portfolios for one or more
Funds, by each applicable Fund's execution and delivery to the Custodian of
an amended Appendix "A", and the execution of such amended Appendix by the
Custodian, in which case such amendment shall take effect immediately upon
execution by the Custodian; (b) Appendix "A" may be amended from time to
time to delete one or more Portfolios (but less than all of the Portfolios)
of one or more of the Funds, by each applicable Fund's execution and
delivery to the Custodian of an amended Appendix "A", in which case such
amendment shall take effect thirty (30) days after such delivery, unless
otherwise agreed by the Custodian and each applicable Fund in writing; (c)
Appendix "B" listing Foreign Subcustodians, Special Subcustodians and
Additional Custodians approved by any Fund may be amended from time to time
to add or delete one or more Foreign Subcustodians, Special Subcustodians
or Additional Custodians for a Fund or Funds by each applicable Fund's
execution and delivery to the Custodian of an amended Appendix "B", in
which case such amendment shall take effect immediately upon execution by
the Custodian; and (d) Appendix "C" setting forth the procedures relating
to the Custodian's security interest with respect to each Fund may be
amended only by an instrument in writing executed by each applicable Fund
and the Custodian.
Section 9.07. Interpretation. In connection with the operation of this
Agreement, the Custodian and any Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement with respect to such Fund as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative
or additional provisions made as provided in the preceding sentence shall
be deemed to be an amendment of this Agreement or affect any other Fund.
Section 9.08. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant
to an agreement with a Foreign Subcustodian that is governed by the laws of
the State of New York, the provisions of this Agreement shall be construed
in accordance with and governed by the laws of the State of New York,
provided that in all other instances this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, in each case without giving effect to principles of
conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid to the parties at the following addresses:
(a) If to any Fund:
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Treasurer of the Fidelity Funds
Telephone: (617) 563-7000
Telefax: (617) 476-4195
(b) If to the Custodian:
CUSTODIAN
ADDRESS
ATTENTION
TELEPHONE
TELEFAX
or to such other address as a Fund or the Custodian may have designated in
writing to the other.
Section 9.11. Assignment. This Agreement shall be binding on and shall
inure to the benefit of each Fund severally and the Custodian and their
respective successors and assigns, provided that, subject to the provisions
of Section 7.01 hereof, neither the Custodian nor any Fund may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
Section 9.12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. With respect
to each Fund, this Agreement shall become effective when one or more
counterparts have been signed and delivered by such Fund and the Custodian.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation. The provisions of this Section
9.13 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this Agreement shall survive any termination of this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies Listed on Bankers Trust Company
Appendix "A" Attached Hereto, on Behalf
of each of Their Respective Portfolios
By: ______________________ By: _______________________
Name: ______________________ Name: _______________________
Title: ______________________ Title: _______________________
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
BANKERS TRUST COMPANY and each of the following Investment Companies
Dated as of ________, 1997
The following is a list of Funds and their respective Portfolios for which
the Custodian shall serve under a Custodian Agreement dated as of
_____________, 1997:
Fund Portfolio
Effective as of:
Fidelity Concord Street Trust Spartan Total Market Index Fund
Spartan Extended Market Index Fund
Spartan International Index Fund
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
Each of the Investment Companies BANKERS TRUST COMPANY
Listed on this Appendix "a", on behalf
of each of their respective portfolios
By: ________________________ By: ________________________
Name: ________________________ Name: ________________________
Title: ________________________ Title: ________________________
Appendix "C" to the
Custodian Agreement
Between
Each of the Investment Companies
Listed on Appendix "A" Thereto
And
BANKERS TRUST COMPANY
Dated as of __________, 1997
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian Agreement) of
any Portfolio, the applicable Fund, on behalf of such Portfolio, shall
pledge, assign and grant to the Custodian a security interest in Collateral
(as hereinafter defined), under the terms, circumstances and conditions set
forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, securities
held by the Custodian on behalf of the Portfolio having a fair market value
(as determined in accordance with the procedures set forth in the
prospectus for the Portfolio) equal to the aggregate of all Overdraft
Obligations of such Portfolio: (i) identified in any Pledge Certificate
executed on behalf of such Portfolio; or (ii) designated by the Custodian
for such Portfolio pursuant to Section 3 of this Appendix C. Such
securities shall consist of marketable securities held by the Custodian on
behalf of such Portfolio or, if no such marketable securities are held by
the Custodian on behalf of such Portfolio, such other securities designated
by the applicable Fund in the applicable Pledge Certificate or by the
Custodian pursuant to Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio, the
amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly authorized
officer of the applicable Fund and delivered by such Fund to the Custodian
by facsimile transmission or in such other manner as the applicable Fund
and the Custodian may agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "C" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the applicable
Fund by facsimile transmission or in such other manner as such Fund and the
Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the applicable Fund and
the Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of a Portfolio are not satisfied by the close of business on
the first Business Day following the Business Day on which the applicable
Fund receives Written Notice requesting security for such Overdraft
Obligation and stating the amount of such Overdraft Obligation, the
applicable Fund, on behalf of such Portfolio, shall pledge, assign and
grant to the Custodian a first priority security interest, by delivering to
the Custodian, a Pledge Certificate executed by such Fund on behalf of such
Portfolio describing the applicable Collateral. Such Written Notice may,
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the
applicable Fund shall fail: (a) to pay, on behalf of the applicable
Portfolio, the Overdraft Obligation described in such Written Notice; (b)
to deliver to the Custodian a Pledge Certificate pursuant to Section 2; or
(c) to identify substitute securities pursuant to Section 6 upon the sale
or maturity of any securities identified as Collateral, the Custodian may,
by Written Notice to the applicable Fund specify Collateral which shall
secure the applicable Overdraft Obligation. Such Fund, on behalf of any
applicable Portfolio, hereby pledges, assigns and grants to the Custodian a
first priority security interest in any and all Collateral specified in
such Written Notice; provided that such pledge, assignment and grant of
security shall be deemed to be effective only upon receipt by the
applicable Fund of such Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify a Fund by Written Notice that the fair market value
of the Collateral securing any Overdraft Obligation of one of such Fund's
Portfolios is less than the amount of such Overdraft Obligation, such Fund,
on behalf of the applicable Portfolio, shall deliver to the Custodian,
within one (1) Business Day following the Fund's receipt of such Written
Notice, an additional Pledge Certificate describing additional Collateral.
If such Fund shall fail to deliver such additional Pledge Certificate, the
Custodian may specify Collateral which shall secure the unsecured amount of
the applicable Overdraft Obligation in accordance with Section 3 of this
Appendix C.
Section 5. Release of Collateral. Upon payment by a Fund, on behalf of
one of its Portfolios, of any Overdraft Obligation secured by the pledge of
Collateral, the Custodian shall promptly deliver to such Fund a Release
Certificate pursuant to which the Custodian shall release Collateral from
the lien under the applicable Pledge Certificate or Written Notice pursuant
to Section 3 having a fair market value equal to the amount paid by such
Fund on account of such Overdraft Obligation. In addition, if at any time
a Fund shall notify the Custodian by Written Notice that such Fund desires
that specified Collateral be released and: (a) that the fair market value
of the Collateral securing any Overdraft Obligation shall exceed the amount
of such Overdraft Obligation; or (b) that the Fund has delivered a Pledge
Certificate substituting Collateral for such Overdraft Obligation, the
Custodian shall deliver to such Fund, within one (1) Business Day following
the Custodian's receipt of such Written Notice, a Release Certificate
relating to the Collateral specified in such Written Notice.
Section 6. Substitution of Collateral. A Fund may substitute securities
for any securities identified as Collateral by delivery to the Custodian of
a Pledge Certificate executed by such Fund on behalf of the applicable
Portfolio, indicating the securities pledged as Collateral.
Section 7. Security for Individual Portfolios' Overdraft Obligations.
The pledge of Collateral by a Fund on behalf of any of its individual
Portfolios shall secure only the Overdraft Obligations of such Portfolio.
In no event shall the pledge of Collateral by one of a Fund's Portfolios be
deemed or considered to be security for the Overdraft Obligations of any
other Portfolio of such Fund or of any other Fund.
Section 8. Custodian's Remedies. Upon (a) a Fund's failure to pay any
Overdraft Obligation of an applicable Portfolio within thirty (30) days
after receipt by such Fund of a Written Notice demanding security
therefore, and (b) one (1) Business Day's prior Written Notice to such
Fund, the Custodian may elect to enforce its security interest in the
Collateral securing such Overdraft Obligation, by taking title to (at the
then prevailing fair market value), or selling in a commercially reasonable
manner, so much of the Collateral as shall be required to pay such
Overdraft Obligation in full. Notwithstanding the provisions of any
applicable law, including, without limitation, the Uniform Commercial Code,
the remedy set forth in the preceding sentence shall be the only right or
remedy to which the Custodian is entitled with respect to the pledge and
security interest granted pursuant to any Pledge Certificate or Section 3.
Without limiting the foregoing, the Custodian hereby waives and
relinquishes all contractual and common law rights of set off to which it
may now or hereafter be or become entitled with respect to any obligations
of any Fund to the Custodian arising under this Appendix "C" to the
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies Listed on BANKERS TRUST COMPANY
Schedule "A" to the Custodian Agreement, on
Behalf of Each of Their Respective Portfolios
By: ______________________ By: ______________________
Name: ______________________ Name: ______________________
Title: ______________________ Title: ______________________
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between [ ] (the
"Fund") and [ ] (the "Custodian"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to [Section 2 or Section 4] of Appendix "C"
attached to the Agreement, the Fund, on behalf of [ ] (the
"Portfolio"), hereby pledges, assigns and grants to the Custodian a first
priority security interest in the securities listed on Exhibit "A" attached
to this Pledge Certificate (collectively, the "Pledged Securities"). Upon
delivery of this Pledge Certificate, the Pledged Securities shall
constitute Collateral, and shall secure all Overdraft Obligations of the
Portfolio described in that certain Written Notice dated ,
delivered by the Custodian to the Fund. The pledge, assignment and grant
of security in the Pledged Securities hereunder shall be subject in all
respect to the terms and conditions of the Agreement, including, without
limitation, Sections 7 and 8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of ____.
[FUND], on Behalf of [Portfolio]
By: ___________________
Name: ___________________
Title: ___________________
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between [ ] (the
"Fund") and [ ] (the "Custodian"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to Section 5 of Appendix "C" attached to the
Agreement, the Custodian hereby releases the securities listed on Exhibit
"A" attached to this Release Certificate from the lien under the [Pledge
Certificate dated ___________, or the Written Notice delivered pursuant to
Section 3 of Appendix "C" dated _________ ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this day of __ .
BANKERS TRUST COMPANY
By: _____________________
Name: _____________________
Title: _____________________
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
EXHIBIT 8(N)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of _____________, among THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), J.P. MORGAN SECURITIES INC. ("Seller") and each of the
entities listed on Schedule A-1, A-2, A-3 and A-4 (collectively, the
"Funds" and each a "Fund") hereto, acting on behalf of itself or (i) in the
case of the Funds listed on Schedule A-1 or A-2 hereto which are portfolios
or series, acting through the series company listed on Schedule A-1 or A-2
hereto, (ii) in the case of the accounts listed on Schedule A-3 hereto,
acting through Fidelity Management & Research Company, and (iii) in the
case of the commingled or individual accounts listed on Schedule A-4
hereto, acting through Fidelity Management Trust Company (collectively, the
"Funds" and each, a "Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase agreement
dated as of ________________(the "Master Agreement") with Seller pursuant
to which from time to time one or more of the Funds, as buyers, and Seller,
as seller, may enter into repurchase transactions effected through one or
more joint trading accounts (collectively, the "Joint Trading Account")
established and administered by one or more custodians of the Funds
identified on Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from Eligible
Securities (as hereinafter defined) held by Repo Custodian, subject to an
agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities account
(the "Seller Account") for Seller for the purpose of, among other things,
effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the custodian
for the Funds in connection with the repurchase transactions effected
hereunder, and that the Repo Custodian hold cash, Cash Collateral (as
hereinafter defined) and Securities for the Funds for the purpose of
effecting repurchase transactions hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller Custodian,
Repo Custodian, and the Federal Reserve Banks where the Custodian and the
Repo Custodian are located, are each open for business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S. Dollars,
credited by Repo Custodian to a Transaction Account pursuant to Paragraphs
3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of this
Agreement.
(d) "Eligible Securities" shall mean those securities which are identified
as permissible securities for a particular Transaction Category.
(e) "FICASH I Transaction" and "FICASH III Transaction " shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day next
following the Sale Date and for which securities issued by the government
of the United States of America that are direct obligations of the
government of the United States of America shall constitute Eligible
Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is the Banking Day next following the Sale Date and for
which one or more of the following two categories of securities, as
specified by the Funds, shall constitute Eligible Securities: (x)
securities issued by the government of the United States of America that
are direct obligations of the government of the United States of America,
or (y) securities issued by or guaranteed as to principal and interest by
the government of the United States of America, or by its agencies and/or
instrumentalities, including, but not limited to, the Federal Home Loan
Bank, Federal Home Loan Mortgage Corp., Government National Mortgage
Association, Federal National Mortgage Association, Federal Farm Credit
Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date and for which securities issued by
the government of the United States of America that are direct obligations
of the government of the United States of America shall constitute Eligible
Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is a date fixed by agreement between Seller and the
Participating Funds which is not the Banking Day next following the Sale
Date and for which one or more of the following two categories of
securities, as specified by the Funds, shall constitute Eligible
Securities: (x) securities issued by the government of the United States
of America that are direct obligations of the government of the United
States of America, or (y) securities issued by or guaranteed as to
principal and interest by the government of the United States of America,
or by its agencies and/or instrumentalities, including, but not limited to,
the Federal Home Loan Bank, Federal Home Loan Mortgage Corp., Government
National Mortgage Association, Federal National Mortgage Association,
Federal Farm Credit Bank, Federal Intermediate Credit Bank, Banks for
Cooperatives, and Federal Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction shall
be 102% or such other percentage as is agreed to by Seller and the
Participating Funds (except that in no event shall the Margin Percentage be
less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of the
Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the preamble of
this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph 3(c) of
this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section 4(g) of
this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to a
particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to by
Seller and the Participating Funds for a repurchase transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph 7 of
this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to repurchase
Securities and Cash Collateral, if any, from the Participating Funds and
the Participating Funds are to resell the Securities and Cash Collateral,
if any, including any date determined by application of the provisions of
Paragraphs 7 and 15 of the Master Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the Sale
Price, plus an incremental amount determined by applying the Pricing Rate
to the Sale Price, calculated on the basis of a 360-day year and the number
of actual days elapsed from (and including) the Sale Date to (but
excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by Seller
pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the Participating
Funds and Seller at which the Securities and Cash Collateral, if any, are
to be sold to the Participating Funds by Seller.
(y) "Securities" shall mean all Eligible Securities delivered by Seller or
to be delivered by Seller to the Participating Funds pursuant to a
particular repurchase transaction and not yet repurchased hereunder,
together with all rights related thereto and all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph 3(c)
of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to this
Agreement.
