SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(e) or Sec. 240.14a-12
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(Name of Registrant as Specified In Its Charter) Spartan
U.S. Treasury Money Market Fund
(Name of Person Filing Proxy Statement) Arthur S. Loring
Payment of Filing Fee (Check the appropriate box):
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[ ] $125 per Exchange Act Rules 0-11(c)(ii), 14a-6(j) (1), or 14a-6(j) (2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(j) (3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j) (4) and 0-11.
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(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
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<CAPTION>
<S> <C>
[X] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
SPARTAN(registered trademark) U. S. TREASURY MONEY MARKET FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Spartan U.S. Treasury Money Market Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Spartan U.S. Treasury Money Market Fund (the fund), will be
held at the office of the fund, 82 Devonshire Street, Boston, Massachusetts
02109 on April 19, 1995, at10:00 a.m. The purpose of the Meeting is to
consider and act upon the following proposals, and to transact such other
business as may properly come before the Meeting or any adjournments
thereof.
1. To adopt a new fundamental investment policy for the fund permitting
the fund to invest all of its assets in another open-end investment company
with the same investment objective and investment policies.
2. To approve an Agreement and Plan providing for the conversion of the
fund into a separate fund of a Delaware business trust.
3. To approve an amended management contract for the fund.
4. To amend the fund's fundamental investment limitation concerning
borrowing.
5. To amend the fund's fundamental investment limitation concerning the
issuance of senior securities.
The Board of Trustees has fixed the close of business on February 21, 1995
as the record date for the determination of the shareholders of each fund
entitled to notice of, and to vote at, such Meeting and any adjournments
thereof.
By the order of the Board of Trustees,
ARTHUR S. LORING, Secretary
February 21, 1995
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help you avoid the time and expense involved in validating your
vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. All other accounts should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
SPARTAN U.S. TREASURY MONEY MARKET FUND
TO BE HELD APRIL 19, 1995
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Spartan U.S.
Treasury Money Market Fund (the fund) to be used at the Special Meeting of
Shareholders of the fund and at any adjournments thereof (the Meeting), to
be held April 19, 1995 at 10:00 a.m. at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the fund and
Fidelity Management & Research Company (FMR), the fund's investment
adviser. The purpose of the Meeting is set forth in the accompanying
Notice. The solicitation is made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about February 21, 1995.
Supplementary solicitations may be made by mail, telephone, telegraph, or
by personal interview by representatives of the fund. 440 Financial Group
of Worcester, Inc. may be paid hourly rates to solicit shareholders on
behalf of the fund at an anticipated cost of approximately $ .
The expenses in connection with preparing this Proxy Statement and its
enclosures and of all solicitations will be borne by FMR. FMR will
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares.
Fidelity Distributors Corporation, the fund's principal underwriter,
principal business address is 82 Devonshire Street, Boston, Massachusetts.
The principal business address of FMR Texas Inc., subadviser to the fund,
is 400 East Las Colinas Boulevard, Irving, Texas.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the fund, by the execution of a later-dated proxy card, or by attending the
Meeting and voting in person. All proxy cards solicited by the Board of
Trustees that are properly executed and received by the Secretary prior to
the Meeting, and which are not revoked, will be voted at the Meeting.
Shares represented by such proxies will be voted in accordance with the
instructions thereon. If no specification is made on a proxy card, it will
be voted FOR the matters specified on the proxy card. All proxies not
voted, including broker non-votes, will not be counted toward establishing
a quorum. Shareholders should note that while votes to ABSTAIN will count
toward establishing a quorum, passage of any proposal being considered at
the Meeting will occur only if a sufficient number of votes are cast FOR
the proposal. Accordingly, votes to ABSTAIN and votes AGAINST will have the
same effect in determining whether the proposal is approved.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote for the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted against the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
To the knowledge of the fund, no shareholder owned of record or
beneficially more than 5% of the outstanding shares of the fund on that
date. As of ___, 1995, the trustees and officers of the fund owned, in the
aggregate, less than __% of the fund's total outstanding shares.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JULY
31, 1994 CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS CORPORATION
AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: APPROVAL OF THE PROPOSALS REQUIRES THE AFFIRMATIVE VOTE OF A
"MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE FUND. UNDER THE
INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), A "MAJORITY VOTE OF THE
OUTSTANDING VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF
(A) 67% OR MORE OF THE SHARES PRESENT AT THE MEETING OR REPRESENTED BY
PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING SHARES ARE PRESENT
OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING SHARES.
1. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR THE FUND PERMITTING
THE FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY
WITH THE SAME INVESTMENT OBJECTIVE AND INVESTMENT POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, the adoption of a new fundamental investment policy that
would permit the fund to invest all of its assets in another open-end
investment company with substantially the same investment objective and
policies ("Pooled Fund Structure"). The purpose of pooling would be to
achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled "master" fund. This proposal would
add a fundamental policy for the fund that permits a Pooled Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that the fund
should invest in a master fund, the Trustees believe it could be in the
best interests of the fund to adopt such a structure at a future date.
At present, certain of the fund's fundamental investment policies and
limitations would prevent the fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit the fund's assets to be invested in a single Pooled Fund,
without a further vote of shareholders, if the Trustees determine that
action to be in the best interests of the fund and its shareholders. If
shareholders approve this proposal, certain fundamental and non-fundamental
policies and limitations of the fund that currently prohibit investment in
shares of one investment company would be modified to permit the investment
in a Pooled Fund. These policies include the fund's limitations on
investing more than 5% of total assets in any one issuer or more than 25%
of total assets in any one industry, and on acting as an underwriter.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Pooled Fund
Structure would facilitate the introduction of new Fidelity mutual funds,
increasing the investment options available to shareholders.
The fund's method of operation and shareholder services would not be
materially affected by its investment in a Pooled Fund, except that the
assets of the fund would be managed as part of a larger pool. Were the
fund to invest all of its assets in a Pooled Fund, it would hold only a
single investment security, and the Pooled Fund would directly invest in
individual securities pursuant to its investment objective. The Pooled
Fund would be managed by FMR or an affiliate, such as FMR Texas in the case
of a money market fund. The Trustees would retain the right to withdraw
the fund's investments from a Pooled Fund at any time and would do so if
the Pooled Fund's investment objective and policies were no longer
appropriate for the fund. The fund would then resume investing directly in
individual securities as it does currently. Whenever a fund is asked to
vote at a shareholder meeting of the Pooled Fund, the fund will hold a
meeting of its shareholders if required by applicable law or the fund's
policies to vote on the matters to be considered at the Pooled Fund
shareholder meeting. The fund will cast its votes at the Pooled Fund
meeting in the same proportion as the fund's shareholders voted at theirs.
The fund would otherwise continue its normal operations.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing the
fund's assets in a Pooled Fund only if they determine that pooling is in
the best interests of the fund and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. In determining whether to
invest in a Pooled Fund, the Trustees will consider, among other things,
the opportunity to reduce costs and to achieve operational efficiencies.
The Trustees will not authorize investment in a Pooled Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR intends to seek federal and state regulatory approval in order to
allow the Fidelity funds to invest in Pooled Funds. There is, of course,
no assurance that all necessary regulatory approvals will be obtained, or
that cost reductions or increased efficiencies will be achieved.
FMR may benefit from the use of a Pooled Fund if overall assets are
increased (since FMR's fees are based on assets). Also, FMR's expenses of
providing investment and other services to the fund may be reduced. If the
fund's investment in a Pooled Fund were to reduce FMR's expenses
materially, the Trustees would consider whether a reduction in FMR's
management fee would be appropriate if and when a Pooled Fund structure is
implemented.
PROPOSED FUNDAMENTAL POLICY. To allow the fund to invest in a Pooled Fund
at a future date, the Trustees recommend that the fund adopt the following
fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research
Company or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for the fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees recommends that the fund's shareholders
vote to adopt a new fundamental policy that would permit the fund, subject
to future review by the Board of Trustees as described above, to invest all
of its assets in an open-end investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
If the proposal is not adopted, the fund's current fundamental investment
policies will remain unchanged with respect to potential investment in
Pooled Funds.
2. TO APPROVE AN AGREEMENT AND PLAN PROVIDING FOR THE CONVERSION OF THE
FUND INTO A SEPARATE FUND OF A DELAWARE BUSINESS TRUST.
The Trustees have approved an Agreement and Plan of Conversion and
Termination (the Plan of Conversion) in the form attached to this Proxy
Statement as Exhibit 1. The Plan of Conversion provides for a conversion
(the Conversion) of Spartan U.S. Treasury Money Market Fund (the current
fund), a Massachusetts business trust (the Massachusetts Trust), to a
separate series (the successor fund) of Fidelity Hereford Street Trust, a
Delaware business trust (the Delaware Trust).
The investment objective, policies, and limitations of the current fund
will not change except as approved by shareholders and as described in this
proxy statement. The successor fund will carry on the business of the
current fund following the Conversion. The successor fund will have an
investment objective, and policies and limitations identical to those of
the current fund (except as they may be modified pursuant to a vote of the
shareholders as proposed in this proxy statement). For a discussion of the
principal differences between the Massachusetts and Delaware business trust
forms of organization, see "Certain Comparative Information About the
Massachusetts Trust and the Delaware Trust" on page __.
Fidelity Management & Research Company (FMR), the current fund's
investment manager, will be responsible for the investment management of
the successor fund, subject to the supervision of the Trustees, under a
management contract substantially identical to the contract currently in
effect between FMR and the current fund (the Present Management Contract);
similarly, FMR Texas, the current fund's sub-adviser, will have primary
responsibility for providing portfolio investment advisory services to the
successor fund under a Sub-Advisory Agreement substantially identical to
the agreement currently in effect between FMR Texas and FMR (the Present
Sub-Advisory Agreement). For a discussion of the Present Management
Contract and the Present Sub-Advisory Agreement see pages ___ through ____.
It should be noted that the location and legal domicile of FMR and FMR
Texas, will not be affected by this proposal.
REASON FOR THE PROPOSED CONVERSION. The current fund is presently
organized as a fund of a Massachusetts business trust with one series of
shares. The Trustees unanimously recommend conversion of the current fund
to a separate series of the Delaware Trust (i.e., into the successor fund)
which will succeed to the business of the current fund. The Trustees have
determined that Delaware law affords advantages to the operations of a
mutual fund in addition to those available under Massachusetts law.
Delaware law provides that the shareholders of a Delaware business trust
shall not be subject to liability for obligations of the trust. Under
Massachusetts law, current fund shareholders are potentially liable for
obligations of the current fund; although the risk of such liability is
remote, the Trustees have determined that Delaware law affords greater
protection against potential shareholder liability. Similarly, Delaware law
provides that, should the Delaware Trust issue multiple series of shares,
each series shall not be liable for the debts of any other series; another
potential, although remote, risk in the case of a Massachusetts business
trust.
The Trustees believe that the Delaware business trust form will enable the
Delaware Trust to adopt new methods of operation and employ new
technologies that are expected to reduce costs of operation when, and if,
implemented. Delaware law, for example, explicitly authorizes electronic or
telephonic communications between shareholders and the Delaware Trust. The
Trustees hope to take advantage of this provision to improve shareholder
voting procedures and reduce costs. It is anticipated that under Delaware
law and the Delaware Trust Instrument, the Delaware Trust will be required
to have fewer shareholder meetings, potentially further reducing costs.