(bb) "Seller Account" shall have the meaning set forth in the preamble of
this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of repurchase
transaction effected hereunder, as determined with reference to the term of
the transaction and the categories of Securities that constitute Eligible
Securities therefor, which term shall include FICASH I Transactions, FICASH
II Transactions, FICASH III Transactions, FITERM I Transactions, FITERM II
Transactions, FITERM III Transactions, and such other transaction
categories as may from time to time be designated by the Funds by notice to
Seller, Custodian and Repo Custodian.
2. Appointment of Repo Custodian. Upon the terms and conditions set forth
in this Agreement, Repo Custodian is hereby appointed by the Funds to act
as the custodian for the Participating Funds to hold cash, Cash Collateral
and Securities for the purpose of effecting repurchase transactions for the
Participating Funds through the Joint Trading Account pursuant to the
Master Agreement. Repo Custodian hereby acknowledges the terms of the
Master Agreement between the Funds and Seller (attached as an Exhibit
hereto), as amended from time to time, and agrees to abide by the
provisions thereof to the extent such provisions relate to the
responsibilities and operations of Repo Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more Transaction
Accounts for the purpose of effecting repurchase transactions hereunder for
the Funds, in each case pursuant to the Master Agreement. From time to
time the Funds may cause Custodian, on behalf of the Funds, to deposit
Securities and cash with Repo Custodian in the designated Transaction
Account, in each case in accordance with Paragraph 3 of the Master
Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash Collateral
received for the Participating Funds segregated at all times from those of
any other person, firm or corporation in its possession and shall identify
all such Securities, cash and Cash Collateral as subject to this Agreement
and the Master Agreement. Segregation may be accomplished by physical
segregation with respect to certificated securities held by the Repo
Custodian and, in addition, by appropriate identification on the books and
records of Repo Custodian in the case of all other Securities, cash and
Cash Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating Funds, and
shall be subject at all times to the proper instructions of the
Participating Funds, or the Custodian on behalf of the Participating Funds,
with respect to the holding, transfer or disposition of such Securities and
Cash Collateral. Repo Custodian shall include in its records for each
Transaction Account all instructions received by it which evidence an
interest of the Participating Funds in the Securities and Cash Collateral
and shall hold physically segregated any written agreement, receipt or
other writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash Collateral to
the Participating Funds or to "credit" a Transaction Account under this or
any other paragraph of this Agreement shall be made in immediately
available funds. If Repo Custodian is required to "deliver" or "transfer"
Securities to the Participating Funds under this or any other paragraph of
this Agreement, Repo Custodian shall take, or cause to be taken, the
following actions to perfect the Participating Funds' interest in such
Securities as an outright purchaser: (i) in the case of certificated
securities and instruments held by Seller, by physical delivery of the
share certificates or other instruments representing the Securities and by
physical segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities are
being held for the Participating Funds (such securities and instruments to
be delivered in form suitable for transfer or accompanied by duly executed
instruments of transfer or assignment in blank and accompanied by such
other documentation as the Participating Funds may request), (ii) in the
case of Securities held in a customer only account in a clearing agency or
federal book-entry system authorized for use by the Funds and meeting the
requirements of Rule 17f-4 under the Investment Company Act of 1940, as
amended (the "1940 Act") (such authorized agency or system being referred
to herein as a "Securities System"), by appropriate entry on the books and
records of Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a customer
only account in the Securities System and by appropriate entry on the books
and records of Repo Custodian identifying such Securities as belonging to
the Participating Funds; provided, further, that Repo Custodian shall
confirm to the Participating Funds the identity of the Securities
transferred or delivered. Acceptance of a "due bill", "trust receipt" or
similar receipt or notification of segregation issued by a third party with
respect to Securities held by such third party shall not constitute good
delivery of Securities to Repo Custodian for purposes of this Agreement or
the Master Agreement and shall expressly violate the terms of this
Agreement and the Master Agreement. The Funds shall identify by notice to
Repo Custodian and Seller those agencies or systems which have been
approved by the Funds for use under this Agreement and the Master
Agreement. The Funds hereby notify Repo Custodian and Seller that the
following agencies and systems have been approved by the Funds for use
under this Agreement and the Master Agreement, until such time as Repo
Custodian and Seller shall have been notified by the Funds to the contrary:
(i) Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular Public
Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry regulations of
federal agencies substantially in the form of 31 CFR 306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the Transaction
Account and effect the transfer of Securities to or from the Participating
Funds upon proper instructions received from the Participating Funds, or
the Custodian on behalf of the Participating Funds, and shall make all
credits and debits to the Seller Account and effect the transfer of
Securities to or from the Seller upon proper instructions received from
Seller. In the event that Repo Custodian receives conflicting proper
instructions from Seller and the Participating Funds, or the Custodian on
behalf of the Participating Funds, Repo Custodian shall follow the
Participating Funds' or the Custodian's proper instructions. The
Participating Funds shall give Repo Custodian only such instructions as
shall be permitted by the Master Agreement. Notwithstanding the preceding
sentence, the Participating Funds, or the Custodian on behalf of the
Participating Funds, may from time to time instruct Repo Custodian to
transfer cash from the Transaction Account to Custodian.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree to
enter into a repurchase transaction, Seller and the Participating Funds, or
the Custodian on behalf of the Participating Funds, will give Repo
Custodian proper instructions by telephone or otherwise on the Sale Date,
specifying the Transaction Category, Repurchase Date, Sale Price,
Repurchase Price or the applicable Pricing Rate and the Margin Percentage
for each such repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase Date
is the Banking Day next following the Sale Date (x) the Participating Funds
may increase or decrease the Sale Price for any such repurchase transaction
by no more than 10% of the initial Sale Price by causing to be delivered
further proper instructions by telephone or otherwise to Repo Custodian
prior to the close of business on the Sale Date and (y) Seller and the
Participating Funds may by mutual consent agree to increase or decrease the
Sale Price by more than 10% of the initial Sale Price by causing to be
provided further proper instructions to Repo Custodian by the close of
business on the Sale Date. In any event, Repo Custodian shall not be
responsible for determining whether any such increase or decrease of the
Sale Price exceeds the 10% limitation.
(c) Seller will take such actions as are necessary to ensure that on the
Sale Date the aggregate Market Value of all Securities held by Repo
Custodian for Seller and cash in the Seller Account equals or exceeds the
Margin Percentage of the Sale Price. Seller shall give Repo Custodian
proper instructions specifying with respect to each of the Securities which
is to be the subject of a repurchase transaction (a) the name of the issuer
and the title of the Securities, and (b) the Market Value of such
Securities. Such instructions shall constitute Seller's instructions to
Repo Custodian to transfer the Securities to the Participating Funds and/or
Cash Collateral from the Seller Account to the Transaction Account.
(d) Prior to the close of business on the Sale Date, the Participating
Funds shall transfer to, or maintain on deposit with, Repo Custodian in the
Transaction Account immediately available funds in an amount equal to the
Sale Price with respect to a particular repurchase transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian shall
transfer Securities from Seller to the Participating Funds and/or cash held
in the Seller Account to the Transaction Account and shall transfer to the
Seller Account immediately available funds from the Transaction Account in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
by Seller to the Participating Funds are Eligible Securities. Any
securities which are not Eligible Securities for a particular repurchase
transaction hereunder shall not be included in the calculations set forth
below and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the aggregate
Market Value of Securities and cash, if any, applicable to the repurchase
transaction is less than the Margin Percentage of the Sale Price and Seller
shall transfer, by the close of business on the Sale Date, to Repo
Custodian additional Securities and/or cash in the amount of such
deficiency. If Seller does not, by the close of business on the Sale Date,
transfer additional Securities and/or cash, the Market Value of which
equals or exceeds such deficiency, Repo Custodian may, at its option,
without notice to Seller, advance the amount of such deficiency to Seller
in order to effectuate the repurchase transaction. It is expressly agreed
that Repo Custodian is not obligated to make an advance to Seller to enable
it to complete any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo Custodian
shall cause the Securities applicable to the repurchase transaction
received from Seller to be transferred to the Participating Funds and shall
cause any cash received from Seller to be transferred to the Transaction
Account, against transfer of the Sale Price from the Transaction Account to
the Seller Account, such transfers of Securities and/or cash and funds to
occur simultaneously on a delivery versus payment basis.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the Transaction
Account is less than the agreed upon Sale Price in connection with the
repurchase transaction immediately prior to effectuating such repurchase
transaction, or if the aggregate Market Value of the Securities and cash,
if any, applicable to such repurchase transaction is less than the Sale
Price multiplied by the Margin Percentage immediately prior to effectuating
such repurchase transaction, Repo Custodian shall effect the repurchase
transaction to the best of its ability by transferring Securities from
Seller to the Participating Funds and/or cash from the Seller Account to
the Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction Account
multiplied by the Margin Percentage and (y) the aggregate Market Value of
the Securities available for transfer from Seller to the Participating
Funds and cash, if any, in the Seller Account, against the transfer of
immediately available funds from the Transaction Account to the Seller
Account in an amount equal to the aggregate Market Value of the Securities
and/or cash to be transferred divided by the Margin Percentage; provided,
however, that in either such event Repo Custodian shall have the right not
to transfer to the Participating Funds such Securities and not to transfer
such cash, if any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian determines, in
its sole discretion, will not be the subject of a repurchase transaction.
The actions of Repo Custodian pursuant to this subparagraph (e)(v) shall
not affect the obligations and liabilities of the parties to each other
pursuant to the Master Agreement with regard to such repurchase
transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the Master
Agreement), Repo Custodian shall perform such substitution in accordance
with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
to the Participating Funds are Eligible Securities. Any securities which
are not eligible for repurchase transactions hereunder shall not be
included in the calculations set forth below and shall not be transferred
to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Eligible Securities and/or Cash Collateral to be transferred. Repo
Custodian shall not make any substitution if, at the time of substitution,
the aggregate Market Value of all Securities and any Cash Collateral
applicable to such repurchase transaction immediately after such
substitution would be less than the Margin Percentage of the Repurchase
Price (calculated as if the Repurchase Date were the date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted against
the delivery by Repo Custodian of substitute Eligible Securities to the
Participating Funds and/or the crediting of the Transaction Account with
Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute Eligible
Securities, and has failed to deliver Eligible Securities against such Cash
Collateral not later than the close of business on such Banking Day in
accordance with the terms of the Master Agreement, Repo Custodian shall
promptly, but in no event later than 10:00 a.m. the following Banking Day,
notify the Participating Funds and Seller of such failure.
(g) With respect to each repurchase transaction, at 10:00 a.m. New York
time, or at such other time as specified in proper instructions of the
Participating Funds (or the Custodian on behalf of the Participating Funds)
on the Repurchase Date, Repo Custodian shall debit the Seller Account and
credit the Transaction Account in the amount of the Repurchase Price and
shall transfer Securities from the Participating Funds to the Seller and
Cash Collateral, if any, from the Transaction Account to the Seller Account
in accordance with the following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller Account
and credit the Transaction Account in the amount of the Repurchase Price
and shall transfer all Securities applicable to such repurchase transaction
from the Participating Funds to the Seller and debit the Transaction
Account and credit the Seller Account in the amount of any Cash Collateral
applicable to such repurchase transaction.
(ii) If the amount of available funds in the Seller Account is less than
the Repurchase Price, then Repo Custodian shall notify the Seller of the
amount of the deficiency and Seller shall promptly cause such amount to be
transferred to the Seller Account. If Seller fails to cause the transfer
of the entire amount of the deficiency to the Seller Account, then Repo
Custodian may, at its option and without notice to Seller, advance to
Seller the amount of such remaining deficiency. It is expressly agreed
that Repo Custodian is not obligated to make any advance to Seller. If,
following such transfer and/or advance, the amount of available funds in
the Seller Account equals or exceeds the Repurchase Price then Repo
Custodian shall debit the Seller Account and credit the Transaction Account
in the amount of the Repurchase Price and shall transfer from the
Participating Funds to the Seller all Securities applicable to such
repurchase transaction and debit the Transaction Account and credit the
Seller Account in the amount of any Cash Collateral applicable to such
repurchase transaction.
(iii) If the Seller fails to cause the transfer of the entire amount of
the deficiency, as required by (ii) above, and Repo Custodian fails to
advance to Seller an amount sufficient to eliminate the entire deficiency,
then Repo Custodian shall debit the Seller Account in the amount of all
immediately available funds designated by Seller as applicable to the
repurchase transaction and credit the Transaction Account in such amount
(such amount being referred to as the "Partial Payment") and shall transfer
Securities from the Participating Funds to the Seller such that the
aggregate Market Value of all remaining Securities and Cash Collateral in
the Transaction Account with respect to such repurchase transaction shall
at least equal the difference between Margin Percentage of the Repurchase
Price and the Partial Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums paid by
or on behalf of the issuer in respect of the Securities and collected by
Repo Custodian, except as otherwise provided in Paragraph 8 of the Master
Agreement.
6. Daily Statement. On each Banking Day on which any Participating Funds
have an outstanding repurchase transaction, Repo Custodian shall deliver by
facsimile to Custodian and to the Participating Funds a statement
identifying the Securities held by Repo Custodian with respect to such
repurchase transaction and the cash and Cash Collateral, if any, held by
Repo Custodian in the Transaction Account, including a statement of the
then current Market Value of such Securities and the amounts, if any,
credited to the Transaction Account as of the close of trading on the
previous Banking Day. Repo Custodian shall also deliver to Custodian and
the Participating Funds such additional statements as the Participating
Funds may reasonably request.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and the
amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the Seller
Account against the receipt from Seller of the Securities and Cash
Collateral, if any, and (ii) on each Banking Day on which such repurchase
transaction is outstanding. If on any Banking Day the aggregate Market
Value of the Securities and Cash Collateral with respect to any repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day) for such
transaction, Repo Custodian shall promptly, but in any case no later than
10:00 a.m. the following Banking Day, notify Seller. If on any Banking Day
the aggregate market value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) for such transaction, and Seller fails to deliver additional
Eligible Securities applicable to such repurchase transaction or an
additional amount of Cash Collateral by the close of business on such
Banking Day such that the aggregate market value of the Securities and Cash
Collateral at least equals the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day), Repo
Custodian shall promptly, but in any event no later than 10:00 a.m. the
following Banking Day, notify the Participating Funds of such failure. For
purposes of determining Seller's margin maintenance requirements on the
Sale Date for repurchase transactions in which the Repurchase Date is the
Banking Day immediately following the Sale Date, such aggregate market
value shall equal at least the Margin Percentage of the Sale Price.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing services
("Pricing Services") set forth on Schedule B. It is understood and agreed
that Repo Custodian shall use the prices made available by the Pricing
Services on the Banking Day of such determination unless Seller and the
Participating Funds mutually agree that some other prices shall be used and
so notify Repo Custodian by proper instructions of the sum of the prices of
all such Securities priced in such different manner. In the event that
Repo Custodian is unable to obtain a valuation of any Securities from the
Pricing Services, Repo Custodian shall request a bid quotation from a
broker's broker or a broker dealer, set forth in Schedule B, other than
Seller. In the event Repo Custodian is unable to obtain a bid quotation
for any Securities from such a broker's broker or a broker dealer, Repo
Custodian (i) shall not include any such Securities in the determination of
whether the aggregate Market Value of the Securities and any Cash
Collateral equals at least the Margin Percentage of the Repurchase Price
and (ii) shall redeliver such Securities to Seller if the Market Value of
all other Securities and any Cash Collateral with respect to such
repurchase transaction equals at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such Banking
Day). The Repo Custodian may rely on prices quoted by Pricing Services,
broker's brokers or broker dealers, except Seller, as set forth in Schedule
B.
(c) (i) If, on any Banking Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase transaction
is less than the Margin Percentage of the Repurchase Price (calculated as
if the Repurchase Date were such Banking Day) applicable to such repurchase
transaction, Repo Custodian shall deliver to the Participating Funds an
amount of additional Eligible Securities applicable to such repurchase
transaction and/or debit the Seller Account and credit the Transaction
Account with an additional amount of Cash Collateral, such that the
aggregate Market Value of all Securities and any Cash Collateral with
respect to such repurchase transaction shall equal at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase Date
were such Banking Day) applicable to such repurchase transaction; except
that, for purposes of determining Seller's margin maintenance requirements
on the Sale Date for repurchase transactions in which the Repurchase Date
is the Banking Day immediately following the Sale Date, such aggregate
market value shall equal at least the Margin Percentage of the Sale Price.
(ii) If, on any Banking Day, the aggregate Market Value of the Securities
and any Cash Collateral with respect to a repurchase transaction exceeds
the Margin Percentage of the Repurchase Price (calculated as if the
Repurchase Date were such Banking Day) applicable to such repurchase
transaction, Repo Custodian shall return to the Seller all or a portion of
such Securities or Cash Collateral, if any; provided that the Market Value
of the remaining Securities and any Cash Collateral with respect to the
repurchase transaction shall be at least equal to the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) applicable to such repurchase transaction. At any time and
from time to time with respect to any repurchase transaction, if authorized
by the Participating Funds, or the Custodian on behalf of the Participating
Funds, the Repo Custodian shall debit the Transaction Account by an amount
of Cash Collateral and credit the Seller Account by the same amount of Cash
Collateral against simultaneous delivery from Seller to the Participating
Funds of Eligible Securities applicable to such repurchase transaction with
a Market Value at least equal to the amount of Cash Collateral credited and
debited.
8. Authorized Persons. Schedule C hereto sets forth those persons who are
authorized to act for Repo Custodian, Custodian, Seller and the Funds,
respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested telex,
facsimile, a written request, direction, instruction or certification
signed or initialed by or on behalf of the party giving the instructions by
one or more authorized persons (as provided in Paragraph 8); provided,
however, that no instructions directing the delivery of Securities or the
payment of funds to any individual who is an authorized signatory of
Custodian or Repo Custodian shall be signed by that individual.
Telephonic, other oral or electro-mechanical or electronic instructions
(including the code which may be assigned by Repo Custodian to Custodian
from time to time) given by one of the above authorized persons shall also
be considered proper instructions if the party receiving such instructions
reasonably believes them to have been given by an authorized person with
respect to the transaction involved. Oral instructions will be confirmed
by tested telex, facsimile or in writing in the manner set forth above.
The Funds authorize Repo Custodian to tape record any and all telephonic or
other oral instructions given to Repo Custodian. Proper instructions may
relate to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to exercise reasonable care and
diligence in carrying out the provisions of this Agreement and the Master
Agreement and shall be liable to each of the Funds and Seller for any
expenses or damages to the Funds or Seller for breach of Repo Custodian's
standard of care in this Agreement, as further provided in this Paragraph.
Repo Custodian assumes responsibility for loss to any property held by it
pursuant to the provisions of this Agreement which is occasioned by the
negligence of, or conversion, misappropriation or theft by, Repo
Custodian's officers, employees and agents. Repo Custodian, at its option,
may insure itself against loss from any cause but shall be under no
obligation to obtain insurance directly for the benefit of the Funds. So
long as and to the extent that Repo Custodian exercises reasonable care and
diligence and acts without negligence, misfeasance or misconduct, Repo
Custodian shall not be liable to Seller or the Funds for (i) any action
taken or omitted in good faith in reliance upon proper instructions, (ii)
any action taken or omitted in good faith upon any notice, request,
certificate or other instrument reasonably believed by it to be genuine and
to be signed by the proper party or parties, (iii) any delay or failure to
act as may be required under this Agreement or under the Master Agreement
when such delay or failure is due to any act of God or war, (iv) the
actions or omissions of a Securities System, (v) the title, validity or
genuineness of any security received, delivered or held by it pursuant to
this Agreement or the Master Agreement, (vi) the legality of the purchase
or sale of any Securities by or to the Participating Funds or Seller or the
propriety of the amount for which the same are purchased or sold (except to
the extent of Repo Custodian's obligations hereunder to determine whether
securities are Eligible Securities and to calculate the Market Value of
Securities and any Cash Collateral), (vii) the due authority of any person
listed on Schedule C to act on behalf of Custodian, Seller or the Funds, as
the case may be, with respect to this Agreement or (viii) the errors of the
Pricing Services, broker's brokers or broker dealers set forth in Schedule
B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any money to
be used in a repurchase transaction, whether or not such money is
represented by any check, draft, or other instrument for the payment of
money, until the Eligible Securities have been delivered in accordance with
Paragraph 3 or until Repo Custodian actually receives and collects such
money on behalf of Seller or the Funds directly or by the final crediting
of the Seller Account or a Transaction Account through the Securities
System, except that this Paragraph 10(b) shall not be deemed to limit the
liability of Repo Custodian to Seller or the Funds if the non-delivery of
such Eligible Securities or the failure to receive and collect such money
results from the breach by Repo Custodian of its obligations under this
Agreement or the Master Agreement.
(c) Repo Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it are such as
properly may be held by the Participating Funds; provided that
notwithstanding anything to the contrary herein, Repo Custodian shall be
obligated to act in accordance with the guidelines and proper instructions
of the Participating Funds, or the Custodian on behalf of the Participating
Funds, with respect to the types of Eligible Securities and the issuers of
such Eligible Securities that may be used in specific repurchase
transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the Custodian
if Securities held by Repo Custodian are in default or if payment on any
Securities has been refused after due demand and presentation and Repo
Custodian shall take action to effect collection of any such amounts upon
the proper instructions of the Participating Funds, or the Custodian on
behalf of the Participating Funds, and assurances satisfactory to it that
it will be reimbursed for its costs and expenses in connection with any
such action.
(e) Repo Custodian shall have no duties, other than such duties as are
necessary to effectuate repurchase transactions in accordance with this
Agreement and the Master Agreement within the standard of care set forth in
Paragraph 10(a) above and in a commercially reasonable manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly authorized
to execute and deliver this Agreement and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) the execution, delivery and performance of
this Agreement do not and will not violate any ordinance, declaration of
trust, partnership agreement, articles of incorporation, charter, rule or
statute applicable to it or any agreement by which it is bound or by which
any of its assets are affected, (iii) the person executing this Agreement
on its behalf is duly and properly authorized to do so, (iv) it has (and
will maintain) a copy of this Agreement and evidence of its authorization
in its official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President or
higher.
(b) Repo Custodian further represents and warrants that (i) it has not
pledged, encumbered, hypothecated, transferred, disposed of, or otherwise
granted, any third party an interest in any Securities, (ii) it does not
have any security interest, lien or right of setoff in the Securities, and
(iii) it has not been notified by any third party, in its capacity as Repo
Custodian, custodian bank or clearing bank, of the existence of any lien,
claim, charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction. Repo Custodian agrees that (i) it
will not pledge, encumber, hypothecate, transfer, dispose of, or otherwise
grant, any third party an interest in any Securities, (ii) it will not
acquire any security interest, lien or right of setoff in the Securities,
and (iii) it will promptly notify the Fund Agent, if, during the term of
any outstanding repurchase transaction, it is notified by any third party,
in its capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim, charge
or encumbrance with respect to any Securities that are the subject of such
repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent that
Repo Custodian is in the exercise of reasonable care and diligence and acts
without negligence, misfeasance or misconduct, Seller will indemnify Repo
Custodian and hold it harmless against any and all losses, claims, damages,
liabilities or actions to which it may become subject, and reimburse it for
any expenses (including attorneys' fees and expenses) incurred by it in
connection therewith, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon or in any way related to this
Agreement, the Master Agreement or those arrangements. Without limiting
the generality of the foregoing indemnification, Repo Custodian shall be
indemnified by Seller for all costs and expenses, including attorneys'
fees, for its successful defense against claims that Repo Custodian
breached its standard of care and was negligent or engaged in misfeasance
or misconduct.
(b) So long as and to the extent that Repo Custodian is in the exercise of
reasonable care and diligence and acts without negligence, misconduct or
misfeasance, the Participating Funds will indemnify Repo Custodian and hold
it harmless against any and all losses, claims, damages, liabilities or
actions to which it may become subject, and reimburse it for any expenses
(including attorneys' fees and expenses) incurred by it in connection
therewith, insofar as such losses, claims, damages, liabilities or actions
result from the negligence, misconduct or misfeasance of the Participating
Funds under this Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional rights
and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement shall
be binding unless in writing and executed by the parties hereto. Schedule
A, listing the Funds, may be amended from time to time to add or delete
Funds by the Funds (i) delivering an executed copy of an addendum to
Schedule A to Seller and Repo Custodian, and (ii) amending Schedule A to
the Master Agreement in accordance with the provisions therein. The
amendment of Schedule A as provided above shall constitute appointment of
Repo Custodian as a custodian for such Fund. Schedule B may be amended
from time to time by an instrument in writing, or counterpart thereof,
executed by Repo Custodian, Seller and the Funds. Schedule C may be
amended from time to time to change an authorized person of: (i) the
Funds, by written notice to Repo Custodian and Seller by Ms. Sarah Zenoble
or the Treasurer of the Funds (or such persons who may be authorized from
time to time in writing by Ms. Zenoble or the President or Treasurer of
Fidelity Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any Vice
President of Repo Custodian; and (iv) Custodian, by written notice to Repo
Custodian by any Vice President of Custodian. Schedule D may be amended
from time to time by any party hereto by delivery of written notice to the
other parties hereto. Repo Custodian shall receive notice of any amendment
to the Master Agreement at the address set forth in Schedule D hereto; and,
if such amendment would have a material adverse effect on the rights of, or
would materially increase the obligations of Repo Custodian under this
Agreement, any such amendment shall also require the consent of Repo
Custodian. Any such amendment shall be deemed not to be material if Repo
Custodian fails to object in writing within 21 days after receipt of notice
thereof. No amendment to this Agreement shall affect the rights or
obligations of any Fund with respect to any outstanding repurchase
transaction entered into under this Agreement and the Master Agreement
prior to such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict between
this Agreement and the Master Agreement, the Master Agreement shall
control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Banking Days' written notice to the other parties; provided,
however, that any such termination shall not affect any repurchase
transaction then outstanding or any rights or obligations under this
Agreement or the Master Agreement with respect to any actions or omissions
of any party hereto prior to termination. In the event of termination,
Repo Custodian will deliver any Securities, Cash Collateral or cash held by
it or any agent to Custodian or to such successor custodian or custodian or
subcustodian as the Participating Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation for
the services to be rendered hereunder, based upon rates which shall be
agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian and
the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and except
as otherwise provided herein or as the parties to the Agreement shall from
time to time otherwise agree, all instructions, notices, reports and other
communications contemplated by this Agreement shall be given to the party
entitled to receive such notice at the telephone number and address listed
on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions hereof
shall not be affected thereby and shall remain in full force and effect.
19. Binding Nature. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their successors and assignees;
provided that, no party hereto may assign this Agreement or any of the
rights or obligations hereunder without the prior written consent of the
other parties.
20. Headings. Section headings are for reference purposes only and shall
not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Seller is hereby expressly put on notice
that the Declarations of Trust or the Certificates and Agreements of
Limited Partnership, as the case may be, of each Participating Fund contain
a limitation of liability provision pursuant to which the obligations
assumed by such Participating Fund hereunder shall be limited in all cases
to such Participating Fund and its assets or, in the case of a series Fund,
to the assets of that series only, and neither Seller nor its respective
agents or assigns shall seek satisfaction of any such obligation from the
officers, employees, agents, directors, trustees, shareholders or partners
of any such Participating Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations set
forth in this Agreement with respect to each repurchase transaction shall
accrue only to the Participating Funds in accordance with their respective
interests therein. No other Fund shall receive any rights or have any
liabilities arising from any action or inaction of any Participating Fund
under this Agreement with respect to such repurchase transaction.
25. General Provisions. This Agreement supersedes any other custodian
agreement by and among Seller, the Funds, and Repo Custodian concerning
repurchase transactions effected through the Joint Trading Account. It is
understood and agreed that time is of the essence with respect to the
performance of each party's respective obligations hereunder.
26. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) In the case of transactions in which one of the parties is a broker or
dealer registered with the SEC under Section 15 of the Exchange Act, the
Securities Investor Protection Corporation has taken the position that the
provisions of the Securities Investor Protection Act of 1970 (the "SIPA")
do not protect the other party with respect to any transaction hereunder;
and
(b) In the case of transactions in which one of the parties is a
government securities broker or a government securities dealer registered
with the SEC under Section 15C of the Exchange Act, SIPA will not provide
protection to the other party with respect to any transaction hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller and
the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data Services
(or any other pricing service mutually agreed upon by Seller and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day of the date of determination or
the last quote available. The pricing services, Brokers' Brokers and
Broker Dealers may be changed from time to time by agreement of all the
parties.
SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Ken Rindos
Kurt Woetzel
Custodian
Ken Rindos
Kurt Woetzel
Seller
Joseph P. Blauvelt
Michael B. Boyer
Robert E. Curry
Patrick Doyle
Frank Forgione
Edward J. Frederick
Christopher Juliano
Joseph Marrone
Thomas T. McGee
John S. Mehrtens
John A. Michielini
Allen Smith, II
The Funds
Barron, Leland C. Harlow, Katharyn M. Stehman, Burnell R.
Carbone, John M. Henning, Frederick L. Jr. Todd, Deborah
Curtis, Fritz Huyck, Timothy Todd, John J.
Duby, Robert K. Jamen, Jon Torres, Joseph E.
Egan, Dorothy T. Litterst, Robert Williams, Richard
Glocke, David Silver, Samuel Zenoble, Sarah
SCHEDULE D
NOTICES
If to Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (212) 635-7947
Attention: Sherman Yu, Esq.
With a copy to the Fund Agent
If to Repo Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, New York 10286
Telephone: (212) 635-4809
Attention: Ms. Kristin Smith
If to Seller: J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Telephone: (212) 483-2323
Attention: Middle Office Traders Support
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277282.c1
SCHEDULE 1
The following lists the additional counterparties to the Repo Custodian
Agreement for Joint Trading Account between The Bank of New York and the
Fidelity Funds:
BZW Government Securities, Inc.
CS First Boston Corp.