Neither Massachusetts nor Delaware business trusts are required to hold
annual shareholder meetings, affording significant cost savings. In
addition, Delaware law affords to the Trustees the ability to adapt the
Delaware Trust to future contingencies; for example, the Trustees have the
power to incorporate the Trust, to merge or consolidate with another
entity, to cause each series to become a separate trust, and to change the
Trust's domicile without shareholder vote. Any exercise of this authority
by the Trustees will be subject to applicable federal law. This flexibility
should help to assure that the Delaware Trust always operates under the
most advanced form of organization, and is intended to reduce the expense
and frequency of future shareholder meetings for non-investment related
operational issues. Of course, the investment objective and many of the
investment limitations of both the current fund and successor fund remain
fundamental, and may only be changed by shareholder vote. For proposed
amendments to certain of the current fund's fundamental investment
limitations, see Proposals 4 and 5.
For a more detailed comparison of the Massachusetts Trust's current
Massachusetts Declaration of Trust (the Declaration of Trust) and the
proposed Delaware Trust Instrument, see "Certain Comparative Information
About the Massachusetts Trust and the Delaware Trust" on page __.
SUMMARY OF THE PLAN OF CONVERSION. The following discussion summarizes the
important terms of the Plan of Conversion. This summary is qualified in its
entirety by reference to the Plan of Conversion itself, which is included
as Exhibit 1 to this Proxy Statement.
The Delaware Trust was formed as a Delaware business trust pursuant to a
Trust Instrument dated November 18, 1993 (the Trust Instrument). On the
closing date of the Conversion (Closing Date), the current fund will
transfer all of its assets to the successor fund, a series of the Delaware
Trust established for the purpose of effecting the Conversion, in exchange
for the assumption by the successor fund of all of the liabilities of the
current fund and the issuance of shares of beneficial interest of the
successor fund (Delaware Trust Shares) equal to the value (as determined by
using the procedures set forth in the current fund's prospectus) on the
date of the exchange of the current fund's net assets divided by $1.00, the
anticipated net asset value per share of the successor fund. Immediately
thereafter, the current fund will distribute the Delaware Trust Shares to
the current fund's shareholders pro rata, in proportion to the current
fund's shareholders respective beneficial interest in the current fund
(Massachusetts Fund Shares), in liquidation of such Massachusetts Fund
Shares. Immediately after this distribution of the Delaware Trust Shares,
the current fund will be terminated and, as soon as practicable thereafter,
will be wound up and liquidated. UPON COMPLETION OF THE CONVERSION, EACH OF
THE CURRENT FUND'S SHAREHOLDERS WILL BE THE OWNER OF FULL AND FRACTIONAL
DELAWARE TRUST SERIES SHARES EQUAL IN NUMBER, DENOMINATION, AND AGGREGATE
NET ASSET VALUE TO HIS OR HER MASSACHUSETTS FUND SHARES.
The Plan of Conversion authorizes the current fund as the then sole
initial shareholder of the successor fund to approve (i) the management
contract with FMR for the successor fund (the New Management Contract),
(ii) the Sub-Advisory Agreement between FMR and FMR Texas with respect to
the successor fund (the New Sub-Advisory Agreement), and (iii) the
Distribution and Service Plan (the New Plan) under Rule 12b-1 with respect
to the successor fund identical to the contract or plan, as the case may
be, currently in effect with the current fund.
The Delaware Trust Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument signed by at least two-thirds of the number of Trustees prior to
removal; (c) any Trustee who requests to be retired by written instrument
signed by a majority of the other Trustees or who is unable to serve due to
physical or mental incapacity by reason of disease or otherwise, death, or
for any other reason, may be retired; and (d) a Trustee may be removed at
any Special Meeting of the shareholders by a vote of two-thirds of the
outstanding shares of the Trust. In case a vacancy shall for any reason
exist, the remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at any
time, less than a majority of the Trustees holding office has been elected
by shareholders, the Trustees then in office will promptly call a
shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The New Management Contract, the New Sub-Advisory Agreement, and the New
Plan will take effect on the Closing Date. The New Management Contract, the
New Sub-Advisory Agreement, and the New Plan will continue in force until
May 31, 1996. The New Management Contract and the New Sub-Advisory
Agreement will continue in force thereafter from year to year so long as
its continuance is approved at least annually (i) by the vote of a majority
of the Trustees who are not "interested persons" of the Delaware Trust,
FMR, or FMR Texas, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Trustees or
by the vote of a majority of the outstanding shares of the successor fund.
The New Plan will continue in effect only if approved annually by a vote of
the Trustees and of those Trustees who are not interested persons, cast in
person at a meeting called for that purpose. The New Management Contract,
New Sub-Advisory Agreement, and New Plan will be terminable without penalty
on sixty days' written notice either by the Delaware Trust, FMR, or FMR
Texas, as the case may be, and will terminate automatically in the event of
its assignment.
Assuming the Plan of Conversion is approved, it is currently contemplated
that the Conversion will become effective at the close of business on April
1, 1995. However, the Conversion may become effective at another time and
date if circumstances warrant.
The obligations of the Massachusetts Trust and the Delaware Trust under
the Plan of Conversion are subject to various conditions as stated therein.
Notwithstanding the approval of the Plan of Conversion by the current
fund's shareholders, the Plan of Conversion may be terminated or amended at
any time prior to the Conversion by action of the Trustees to provide
against unforeseen events, if (1) there is a material breach by the other
party of any representation, warranty or agreement contained in the Plan of
Conversion or (2) it reasonably appears that a party cannot meet a
condition of the Plan of Conversion. The Massachusetts Trust and the
Delaware Trust may at any time waive compliance with any of the covenants
and conditions contained in, or may amend, the Plan of Conversion, provided
that such waiver or amendment does not materially adversely affect the
interests of the current fund's shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS AND PLANS. The Delaware Trust's
transfer agent will establish an account for the successor fund's
shareholders containing the appropriate number and denominations of
Delaware Trust Shares to be received by each shareholder under the Plan of
Conversion. Such accounts will be identical in all material respects to the
accounts currently maintained by the current fund's transfer agent for the
current fund's shareholders. Current fund shareholders who are receiving
payment under a withdrawal plan with respect to Massachusetts Fund Shares
will retain the same rights and privileges as to Delaware Trust Shares
under the Plan of Conversion. Similarly, no further action will be
necessary in order to continue any automatic investment plan or retirement
plan currently maintained by a fund shareholder with respect to
Massachusetts Fund Shares.
EXPENSES. The current fund and the successor fund shall each be
responsible for all of their respective expenses of the Conversion,
estimated at $______ in the aggregate.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS. Certain fundamental
investment restrictions of the current fund, which prohibit the current
fund from acquiring more than a stated percentage of ownership of another
company, might be construed as restricting the current fund's ability to
carry out the Conversion. By approving the Plan of Conversion, current fund
shareholders will be agreeing to waive, only for the purpose of the
Conversion, those fundamental investment restrictions that could prohibit
or otherwise impede the transaction.
TAX CONSEQUENCES OF THE CONVERSION. The Massachusetts Trust and the
Delaware Trust have received an opinion from their counsel, Kirkpatrick &
Lockhart, that no gain or loss will be recognized for federal income tax
purposes by the current fund, the Delaware Trust or the current fund's
shareholders upon (1) the transfer of the current fund's assets in exchange
solely for the Delaware Trust Shares and the assumption by the Delaware
Trust on behalf of the successor fund of the current fund's liabilities or
(2) the distribution of Delaware Trust Shares to the current fund's
shareholders in liquidation of their Massachusetts Fund Shares. The opinion
further provides, among other things, that (a) the basis for federal income
tax purposes of the Delaware Trust Shares to be received by each of the
current fund's shareholders will be the same as that of his or her
Massachusetts Fund Shares; and (b) the current fund's shareholder's holding
period for his or her Massachusetts Fund Shares will include the current
fund's shareholder's holding period for his or her Massachusetts Fund
Shares, provided that said Massachusetts Fund Shares were held as capital
assets on the date of the exchange.
CONCLUSION. The Board of Trustees has concluded that the proposed
agreement and plan to convert the fund into a separate series of a Delaware
business trust is in the best interest of the fund's shareholders. The
Trustees recommend that the current fund's shareholders vote FOR the
approval of the Plan of Conversion as described above. Such a vote
encompasses approval of the conversion of the current fund to a separate
series of a Delaware business trust; temporary waiver of certain investment
limitations of the current fund to permit the Conversion (see "Temporary
Waiver of Investment Restrictions" on page __); authorization of the
current fund, as sole shareholder of the Delaware Trust series, to approve
(i) a Management Contract for the successor fund between the Trust and FMR,
(ii) a Sub-Advisory Agreement for the successor fund between FMR and FMR
Texas, and (iii) a Distribution and Service Plan under Rule 12b-1,
identical to the contract or plan, as the case may be, currently in effect
with the current fund. If approved, the Plan of Conversion will take
effect on the fund's closing date. If the Plan of Conversion is not
approved, the current fund will continue to operate as a fund of a
Massachusetts business trust.
CERTAIN COMPARATIVE INFORMATION ABOUT THE MASSACHUSETTS TRUST
AND THE DELAWARE TRUST
SUMMARY OF THE TRUST INSTRUMENT. The Delaware Trust has been established
pursuant to the Trust Instrument under the laws of the State of Delaware.
The investment objective, policies, and limitations of the successor fund
will be the same as those of the current fund, including the revised
policies and limitations, if approved, adopted by shareholders pursuant to
Proposal 4 and 5. The Delaware Trust's fiscal year end is April 30, which
is different than that of the Massachusetts Trust. The Trustees may change
the fiscal year end of the Delaware Trust at their discretion in the
future. Prior to the Conversion, the successor fund will not have any
assets or liabilities. During the Conversion, the current fund will be the
sole shareholder of the successor fund immediately prior to the
distribution of Delaware Trust Shares to current fund shareholders.
As a Delaware business trust, the Delaware Trust's operations will be
governed by the Trust Instrument, the Bylaws and applicable Delaware law
rather than by the Massachusetts Declaration of Trust, the Bylaws, and
applicable Massachusetts law. The operations of the Delaware Trust will
continue to be subject to the provisions of the 1940 Act, the rules and
regulations of the SEC thereunder, and applicable state securities laws.
TRUSTEES AND OFFICERS OF THE TRUST. Subject to the provisions of the Trust
Instrument, the business of the Delaware Trust is supervised by its
Trustees, who serve indefinite terms and who have all powers necessary or
convenient to carry out that responsibility. The responsibilities, powers,
and fiduciary duties of the Trustees of the Delaware Trust will be
substantially the same as those of the Trustees of the Massachusetts Trust.
The Trustees of the Delaware Trust would be those persons who currently
serve as Trustees of the Massachusetts Trust.
SERIES OR FUNDS OF THE MASSACHUSETTS TRUST AND THE DELAWARE TRUST. The
Delaware Trust's Trust Instrument permits the Trustees to create one or
more series or funds of the Delaware Trust and, with respect to each series
or fund, to issue an unlimited number of full or fractional shares of that
series or fund or of one or more of that series' or fund's classes. The
Massachusetts Trust's Trustees have identical rights under the
Massachusetts Declaration of Trust. Each share of a fund of the Delaware
Trust, like each share of a fund of the Massachusetts Trust, represents an
equal proportionate interest with each other share in that series or fund,
none having priority or preference over another. While additional series or
classes thereof may be added in the future, none are currently
contemplated.
DELAWARE TRUST SHAREHOLDER AND MASSACHUSETTS TRUST SHAREHOLDER LIABILITY.