Daiwa Securities America, Inc.
Deutsche Bank Securities Corp.
Donaldson, Lufkin & Jenerette Securities Corp.
Fuji Securities, Inc.
Goldman Sachs & Co
Morgan Stanley & Co., Inc.
NationsBanc Capital Markets
Nikko Securities Co. International, Inc.
Nomura Securities International, Inc.
Prudential Securities, Inc.
Salomon Brothers, Inc.
Sanwa BJK Securities Co., LP
SBC Capital Markets, Inc.
Smith Barney, Inc.
EXHIBIT 8(O)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of _________________, among CHEMICAL BANK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), GREENWICH CAPITAL MARKETS, INC. ("Seller") and each of the
entities listed on Schedule A-1, A-2, A-3 and A-4 hereto acting on behalf
of itself or (i) in the case of a series company, on behalf of one or more
of its portfolios or series listed on Schedule A-1 or A-2 hereto, (ii) in
the case of the accounts listed on Schedule A-3 hereto, acting through
Fidelity Management & Research Company, and (iii) in the case of the
commingled or individual accounts listed on Schedule A-4 hereto, acting
through Fidelity Management Trust Company (collectively, the "Funds" and
each, a "Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase agreement
dated as of _________________, (the "Master Agreement") with Seller
pursuant to which from time to time one or more of the Funds, as buyers,
and Seller, as seller, may enter into repurchase transactions effected
through one or more joint trading accounts (collectively, the "Joint
Trading Account") established and administered by one or more custodians of
the Funds identified on Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from Eligible
Securities (as hereinafter defined) held by Repo Custodian , subject to an
agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities account
(the "Seller Account") for Seller for the purpose of, among other things,
effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the custodian
for each of the Funds in connection with the repurchase transactions
effected hereunder, and that the Repo Custodian hold cash, Cash Collateral
(as hereinafter defined) and Securities for each of the Funds for the
purpose of effecting repurchase transactions hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller Custodian,
Repo Custodian, and the Federal Reserve Banks where the Custodian and the
Repo Custodian are located, are each open for business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S. Dollars,
credited by Repo Custodian to a Transaction Account pursuant to Paragraphs
3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of this
Agreement.
(d) "Eligible Securities" shall mean those securities which are identified
as permissible securities for a particular Transaction Category.
(e) "FICASH I Transaction" and "FICASH III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day next
following the Sale Date and for which securities issued by the government
of the United States of America that are direct obligations of the
government of the United States of America shall constitute Eligible
Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is the Banking Day next following the Sale Date and for
which one or more of the following two categories of securities, as
specified by the Funds, shall constitute Eligible Securities: (x)
securities issued by the government of the United States of America that
are direct obligations of the government of the United States of America,
or (y) securities issued by or guaranteed as to principal and interest by
the government of the United States of America, or by its agencies and/or
instrumentalities, including, but not limited to, the Federal Home Loan
Bank, Federal Home Loan Mortgage Corp., Government National Mortgage
Association, Federal National Mortgage Association, Federal Farm Credit
Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date, or if applicable, the date fixed
upon exercise of an Unconditional Resale Right (as hereinafter defined) by
the Participating Funds and for which securities issued by the government
of the United States of America that are direct obligations of the
government of the United States of America shall constitute Eligible
Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is a date fixed by agreement between Seller and the
Participating Funds which is not the Banking Day next following the Sale
Date, or, if applicable, the date fixed upon exercise of an Unconditional
Resale Right (as hereinafter defined) by the Participating Funds and for
which one or more of the following two categories of securities, as
specified by the Funds, shall constitute Eligible Securities: (x)
securities issued by the government of the United States of America that
are direct obligations of the government of the United States of America,
or (y) securities issued by or guaranteed as to principal and interest by
the government of the United States of America, or by its agencies and/or
instrumentalities, including, but not limited to, the Federal Home Loan
Bank, Federal Home Loan Mortgage Corp., Government National Mortgage
Association, Federal National Mortgage Association, Federal Farm Credit
Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction shall
be 102% or such other percentage as is agreed to by Seller and the
Participating Funds (except that in no event shall the Margin Percentage be
less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of the
Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the preamble of
this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph 3(c) of
this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section 4(g) of
this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to a
particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to by
Seller and the Participating Funds for a particular repurchase transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph 7 of
this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to repurchase
Securities and Cash Collateral, if any, from the Participating Funds and
the Participating Funds are to resell the Securities and Cash Collateral,
if any, including any date determined by application of the provisions of
Paragraphs 7(a) and 15 of the Master Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the Sale
Price, plus an incremental amount determined by applying the Pricing Rate
to the Sale Price, calculated on the basis of a 360-day year and the number
of actual days elapsed from (and including) the Sale Date to (but
excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by Seller
pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the Participating
Funds and Seller at which the Securities and Cash Collateral, if any, are
to be sold to the Participating Funds by Seller.
(y) "Securities" shall mean all Eligible Securities delivered by Seller or
to be delivered by Seller to the Participating Funds pursuant to a
particular repurchase transaction and not yet repurchased hereunder,
together with all rights related thereto and all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph 3(c)
of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to this
Agreement.
(bb) "Seller Account" shall have the meaning set forth in the preamble of
this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of repurchase
transaction effected hereunder, as determined with reference to the term of
the transaction and the categories of Securities that constitute Eligible
Securities therefor, which term shall include FICASH I Transactions, FICASH
II Transactions, FICASH III Transactions, FITERM I Transactions, FITERM II
Transactions, FITERM III Transactions, and such other transaction
categories as may from time to time be designated by the Funds by notice to
Seller, Custodian and Repo Custodian.
(ee) "Unconditional Resale Right" shall have the meaning set forth in
Paragraph 7(b) of the Master Agreement.
(ff) "Valuation Day" shall mean any day on which Repo Custodian is open
for business.
2. Appointment of Repo Custodian. Upon the terms and conditions set forth
in this Agreement, Repo Custodian is hereby appointed by the Funds to act
as the custodian for the Participating Funds to hold cash, Cash Collateral
and Securities for the purpose of effecting repurchase transactions for the
Participating Funds through the Joint Trading Account pursuant to the
Master Agreement. Repo Custodian hereby acknowledges the terms of the
Master Agreement between the Funds and Seller (attached as an Exhibit
hereto), as amended from time to time, and agrees to abide by the
provisions thereof to the extent such provisions relate to the
responsibilities and operations of Repo Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more Transaction
Accounts for the purpose of effecting repurchase transactions hereunder for
the Funds, in each case pursuant to the Master Agreement. From time to
time the Funds may cause Custodian, on behalf of the Funds, to deposit
Securities and cash with Repo Custodian in the designated Transaction
Account, in each case in accordance with Paragraph 3 of the Master
Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash Collateral
received for the Participating Funds segregated at all times from those of
any other person, firm or corporation in its possession and shall identify
all such Securities, cash and Cash Collateral as subject to this Agreement
and the Master Agreement. Segregation may be accomplished by physical
segregation with respect to certificated securities held by the Repo
Custodian and, in addition, by appropriate identification on the books and
records of Repo Custodian in the case of all other Securities, cash and
Cash Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating Funds, and
shall be subject at all times to the proper instructions of the
Participating Funds, or the Custodian on behalf of the Participating Funds,
with respect to the holding, transfer or disposition of such Securities and
Cash Collateral. Repo Custodian shall include in its records for each
Transaction Account all instructions received by it which evidence an
interest of the Participating Funds in the Securities and Cash Collateral
and shall hold physically segregated any written agreement, receipt or
other writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash Collateral to
the Participating Funds or to "credit" a Transaction Account under this or
any other paragraph of this Agreement shall be made in immediately
available funds. If Repo Custodian is required to "deliver" or "transfer"
Securities to the Participating Funds under this or any other paragraph of
this Agreement, Repo Custodian shall take, or cause to be taken, the
following actions to perfect the Participating Funds' interest in such
Securities as an outright purchaser: (i) in the case of certificated
securities and instruments held by Seller, by physical delivery of the
share certificates or other instruments representing the Securities and by
physical segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities are
being held for the Participating Funds (such securities and instruments to
be delivered in form suitable for transfer or accompanied by duly executed
instruments of transfer or assignment in blank and accompanied by such
other documentation as the Participating Funds may request), (ii) in the
case of Securities held in a customer only account in a clearing agency or
federal book-entry system authorized for use by the Funds and meeting the
requirements of Rule 17f-4 under the Investment Company Act of 1940, as
amended (the "1940 Act") (such authorized agency or system being referred
to herein as a "Securities System"), by appropriate entry on the books and
records of Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a customer
only account in the Securities System and by appropriate entry on the books
and records of Repo Custodian identifying such Securities as belonging to
the Participating Funds; provided, further, that Repo Custodian shall
confirm to the Participating Funds the identity of the Securities
transferred or delivered. Acceptance of a "due bill", "trust receipt" or
similar receipt or notification of segregation issued by a third party with
respect to Securities held by such third party shall not constitute good
delivery of Securities to Repo Custodian for purposes of this Agreement or
the Master Agreement and shall expressly violate the terms of this
Agreement and the Master Agreement. The Funds shall identify by notice to
Repo Custodian and Seller those agencies or systems which have been
approved by the Funds for use under this Agreement and the Master
Agreement. The Funds hereby notify Repo Custodian and Seller that the
following agencies and systems have been approved by the Funds for use
under this Agreement and the Master Agreement, until such time as Repo
Custodian and Seller shall have been notified by the Funds to the contrary:
(i) Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular Public
Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry regulations of
federal agencies substantially in the form of 31 CFR 306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the Transaction
Account and effect the transfer of Securities to or from the Participating
Funds upon proper instructions received from the Participating Funds, or
the Custodian on behalf of the Participating Funds, and shall make all
credits and debits to the Seller Account and effect the transfer of
Securities to or from the Seller upon proper instructions received from
Seller. In the event that Repo Custodian receives conflicting proper
instructions from Seller and the Participating Funds, or the Custodian on
behalf of the Participating Funds, Repo Custodian shall follow the
Participating Funds' or the Custodian's proper instructions. The
Participating Funds shall give Repo Custodian only such instructions as
shall be permitted by the Master Agreement. Notwithstanding the preceding
sentence, the Participating Funds, or the Custodian on behalf of the
Participating Funds, may from time to time instruct Repo Custodian to
transfer cash from the Transaction Account to Custodian so long as such
transfer is not in contravention of the Master Agreement.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree to
enter into a repurchase transaction, Seller and the Participating Funds, or
the Custodian on behalf of the Participating Funds, will give Repo
Custodian proper instructions by telephone or otherwise by 5:00 p.m. New
York time on the Sale Date, specifying the Transaction Category, Repurchase
Date, Sale Price, Repurchase Price or the applicable Pricing Rate and the
Margin Percentage for each such repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase Date
is the Banking Day next following the Sale Date (x) the Participating Funds
may increase or decrease the Sale Price for any such repurchase transaction
by no more than 10% of the initial Sale Price by causing to be delivered
further proper instructions by telephone or otherwise to Repo Custodian by
5:15 p.m. New York time (or at such later time as may be agreed upon by the
parties) on the Sale Date and (y) Seller and the Participating Funds may by
mutual consent agree to increase or decrease the Sale Price by more than
10% of the initial Sale Price by causing to be provided further proper
instructions to Repo Custodian by the close of business on the Sale Date.
In any event, Repo Custodian shall not be responsible for determining
whether any such increase or decrease of the Sale Price exceeds the 10%
limitation.
(c) Seller will take such actions as are necessary to ensure that on the
Sale Date the aggregate Market Value of all Securities held by Repo
Custodian for Seller and cash in the Seller Account equals or exceeds the
Margin Percentage of the Sale Price. Seller shall give Repo Custodian
proper instructions specifying with respect to each of the Securities which
is to be the subject of a repurchase transaction (a) the name of the issuer
and the title of the Securities, and (b) the Market Value of such
Securities. Such instructions shall constitute Seller's instructions to
Repo Custodian to transfer the Securities to the Participating Funds and/or
Cash Collateral from the Seller Account to the Transaction Account.
(d) By 5:00 p.m. New York Time on the Sale Date, the Participating Funds
shall transfer to, or maintain on deposit with, Repo Custodian in the
Transaction Account immediately available funds in an amount equal to the
Sale Price with respect to a particular repurchase transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian shall
transfer Securities from Seller to the Participating Funds and/or cash held
in the Seller Account to the Transaction Account and shall transfer to the
Seller Account immediately available funds from the Transaction Account in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
by Seller to the Participating Funds are Eligible Securities. Any
securities which are not Eligible Securities for a particular repurchase
transaction hereunder shall not be included in the calculations set forth
below and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the aggregate
Market Value of Securities and cash, if any, applicable to the repurchase
transaction is less than the Margin Percentage of the Sale Price and Seller
shall transfer, by the close of business on the Sale Date, to Repo
Custodian additional Securities and/or cash in the amount of such
deficiency. If Seller does not, by the close of business on the Sale Date,
transfer additional Securities and/or cash, the Market Value of which
equals or exceeds such deficiency, Repo Custodian may, at its option,
without notice to Seller, advance the amount of such deficiency to Seller
in order to effectuate the repurchase transaction. It is expressly agreed
that Repo Custodian is not obligated to make an advance to Seller to enable
it to complete any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo Custodian
shall cause the Securities applicable to the repurchase transaction
received from Seller to be transferred to the Participating Funds and shall
cause any cash received from Seller to be transferred to the Transaction
Account, against transfer of the Sale Price from the Transaction Account to
the Seller Account, such transfers of Securities and/or cash and funds to
be deemed to occur simultaneously.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the Transaction
Account is less than the agreed upon Sale Price in connection with the
repurchase transaction immediately prior to effectuating such repurchase
transaction, or if the aggregate Market Value of the Securities and cash,
if any, applicable to such repurchase transaction is less than the Sale
Price multiplied by the Margin Percentage immediately prior to effectuating
such repurchase transaction, Repo Custodian shall effect the repurchase
transaction to the best of its ability by transferring Securities from
Seller to the Participating Funds and/or cash from the Seller Account to
the Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction Account
multiplied by the Margin Percentage and (y) the aggregate Market Value of
the Securities available for transfer from Seller to the Participating
Funds and cash, if any, in the Seller Account, against the transfer of
immediately available funds from the Transaction Account to the Seller
Account in an amount equal to the aggregate Market Value of the Securities
and/or cash to be transferred divided by the Margin Percentage; provided,
however, that in either such event Repo Custodian shall have the right not
to transfer to the Participating Funds such Securities and not to transfer
such cash, if any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian determines, in
its sole discretion, will not be the subject of a repurchase transaction.
The actions of Repo Custodian pursuant to this subparagraph (e)(v) shall
not affect the obligations and liabilities of the parties to each other
pursuant to the Master Agreement with regard to such repurchase
transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the Master
Agreement), Repo Custodian shall perform such substitution in accordance
with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
to the Participating Funds are Eligible Securities. Any securities which
are not eligible for repurchase transactions hereunder shall not be
included in the calculations set forth below and shall not be transferred
to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Eligible Securities and/or Cash Collateral to be transferred. Repo
Custodian shall not make any substitution if, at the time of substitution,
the aggregate Market Value of all Securities and any Cash Collateral
applicable to such repurchase transaction immediately after such
substitution would be less than the Margin Percentage of the Repurchase
Price (calculated as if the Repurchase Date were the date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted against
the delivery by Repo Custodian of substitute Eligible Securities to the
Participating Funds and/or the crediting of the Transaction Account with
Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute Eligible
Securities, and has failed to deliver Eligible Securities against such Cash
Collateral not later than the close of business on such Banking Day in
accordance with the terms of the Master Agreement, Repo Custodian shall
promptly, but in no event later than 10:00 a.m. the following Banking Day,
notify the Participating Funds and Seller of such failure.
(g) With respect to each repurchase transaction, at 9:00 a.m. New York
time, or at such other time as specified in proper instructions of the
Participating Funds (or the Custodian on behalf of the Participating Funds)
on the Repurchase Date, Repo Custodian shall debit the Seller Account and
credit the Transaction Account in the amount of the Repurchase Price and
shall transfer Securities from the Participating Funds to the Seller and
Cash Collateral, if any, from the Transaction Account to the Seller Account
in accordance with the following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller Account
and credit the Transaction Account in the amount of the Repurchase Price
and shall transfer all Securities applicable to such repurchase transaction
from the Participating Funds to the Seller and debit the Transaction
Account and credit the Seller Account in the amount of any Cash Collateral
applicable to such repurchase transaction.
(ii) If the amount of available funds in the Seller Account is less than
the Repurchase Price, then Repo Custodian shall notify the Seller of the
amount of the deficiency and Seller shall promptly cause such amount to be
transferred to the Seller Account. If Seller fails to cause the transfer
of the entire amount of the deficiency to the Seller Account, then Repo
Custodian may, at its option and without notice to Seller, advance to
Seller the amount of such remaining deficiency. It is expressly agreed
that Repo Custodian is not obligated to make any advance to Seller. If,
following such transfer and/or advance, the amount of available funds in
the Seller Account equals or exceeds the Repurchase Price then Repo
Custodian shall debit the Seller Account and credit the Transaction Account
in the amount of the Repurchase Price and shall transfer from the
Participating Funds to the Seller all Securities applicable to such
repurchase transaction and debit the Transaction Account and credit the
Seller Account in the amount of any Cash Collateral applicable to such
repurchase transaction.
(iii) If the Seller fails to cause the transfer of the entire amount of
the deficiency, as required by (ii) above, and Repo Custodian fails to
advance to Seller an amount sufficient to eliminate the entire deficiency,
then Repo Custodian shall debit the Seller Account in the amount of all
immediately available funds designated by Seller as applicable to the
repurchase transaction and credit the Transaction Account in such amount
(such amount being referred to as the "Partial Payment") and shall transfer
Securities from the Participating Funds to the Seller such that the
aggregate Market Value of all remaining Securities and Cash Collateral in
the Transaction Account with respect to such repurchase transaction shall
at least equal the difference between Margin Percentage of the Repurchase
Price and the Partial Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums paid by
or on behalf of the issuer in respect of the Securities and collected by
Repo Custodian, except as otherwise provided in Paragraph 8 of the Master
Agreement.
6. Daily Statement. On each Banking Day on which any Participating Funds
have an outstanding repurchase transaction, Repo Custodian shall deliver by
facsimile, or other electronic means acceptable to the Participating Funds,
the Custodian and the Repo Custodian, to Custodian and to the Participating
Funds a statement identifying the Securities held by Repo Custodian with
respect to such repurchase transaction and the cash and Cash Collateral, if
any, held by Repo Custodian in the Transaction Account, including a
statement of the then current Market Value of such Securities and the
amounts, if any, credited to the Transaction Account as of the close of
trading on the previous Banking Day. Repo Custodian shall also deliver to
Custodian and the Participating Funds such additional statements as the
Repo Custodian and the Participating Funds may agree upon from time to
time.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and the
amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the Seller
Account against the receipt from Seller of the Securities and Cash
Collateral, if any, and (ii) on each Valuation Day on which such repurchase
transaction is outstanding. If on any Valuation Day the aggregate Market
Value of the Securities and Cash Collateral with respect to any repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day) for such
transaction, Repo Custodian shall promptly, but in any case no later than
10:00 a.m. the following Valuation Day, notify Seller. If on any Valuation
Day the aggregate market value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) for such transaction, and Seller fails to deliver additional
Eligible Securities applicable to such repurchase transaction or an
additional amount of Cash Collateral by the close of business on such
Valuation Day such that the aggregate market value of the Securities and
Cash Collateral at least equals the Margin Percentage of the Repurchase
Price (calculated as if the Repurchase Date were such Valuation Day), Repo
Custodian shall promptly, but in any event no later than 10:00 a.m. the
following Valuation Day, notify the Participating Funds of such failure.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing services
("Pricing Services") set forth on Schedule B. It is understood and agreed
that Repo Custodian shall use the prices made available by the Pricing
Services at the close of business of the preceding Valuation Day. In the
event that Repo Custodian is unable to obtain a valuation of any Securities
from the Pricing Services, Repo Custodian shall request a bid quotation
from a broker's broker or a broker dealer, set forth in Schedule B, other
than Seller. In the event Repo Custodian is unable to obtain a bid
quotation for any Securities from such a broker's broker or a broker
dealer, Repo Custodian (i) shall not include any such Securities in the
determination of whether the aggregate Market Value of the Securities and
any Cash Collateral equals at least the Margin Percentage of the Repurchase
Price and (ii) shall redeliver such Securities to Seller if the Market
Value of all other Securities and any Cash Collateral with respect to such
repurchase transaction equals at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such Valuation
Day). The Repo Custodian may rely on prices quoted by Pricing Services,
broker's brokers or broker dealers, except Seller, as set forth in Schedule
B.
(c) (i) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase transaction
is less than the Margin Percentage of the Repurchase Price (calculated as
if the Repurchase Date were such Valuation Day) applicable to such
repurchase transaction, Repo Custodian shall deliver to the Participating
Funds an amount of additional Eligible Securities applicable to such
repurchase transaction and/or debit the Seller Account and credit the
Transaction Account with an additional amount of Cash Collateral, such that
the aggregate Market Value of all Securities and any Cash Collateral with
respect to such repurchase transaction shall equal at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase Date
were such Valuation Day) applicable to such repurchase transaction.
(ii) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase transaction
exceeds the Margin Percentage of the Repurchase Price (calculated as if the
Repurchase Date were such Valuation Day) applicable to such repurchase
transaction, Repo Custodian shall return to the Seller all or a portion of
such Securities or Cash Collateral, if any; provided that the Market Value
of the remaining Securities and any Cash Collateral with respect to the
repurchase transaction shall be at least equal to the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) applicable to such repurchase transaction. At any time and
from time to time with respect to any repurchase transaction, if authorized
by the Participating Funds, or the Custodian on behalf of the Participating
Funds, the Repo Custodian shall debit the Transaction Account by an amount
of Cash Collateral and credit the Seller Account by the same amount of Cash
Collateral against simultaneous delivery from Seller to the Participating
Funds of Eligible Securities applicable to such repurchase transaction with
a Market Value at least equal to the amount of Cash Collateral credited and
debited.
8. Authorized Persons. Schedule C hereto sets forth those persons who are
authorized to act for Repo Custodian, Custodian, Seller and the Funds,
respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested telex,
facsimile, a written request, direction, instruction or certification
signed or initialed by or on behalf of the party giving the instructions by
one or more authorized persons (as provided in Paragraph 8); provided,
however, that no instructions directing the delivery of Securities or the
payment of funds to any individual who is an authorized signatory of
Custodian or Repo Custodian shall be signed by that individual.
Telephonic, other oral or electro-mechanical or electronic instructions
(including the code which may be assigned by Repo Custodian to Custodian
from time to time) given by one of the above authorized persons shall also
be considered proper instructions if the party receiving such instructions
reasonably believes them to have been given by an authorized person with
respect to the transaction involved. Oral instructions will be confirmed
by tested telex, facsimile or in writing in the manner set forth above.
The Funds and Seller authorize Repo Custodian to tape record any and all
telephonic or other oral instructions given to Repo Custodian. Proper
instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to use reasonable care and diligence
in carrying out the provisions of this Agreement and the Master Agreement
and shall be liable to the Funds and/or Seller only for direct damages
resulting from the negligence or willful misconduct of the Repo Custodian
or its officers, employees or agents. The parties hereby agree that Repo
Custodian shall not be liable for consequential, special or indirect
damages, even if Repo Custodians has been advised as to the possibility
thereof. So long as and to the extent that Repo Custodian exercises
reasonable care and diligence and acts without negligence, misfeasance or
misconduct, Repo Custodian shall not be liable to Seller or the Funds for
(i) any action taken or omitted in good faith in reliance upon proper
instructions, (ii) any action taken or omitted in good faith upon any
notice, request, certificate or other instrument reasonably believed by it
to be genuine and to be signed by the proper party or parties, (iii) any
delay or failure to act as may be required under this Agreement or under
the Master Agreement when such delay or failure is due to any act of God or
war, (iv) the actions or omissions of a Securities System, (v) the title,
validity or genuineness of any security received, delivered or held by it
pursuant to this Agreement or the Master Agreement, (vi) the legality of
the purchase or sale of any Securities by or to the Participating Funds or
Seller or the propriety of the amount for which the same are purchased or
sold (except to the extent of Repo Custodian's obligations hereunder to
determine whether securities are Eligible Securities and to calculate the
Market Value of Securities and any Cash Collateral), (vii) the due
authority of any person listed on Schedule C to act on behalf of Custodian,
Seller or the Funds, as the case may be, with respect to this Agreement or
(viii) the errors of the Pricing Services, broker's brokers or broker
dealers set forth in Schedule B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any money to
be used in a repurchase transaction, whether or not such money is
represented by any check, draft, or other instrument for the payment of
money, until the Eligible Securities have been delivered in accordance with
Paragraph 3 or until Repo Custodian actually receives and collects such
money on behalf of Seller or the Funds directly or by the final crediting
of the Seller Account or a Transaction Account through the Securities
System, except that this Paragraph 10(b) shall not be deemed to limit the
liability of Repo Custodian to Seller or the Funds if the non-delivery of
such Eligible Securities or the failure to receive and collect such money
results from the breach by Repo Custodian of its obligations under this
Agreement or the Master Agreement.
(c) Repo Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it are such as
properly may be held by the Participating Funds; provided that
notwithstanding anything to the contrary herein, Repo Custodian shall be
obligated to act in accordance with the guidelines and proper instructions
of the Participating Funds, or the Custodian on behalf of the Participating
Funds, with respect to the types of Eligible Securities and the issuers of
such Eligible Securities that may be used in specific repurchase
transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the Custodian
if Securities held by Repo Custodian are in default or if payment on any
Securities has been refused after due demand and presentation and Repo
Custodian shall take action to effect collection of any such amounts upon
the proper instructions of the Participating Funds, or the Custodian on
behalf of the Participating Funds, and assurances satisfactory to it that
it will be reimbursed for its costs and expenses in connection with any
such action.
(e) Repo Custodian shall have no duties, other than such duties as are
necessary to effectuate repurchase transactions in accordance with this
Agreement and the Master Agreement within the standard of care set forth in
Paragraph 10(a) above and in a commercially reasonable manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly authorized
to execute and deliver this Agreement and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) the execution, delivery and performance of
this Agreement do not and will not violate any ordinance, declaration of
trust, partnership agreement, articles of incorporation, charter, rule or
statute applicable to it or any agreement by which it is bound or by which
any of its assets are affected, (iii) the person executing this Agreement
on its behalf is duly and properly authorized to do so, (iv) it has (and
will maintain) a copy of this Agreement and evidence of its authorization
in its official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President or
higher.
(b) Repo Custodian further represents and warrants that (i) it has not
pledged, encumbered, hypothecated, transferred, disposed of, or otherwise
granted, any third party an interest in any Securities, (ii) it does not
have any security interest, lien or right of setoff in the Securities, and
(iii) it has not received notification from any third party, in its
capacity as Repo Custodian, custodian bank or clearing bank, of any lien,
claim, charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction. Repo Custodian agrees that (i) it
will not pledge, encumber, hypothecate, transfer, dispose of, or otherwise
grant, any third party an interest in any Securities, (ii) it will not
acquire any security interest, lien or right of setoff in the Securities,
and (iii) it will promptly notify the Fund Agent, if, during the term of
any outstanding repurchase transaction, it is notified by any third party,
in its capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim, charge
or encumbrance with respect to any Securities that are the subject of such
repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent that
Repo Custodian is in the exercise of reasonable care and diligence and acts
without negligence, misfeasance or misconduct, Seller will indemnify Repo
Custodian and hold it harmless against any and all losses, claims, damages,
liabilities or actions to which it may become subject, and reimburse it for
any expenses (including attorneys' fees and expenses) incurred by it in
connection therewith, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon or in any way related to this
Agreement, the Master Agreement or any transactions contemplated hereby or
thereby or effected hereunder or thereunder. Without limiting the
generality of the foregoing indemnification, Repo Custodian shall be
indemnified by Seller for all costs and expenses, including attorneys'
fees, for its successful defense against claims that Repo Custodian
breached its standard of care and was negligent or engaged in misfeasance
or misconduct.
(b) So long as and to the extent that Repo Custodian is in the exercise of
reasonable care and diligence and acts without negligence, misconduct or
misfeasance, the Participating Funds will indemnify Repo Custodian and hold
it harmless against any and all losses, claims, damages, liabilities or
actions to which it may become subject, and reimburse it for any expenses
(including attorneys' fees and expenses) incurred by it in connection
therewith, insofar as such losses, claims, damages, liabilities or actions
result from the negligence, misconduct or misfeasance of the Participating
Funds under this Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional rights
and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement shall
be binding unless in writing and executed by the parties hereto. Schedule
A, listing the Funds, may be amended from time to time to add or delete
Funds by the Funds (i) delivering an executed copy of an addendum to
Schedule A to Seller and Repo Custodian, and (ii) amending Schedule A to
the Master Agreement in accordance with the provisions therein. The
amendment of Schedule A as provided above shall constitute appointment of
Repo Custodian as a custodian for such Fund. Schedule B may be amended
from time to time by an instrument in writing, or counterpart thereof,
executed by Repo Custodian, Seller and the Funds. Schedule C may be
amended from time to time to change an authorized person of: (i) the
Funds, by written notice to Repo Custodian and Seller by Ms. Sarah Zenoble
or the Treasurer of the Funds (or such persons who may be authorized from
time to time in writing by Ms. Zenoble or the President or Treasurer of
Fidelity Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any Vice
President of Repo Custodian; and (iv) Custodian, by written notice to Repo
Custodian by any Vice President of Custodian. Schedule D may be amended
from time to time by any party hereto by delivery of written notice to the
other parties hereto. Repo Custodian shall receive notice of any amendment
to the Master Agreement at the address set forth in Schedule D hereto; and,
if such amendment would have a material adverse effect on the rights of, or
would materially increase the obligations of Repo Custodian under this
Agreement, any such amendment shall also require the consent of Repo
Custodian. Any such amendment shall be deemed not to be material if Repo
Custodian fails to object in writing within 21 days after receipt of notice
thereof. No amendment to this Agreement shall affect the rights or
obligations of any Fund with respect to any outstanding repurchase
transaction entered into under this Agreement and the Master Agreement
prior to such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict between
this Agreement and the Master Agreement, the Master Agreement shall
control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Valuation Days' written notice to the other parties;
provided, however, that any such termination shall not affect any
repurchase transaction then outstanding or any rights or obligations under
this Agreement or the Master Agreement with respect to any actions or
omissions of any party hereto prior to termination. In the event of
termination, Repo Custodian will deliver any Securities, Cash Collateral or
cash held by it or any agent to Custodian or to such successor custodian or
custodian or subcustodian as the Participating Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation for
the services to be rendered hereunder, based upon rates which shall be
agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian and
the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and except
as otherwise provided herein or as the parties to the Agreement shall from
time to time otherwise agree, all instructions, notices, reports and other
communications contemplated by this Agreement shall be given to the party
entitled to receive such notice at the telephone number and address listed
on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions hereof
shall not be affected thereby and shall remain in full force and effect.