One area of difference between the two forms of organizations is the
potential liability of shareholders. Generally, Delaware Trust shareholders
are not personally liable for obligations of the Delaware Trust under
Delaware law. The Delaware Business Trust Act (the Delaware Act) provides
that a shareholder of a Delaware business trust shall be entitled to the
same limitation of liability extended to shareholders of private
corporations for profit. However, no similar statutory or other authority
limiting business trust shareholder liability applies in many other states,
including Texas, the location of the fund's sub-adviser. As a result, to
the extent that the Delaware Trust or a shareholder is subject to the
jurisdiction of courts in those states, the courts may not apply Delaware
law, and may thereby subject the Delaware Trust shareholders to liability.
To guard against this risk, the Trust Instrument (i) contains an express
disclaimer of shareholder liability for acts or obligations of the Delaware
Trust and requires that notice of such disclaimer be given in each
agreement, obligation, and instrument entered into as executed by the
Delaware Trust or its Trustees and (ii) provides for indemnification out of
series or fund property of any shareholder held personally liable for the
obligations of the Delaware Trust. Thus, the risk of a Delaware Trust
shareholder incurring financial loss beyond his or her investment because
of shareholder liability is limited to circumstances in which (1) a court
refused to apply Delaware law, (2) no contractual limitation of liability
was in effect, and (3) the series or fund itself would be unable to meet
its obligations. In light of Delaware law, the nature of the Delaware
Trust's business, and the nature of its assets, FMR believes that the risk
of personal liability to a Delaware Trust shareholder is extremely remote.
Shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable under Massachusetts law for the
obligations of the Massachusetts Trust. The Massachusetts Declaration of
Trust, like the Delaware Trust Instrument, contains an express disclaimer
of shareholder liability and requires that notice of such disclaimer be
given in each agreement entered into or executed by the Massachusetts Trust
or the Trustees. The Declaration of Trust also provides for indemnification
out of Trust property. Thus, FMR believes the risk of Massachusetts Trust
shareholder liability is also remote for shareholders of Massachusetts
business trusts.
VOTING RIGHTS OF MASSACHUSETTS TRUST AND DELAWARE TRUST SHAREHOLDERS.
Neither the Massachusetts Trust nor the Delaware Trust holds annual
meetings. The Declaration of Trust and Trust Instrument each, in substance,
provides that a special meeting of shareholders may be called by the
holders of 10% or more of the shares, and that 10 or more holders of
$25,000 (who have been such for six months), or 1% of the shares, whichever
is greater, may apply to the Trustees stating that they wish to communicate
with shareholders in order to obtain the call by 10% of the outstanding
shares, in which case the Trustees shall cooperate with such shareholders
as required under Section 16(c) of the 1940 Act.
The Delaware Trust, like the Massachusetts Trust, will operate as an
open-end management investment company registered with the SEC under the
1940 Act. Shareholders of the successor fund will, therefore, have the
power to vote at special meetings with respect to, among other things,
changes in fundamental investment policies and limitations of the successor
fund; ratification of the selection by the Trustees of the independent
accountants for the Delaware Trust; and such additional matters relating to
the Delaware Trust as may be required by law, or which the Trustees
consider desirable. If, at any time, less than a majority of the Trustees
holding office have been elected by shareholders, the Trustees then in
office will promptly call a meeting of shareholders of the Delaware Trust
for the purpose of electing a Board of Trustees. The Massachusetts Trust
intends to notify the SEC that the Delaware Trust will succeed to the
shares registered by the Massachusetts Trust under the Securities Act of
1933 on behalf of the fund.
The Trust Instrument provides that shareholders shall have the power to
vote only with respect to the election of Trustees, the removal of
Trustees, the approval of investment advisory or management contracts, and
with respect to such additional matters as may be required by law or the
Trustees may consider desirable. The Trust Instrument also permits the
Trustees to amend the Trust Instrument, except that shareholders shall have
the right to vote on any amendment affecting their right to vote, on any
amendment required by law or the Trust's registration statement, or on any
matter submitted to shareholders by the Trustees. The Massachusetts
Declaration of Trust, on the other hand, generally gives shareholders
exclusive power to amend the Declaration of Trust in addition to the voting
rights granted by the Trust Instrument. The Trust Instrument provides that
one-third of the shares shall constitute a quorum; the Massachusetts
Declaration of Trust requires a majority of shares to establish quorum for
a meeting.
The Massachusetts Declaration of Trust and the Delaware Trust Instrument
provide for different methods of calculating voting rights. The
Massachusetts Declaration of Trust provides that each share of a fund in a
Trust is entitled to one vote. The amendment, if approved, would provide
for voting rights to be calculated based on a shareholder's total dollar
interest in a fund rather than on the number of shares owned. This is the
method by which shareholders' voting rights are calculated under the
Delaware Trust Instrument. If this Proposal to convert the fund to a fund
of a Delaware Trust is passed by shareholders, the Massachusetts Trust and
the Delaware Trust will provide for calculating voting rights in the same
manner.
LIABILITY OF TRUSTEES. The Trust Instrument provides that the Trustees
shall not be liable to any person other than the Delaware Trust or a
shareholder and that a Trustee shall not be liable for any act as a
Trustee; but nothing in the Trust Instrument protects a Trustee against any
liability to the Trust or its shareholders 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.
The Declaration of Trust provides that its Trustees shall not be liable for
errors of judgment or mistakes of fact or law, subject to substantially
similar provisions concerning willful misfeasance, bad faith, gross
negligence, and reckless disregard as those described above.
3. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR THE FUND.
The Board of Trustees has approved, and recommends that shareholders of
the fund approve, a proposal to amend the management contract between the
fund and FMR. The proposal would modify the management fee that FMR
receives from the fund by reducing it 0.10% from an annual rate of 0.55% of
the fund's average net assets to 0.45%.
A copy of the present management contract, marked to indicate proposed
amendments, is supplied as Exhibit 2 on page __. Except for the amendment
to the management fee rate, the proposed contract is substantially
identical to the present management contract. If approved by shareholders,
the proposed contract will take effect on May 1, 1995 (or, if later, the
first day of the first month following approval) and will remain in effect
through May 31, 1996, subject to continuation by the Board of Trustees. If
the proposed contract is not approved, the present contract will continue
in effect through May 31, 1995, subject to continuation by the Board of
Trustees.
PROPOSED AMENDMENT TO THE MANAGEMENT CONTRACT. The fund's management fee
is an annual percentage of the fund's average net assets, calculated and
paid monthly. As the fund's manager, FMR manages the fund's investments and
business affairs and pays all of the fund's expenses with certain
exceptions (for details of the exceptions and the terms of the present
contract, see "Present Management Contract" on page __). The fund's current
management contract, dated December 1, 1990, provides that FMR, for its
provision of investment advisory and other services, is to receive a
monthly management fee at the annual rate of 0.55%, of the average net
assets of the fund. However, since the adoption of the fund's current
contract, FMR voluntarily agreed to reimburse a portion of the fund's
operating expenses (excluding interest, taxes, brokerage commissions, and
extraordinary expenses). The result was to limit the fund's total operating
expenses to an annual rate of 0.45% through December 31, 1995. For the
fiscal year ended July 31, 1994, the total management fee paid by the fund
before reimbursement would have been 0.55% of average net assets. However,
under FMR's reimbursement arrangements, the fee paid by the fund equaled
0.45% of average net assets, the same as it would have been under the
proposed contract if the proposed contract had been in effect.
COMPARISON OF MANAGEMENT FEES. The following chart compares the fund's
management fee under the terms of the present contract for the fiscal year
ended July 31, 1994, to the management fee the fund would have incurred if
the proposed contract had been in effect.
Present Contract Proposed Contract
Management Fee Management Fee Percent Difference
$ $ %
According to Lipper Analytical Services, Inc., an independent service that
monitors the mutual fund industry, the median management fee for the
Taxable Government & Treasury Money Market Fund universe, which includes
166 funds, was 0.40% for the twelve months ended July 31, 1994. However,
because the fund's management fee is all-inclusive, it is more appropriate
to compare the fund to its competitors on the basis of total expense. Thus,
the proposed fee (0.45%), which includes payment by FMR of the total
expenses for the fund, would remain well below the competitive median total
expense level for Taxable Government & Treasury Money Market Funds (0.64%).
Matters Considered by the Board.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Trustees who are not interested persons of FMR (the
"Independent Trustees") on June 17, 1993. The Board of Trustees meets
eleven times a year, typically for a full day or over a two-day period when
warranted. The Independent Trustees frequently meet as independent Trustees
in executive session. The Board of Trustees, including the Independent
Trustees, believe that matters bearing on the appropriateness of the fund's
management fee are considered at most, if not all, of its meetings. The
Independent Trustees are advised by independent legal counsel selected by
the Independent Trustees, which has provided extensive legal advice to the
Independent Trustees on a variety of matters, including the Independent
Trustees, responsibilities in respect of the fund's management fees.
Information Received by the Independent Trustees. In connection with their
regular meetings Trustees receive information material relating to the
consideration of the fund's management fee, including (i) sales and
redemption data in respect of the fund, (ii) the fund's average assets,
(iii) the economic outlook and the general investment outlook in the
markets in which the fund invests, (iv) the investment outlook of the
fund's portfolio manager, and (v) notable changes in the fund's
investments. The Board of Trustees and the Independent Trustees also
consider periodically other material facts such as (1) FMR's financial
condition, (2) arrangements in respect of the distribution of the fund's
shares, (3) relationships with the fund's custodian and subcustodians, and
(4) the resources devoted to and the record of compliance with investment
policies and restrictions.
Matters considered in connection with their approval of the Amended
Contract include the following:
Investment Performance and Comparative Information. The Board of Trustees
and the Independent Trustees considered whether the fund's record of
operating within its investment objective and its investment restrictions.
They reviewed data on investment performance, management fees, and expense
ratios of the fund, competitor funds, and other Fidelity funds. The
performance information reviewed included the following: background
information, investment results, performance charts, top fifteen holdings,
portfolio diversification and ranking in the competitive universe. The
Trustees also reviewed the fund's one-year and three-year total returns for
the period ended ___ (as reported and as restated to include the impact of
the proposed fee amendment) compared to the returns for all money market
funds and for selected competitor funds.
FMR's Personnel and Methods. The Independent Trustees met periodically with
the fund's portfolio manager, and with the senior management of FMR
responsible for investment operations, and the senior management of
Fidelity's money market group. The Board of Trustees and the Independent
Trustees considered extensive financial, personnel, and structural
information as to the Fidelity organization, including the revenues and
expenses of FMR and Fidelity Service Co. (the fund's transfer, shareholder
servicing, and bookkeeping agent), information on the size, education and
experience of FMR's investment staff, and FMR's approach to recruiting and
retaining capable portfolio managers and other research, advisory and
management personnel. The Trustees also considered FMR's policies and
procedures, and its dedication of resources, to assure compliance with
investment policies and restrictions, as well as other applicable
accounting, tax and regulatory requirements. They also considered the
efforts undertaken by FMR to further improve the quality and extent of
investment and other services.
Nature and Quality of Other Services. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed for the fund, and the
other Fidelity funds by FMR and related companies, both under the Amended
Contract and under separate agreements covering transfer agency functions
and pricing, bookkeeping and securities lending services under the current
and amended contract the management fee is all-inclusive and accordingly,
covers the fund's fees payable in respect of these services. The Board of
Trustees and the Independent Trustees considered FMR's expenditures in
developing enhanced shareholder services for the fund, enhancement sin the
quality and scope of the shareholder services provided to the fund'
shareholders, and the nature and extent of FMR's supervision of third party
service providers, principally custodians and subcustodians.
Expenses. The Board of Trustees and the Independent Trustees considered
the fund's expense ratio and expense ratios of selected competitor funds.
They also considered the amount and nature of fees paid by shareholders.
Profitability. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
fund and reviewed profitability data giving pro forma effect to the
proposed change in management fee. This consideration included a review of
FMR's methodology in allocating its costs to its management of the fund.
Economies of Scale. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, the extent to which FMR and the fund have
benefitted from any economies of scale, and the extent to which there is
potential for realization of any further economies of scale.
Other Benefits to FMR. The Board of Trustees and the Independent Trustees
also considered the revenues and profitability of other FMR businesses
(that is businesses other than its mutual fund business) that might benefit
from FMR's mutual fund business. The Independent Trustees have considered
the intangible benefits that accrue to FMR and its affiliates by virtue of
their relationship with the fund.
Other Benefits to Shareholders. The Independent Trustees and the Board of
Trustees have considered the benefit to shareholders of investing in a fund
that is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
In considering the foregoing factors the Board of Trustees and the
Independent Trustees did not identify any single factor as all-important or
controlling, and the foregoing summary does not detail all of the matters
considered. Based on its evaluation of all material information and
assisted by the advice of independent counsel, the Board of Trustees
concluded that the proposed management fee rate under the Amended Contract
structure is fair and reasonable. The Board of Trustees and the Independent
Trustees voted to approve the submission of the Amended Contract to
shareholders of the fund and recommend that shareholders of the fund vote
FOR the Amended Contract.
4. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
BORROWING.
The fund's current fundamental investment limitation concerning borrowing
states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of its total assets (less
liabilities other than borrowings). Any borrowings that come to exceed 33
1/3% of the fund's total assets by reason of a decline in net assets will
be reduced within three days to the extent necessary to comply with the 33
1/3% limitation."
Subject to shareholder approval, the Trustees intend to replace the fund's
fundamental investment limitation with the following modified fundamental
investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment) and
(ii) engage in reverse repurchase agreements for any purpose; provided that
(i) and (ii) in combination do not exceed 33 1/3% of the fund's total
assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed this amount will be reduced
within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation."
The primary purpose of the proposal is to conform the fund's fundamental
borrowing limitation to a limitation that is expected to become the
standard for all taxable money market funds managed by FMR. The SEC
considers reverse repurchase agreements to be a form of borrowing and
therefore, subject to the fund's limitation on borrowing. Currently the
fund may only borrow (and engage in reverse repurchase agreements) for
temporary or emergency purposes. The proposed fundamental limitation would
permit the fund to continue to borrow for temporary or emergency purposes,
but also allow it to engage in reverse repurchase agreements for any
purpose. If approved, the revised limitation cannot be changed without a
future vote of shareholders.
In a reverse repurchase agreement, the fund temporarily transfers
possession of a security to another party in return for cash and agrees to
repurchase the security at a particular price and time. The fund then
invests the cash in other short-term money market instruments in which it
is permitted to invest. The fund continues to earn interest on the security
transferred to the counterparty ("transferred security") and, in addition,
the difference between the cost of the reverse repurchase agreement and the
amount earned from the investment of cash obtained through the reverse
repurchase agreement. This investment strategy may be employed when a
particular security held by the fund is in demand so that the reverse
repurchase agreement counterparty is willing to charge less than a market
rate of interest on the reverse repurchase agreement. If the fund is able
to invest the cash it receives from the reverse repurchase agreement at a
short-term rate higher than the cost of the agreement, the fund will
benefit.
Although the fund will require that a reverse repurchase agreement be
fully collateralized with cash or other appropriate securities, there is a
risk that the securities transferred to the counterparty may not be
returned. In this case, the fund might be forced to reinvest the cash at a
lower interest rate than that of the transferred security. The use of
reverse repurchase agreements could increase the risk of fluctuation in the
fund's yield or in the market value of its assets since the fund has credit
and interest rate exposure to both the transferred security and the
security purchased with the cash proceeds ("securities purchased"). However
this risk is limited since both the security transferred and the securities
purchased will be short-term, high quality money market obligations. All
money market funds, including the Spartan U.S. Treasury Money Market Fund,
are required to observe a maximum dollar-weighted average maturity of 90
days or less. The maturity of the transferred security and the securities
purchased are considered in the calculation of the fund's dollar-weighted
average maturity. This maturity restriction is designed to limit the impact
of changes in general levels of short-term interest rates on the value of
the fund's portfolio securities.
The proposed amended limitation would also require the fund to reduce
borrowings that come to exceed 33 1/3% of total assets for any reason
within three days excluding Sundays and holidays. Under the current
limitation, the fund must reduce borrowings that come to exceed 33 1/3% of
total assets only by reason of a decline in net assets. In addition, the
proposed limitation specifically defines "three days" to exclude Sundays
and holidays.
If the proposal is approved, the fund will also adopt the following
non-fundamental limitation. The current non-fundamental limitation includes
reverse repurchase agreements in the limitation on purchasing securities
when borrowings representing 5% of the fund's assets are outstanding. The
proposed limitation would exclude reverse repurchase agreements from
counting towards the 5% limitation and therefore allows the fund to enter
into reverse repurchase agreements with respect to more than 5% of its
assets for investment purposes.
"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. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) 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."
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. The Trustees recommend that shareholders
of the fund vote FOR the proposed amendment. The amended limitation, upon
shareholder approval, will become effective immediately. If the proposal is
not approved, the fund's current limitation will remain unchanged.
5. TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE
ISSUANCE OF SENIOR SECURITIES.
The primary purpose of this proposal is to revise the fund's investment
limitation to conform to a limitation which are expected to become standard
for all funds managed by FMR. The Board of Trustees has asked FMR to
analyze the various fundamental and non-fundamental investment limitations
of the Fidelity funds, and, where practical and appropriate to a fund's
investment objective, to adopt standard non-fundamental limitations and to
propose to shareholders elimination of certain fundamental investment
limitations or adoption of standard fundamental investment limitations. FMR
believes that increased standardization will help to promote operational
efficiencies and facilitate monitoring of compliance with fundamental and
non-fundamental investment limitations. Although adoption of a new or
revised limitation is not likely to have any impact on the investment
techniques employed by the funds at this time, it will contribute to the
overall objective of standardization.
The fund's current fundamental investment limitation regarding the
issuance of senior securities states:
"The fund may not issue bonds or any other class of securities preferred
over shares of the fund in respect of the fund's assets or earnings,
provided that the fund may establish additional series of shares in
accordance with its Declaration of Trust."
Subject to shareholder approval, the Trustees intend to replace this
limitation with the following fundamental investment limitation governing
the issuance of senior securities:
"The fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940."
The 1940 Act restricts a fund's ability to issue senior securities.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as a
class of security preferred over shares of a fund with respect to the
fund's assets or earnings. It generally does not include temporary or
emergency borrowings by a fund (which might occur to meet shareholder
redemption requests) in accordance with federal law and a fund's investment
limitations. Various investment techniques that obligate a fund to pay
money at a future date (e.g., the purchase of securities for settlement on
a date that is longer than normal) occasionally raise questions as to
whether a "senior security" is created. The fund utilizes such techniques
only in accordance with applicable regulatory requirements under the 1940
Act.
Although adoption of the amended senior securities limitation is not
likely to have any impact on the investment techniques employed by the
fund, it will contribute to the overall objective of standardization. If
the proposal is approved, the new fundamental senior securities investment
limitation cannot be changed without a future vote of the fund's
shareholders.
CONCLUSION. The Board of Trustees recommends voting FOR the proposed
amendment. The amended limitation, upon shareholder approval, will become
effective immediately. If the proposal is not approved, the fund's current
limitation will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
PRESENT MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments, and
compensates all officers of the trust, all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the trust or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the funds. These services include providing
facilities for maintaining the fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of the fund's shares under federal and
state law; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees. Services provided by affiliates of FMR will continue
under the proposed management contract described in proposal 3.
FMR is responsible for the payment of all expenses of the fund with
certain exceptions. Specific expenses payable by FMR include, without
limitation, the fees and expenses of registering and qualifying the trust,
the fund, and its shares for distribution under federal and state
securities laws; expenses of typesetting for printing the Prospectus and
Statement of Additional Information; custodian charges; audit and legal
expenses; insurance expense; association membership dues; and the expenses
of mailing reports to shareholders, shareholder meetings, and proxy
solicitations. FMR also provides for transfer agent and dividend disbursing
services and general accounting record maintenance through FSC, an
affiliate of FMR.
FMR is the fund's manager pursuant to a management contract dated December
1, 1990, which was approved by the fund's shareholders on November 14,
1990. For the services of FMR under the contract, the fund pays FMR a
monthly management fee at the annual rate of .55% of the fund's average net
assets throughout the month. FMR reduces its fee by an amount equal to the
fees and expenses of the non-interested Trustees.
Prior to December 1, 1990, FMR was the fund's manager pursuant to a
management contract dated December 1, 1989, executed in conjunction with
shareholder approval of a plan to convert the fund from a Delaware limited
partnership to a Massachusetts business trust. For the services of FMR
under that contract, the fund paid FMR a monthly management fee composed of
two elements: a group fee rate and an individual fund fee rate of .28%. The
group fee rate was based on the average monthly net assets of all of the
registered investment companies with which FMR had management contracts.
The fund was responsible for paying expenses for maintaining shareholder
records, furnishing shareholder statements and reports, and other services
that are now paid for by FMR under the fund's current management contract.
The gross management fees incurred by the fund and the amounts reimbursed
by FMR for the fiscal year ending July 31, 1994 are indicated in the table
below.
Management Fees Amount of Total
Before Reimbursement Expense Reimbursements
$8,799,000 $1,602,000
FMR pays all other expenses of the fund with the following exceptions:
fees and expenses of all Trustees who are not "interested persons" of the
trust or FMR (the non-interested Trustees); interest on borrowings; taxes;
brokerage commissions (if any); and such nonrecurring expenses as may
arise, including costs of any litigation to which a fund may be a party,
and any obligation it may have to indemnify the officers and Trustees with
respect to litigation.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions (if any), and extraordinary expenses). During fiscal 1994 the
fund's total operating expenses were .45% of average net assets. FMR has
voluntarily agreed to limit the fund's total operating expenses to an
annual rate of .45% of its average net assets through December 31, 1995. If
voluntary implementation had not been in effect, fees for fiscal 1994 would
have been .55%.
To defray shareholder service costs, FMR or its affiliates also collect the
fund's $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for wire
purchases and redemptions, and $2.00 checkwriting charge. For the fiscal
year ending July 31, 1994, exchange fees, account closeout fees, wire fees
and checkwriting charges amounted to $40,000, $6,000, $3,000, and $25,000,
respectively.
SUB-ADVISORY AGREEMENTS
On behalf of the fund, FMR has entered into a sub-advisory agreement with
FMR Texas pursuant to which FMR Teaxs has primary responsibility for
providing portfolio investment management services to the fund. The
contract was approved by shareholders on November 14, 1990.
Under the sub-advisory agreement, FMR pays FMR Texas fees equal to 50% of
the management fee payable to FMR under its management contract with the
fund. The fees paid to FMR Texas are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to time.