19. Binding Nature. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their successors and assignees;
provided that, no party hereto may assign this Agreement or any of the
rights or obligations hereunder without the prior written consent of the
other parties.
20. Headings. Section headings are for reference purposes only and shall
not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Repo Custodian and Seller are hereby
expressly put on notice of the limitation of liability set forth in the
Declarations of Trust and in the Certificates and Agreements of Limited
Partnership of the Funds and agree that the obligations assumed by any Fund
hereunder shall be limited in all cases to a Fund and its assets or, in the
case of a series Fund, to the assets of that series only, and neither
Seller, Repo Custodian nor their respective agents or assigns shall seek
satisfaction of any such obligation from the officers, agents, employees,
directors, trustees, shareholders or partners of any such Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations set
forth in this Agreement with respect to each repurchase transaction shall
accrue only to the Participating Funds in accordance with their respective
interests therein. No other Fund shall receive any rights or have any
liabilities arising from any action or inaction of any Participating Fund
under this Agreement with respect to such repurchase transaction.
25. General Provisions. This Agreement supersedes any other custodian
agreement by and among Seller, the Funds, and Repo Custodian concerning
repurchase transactions effected through the Joint Trading Account. It is
understood and agreed that time is of the essence with respect to the
performance of each party's respective obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller and
the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data Services
(or any other pricing service mutually agreed upon by Seller and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day immediately preceding the date of
determination or the last quote available. The pricing services, Brokers'
Brokers and Broker Dealers may be changed from time to time by agreement of
all the parties.
SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Anthony Isola
Raymond Stancil
William Mosca
Leonardo Nichols
Alan Mann
Allen B. Clark
Custodian
Ken Rindos
Kurt Woetzel
Seller
Gary F. Holloway
Konrad R. Kruger
Stephen M. Peet
Raymond E. Humiston
P. Michael Florio
Ben Carpenter
Blake S. Drexler
Derick B. Burgher
Lyn Kratovil
The Funds
Leland Barron
Wickliffe Curtis
Dorothy Egan
David Glocke
Katharyn Harlow
Timothy Huyck
Jon Jamen
Robert Litterst
Sam Silver
Burnell Stehman
Jeffrey St. Peters
Deborah Todd
John Todd
Joseph Torres
Richard Williams
SCHEDULE D
NOTICES
If to Custodian: Morgan Guaranty Trust Co. of New York
15 Broad Street, 16th Floor
New York, New York 10015
Telephone: (212) 483-4150
Attention: Ms. Kimberly Smith
or
The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (312) 635-4808
Attention: Claire Meskovic
With a copy to the Fund Agent
If to Repo Custodian: Chemical Bank
4 New York Plaza
21st Floor
New York, NY 10004-2477
Telephone: (212) 623-6446
Attention: Anthony Isola
If to Seller: Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-7909
Attention: Peter Sanchez
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277262.c1
SCHEDULE 1
The following lists the additional counterparties to the Repo Custodian
Agreement for Joint Trading Account between Chemical Bank and the Fidelity
Funds:
Chase Securities, Inc.
CS First Boston Corp.
Dresdner Securities (U.S.A.), Inc.
HSBC Securities, Inc.
Lehman Government Securities, Inc.
Merrill Lynch Government Securities, Inc.
Paine Webber, Inc.
Salomon Brothers, Inc.
UBS Securities, Inc.
EXHIBIT 8(P)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
Between
THE BANK OF NEW YORK
and
FIDELITY FUNDS
Dated as of: ______________________
TABLE OF CONTENTS
Page
ARTICLE I - APPOINTMENT OF CUSTODIAN 2
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN 2
Section 2.01. Establishment of Accounts 2
Section 2.02. Receipt of Funds 2
Section 2.03. Repurchase Transactions 2
Section 2.04. Other Transfers 4
Section 2.05. Custodian's Books and Records 5
Section 2.06. Reports by Independent Certified Public Accountants 5
Section 2.07. Securities System 6
Section 2.08. Collections 6
Section 2.09. Notices, Consents, Etc. 6
Section 2.10. Notice of Custodian's Inability to Perform 7
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS 7
Section 3.01. Proper Instructions; Special Instruction 7
Section 3.02. Authorized Persons 8
Section 3.03. Investment Limitations 8
Section 3.04. Persons Having Access to Assets of the Funds 8
Section 3.05. Actions of Custodian Based on Proper Instructions and Special
Instructions 9
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION 9
Section 4.02. Liability of Custodian for Actions of Securities Systems 9
Section 4.03. Indemnification 9
Section 4.04. Funds, Right to Proceed 10
ARTICLE V - COMPENSATION 11
Section 5.01. Compensation 11
Section 5.02. Waiver of Right of Set-Off 11
ARTICLE VI - TERMINATION 11
Section 6.01. Events of Termination 11
Section 6.02. Successor Custodian; Payment of Compensation 11
ARTICLE VII - MISCELLANEOUS 12
Section 7.01. Representative Capacity and Binding Obligation 12
Section 7.02. Entire Agreement 12
Section 7.03. Amendments 12
Section 7.04. Interpretation 12
Section 7.05. Captions 13
Section 7.06. Governing Law 13
Section 7.07. Notice and Confirmations 13
Section 7.08. Assignment 14
Section 7.09. Counterparts 14
Section 7.10. Confidentiality; Survival of Obligations 14
EXHIBIT 8(J)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
AGREEMENT dated as of __________________by and between The Bank of New
York (hereinafter referred to as the "Custodian") and each of the entities
listed on Schedules A-1, A-2, A-3 and A-4 hereto, acting on behalf of
itself or, (i) in the case of a series company, on behalf of one or more of
its portfolios or series listed on Schedule A-1 or A-2 hereto, (ii) in the
case of the accounts listed on Schedule A-3 hereto, acting through Fidelity
Management & Research Company, and (iii) in the case of the commingled or
individual accounts listed on Schedule A-4 hereto, acting through Fidelity
Management Trust Company (collectively, the "Funds" and each, a "Fund").
W I T N E S S E T H
WHEREAS, each of the Funds desire to appoint the Custodian as its
custodian for the purpose of establishing and administering one or more
joint trading accounts or subaccounts thereof (individually, an "Account"
and collectively, the "Accounts") and holding cash and securities for the
Funds in connection with repurchase transactions effected through the
Accounts; and
WHEREAS, one or more of the Funds may, from time to time, enter into one
or more written repurchase agreements pursuant to which one or more of the
Funds agrees to purchase and resell, and the sellers named in such
agreements agree to sell and repurchase through the Accounts, certain
securities (collectively, the "Securities") (such repurchase agreements
being hereinafter referred to, collectively, as the "Repurchase
Agreements"); and
WHEREAS, each of the custodians identified in ScheduleB hereto (each, a
"Fund Custodian") serves as the primary custodian for one or more of the
Funds; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from one or more Fund Custodians to the
Custodian or transfer cash or Securities from the Custodian to one or more
Fund Custodians, or in the case of Funds in which Custodian is also Fund
Custodian, such Fund may arrange for transfer of cash or Securities between
an Account and an account maintained by Custodian in its capacity as Fund
Custodian for such Fund, in each event in connection with Repurchase
Agreement transactions; and
WHEREAS, from time to time, such Funds may arrange to transfer cash or
securities from the Custodian to the seller in such Repurchase Agreement
transactions, or in the case in which Custodian is also the clearing bank
for such seller, such Funds may arrange for transfer of cash or securities
between an Account and an account maintained by Custodian for such seller
in its capacity as clearing bank, in each event in connection with
two-party Repurchase Agreement transactions; and
WHEREAS, each of the custodians identified in Schedule C hereto (each, a
"Repo Custodian") serves as a third-party custodian of the Funds for
purposes of effecting third-party Repurchase Agreement transactions; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from the Custodian to one or more Repo
Custodians or transfer cash or Securities from one or more Repo Custodians
to the Custodian, or in the case in which Custodian is also Repo Custodian,
such Funds may arrange for transfer of cash or securities between an
Account and an account maintained for such Funds in its capacity as Repo
Custodian, in each event in connection with third-party Repurchase
Agreement transactions;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I - APPOINTMENT OF CUSTODIAN
Each of the Funds hereby employs and appoints the Custodian as its
custodian, subject to the terms and provisions of this Agreement.
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties,
and only such powers and duties, as are set forth in this Agreement.
Section 2.01. Establishment of Accounts. The Custodian shall establish
one or more Accounts as segregated joint trading accounts for the Funds
through which the Funds shall, from time to time, effect Repurchase
Agreement transactions.
Section 2.02. Receipt of Funds. The Custodian shall, from time to time,
receive funds for or on behalf of the Funds and shall hold such funds in
safekeeping. Upon receipt of Proper Instructions, the Custodian shall
credit funds so received to one or more Accounts designated in such Proper
Instructions. Promptly after receipt of such funds from the Fund Custodian
or a Repo Custodian or promptly following the transfer to an Account from
any account maintained by Custodian in its capacity as Fund Custodian, or
as Repo Custodian, the Custodian shall provide written confirmation of such
receipt to the Fund Custodian or Repo Custodian, when and as applicable,
and of such receipt or transfer to the Fund Agent designated in Section
7.07(b) hereof (the "Fund Agent"). The Custodian shall designate on its
books and records the funds allocable to each Account and the identity of
each Fund participating in such Account.
Section 2.03. Repurchase Transactions. The Funds may, from time to time,
enter into Repurchase Agreement transactions. In connection with each such
Repurchase Agreement transaction, unless otherwise specifically directed by
Special Instructions, the Custodian shall take the following actions:
(a) Purchase of Securities. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive Securities and any cash denominated in
U.S. Dollars which is serving as collateral ("Cash Collateral"), provided
that payment therefor shall be made by the Custodian only against prior or
simultaneous receipt of the Securities and any Cash Collateral in the
manner prescribed in subsection 2.03(b) below. Except as provided in
Section2.04 hereof, in no event shall the Custodian deliver funds from an
Account for the purchase of Securities and any Cash Collateral prior to
receipt of the Securities and any Cash Collateral by the Custodian or a
Securities System (as hereinafter defined). The Custodian is not under any
obligation to make credit available to the Funds to complete transactions
hereunder. Promptly after the transfer of funds and receipt of Securities
and any Cash Collateral, the Custodian shall provide a confirmation to the
Fund Agent, setting forth (i) the Securities and any Cash Collateral which
the Custodian has received pursuant to the Repurchase Agreement
transaction, (ii) the amount of funds transferred from the applicable
Account, and (iii) any security or transaction identification numbers
reasonably requested by the Fund Agent.
(b) Receipt and Holding of Securities. In connection with each Repurchase
Agreement transaction, the Custodian shall receive and hold the Securities
as follows: (i) in the case of certificated securities, by physical receipt
of the certificates or other instruments representing such Securities and
by physical segregation of such certificates or instruments from other
assets of the Custodian in a manner indicating that such Securities belong
to specified Funds; and (ii) in the case of Securities held in book-entry
form by a Securities System (as hereinafter defined), by appropriate
transfer and registration of such Securities to a customer only account of
the Custodian on the book-entry records of the Securities System, and by
appropriate entry on the books and records of the Custodian identifying
such Securities as belonging to specified Funds.
(c) Sale of Securities. Upon receipt of Proper Instructions, the
Custodian shall make delivery of Securities and any Cash Collateral held in
or credited to an Account against prior or simultaneous payment for such
Securities in immediately available funds in the form of: (i) cash, bank
credit, or bank wire transfer received by the Custodian; or (ii) credit to
the customer only account of the Custodian with a Securities System.
Notwithstanding the foregoing, the Custodian shall make delivery of
Securities held in physical form in accordance with "street delivery
custom" to a broker or its clearing agent, against delivery to the
Custodian of a receipt for such Securities; provided that the Custodian
shall have taken all actions possible to ensure prompt collection of the
payment for, or the return of such Securities by the broker or its clearing
agent. Promptly after the transfer of Securities and any Cash Collateral
and the receipt of funds, the Custodian shall provide a confirmation to the
Fund Agent, setting forth the amount of funds received by the Custodian or
a Securities System for credit to the applicable Account.
(d) Additional Functions. Upon receipt of Proper Instructions, the
Custodian shall take all such other actions as specified in such Proper
Instructions and as shall be reasonable or necessary with respect to
Repurchase Agreement transactions and the Securities and funds transferred
and received pursuant to such transactions, including, without limitation,
all such actions as shall be prescribed in the event of a default under a
Repurchase Agreement.
(e) Nondiscretionary Functions. The Custodian shall attend to all
non-discretionary details in connection with the purchase, sale, transfer
or other dealings with Securities or other assets of the Funds held by the
Custodian.
(f) In the event that the Custodian is directed by Proper Instructions to
make any payment or transfer of funds on behalf of a Fund for which there
would be, at the close of business on the date of such payment or transfer,
insufficient funds held by the Custodian on behalf of such Fund, the
Custodian may, in its discretion, provide an overdraft ("Overdraft") to the
Fund, in an amount sufficient to allow the completion of such payment or
transfer. Any Overdraft provided hereunder: (a) shall be payable on the
next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest form the date of the Overdraft to the date of
payment in full by the Fund at a rate agreed upon in writing, from time to
time, by the Custodian and the Fund. The Custodian and the Funds
acknowledge that the purpose of such Overdrafts is to temporarily finance
the purchase or sale of securities for prompt delivery in accordance with
the terms hereof, or to meet emergency expenses not reasonably foreseeable
by a particular Fund. The Funds hereby agree that the Custodian shall have
a continuing lien and security interest in and to all Securities whose
purchase is financed by Custodian and which are in Custodian's possession
or in the possession or control of any third party acting on Custodian's
behalf and the proceeds thereof. In this regard, Custodian shall be
entitled to all the rights and remedies of a pledgee under common law and a
secured party under the New York Uniform Commercial Code and any other
applicable laws or regulations as then in effect.