For fiscal 1994, FMR paid FMR Texas fees of $4,399,000 for the fund.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to the fund advised by FMR is contained in the Table of Average Net Assets
and Expense Ratios in Exhibit 3 on page __.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks for certain of the funds advised by FMR. Those
transactions which have occurred to date have included mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the fund. Messrs. Johnson 3d, Burkhead, John
H. Costello, Gary L. French, Arthur S. Loring, Thomas D. Maher, Leonard M.
Rush, Fred L. Henning, Jr., and Leland Barron are currently officers of the
fund and officers or employees of FMR or FMR Corp. With the exception of
Mr. Costello, Mr. Maher, and Mr. Rush, all of these persons are
stockholders of FMR Corp. FMR's address is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of the Directors of FMR.
All of the stock of FMR is owned by a parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts, which was organized on October
31, 1972. Messrs. Johnson 3d and Burkhead are Directors of FMR Corp. On
November 31, 1994, Messrs. Johnson 3d and Burkhead owned approximately __%
and __%, respectively, of the voting common stock of FMR Corp. In addition,
various Johnson family members and various trusts for the benefit of
Johnson family members, for which Mr. Burkhead is a Trustee, owned in the
aggregate approximately __% of the voting common stock of FMR Corp. Messrs.
Johnson 3d and Burkhead owned approximately _% and _%, respectively, of the
non-voting common and equivalent stock of FMR Corp. In addition, various
trusts for the benefit of members of the Johnson family and other trusts
for the benefit of Johnson family members, through limited partnership
interest in a partnership the corporate general partner of which is
controlled by Mr. Johnson 3d and other Johnson family members, together
owned approximately __% of the non-voting common and equivalent stock of
FMR Corp. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d (President and a
Trustee of the trust), Johnson family members, and various trusts for the
benefit of the Johnson family form a controlling group with respect to FMR
Corp.
TO BE UPDATED
During the period _____, 199_ through ______, 199_, the following
transactions were entered into by Trustees of the fund involving more than
1% of the voting common, non-voting common and equivalent stock, or
preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR TEXAS
FMR Texas is a wholly owned subsidiary of FMR formed in 1989 to provide
portfolio management services to Fidelity's money market funds and
investment advice with respect to money market instruments.
Funds with investment objectives similar to the fund's for which FMR has
entered into a sub-advisory agreement with FMR Texas, and the net assets of
each of these funds, are indicated in the Table of Average Net Assets and
Expense Ratios (Exhibit 3) on page __.
The Directors of FMR Texas are Edward C. Johnson 3d, Chairman, and J. Gary
Burkhead, President. Mr. Johnson 3d also is President and a Trustee of the
fund and of other funds advised by FMR; Chairman, Chief Executive Officer,
and a Director of FMR Corp.; Chairman of the Board and of the Executive
Committee of FMR; a Director of FMR; and Chairman and Director of Fidelity
Management & Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc. In addition, Mr. Burkhead is Senior Vice President and a Trustee
of the fund and of other funds advised by FMR; a Director of FMR Corp.;
President of FMR; and President and Director of Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.
Each of the Directors are stockholders of FMR Corp.
The principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts. The principal business address of FMR Texas is 400
East Las Colinas Boulevard, Irving, Texas.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The fund does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Fund, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the fund, in care of Fidelity Service Co., P.O. Box 789,
Boston, Massachusetts 02102, whether other persons are beneficial owners of
shares for which proxies are being solicited and, if so, the number of
copies of the Proxy Statement and the fund's Annual Report you wish to
receive in order to supply copies to the beneficial owners of the shares.
EXHIBIT 1
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
THIS AGREEMENT AND PLAN OF CONVERSION AND TERMINATION (the Agreement) is
made as of the __ day of ____ 199_, by and between Spartan U.S. Treasury
Money Market Fund (the Fund), a separate series of Spartan U.S. Treasury
Money Market Fund (the Massachusetts Trust), a business trust duly formed
under the laws of the Commonwealth of Massachusetts, and Fidelity Hereford
Street Trust (the Trust), a business trust duly formed under the laws of
the State of Delaware.
This Agreement is intended to effect the conversion of the Fund into a
series of the Delaware business trust. The conversion will involve the
transfer of all of the assets of the Fund solely in exchange for assumption
by a series of the Trust of all liabilities of the Fund and issuance of
shares of beneficial interest of a series of the Trust (the Trust Series
Shares), followed by the constructive distribution, on the Closing Date
hereinafter referred to, of such Trust Series Shares to the holders of
shares of beneficial interest of the Fund (the Fund Shareholders) in
liquidation and termination of the Fund as provided herein, all upon the
terms and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE FUND IN EXCHANGE FOR ASSUMPTION OF LIABILITIES
AND ISSUANCE OF SHARES OF THE TRUST; DISSOLUTION OF THE FUND
1.1. Subject to the terms and conditions set forth herein and on the basis
of the representations and warranties contained herein, the Fund agrees to
transfer its assets as set forth in paragraph 1.2 to a separate series of
the Trust (the Series) established by the Trust solely for the purpose of
acquiring all of the assets of the Fund, which Series has not issued any
Trust Series Shares (except for one share issued to Fidelity Management &
Research Company (FMR)) or commenced operations. The Trust, on behalf of
the Series, agrees in exchange therefor (1) that the Series shall assume
all of the Fund's liabilities, whether contingent or otherwise, then
existing, and further (2) that the Trust shall deliver to the Fund the
number of full and fractional Trust Series Shares equal to the value and
number of full and fractional shares of the Fund outstanding at the time of
closing, as described in paragraph 3.1, on the Closing Date provided for in
paragraph 3.1. Such transactions shall take place at the Closing provided
for in paragraph 3.1.
1.2. The assets of the Fund to be acquired by the Trust on behalf of the
Series and allocated thereto shall include, without limitation, all cash,
cash equivalents, securities, receivables (including interest and dividends
receivable), any claims or rights of action or rights to register shares
under applicable securities laws, any books or records of the Fund and
other property owned by the Fund and any deferred or prepaid expenses shown
as assets on the books of the Fund on the Closing Date provided for in
paragraph 3.1.
1.3. Immediately upon delivery to the Fund of the Trust Series Shares, the
individual Trustees of the Fund or any officer duly authorized by them, on
the Fund's behalf as the then sole shareholder of the Trust, shall approve
or disapprove (i) a Management Contract between the Trust and FMR, (ii) a
Sub-Advisory Agreement between FMR and FMR Texas Inc., (iii) a Distribution
and Service Plan under Rule 12b-1 under the Investment Company Act of 1940,
as amended (1940 Act), between the Trust and Fidelity Distributors
Corporation (FDC) substantively identical to the plan and contracts
currently in effect with the Fund, except as to the parties to such plan or
contract , (iv) the independent accountants who currently serve in that
capacity for the Fund, and (v) the adoption of revised fundamental policies
described in Proposal 7.
1.4. As provided in paragraph 3.3, on the Closing Date the Fund will
constructively distribute the Trust Series Shares pro rata in proportion to
their respective shares of beneficial interest in the Fund (Fund Shares) to
Fund Shareholders of record determined as of the close of business on the
Closing Date, in liquidation of such Fund Shares. Such distribution will be
accomplished by the transfer of the Trust Series Shares then credited to
the account of the Fund on the share records of the Trust to open accounts
on those records in the names of such Fund Shareholders and representing
the respective pro rata number of the Trust Series Shares due such Fund
Shareholders. The Trust shall not issue certificates representing Trust
Series Shares in connection with such distribution. Fractional Trust Series
Shares shall be rounded to the third decimal place.
1.5. Immediately after the distribution of the Trust Series Shares as set
forth in Section 1.4, the Fund shall be terminated and liquidated and any
such further actions shall be taken in connection therewith as required by
applicable law.
1.6. Ownership of Trust Series Shares will be shown on the books of
Fidelity Service Co. (FSC) as the Trust's transfer agent.
1.7. Any transfer taxes payable upon issuance of Trust Series Shares in a
name other than the registered holder of the corresponding Fund Shares on
the books of the Fund as of that time shall be paid by the person to whom
such Trust Series Shares are to be distributed as a condition of such
transfer.
1.8. Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the Closing Date and any
later date on which the Fund may be terminated.
2. VALUATION
2.1. The value of the Fund's net assets to be acquired by the Trust on
behalf of the Series hereunder shall be the net asset value computed as of
the valuation time provided in the Fund's prospectus on the Closing Date,
using the valuation procedures set forth in the Fund's then current
Prospectus or Statement of Additional Information.
2.2. The number, value and denominations of full and fractional Trust
Series Shares to be issued in exchange for the Fund's net assets shall be
equal to the number, value and denomination of full and fractional Fund
Shares outstanding on the Closing Date.
2.3. All computations of value shall be made by FSC, a division of FMR
Corp., in accordance with its regular practice as pricing agent for the
Fund.
3. CLOSING AND CLOSING DATE
3.1. The transfer of the Fund's assets in exchange for the assumption by
the Series of the Fund's liabilities and the issuance of Trust Series
Shares, as described above, together with related acts necessary to
consummate such acts (Closing), shall occur at the principal office of the
Trust on ____, 199_ (Closing Date), or at such other place or later date
as the parties may agree in writing. All acts taking place at the Closing
shall be deemed to take place simultaneously as of the last daily
determination of the Fund's net asset value or at such other time and/or
place as the parties may agree.
3.2. In the event that, on the Closing Date, (a) the New York Stock
Exchange is closed to trading, or trading thereon is restricted, or (b)
trading or reporting of trading on said Exchange or in any market in which
portfolio securities of the Fund are traded is disrupted so that accurate
appraisal of the value of the total net assets of the Fund is
impracticable, the Closing shall be postponed until the first business day
upon which trading shall have been fully resumed and reporting shall have
been restored.
3.3. The Fund shall deliver at the Closing a certificate of an authorized
officer stating that it has notified the Custodian, as Custodian for the
Fund, of the Fund's conversion to a series of the Trust.