Section 2.04. Other Transfers.
(a) In addition to transfers of funds and Securities referred to in
Section 2.03, the Custodian shall transfer funds and Securities held in an
Account: (a) upon receipt of Proper Instructions, to (i)any Fund
Custodian, or (ii)any other account maintained for any Fund by the
Custodian in its capacity as a Fund Custodian, (iii)any Repo Custodian or
(iv) any other account maintained for any Fund by the Custodian in its
capacity as a Repo Custodian; or (b) upon receipt of Special Instructions,
and subject to Section 3.04 hereof, to any other person or entity
designated in such Special Instructions.
(b) Determination of Fund Custodian Daily Net Amount. On each banking
day, based upon daily transaction information provided to the Custodian by
the Funds, Custodian shall determine: (i) the amount of cash due to be
transferred on such day by each Fund Custodian to the Custodian in
connection with all Repurchase Agreement transactions in which the date
fixed for the repurchase and resale of Securities is the banking day next
following the date on which the sale and purchase of such Securities takes
place (each, an "Overnight Repo Transaction") to be effected through the
Accounts in such day; and (ii) the amount of cash due to be transferred on
such day by Custodian to such Fund Custodian in connection with all
outstanding Overnight Repo Transactions previously effected through the
Accounts (the difference between (i) and (ii) with respect to each Fund
Custodian being referred to as the "Fund Custodian Daily Net Amount"). On
each banking day, Custodian shall notify each Fund Custodian of the
foregoing determination and, unless otherwise directed in accordance with
Proper Instructions, Custodian shall (i) instruct such Fund Custodian to
transfer cash to the Custodian equal to the Fund Custodian Daily Net Amount
(if the Fund Custodian Daily Net Amount is positive) or (ii) transfer to
such Fund Custodian cash equal to the Fund Custodian Daily Net Amount (if
the Fund Custodian Daily Net Amount is negative).
(c) Determination of Repo Custodian Daily Net Amount. On each banking
day, based upon daily transaction information provided to the Custodian by
the Funds and each Repo Custodian, Custodian shall determine: (i) the
amount of cash due to be transferred on such day by each Repo Custodian on
behalf of the Funds to all counterparties in connection with all
third-party Overnight Repo Transactions to be effected through the Accounts
on such day; and (ii) the amount of cash due to be transferred on such day
by each Repo Custodian on behalf of all counterparties to the Funds in
connection with all outstanding third-party Overnight Repo Transactions
previously effected through the Accounts (the difference between (i) and
(ii) with respect to each Repo Custodian being referred to as the "Repo
Custodian Daily Net Amount"). On each banking day, Custodian shall notify
the Funds of the foregoing determinations and, unless otherwise directed in
accordance with Proper Instructions, Custodian shall (i) transfer to each
Repo Custodian cash equal to the Repo Custodian Daily Net Amount (if the
Repo Custodian Daily Net Amount is positive) or (ii) instruct each Repo
Custodian to transfer to the Custodian cash equal to the Repo Custodian
Daily Net Amount (if the Repo Custodian Daily Net Amount is negative).
Section 2.05. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by the Funds in the preparation of
reports to shareholders of the Funds and others, audits of accounts, and
other ministerial matters of like nature. The Custodian shall maintain
complete and accurate records with respect to cash and Securities held for
the benefit of the Funds as required by the rules and regulations of the
Securities and Exchange Commission applicable to investment companies
registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), including: (a) journals or other records of
original entry containing a detailed and itemized daily record of all
receipts and deliveries of securities (including certificate and
transaction identification numbers, if any), and all receipts and
disbursements of cash; (b) ledgers or other records reflecting Securities
in transfer, and Securities in physical possession; and (c) cancelled
checks and bank records related thereto. The Custodian shall keep such
other books and records of the Funds relating to repurchase transactions
effected through the Accounts as the Funds shall reasonably request. Such
books and records maintained by the Custodian shall reflect at all times
the identity of each Fund participating in each Account and the aggregate
amount of the Securities and any Cash Collateral held by the Custodian on
behalf of the Funds in such Account pursuant to this Agreement. All such
books and records maintained by the Custodian shall be maintained in a form
acceptable to the Funds and in compliance with the rules and regulations of
the Securities and Exchange Commission, including, but not limited to,
books and records required to be maintained by Section 31(a) of the
Investment Company Act and the rules from time to time adopted thereunder.
All books and records maintained by the Custodian relating to the Accounts
shall at all times be the property of the Funds and shall be available
during normal business hours for inspection and use by the Funds and their
agents, including, without limitation, their independent certified public
accountants. Notwithstanding the preceding sentence, the Funds shall not
take any actions or cause Custodian to take any actions which would cause,
either directly or indirectly, the Custodian to violate any applicable
laws, regulations, rules or orders.
Section 2.06. Reports by Independent Certified Public Accountants. At the
request of the Funds, the Custodian shall deliver to the Funds such annual
reports and other interim reports prepared by the independent certified
public accountants of the Custodian with respect to the services provided
by the Custodian under this Agreement, including, without limitation, the
Custodian's accounting system, internal accounting control and procedures
for safeguarding Securities, including Securities deposited and/or
maintained in a Securities System. Such reports, which shall be of
sufficient scope and in sufficient detail as may reasonably be required by
the Funds and as may reasonably by obtained by the Custodian, shall provide
reasonable assurance to the Funds that the procedures employed by the
independent certified public accountants are reasonably designed to detect
any material inadequacies with respect to the matters discussed in the
report, shall state in detail the material inadequacies disclosed by such
examination, and, if no such inadequacies exist, shall so state.
Section 2.07. Securities System. As used herein the term "Securities
System" shall mean each of the following: (a) the Depository Trust
Company; (b) the Participants Trust Company; (c) any book-entry system as
provided in (i) Subpart0 of Treasury Circular No. 300, 31CFR 306.115, (ii)
SubpartB of Treasury Circular Public Debt Series No. 27-76, 31CFR 350.2, or
(iii) the book-entry regulations of federal agencies substantially in the
form of 31CFR 306.115; or (d) any domestic clearing agency registered with
the Securities and Exchange Commission under Section17A of the Securities
Exchange Act of 1934, as amended (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which has
been approved in Special Instructions. Use of a Securities System by the
Custodian shall be in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
(A) The Custodian may deposit and/or maintain Securities held hereunder in
a Securities System, provided that such Securities are represented in an
account of the Custodian in the Securities System which account shall not
contain any assets of the Custodian other than assets held as a fiduciary,
custodian, or otherwise for customers.
(B) The Custodian shall, if requested by the Funds, provide the Funds with
all reports obtained by the Custodian with respect to the Securities
System's accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System.
(C) Upon receipt of Special Instructions, the Custodian shall terminate
the use hereunder of any Securities System (except for the federal
book-entry system) as promptly as practicable and shall take all actions
reasonably practicable to safeguard the Securities and other assets of the
Funds maintained with such Securities System.
Section 2.08. Collections. The Custodian shall (a) collect, receive and
deposit in the applicable Account all income and other payments with
respect to Securities held by the Custodian hereunder; (b) endorse and
deliver any instruments required to effect such collection; and (c) execute
ownership and other certificates and affidavits for all federal, state and
foreign tax purposes in connection with receipt of income or other payments
with respect to Securities, or in connection with the transfer of
Securities.
Section 2.09. Notices, Consents, Etc. The Custodian shall deliver to the
Funds, in the most expeditious manner practicable, all notices, consents or
announcements affecting or relating to Securities held by the Custodian on
behalf of the Funds that are received by the Custodian, and, upon receipt
of Proper Instructions, the Custodian shall execute and deliver such
consents or other authorizations as may be required.
Section 2.10. Notice of Custodian's Inability to Perform. The Custodian
shall promptly notify the Funds in writing by facsimile transmission or
such other manner as the Funds may designate, if, for any reason: (a) the
Custodian determines that it is unable to perform any of its duties or
obligations hereunder or its duties or obligations with respect to any
repurchase transaction; or (b) the Custodian reasonably foresees that it
will be unable to perform any such duties or obligations.
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS
Section 3.01. Proper Instructions; Special Instruction.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by one or more Authorized Persons (as hereinafter
defined); (ii) a telephonic or other oral communication by one or more
Authorized Persons; or (iii) a communication effected directly between
electromechanical or electronic devices or systems (including, without
limitation, computers) by one or more Authorized Persons; provided,
however, that communications of the types described in clauses (ii) and
(iii) above purporting to be given by an Authorized Person shall be
considered Proper Instructions only if the Custodian reasonably believes
such communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the Funds by tested telex or in
writing in the manner set forth in clause(i) above, but the lack of such
confirmation shall in no way affect any action taken by the Custodian in
reliance upon such oral instructions prior to the Custodian's receipt of
such confirmation. Each of the Funds and the Custodian is hereby
authorized to record any and all telephonic or other oral instructions
communicated to the Custodian. Proper Instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form
of standing instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by, in
the case of the entities listed in Schedules A-1 or A-2 hereto, the
Treasurer or any Assistant Treasurer of the Funds or any other person
designated in writing by the Treasurer of the Funds, and in the case of
each of the entities listed on Schedules A-3 or A-4, by the officer who is
a signatory to this Agreement on behalf of such entity or any other person
designated in writing by such officer or an officer of such entity of
higher authority, which countersignature or written confirmation shall be
(i) included on the same instrument containing the Proper Instructions or
on a separate instrument relating thereto, and (ii) delivered by hand, by
facsimile transmission, or in such other manner as the parties hereto may
agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the Funds.
Section 3.02. Authorized Persons. Concurrently with the execution of this
Agreement and from time to time thereafter, as appropriate, the Funds shall
deliver to the Custodian, duly certified as appropriate by the Treasurer or
any Assistant Treasurer of the Funds or by a Secretary or Assistant
Secretary of the Funds, and in the case of each of the entities listed on
Schedules A-3 or A-4, by the officer who is a signatory to this Agreement
on behalf of such entity or any other person designated in writing by such
officer or an officer of higher authority, a certificate setting forth (a)
the names, signatures and scope of authority of all persons authorized to
give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Funds
(collectively, the "Authorized Persons," and individually, an "Authorized
Person"), and (b) the names and signatures of those persons authorized to
issue Special Instructions. Such certificate may be accepted and relied
upon by the Custodian as conclusive evidence of the facts set forth therein
and shall be considered to be in full force and effect until delivery to
the Custodian of a similar certificate to the contrary. Upon delivery of a
certificate which deletes the name of a person previously authorized to
give Proper Instructions or to issue Special Instructions, such person
shall no longer be considered an Authorized Person or authorized to issue
Special Instructions, as applicable.
Section 3.03. Investment Limitations. In performing its duties hereunder
the Custodian may assume, unless and until it receives special Instructions
to the contrary (a "Contrary Notice"), that Proper Instructions received by
it are not in conflict with or in any way contrary to any investment or
other limitation applicable to any of the Funds. The Custodian shall in no
event be liable to the Funds and shall be indemnified by the Funds for any
loss, damage or expense to the Custodian arising out of any violation of
any investment or other limitation to which any Fund is subject, except to
the extent that such loss, damage or expense: (i) relates to a violation
of any investment or other limitation of a Fund occurring after receipt by
the Custodian of a Contrary Notice; or (ii) arises from a breach of this
Agreement by the Custodian.
Section 3.04. Persons Having Access to Assets of the Funds. No Authorized
Person, Trustee, officer, employee or agent of the Funds (other than the
Custodian) shall have physical access to the assets of the Funds held by
the Custodian, or shall be authorized or permitted to withdraw any such
assets for delivery to an account of such person, nor shall the Custodian
deliver any such assets to any such person; provided, however, that nothing
in this Section 3.04 shall prohibit: (a) any Authorized Person from giving
Proper Instructions, or the persons described in Section 3.01(b) from
issuing Special Instructions, so long as such action does not result in
delivery of or access to assets of the Funds prohibited by this Section
3.04; or (b) the Funds' independent certified public accountants from
examining or reviewing the assets of the Funds held by the Custodian.
Section 3.05. Actions of Custodian Based on Proper Instructions and
Special Instructions. Subject to the provisions of Section 4.01 hereof,
the Custodian shall not be responsible for the title, validity or
genuineness of any property, or evidence of title thereof, received by it
or delivered by it pursuant to this Agreement.
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION
Section 4.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Funds for all loss, damage and
expense incurred or suffered by the Funds, resulting from the failure of
the Custodian to exercise such reasonable care and diligence or from any
other breach by the Custodian of the terms of this Agreement.
(b) Acts of God, Etc. In no event shall the Custodian incur liability
hereunder if the Custodian is prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this Agreement
provides shall be performed or omitted to be performed by reason of: (i)
any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or of any foreign country,
or political subdivision thereof or of any court of competent jurisdiction;
or (ii) any act of God or war; unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the Custodian, or (B) a malfunction or failure of equipment maintained
or operated by the Custodian other than a malfunction or failure caused by
events beyond the Custodian's control and which could not reasonably be
anticipated and/or prevented by the Custodian.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Funds, the Custodian
shall use all commercially reasonable efforts and shall take all reasonable
steps under the circumstances to mitigate the effects of such event and to
avoid continuing harm to the Funds.
Section 4.02. Liability of Custodian for Actions of Securities Systems.
Notwithstanding the provisions of Section4.01 to the contrary, the
Custodian shall not be liable to the Funds for any loss, damage or expense
resulting from the use by the Custodian of a Securities System, unless such
loss, damage or expense is caused by, or results from, negligence,
misfeasance or misconduct of the Custodian. In the case of loss, damage or
expense resulting from use of a Securities System by the Custodian, the
Custodian shall take all reasonable steps to enforce such rights as it may
have against the Securities System to protect the interest of the Funds.
Section 4.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Funds severally agree to indemnify and hold harmless
the Custodian from all claims and liabilities (including reasonable
attorneys' fees) incurred or assessed against the Custodian for actions
taken in reliance upon Proper Instructions or Special Instructions;
provided, however, that such indemnity shall not apply to claims and
liabilities occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian, or any other breach of this Agreement by the
Custodian. In addition, the Funds severally agree to indemnify the
Custodian against any liability incurred by the Custodian by reason of
taxes assessed to the Custodian, or other costs, liability or expenses
incurred by the Custodian, resulting directly or indirectly solely from the
fact that securities and other property of the Funds is registered in the
name of the Custodian; provided, however, in no event shall such
indemnification be applicable to income, franchise or similar taxes which
may be imposed or applied against the Custodian or charges imposed by a
Federal Reserve Bank with respect to intra-day overdrafts unless separately
agreed to by the Funds.
(b) Extent of Liability. Notwithstanding anything to the contrary
contained herein, with respect to the indemnification obligations of the
Funds provided in this Section4.03, each Fund shall be: (i) severally, and
not jointly and severally, liable with each of the other Funds; and (ii)
liable only for its pro rata share of such liabilities, determined with
reference to such Fund's proportionate interest in the aggregate of assets
held by the Custodian in the Account with respect to which such liability
relates at the time such liability was incurred, as reflected on the books
and records of the Funds.