3.4. FSC, as transfer agent for the Fund, shall deliver at the Closing a
certificate as to the conversion on its books and records of each Fund
Shareholder account to an account as a holder of Trust Series Shares. The
Trust shall issue and deliver a confirmation to the Fund evidencing the
Trust Series Shares to be credited on the Closing Date or provide evidence
satisfactory to the Fund that such Trust Series Shares have been credited
to the Fund's account on the books of the Trust. At the Closing each party
shall deliver to the other such bills of sale, checks, assignments, stock
certificates, receipts or other documents as such other party or its
counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Fund represents and warrants as follows:
4.1.A. The Fund is a Massachusetts business trust or series thereof duly
formed and validly existing under the laws of the Commonwealth of
Massachusetts;
4.1.B. The Fund is duly registered as an open-end management investment
company under the 1940 Act, or is a series of a registrant and such
registration is in full force and effect;
4.1.C. The Fund is not, and the execution, delivery and performance of
this Agreement will not result, in violation of any provision of the
Declaration of Trust dated December 31, 1989 or the Fund's Bylaws or, to
the Fund's knowledge, of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Fund is a party or by which the
Fund is bound;
4.1.D. The Fund has no material contracts or other commitments (other
than this Agreement) that will not be terminated without liability to the
Fund on or prior to the Closing Date;
4.1.E. To the Fund's knowledge, no material litigation or administrative
proceeding or investigation of, or before, any court or governmental body
presently is pending or threatened against the Fund or any of its
properties or assets, except as previously disclosed in writing to the
Trust. The Fund knows of no facts that might form the basis for the
institution of such proceedings, and the Fund is not a party to, or subject
to, the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects its business or its
ability to consummate the transactions herein contemplated;
4.1.F. At the date hereof and at the Closing Date, all federal and other
tax returns and reports of the Fund required by law to have been filed by
such dates shall have been filed, and all federal and other taxes shall
have been paid so far as due, or provision shall have been made for the
payment thereof, and to the best of the Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to
any of such returns;
4.1.G. All issued and outstanding Fund Shares are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid and
nonassessable, except that under Massachusetts law, shareholders of a
Massachusetts business trust may be held personally liable for the
obligations of the trust;
4.1.H. The information to be furnished by the Fund for use in
applications for orders, registration statements, proxy materials and other
documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto;
4.1.I. All of the issued and outstanding Fund Shares will, at the time of
the Closing, be held by the persons and in the amounts as certified in
accordance with the provisions of paragraph 3.4;
4.1.J. On the Closing Date, the Fund will have good and marketable title
to its assets to be transferred to the Series pursuant to paragraph 1.2,
and full right, power, and authority to sell, assign, transfer and deliver
such assets hereunder free of any liens or other encumbrances, and upon
delivery and payment for such assets, the Trust will acquire good and
marketable title thereto;
4.1.K. The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action
on the part of the Fund, and, upon its proper execution, this Agreement
will constitute a valid and binding obligation of the Fund enforceable in
accordance with its terms, subject to approval of Fund Shareholders, and
will not conflict with the Fund's Declaration of Trust, or Bylaws, if any,
or any provision of any agreement to which the Fund is a party or by which
it is bound, or to the knowledge of the Fund, result in the acceleration of
any obligation or the imposition of any penalty under any agreement,
judgment or decree to which the Fund is a party or by which it is bound;
4.1.L. To the best of the knowledge of the Fund's management, there is no
plan or intention by the Fund's shareholders to sell, exchange or otherwise
dispose of any of the Trust Series Shares to be received in the conversion;
4.1.M. The Fund shares are widely held and may be purchased and redeemed
upon request;
4.1.N. No consideration other than Trust Series Shares will be issued in
exchange for the Fund Shares in the conversion;
4.1.O. Immediately following consummation of the conversion, the Fund
Shareholders will own all of the Trust Series Shares and will own such
shares solely by reason of their ownership of the Fund Shares immediately
prior to the conversion;
4.1.P. Immediately following the consummation of the conversion, the
Trust will hold on behalf of the Series the same assets and be subject to
the same liabilities that the Fund held or was subject to immediately prior
thereto, except for assets used to pay expenses incurred in connection with
the conversion. Assets used to pay expenses and all distributions (except
for distributions and redemptions arising in the ordinary course of the
Fund's business as an open-end investment company) made by the Fund
immediately preceding the conversion will, in the aggregate, constitute
less than 1% of the net assets of the Fund;
4.1.Q. At the time of the conversion, the Fund will not have outstanding
any warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in the Fund;
4.1.R. There is no intercompany indebtedness between the Trust on behalf
of the Series and the Fund that was issued, acquired or that will be
settled at a discount;
4.1.S. The Fund's liabilities to be assumed by the Trust on behalf of the
Series in the conversion were incurred by the Fund in the ordinary course
of its business and are associated with the assets to be transferred;
4.1.T. The Fund's shareholders each will pay their own expenses, if any,
incurred in connection with the conversion;
4.1.U. The fair market value of the Fund's assets to be transferred by
the Fund to the Trust on behalf of the Series will equal or exceed the
Fund's liabilities to be assumed by the Trust on behalf of the series plus
the liabilities to which the transferred assets are subject;
4.1.V. The Fund is a regulated investment company as defined in Section
851 of the Internal Revenue Code of 1986, as amended (the Code);
4.1.W. The Fund is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the meaning
of Section 368(a)(3)(A) of the Code;
4.1.X. To the Fund's knowledge, no consent, approval, authorization or
order of any court or governmental authority is required for the
consummation by the Fund of the transactions contemplated herein, except
such as shall have been obtained prior to the Closing Date under the
Securities Act of 1933 (the 1933 Act), the Securities Exchange Act of 1934
(the 1934 Act) and the 1940 Act, and such as may be required under state
securities laws;
4.1.Y. The Statements of Assets and Liabilities and Operations, the
Statement of Changes in Net Assets, Per Share Data and Ratios, and the
Schedule of Investments of the Fund at July 31, 1994 (copies of which have
been furnished to the Trust) have been audited by Price Waterhouse,
independent accountants, in accordance with generally accepted auditing
standards. Such financial statements are presented in accordance with
generally accepted accounting principles, and fairly present, in all
material respects, the financial condition of the Fund as of such date, and
there are no material known liabilities of the Fund at such date
(contingent or otherwise) not disclosed therein;
4.1.Z. Since _______ there has not been any material adverse change in
the Fund's financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any incurrence by
the Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by
the Trust; and
4.1.A.A. The Fund will be liquidated immediately after the conversion.
4.2. The Trust represents and warrants as follows:
4.2.A. The Trust is a Delaware business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware; that
the Trust filed its Trust Certificate with the Secretary of State of
Delaware;
4.2.B. The Series is a duly established and designated Series of the
Trust;
4.2.C. The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in violation of any provision of the Trust
Instrument or Bylaws of the Trust or, to the Trust's knowledge, of any
agreement, indenture, instrument, contract, lease or other undertaking to
which the Trust is a party or by which the Trust is bound;
4.2.D. To the Trust's knowledge, no material litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened against the Trust or any of its properties
or assets, except as previously disclosed in writing to the Fund. The Trust
knows of no facts that might form the basis for the institution of such
proceedings, and the Trust is not a party to, or subject to, the provisions
of any order, decree or judgment of any court or governmental body that
materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
4.2.E. The Trust intends for the Series to be a regulated investment
company, under Section 851 of the Code;
4.2.F. Prior to the Closing Date, there shall be no issued and
outstanding Trust Series Shares or any other securities issued by the
Series; Trust Series Shares issued in connection with the transactions
contemplated herein will be, duly and validly issued and outstanding, fully
paid and non-assessable under Delaware law on the Closing Date;
4.2.G. The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action
on the part of the Trust, and, upon its proper execution, this Agreement
will constitute a valid and binding obligation of the Trust enforceable
against the Series in accordance with its terms;
4.2.H. The Trust Series Shares at the Closing will have been duly
authorized and, when so issued and delivered, will be duly and validly
issued shares of the Series, fully paid and non-assessable under Delaware
law;
4.2.I. The fair market value of the Trust Series Shares to be received by
the Fund Shareholders will be approximately equal to the fair market value
of their Fund Shares constructively surrendered in exchange therefor;
4.2.J. The Trust has no plan or intention on behalf of the Series to
issue additional Trust Series Shares following the conversion except for
issuance of shares arising in the ordinary course of the business of the
Series as the series of an open-end investment company;
4.2.K. The Trust has no plan or intention to reacquire the Trust Series
Shares issued to the Fund Shareholders pursuant to the conversion other
than through redemptions arising in the ordinary course of the business of
the Series as a series of an open-end investment company;
4.2.L. Following the conversion, the Trust, on behalf of the Series, will
continue the Fund's historic business;
4.2.M. The Trust has no plan or intention to sell or otherwise dispose of
any of the Fund's assets to be acquired by the Series in the conversion,
except for dispositions made in the ordinary course of its business and
dispositions necessary to maintain the status of the Series as a regulated
investment company under Section 851 of the Code;
4.2.N. The information to be furnished by the Trust with respect to the
Series for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations applicable thereto;
4.2.O. The Trust, on behalf of the Series, shall use all reasonable
efforts to obtain the approvals and authorizations required by the 1933
Act, the 1940 Act and such state securities laws as it may deem appropriate
in order to operate after the Closing Date; and
4.2.P. To the Trust's knowledge, no consent, approval, authorization or
order of any court or governmental authority is required for the
consummation by the Series of the transactions contemplated herein, except
such as shall have been obtained prior to the Closing Date under the 1933
Act, the 1934 Act and the 1940 Act and such as may be required under state
securities laws.
5. COVENANTS OF THE FUND AND THE TRUST
5.1. The Fund covenants to call a meeting of Fund Shareholders (the
Shareholder's Meeting) to consider and act upon this Agreement and to take
all other action necessary to obtain approval of the transactions
contemplated hereby.
5.2. The Fund covenants that the Trust Series Shares are not being
acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.3. The Fund covenants that it will assist the Trust in obtaining such
information as the Trust reasonably requests concerning the beneficial
ownership of Fund Shares.
5.4. The Fund will, from time to time, as and when requested by the Trust,
execute and deliver, or cause to be executed and delivered, all such
assignments and other instruments, and will take or cause to be taken such
further action, as the Trust may deem necessary or desirable in order to
vest in, and confirm to, the Trust on behalf of the Series, title to, and
possession of, all the assets of the Fund to be sold, assigned, transferred
and delivered hereunder and otherwise to carry out the intent and purpose
of this Agreement.
5.5. The Fund will prepare a proxy statement in compliance with the 1933
Act, the 1934 Act and the 1940 Act in connection with the Shareholder's
Meeting to consider approval of this Agreement and the transactions
contemplated herein.
5.6. The Trust will, from time to time as and when requested by the Fund,
execute and deliver or cause to be executed and delivered all such
assignments and other instruments, and will take or cause to be taken such
further action, as the Fund may deem necessary or desirable in order to
vest in, and confirm to, the Fund, title to, and possession of, the Trust
Series Shares issued, sold, assigned, transferred and delivered hereunder
and otherwise to carry out the intent and purpose of this Agreement.
5.7. Subject to the provisions of this Agreement, the Trust and the Fund
each will take, or cause to be taken, all actions, and will do or cause to
be done all things reasonably necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND
The obligations of the Fund to consummate the transactions provided for
herein shall be subject to the performance by the Trust of all the
obligations to be performed by the Trust hereunder on or before the Closing
Date and, in addition thereto, to the following further conditions:
6.1. All representations and warranties of the Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date, with the same force and effect
as if made on and as of the Closing Date; and
6.2. The Trust shall have delivered on the Closing Date to the Fund a
certificate executed in the Trust's name by its duly authorized officer in
form and substance satisfactory to the Fund, dated as of the Closing Date,
to the effect that the representations and warranties of the Trust made in
this Agreement are true and correct at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Fund shall reasonably request.
Each of the foregoing conditions precedent may be waived by the Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST
The obligations of the Trust to consummate the transactions provided for
herein shall be subject to the performance by the Fund of all the
obligations to be performed by the Fund hereunder on or before the Closing
Date and, in addition thereto, to the following further conditions:
7.1. All representations and warranties of the Fund contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date, with the same force and effect
as if made on and as of the Closing Date;
7.2. The Fund shall have delivered to the Trust on the Closing Date a
statement of its assets and liabilities, prepared in accordance with
generally accepted accounting principles consistently applied, together
with a certificate of the Treasurer or Assistant Treasurer of the Fund as
to the aggregate asset value of the Fund's portfolio securities as of the
Closing Date; and
7.3. The Fund shall have delivered to the Trust on the Closing Date a
certificate executed in the Fund's name by its duly authorized officer, in
form and substance satisfactory to the Trust, dated as of the Closing Date,
to the effect that the representations and warranties of the Fund made in
this Agreement are true and correct at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Trust shall reasonably request.
Each of the foregoing conditions precedent may be waived by the Trust.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND AND THE TRUST
The obligations of the Fund and the Trust are each subject to the further
conditions that on or before the Closing Date:
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of Fund Shareholders in accordance with
applicable law;
8.2. On the Closing Date no action, suit, or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection
with, the transactions contemplated hereby;
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those
of the SEC and of state securities authorities) deemed necessary by the
Trust or the Fund to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a
risk of a material adverse effect on the assets or properties of the Trust
or the Fund, provided that either party hereto may for itself waive any of
such conditions; and
8.4. The Trust shall have taken all necessary action so that it shall be a
registered open-end investment company under the 1940 Act immediately after
the closing.
8.5. The Fund and the Trust shall have received on or before the Closing
Date an opinion of Kirkpatrick & Lockhart satisfactory to the Fund and the
Trust, substantially to the effect that for federal income tax purposes:
8.5.A. No gain or loss will be recognized to the Fund upon the transfer
of its assets in exchange solely for the Trust Series Shares and the
assumption by the Trust on behalf of the Series of the Fund's liabilities;
8.5.B. No gain or loss will be recognized to the Series on the Trust's
receipt of the Fund's assets in exchange for the Trust Series Shares and
the assumption by the Series of the Fund's liabilities;
8.5.C. The basis of the Fund's assets in the Series' hands will be the
same as the basis of those assets in the Fund's hands immediately before
the conversion;
8.5.D. The Series' holding period for the assets transferred to the Trust
by the Fund will include the holding period of those assets in the Fund's
hands immediately before the conversion;
8.5.E. No gain or loss will be recognized to the Fund on the distribution
of the Trust Series Shares to the Fund Shareholders in constructive
exchange for their Fund Shares;
8.5.F. No gain or loss will be recognized to a Fund Shareholder as a
result of the Fund's distribution of Trust Series Shares to that Fund
Shareholder in constructive exchange for that Fund Shareholder's Fund
Shares;
8.5.G. The basis of the Trust Series Shares received by a Fund
Shareholder will be the same as the adjusted basis of that Fund
Shareholder's Fund Shares constructively surrendered in exchange therefor;
and
8.5.H. The holding period of the Trust Series Shares received by a Fund
Shareholder will include the Fund Shareholder's holding period for the Fund
Shareholder's Fund Shares constructively surrendered in exchange therefor,
provided that said Fund Shares were held as capital assets on the date of
the conversion.
Each of the foregoing conditions precedent to the obligations of a party
may be waived by that party.
9. BROKERAGE FEES AND EXPENSES
9.1. The Trust and the Fund each represent and warrant to the other that
there are no brokers or finders fees payable in connection with the
transactions contemplated hereby.
9.2. The Fund will assume expenses incurred by the Trust and by the Fund
in connection with the entering into and carrying out of provisions of this
Agreement, including, without limitation: (a) registration or qualification
fees and expenses of preparing and filing such forms as are necessary under
applicable federal and state securities laws to qualify the Trust Series
Shares in each state in which the Fund Shareholders are resident as of the
date of the mailing of the Proxy Statement to the Fund Shareholder; (b)
postage; (c) printing; (d) accounting fees; (e) legal fees; and (f)
solicitation costs whether or not the transactions contemplated hereby are
consummated.
10. ENTIRE AGREEMENT
The Trust and the Fund agree that neither party has made any
representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties. The
representations, warranties and covenants contained herein or in any
document delivered pursuant hereto or in connection herewith shall survive
the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1. This Agreement may be terminated by the mutual agreement of the
Trust and the Fund. In addition, either the Trust or the Fund may at its
option terminate this Agreement at or prior to the Closing Date because:
11.1.A. Of a material breach by the other of any representations,
warranties or agreements contained herein to be performed at or prior to
the Closing Date; or
11.1.B. A condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears that it
will not or cannot be met.
11.2. In the event of any such termination, there shall be no liability
for damages on the part of the Trust or the Fund, or their respective
trustees or officers, to the other party or its trustees or officers.
12. AMENDMENT
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties; provided, however,
that following the Shareholders' Meeting called by the Fund pursuant to
paragraph 5.1, no such amendment may have the effect of changing the
provisions for determining the number of Trust Series Shares to be paid to
the Fund Shareholders under this Agreement to the detriment of the Fund
Shareholders without their further approval.
13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
13.1. The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
13.3. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
13.4. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder
shall be made by any party without the written consent of the other party.
Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation other than the parties
hereto and their respective successors and assigns any rights or remedies
under or by reason of this Agreement.
13.5. The parties hereto recognize that each of the Fund and the Trust is
a business trust and all parties agree that any claim arising hereunder or
by reason hereof shall not be enforceable against the Trustees or
shareholders of either the Fund or the Trust but only against the assets of
the Fund and of the Series, respectively.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer.
Spartan U.S. Treasury Money Market Fund:
[signature lines omitted]
DELAWARE TRUST NAME:
Fidelity Hereford Street Trust
[signature lines omitted]
FMR hereby agrees, pursuant to its Management
Contract with the Fund and with the Delaware Trust in
respect of the Series, to assume the expenses provided for in
accordance with paragraph 9.2 of this Agreement.
FIDELITY MANAGEMENT & RESEARCH COMPANY
[signature lines omitted]
EXHIBIT 2
The language to be added to the current contract is underlined and material
to be deleted is set forth in [brackets].
MANAGEMENT CONTRACT
BETWEEN
SPARTAN U.S. TREASURY MONEY MARKET FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[AGREEMENT] MODIFICATION made this 1st day of [December, 1990] _____,
1995, by and between Spartan U.S. Treasury Money Market Fund a
Massachusetts business trust which may issue one or more series of shares
of beneficial interest (hereinafter called the "Fund"), on behalf of its
single existing series of shares (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser").
Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract
modified December 1st, 1990, to a modification of said Contract in the
manner set forth below. The Modified Management Contract shall when
executed by duly authorized officers of the Fund and the Adviser, take
effect on the later of April 1, 1995 or the first day of the month
following approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser undertakes to pay all expenses involved in the operation
of the Portfolio, except the following, which shall be paid by the
Portfolio: (i) taxes; (ii) the fees and expenses of all Trustees of the
Fund who are not "interested persons" of the Fund or of the Adviser; (iii)
brokerage fees and commissions; (iv) interest expenses with respect to
borrowings by the Portfolio; and (v) such non-recurring and extraordinary
expenses as may arise, including actions, suits or proceedings to which the
Portfolio is or is threatened to be a party and the legal obligation that
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser, but
may be received and retained by the Adviser or its affiliates.
(d) The Adviser [, at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (a[t]s 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, payable monthly as soon as
practicable after the last day of each month, at the annual rate of [.55%]
.45% of the average daily net assets of the Portfolio (computed in the
manner set forth in the [fund's] Declaration of Trust) [determined as of
the close of business on each day] throughout the month; provided that the
fee, so computed, shall be reduced by the compensation, including
reimbursement of expenses, paid by the Portfolio to those Trustees who are
not "interested persons" of the Fund or the Adviser.
In 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. 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.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until [June 30,
1992] May 31, 1995 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 5, 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.
6. 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.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[Signature lines omitted]
EXHIBIT 1
TANAER table to be updated
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
RATIO OF RATIO OF NET
ADVISORY FEES ADVISORY FEES
TO AVERAGE TO AVERAGE RATIO OF
AVERAGE NET ASSETS NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PURSUANT TO PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) ADVISORY CONTRACT TO FMR
(B) ASSETS (C)
GROWTH AND INCOME
Balanced (3) 7/31/93 $ 2,154.5 0.53% 0.53% 0.93%