(c) Notice of Litigation, Right to Prosecute, Etc. The Custodian shall
promptly notify the Funds in writing of the commencement of any litigation
or proceeding brought against the Custodian in respect of which indemnity
may be sought against the Funds pursuant to this Section4.03. The Funds
shall be entitled to participate in any such litigation or proceeding and,
after written notice from the Funds to the Custodian, the Funds may assume
the defense of such litigation or proceeding with counsel of their choice
at their own expense. The Custodian shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or proceeding
without providing the Funds with adequate notice of any such settlement or
judgment, and without the Funds' prior written consent. The Custodian
shall submit written evidence to the Funds with respect to any cost or
expense for which it seeks indemnification in such form and detail as the
Funds may reasonably request.
Section 4.04. Funds, Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Funds shall have, at their election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Securities System or other person for loss, damage or
expense caused the Custodian or the Funds by such Securities System or
other person, and shall be entitled to enforce the rights of the Custodian
with respect to.any claim against such Securities System or other person
which the Custodian may have as a consequence of any such loss, damage or
expense if and to the extent that the Custodian or any Fund has not been
made whole for any such loss, damage or expense.
ARTICLE V - COMPENSATION
Section 5.01. Compensation. The Custodian shall be compensated for its
services hereunder in an amount, and at such times, as may be agreed upon,
from time to time, by the Custodian and the Funds. Each Fund shall be
severally, and not jointly, liable with the other Funds only for its pro
rata share of such compensation, determined with reference to such Fund's
proportionate interest in each Repurchase Agreement transaction to which
such compensation relates.
Section 5.02. Waiver of Right of Set-Off. The Custodian hereby waives and
relinquishes all contractual and common law rights of set-off to which it
may now or hereafter be or become entitled with respect to any obligations
of the Funds to the Custodian arising under this Agreement.
ARTICLE VI - TERMINATION
Section 6.01. Events of Termination. This Agreement shall continue in
full force and effect until the first to occur of: (a) termination by the
Custodian or the Funds by an instrument in writing delivered to the other
party, such termination to take effect not sooner than ninety (90) days
after the date of such delivery; or (b) termination by the Funds by written
notice delivered to the Custodian, based upon the Funds' determination that
there is a reasonable basis to conclude that the Custodian is insolvent or
that the financial condition of the Custodian is deteriorating in any
material respect, in which case termination shall take effect upon the
Custodians receipt of such notice or at such later time as the Funds shall
designate; provided, however, that this Agreement may be terminated as to
one or more Funds (but less than all Funds) by delivery of an amended
Schedule A-1, A-2, A-3 or A-4 pursuant to Section7.03 hereof. The
execution and delivery of an amended Schedule A-1, A-2, A-3 or A-4 which
deletes one or more Funds shall constitute a termination of this Agreement
only with respect to such deleted Fund(s).
Section 6.02. Successor Custodian; Payment of Compensation. Each of the
Funds may identify a successor custodian to which the cash, Securities and
other assets of such Fund shall, upon termination of this Agreement, be
delivered; provided that in the case of the termination of this Agreement
with respect to any of the Funds, such Fund or Funds shall direct the
Custodian to transfer the assets of such Fund or Funds held by the
Custodian pursuant to Proper Instructions. The Custodian agrees to
cooperate with the Funds in the execution of documents and performance or
all other actions necessary or desirable in order to substitute the
successor custodian for the Custodian under this Agreement. In the event
of termination, each Fund shall make payment of such Fund's applicable
share of unpaid compensation within a reasonable time following termination
and delivery of a statement to the Funds setting forth such fees. The
termination of this Agreement with respect to any of the Funds shall be
governed by the provisions of this ArticleVI as to notice, payments and
delivery of securities and other assets, and shall not affect the
obligations of the parties hereunder with respect to the other Funds set
forth in Schedule A-1, A-2, A-3 or A-4 as amended from time to time.
ARTICLE VII - MISCELLANEOUS
Section 7.01. Representative Capacity and Binding Obligation. A COPY OF
THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENTS OF EACH FUND IS
ON FILE WITH THE SECRETARY OF THE STATE OF EACH FUND'S FORMATION, AND
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE
TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT
ARE NOT BINDING UPON ANY OF THE SHAREHOLDERS, TRUSTEES, DIRECTORS,
PARTNERS, OFFICERS, EMPLOYEES OR AGENTS OF ANY FUND INDIVIDUALLY, BUT ARE
BINDING ONLY UPON THE ASSETS AND PROPERTY OF THE FUNDS, AND IN THE CASE OF
SERIES COMPANIES, SUCH FUNDS' RESPECTIVE PORTFOLIOS OR SERIES.
THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, DIRECTOR, PARTNER,
OFFICER, EMPLOYEE OR AGENT OF ANY FUND MAY BE HELD PERSONALLY LIABLE OR
RESPONSIBLE FOR ANY OBLIGATIONS OF THE FUNDS ARISING OUT OF THIS AGREEMENT.
WITH RESPECT TO OBLIGATIONS OF EACH FUND ARISING OUT OF THIS AGREEMENT, THE
CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY CLAIM SOLELY TO THE
ASSETS AND PROPERTY OF THE FUND TO WHICH SUCH OBLIGATION RELATES AS THOUGH
EACH FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT."
Section 7.02. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
subject matter hereof.
Section 7.03. Amendments. No provision of this Agreement may be amended
except by a statement in writing signed by the party against which
enforcement of the amendment is sought; provided, however, Schedule A-1,
A-2, A-3 or A-4 listing the Funds which are parties hereto, Schedule B
listing the Fund Custodians and Schedule C listing the Repo Custodians may
be amended from time to time to add or delete one or more Funds, Fund
Custodians or Repo Custodians, as the case may be, by the Funds' delivery
of an amended Schedule A-1, A-2, A-3 or A-4, Schedule B or Schedule C to
the Custodian. The deletion of one or more Funds from Schedule A-1, A-2,
A-3 or A-4 shall have the effect of terminating this Agreement as to such
Fund(s), but shall not affect this Agreement with respect to any other
Fund.
Section 7.04. Interpretation. In connection with the operation of this
Agreement, the Custodian, and the Funds may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
Section 7.05. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 7.06. Governing Law. THE PROVISIONS OF THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 7.07. Notice and Confirmations.
(a) Except as provided in Section 7.07(b) below and except in the case of
Proper Instructions or Special Instructions, notices and other writings
contemplated by this Agreement shall be delivered by hand or by facsimile
transmission (provided that in the case of delivery by facsimile
transmission, notice shall also be mailed postage prepaid) to the parties
at the following addresses:
(i) If to the Funds:
FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah Todd or
Mr. Samuel Silver
(ii) If to the Custodian:
The Bank of New York
One Wall Street
Fourth Floor
New York, NY 10286
Attn: Claire Meskovic
Telephone: (212) 635-4808
Telefax: (212) 635-4828
(b) The Custodian may provide the confirmations required by Sections 2.02
and 2.03 of this Agreement by making the information available in the form
of a communication directly between electromechanical or electrical devices
or systems (including, without limitation, computers) (or in such other
manner as the parties hereto may agree in writing) to the following Fund
Agent:
Fidelity Accounting and Custody
Domestic Securities Operations
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 506-4071
Attention: Mr. Mark Mufler
The address and telephone number of the Funds, the Fund Agent and the
Custodian and the identity of the Fund Agent specified in this Section 7.07
may be changed by written notice of the Funds to Custodian or Custodian to
the Funds, as the case may be. All written notices which are required or
provided to be given hereunder shall be effective upon actual receipt by
the entity to which such notice is given.
Section 7.08. Assignment. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective successors
and assigns, provided that, no party hereto may assign this Agreement or
any of its rights or obligations hereunder without the prior written
consent of each of the other parties.
Section 7.09. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
Section 7.10. Confidentiality; Survival of Obligations. The parties
hereto agree that they shall each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each party to
the others regarding its business and operations. All confidential
information provided by a party hereto shall be used by any other party
hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information
that is publicly available when provided or thereafter becomes publicly
available other than through a breach of this Agreement, or that is
required to be disclosed by any bank examiner of the Custodian, any auditor
of the parties hereto or by judicial or administrative process or otherwise
by applicable law or regulation. The provisions of this Section 7.10 and
Sections3.03, 4.01, 4.02, 4.03, 4.04, 4.05, 7.01 and 7.06 shall survive any
termination of this Agreement, provided that in the event of termination
the Custodian agrees that it shall transfer and return Securities and other
assets held by the Custodian for the benefit of the Funds as the Funds
direct pursuant to Proper Instructions.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of the Fund Custodians of the Funds:
The Bank of New York
Morgan Guaranty Trust Company
Brown Brothers Harriman & Co.
First Union National Bank Charlotte
Chase Manhattan Bank, N.A.
State Street Bank and Trust Company
SCHEDULE C
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of Repo Custodians of the Funds:
The Bank of New York
Chemical Bank
Morgan Guaranty Trust Company
EXHIBIT 8(J)
Form of
FIRST AMENDMENT TO
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN
THE BANK OF NEW YORK
AND
FIDELITY FUNDS
FIRST AMENDMENT TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT BETWEEN THE
BANK OF NEW YORK AND FIDELITY FUNDS, dated as of________________, by and
between THE BANK OF NEW YORK ("Custodian") and each of the entities listed
on Schedules A-1, A-2, A-3 and A-4 hereto on behalf of itself or, (i) in
the case of a series company, on behalf of one or more of its portfolios or
series listed on SchedulesA-1 or A-2 hereto, (ii) in the case of the
accounts listed on Schedule A-3 hereto, acting through Fidelity Management
& Research Company, and (iii)in the case of the commingled or individual
accounts listed on Schedule A-4 hereto, acting through Fidelity Management
Trust Company (collectively, the "Funds" and each, a "Fund").
WITNESSETH
WHEREAS, Custodian and certain of the Funds have entered into that certain
Joint Trading Account Custody Agreement between The Bank of New York and
Fidelity Funds, dated as of ______________ (the "Agreement"), pursuant to
which the Funds have appointed the Custodian as its custodian for the
purpose of establishing and administering one or more joint trading
accounts or subaccounts thereof (individually, an "Account" and
collectively, the "Accounts") and holding cash and securities for the Funds
in connection with repurchase transactions effected through the Accounts;
and
WHEREAS, Seller and the Funds desire to amend the Agreement as set forth
below.
NOW, THEREFORE, in consideration of the premises and mutual promises and
covenants contained herein, the parties hereto agree as follows. Unless
otherwise defined herein or the context otherwise requires, terms used in
this Amendment, including the preamble and recitals, have the meanings
provided in the Agreement.
The Agreement is hereby amended by deleting Paragraph2.03(f) in its
entirety and substituting the following in lieu thereof:
"(f) Overdraft. In the event that the Custodian is directed by Proper
Instructions to make any payment or transfer of funds on behalf of a Fund
for which there would be, at the close of business on the date of such
payment or transfer, insufficient funds held by the Custodian on behalf of
such Fund, the Custodian may, in its discretion, provide an overdraft
("Overdraft") to the Fund (such Fund being referred to herein as an
"Overdraft Fund"), in an amount sufficient to allow the completion of such
payment or transfer. Any Overdraft provided hereunder: (a) shall be
payable on the next Business Day, unless otherwise agreed by the Overdraft
Fund and the Custodian; and (b) shall accrue interest from the date of the
Overdraft to the date of payment in full by the Overdraft Fund at a rate
agreed upon in writing, from time to time, by the Custodian and the
Overdraft Fund. The Custodian and the Funds acknowledge that the purpose
of such Overdrafts is to temporarily finance the purchase or sale of
securities for prompt delivery in accordance with the terms hereof. The
Custodian hereby agrees to notify each Overdraft Fund by 3:00 p.m., New
York time, of the amount of any Overdraft. Provided that Custodian has
given the notice required by this subparagraph (f), the Funds hereby agree
that, as security for the Overdraft of an Overdraft Fund, the Custodian
shall have a continuing lien and security interest in and to all interest
of such Overdraft Fund in Securities whose purchase is financed by
Custodian and which are in Custodian's possession or in the possession or
control of any third party acting on Custodian's behalf and the proceeds
thereof. In this regard, Custodian shall be entitled to all the rights and
remedies of a pledgee under common law and a secured party under the New
York Uniform Commercial Code and any other applicable laws or regulations
as then in effect."
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed and delivered under seal by their duly authorized officers.
[Signature Lines Omitted]
Exhibit 15(a)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Concord Street Trust:
Fidelity U.S. Bond Index Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Concord Street Trust: Fidelity U.S. Bond Index Fund (the "Portfolio"), a
series of Fidelity Concord Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement,
the Distributor pays the expenses of printing and distributing any
prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that the Adviser may use its management fee revenues as well as
past profits or its resources from any other source, to make payment to the
Distributor with respect to any expenses incurred in connection with the
distribution of Portfolio shares, including the activities referred to
above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until July 31, 1987, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust, any obligations assumed by the
Portfolio pursuant to this Plan and any agreements related to this Plan
shall be limited in all cases to the Portfolio and its assets, and shall
not constitute obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
Exhibit 15(b)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Concord Street Trust:
Spartan U.S. Equity Index Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Concord Street Trust: Spartan U.S. Equity Index Fund (the "Portfolio"), a
series of Fidelity Concord Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement,
the Distributor pays the expenses of printing and distributing any
prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that the Adviser may use its management fee revenues as well as
past profits or its resources from any other source, to make payment to the
Distributor with respect to any expenses incurred in connection with the
distribution of Portfolio shares, including the activities referred to
above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until July 31, 1987, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust, any obligations assumed by the
Portfolio pursuant to this Plan and any agreements related to this Plan
shall be limited in all cases to the Portfolio and its assets, and shall
not constitute obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
Exhibit 15(c)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Concord Street Trust:
Spartan Total Market Index Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Spartan Total
Market Index (the "Portfolio"), a series of shares of Fidelity Concord
Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement,
the Distributor pays the expenses of printing and distributing any
prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that the Adviser may use its management fee revenues as well as
past profits or its resources from any other source, to make payment to the
Distributor with respect to any expenses incurred in connection with the
distribution of Portfolio shares, including the activities referred to
above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1998 and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
LG912940020
Exhibit 15(d)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Concord Street Trust:
Spartan Extended Market Index Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Spartan
Extended Market Index (the "Portfolio"), a series of shares of Fidelity
Concord Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement,
the Distributor pays the expenses of printing and distributing any
prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that the Adviser may use its management fee revenues as well as
past profits or its resources from any other source, to make payment to the
Distributor with respect to any expenses incurred in connection with the
distribution of Portfolio shares, including the activities referred to
above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1998 and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
LG912940020
Exhibit 15(e)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Concord Street Trust:
Spartan International Index Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Spartan
International Index Fund (the "Portfolio"), a series of shares of Fidelity
Concord Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement,
the Distributor pays the expenses of printing and distributing any
prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that the Adviser may use its management fee revenues as well as
past profits or its resources from any other source, to make payment to the
Distributor with respect to any expenses incurred in connection with the
distribution of Portfolio shares, including the activities referred to
above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1998 and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
LG912940020