Dividend Growth (3) 7/31/93** 9.2 0.62(dagger) - 2.50(dagger)
Global Balanced (1) 7/31/93** 35.7 0.77(dagger) 0.77(dagger) 2.12(dagger)
Growth & Income 7/31/93 5,195.4 0.53 0.53 0.83
Puritan (3) 7/31/93 6,319.2 0.47 0.47 0.74
Advisor Income &
Growth 10/31/93 870.1 0.53 0.53 1.51
International Growth
& Income (2) 10/31/93 301.5 0.77 0.77 1.52
Advisor Equity Portfolio
Income :
Class A (3) 11/30/93 19.1 0.50 0.50 1.77
Institutional Class (3) 11/30/93 167.8 0.50 0.50 0.79
Convertible Securities (3) 11/30/93 782.6 0.53 0.53 0.92
Equity-Income II (3) 11/30/93 3,544.3 0.53 0.53 0.88
Variable Insurance
Products:
Equity-Income 12/31/93 952.1 0.53 0.53 0.62
Equity-Income (3) 1/31/94 6,040.5 0.38 0.38 0.66
Real Estate (3) 1/31/94 417.9 0.63 0.63 1.13
Utilities Income (3) 1/31/94 1,394.4 0.53 0.53 0.86
U.S. Equity Index 2/28/94 1,647.0 0.28 - 0.28
Market Index 4/30/94 300.9 0.45 0.45 0.45
Fidelity Fund (3) 6/30/94 1,545.0 0.41 0.41 0.65
ASSET ALLOCATION
Asset Manager 9/30/93 4,704.2 0.72 0.72 1.09
Asset Manager:
Growth (3)(4) 9/30/93 566.0 0.73 0.63 1.19
Asset Manager:
Income (3)(4) 9/30/93 79.1 0.44 - 0.65
Variable Insurance
Products II:
Asset Manager (3) 12/31/93 1,432.9 0.72 0.72 0.88
Index 500 12/31/93 20.8 0.28 - 0.28
GROWTH
RATIO OF RATIO OF NET
ADVISORY FEES ADVISORY FEES
TO AVERAGE TO AVERAGE RATIO OF
AVERAGE NET ASSETS NET ASSETS EXPENSES
TO
INVESTMENT FISCAL NET ASSETS PURSUANT TO PAID AVERAGE
NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) ADVISORY CONTRACT TO FMR
(B)
ASSETS (C)
Blue Chip Growth 7/31/93 589.5 0.72 0.72 1.25
Low-Priced Stock (3) 7/31/93 2,048.8 0.76 0.76 1.12
OTC Portfolio 7/31/93 1,202.7 0.74 0.74 1.08
Advisor Strategic
Opportunities (3) 9/30/93 $ 219.2 0.54% 0.54% 1.57%
Destiny I 9/30/93# 2,920.5 0.60(dagger) 0.60(dagger) 0.65(dagger)
Destiny II 9/30/93# 1,100.8 0.71(dagger) 0.71(dagger) 0.84(dagger)
Strategic
Opportunities (3) 9/30/93 19.2 0.54 0.54 0.89
Advisor Emerging Asia
Fund, Inc. (5) 10/31/94** 117.0 1.01(dagger) 1.01(dagger) 1.86(dagger)
Advisor Global
Resources (3) 10/31/93 14.4 0.77 0.77 2.62
Advisor Growth
Opportunities 10/31/93 1,204.5 0.68 0.68 1.64
Advisor Overseas (2) 10/31/93 65.5 0.77 0.77 2.38
Canada (2) 10/31/93 61.1 0.86 0.86 2.00
Capital Appreciation (3) 10/31/93 1,139.1 0.48 0.48 0.86
Disciplined Equity (3) 10/31/93 622.1 0.70 0.70 1.09
Diversified
International (2) 10/31/93 119.1 0.73 0.73 1.47
Emerging Markets (2) 10/31/93 144.4 0.77 0.77 1.91
Europe (2) 10/31/93 488.3 0.64 0.64 1.25
Europe Capital
Appreciation (2) 10/31/94** 231.8 0.78(dagger) 0.78(dagger) 1.58(dagger)
Japan (1) 10/31/93 98.4 0.77 0.77 1.71
Latin America (2) 10/31/93** 114.6 0.77(dagger) 0.77(dagger) 1.94(dagger)
Overseas (2) 10/31/93 1,025.1 0.77 0.77 1.27
Pacific Basin (1) 10/31/93 251.2 0.80 0.80 1.59
Southeast Asia (1) 10/31/93** 139.3 0.77(dagger) 0.71(dagger) 2.00(dagger)
Stock Selector (3) 10/31/93 459.7 0.71 0.71 1.10
Value (3) 10/31/93 1,100.8 0.72 0.72 1.11
Worldwide (2) 10/31/93 148.9 0.78 0.78 1.40
Advisor Equity Portfolio
Growth :
Class A (3) 11/30/93 176.0 0.66 0.66 1.84
Institutiona l Class (3) 11/30/93 226.7 0.66 0.66 0.94
Emerging Growth (3) 11/30/93 620.6 0.80 0.80 1.19
Growth Company (3) 11/30/93 2,119.8 0.75 0.75 1.07
New Millennium 11/30/93** 187.5 0.68(dagger) 0.68(dagger) 1.32(dagger)
Retirement Growth (3) 11/30/93 2,404.1 0.76 0.76 1.05
Congress Street 12/31/93 63.4 0.46 0.46 0.61
Contrafund (3) 12/31/93 4,138.1 0.69 0.69 1.06
Exchange 12/31/93 187.7 0.54 0.54 0.57
Trend (3) 12/31/93 1,296.7 0.65 0.65 0.92
Variable Insurance
Products:
Growth 12/31/93 $ 1,016.0 0.63% 0.63% 0.71%
Overseas (2) 12/31/93 398.7 0.77 0.77 1.03
Mid-Cap Stock (3) 1/31/95** 17.6 0.62(dagger) 0.62(dagger) 2.23(dagger)
Select Portfolios:
Air Transportation (3) 2/28/94 17.8 0.63 0.63 2.31
American Gold 2/28/94 313.4 0.63 0.63 1.49
Automotive (3) 2/28/94 133.8 0.63 0.63 1.68
Biotechnology (3) 2/28/94 549.9 0.63 0.63 1.61
Brokerage and Investment
Management (3) 2/28/94 69.3 0.63 0.63 1.77
Chemicals (3) 2/28/94 27.4 0.63 0.63 1.93
Computers (3) 2/28/94 41.2 0.63 0.63 1.89
Construction and
Housing (3) 2/28/94 42.1 0.63 0.63 1.66
Consumer Products (3) 2/28/94 9.0 0.63 0.49 2.48
Defense and
Aerospace (3) 2/28/94 4.6 0.63 - 2.53
Developing
Communications (3) 2/28/94 177.0 0.63 0.63 1.56
Electronics (3) 2/28/94 54.3 0.63 0.63 1.67
Energy (3) 2/28/94 126.1 0.63 0.63 1.66
Energy Service (3) 2/28/94 94.0 0.63 0.63 1.65
Environmental
Services (3) 2/28/94 56.6 0.63 0.63 2.03
Financial Services (3) 2/28/94 168.8 0.62 0.62 1.63
Food and Agriculture (3) 2/28/94 110.1 0.62 0.62 1.64
Health Care (3) 2/28/94 552.3 0.63 0.63 1.55
Home Finance (3) 2/28/94 224.4 0.63 0.63 1.58
Industrial Equipment (3) 2/28/94 58.2 0.63 0.63 1.68
Industrial Materials (3) 2/28/94 33.8 0.64 0.64 2.08
Insurance (3) 2/28/94 22.4 0.63 0.63 1.93
Leisure (3) 2/28/94 88.1 0.63 0.63 1.53
Medical Delivery (3) 2/28/94 105.8 0.63 0.63 1.79
Multimedia (3) (6) 2/28/94 62.8 0.63 0.63 1.63
Natural Gas (3) 2/28/94** 45.1 0.63(dagger) 0.63(dagger) 1.93(dagger)
Paper and Forest
Products (3) 2/28/94 27.0 0.64 0.64 2.07
Precious Metals and
Minerals (3) 2/28/94 378.4 0.63 0.63 1.55
Regional Banks (3) 2/28/94 201.0 0.62 0.62 1.60
Retailing (3) 2/28/94 $ 57.7 0.62% 0.62% 1.83%
Software and Computer
Services (3) 2/28/94 172.2 0.63 0.63 1.57
Technology (3) 2/28/94 163.4 0.63 0.63 1.54
Telecommunications (3) 2/28/94 353.3 0.63 0.63 1.53
Transportation (3) 2/28/94 10.5 0.63 0.63 2.39
Utilities (3) 2/28/94 310.9 0.63 0.63 1.35
Magellan (3) 3/31/94 29,816.4 0.76 0.76 0.99
Small Cap Stock 4/30/94** 572.2 0.68(dagger) 0.68(dagger) 1.18(dagger)
Fidelity Fifty (3) 6/30/94 44.2 0.63 0.63 1.58
CURRENCY PORTFOLIOS
Deutsche Mark
Peformance, L.P. 12/31/93 8.4 0.50 - 1.50
Sterling
Performance, L.P. 12/31/93 3.0 0.50 - 1.50
Yen Performance, L.P. 12/31/93 4.0 0.50 - 1.50
INCOME
Ginnie Mae 7/31/93 953.2 0.47 0.47 0.80
Mortgage Securities 7/31/93 428.9 0.47 0.47 0.76
Spartan Limited Maturity
Government 7/31/93 1,653.7 0.65 0.65 0.65
Spartan Ginnie Mae 8/31/93 766.9 0.65 0.41 0.41
Government Securities 9/30/93** 616.6 0.47(dagger) 0.47(dagger)
0.69(dagger)
Short-Intermediate
Government 9/30/93 167.6 0.47 0.18 0.61
Spartan Investment
Grade Bond (3) 9/30/93 59.1 0.65 0.65 0.65
Spartan Short-Term
Income (3) 9/30/93 547.0 0.65 0.20 0.20
Advisor Government
Investment 10/31/93 40.8 0.46 - 0.68
Advisor High Yield 10/31/93 299.1 0.51 0.51 1.11
Advisor Short Fixed
Income 10/31/93 359.6 0.47 0.47 0.95
Advisor Institutional
Limited Term Bond:
Class A 11/30/93 174.3 0.42 0.42 0.64
Institutional Class 11/30/93 22.5 0.42 0.42 1.23
Institutional Short-
Intermediate
Government:
Class I 11/30/93 $ 255.2 0.45% 0.45% 0.45%
Class II 11/30/94** .1 0.45(dagger) 0.45(dagger) 0.70(dagger)
Advisor Emerging
Markets Income 12/31/94** 6.2 0.71(dagger) - 1.50(dagger)
Global Bond (2) 12/31/93 434.1 0.71 0.71 1.17
New Markets Income (2) 12/31/93** 114.6 0.71(dagger) 0.28(dagger)
1.24(dagger)
Short-Term World
Income (2) 12/31/93 400.1 0.62 0.62 1.00
Spartan Bond
Strategist (3) 12/31/93** 15.4 0.70(dagger) 0.70(dagger) 0.70(dagger)
Variable Insurance
Products:
High Income 12/31/93 343.1 0.51 0.50 0.64
Variable Insurance
Products II:
Investment Grade
Bond 12/31/93 98.9 0.47 0.47 0.68
Spartan Long-Term
Government Bond 1/31/94 85.8 0.65 0.65 0.65
U.S. Bond Index 2/28/94 190.2 0.32 - 0.32
Capital & Income (3) 4/30/94 2,644.6 0.71 0.71 0.97
Intermediate Bond (3) 4/30/94 1,782.5 0.31 0.31 0.64
Investment Grade Bond (3) 4/30/94 1,026.3 0.41 0.41 0.74
Short-Term Bond (3) 4/30/94 2,230.0 0.46 0.46 0.80
Spartan Government
Income 4/30/94 397.4 0.65 0.65 0.65
Spartan High Income 4/30/94 671.4 0.75 0.75 0.75
Spartan Short-Intermediate
Government 4/30/94 61.7 0.65 0.10 0.10
The North Carolina Capital
Management Trust:
Term Portfolio 6/30/94 74.1 0.41 0.41 0.41
MONEY MARKET
Daily Money Fund:
Capital Reserves:
Money Market (4) 7/31/93 443.3 0.50 0.31 0.95
U.S. Government
Money Market (4) 7/31/93 269.5 0.50 0.38 0.95
Money Market (4) 7/31/93 1,554.7 0.50 0.50 0.61
U.S. Treasury (4) 7/31/93 $ 2,841.7 0.50% 0.50% 0.57%
U.S. Treasury
Income (4) 7/31/93 1,166.9 0.42 0.20 0.20
Spartan U.S. Treasury
Money Market (4) 7/31/93 2,138.9 0.55 0.42 0.42
Daily Income Trust (4) 8/31/93 2,302.8 0.30 0.30 0.57
Money Market Trust:
Domestic Money
Market (4) 8/31/93 690.3 0.42 0.42 0.42
Retirement Government
Money Market (4) 8/31/93 1,338.8 0.42 0.42 0.42
Retirement Money
Market (4) 8/31/93 1,661.1 0.42 0.42 0.42
U.S. Government (4) 8/31/93 297.5 0.42 0.42 0.42
U.S. Treasury (4) 8/31/93 181.5 0.42 0.42 0.42
U.S. Government
Reserves (4) 9/30/93 1,139.5 0.43 0.43 0.73
Cash Reserves (4) 11/30/93 9,761.4 0.14 0.13 0.48
State and Local Asset
Management Series:
Government Money
Market (4) 11/30/93 844.5 0.43 0.43 0.43
Variable Insurance
Products:
Money Market (4) 12/31/93 307.3 0.14 0.13 0.22
Select Money Market (4) 2/28/94 462.6 0.13 0.13 0.72
Institutional Cash:
Domestic Money
Market (4) 3/31/94 762.8 0.20 0.12 0.18
Money Market :
Class A (4) 3/31/94 5,263.1 0.20 0.15 0.18
Class B (4) 3/31/94** 34.4 0.20(dagger) 0.15(dagger) 0.50(dagger)
U.S. Government (4) 3/31/94 4,830.3 0.20 0.14 0.18
U.S. Treasury (4) 3/31/94 1,898.0 0.20 0.15 0.18
U.S. Treasury II:
Class A (4) 3/31/94 4,916.5 0.20 0.14 0.18
Class B (4) 3/31/94** 1.5 0.20(dagger) 0.14(dagger) 0.50(dagger)
Spartan Money Market (4) 4/30/94 4,512.4 0.45 0.31 0.31
Spartan U.S. Governmenrt
Money Market (4) 4/30/94 799.3 0.45 0.45 0.45
The North Carolina
Capital Management Trust:
Cash Portfolio (4) 6/30/94 1,391.7 0.39 0.39 0.39
TAX-EXEMPT INCOME
Daily Money Fund:
Capital Reserves:
Municipal Money
Market (4) 7/31/93 $ 91.7 0.50% 0.22% 0.95%
Spartan Aggressive
Municipal 8/31/93** 6.4 0.60(dagger) 0.60(dagger) 0.60(dagger)
Spartan Intermediate
Municipal 8/31/93** 82.6 0.55(dagger) - -
Spartan Maryland
Municipal Income 8/31/93** 13.4 0.55(dagger) - -
Spartan Municipal
Income 8/31/93 869.8 0.55 0.47 0.47
Spartan Municipal
Money Market (4) 8/31/93 1,561.2 0.50 0.27 0.27
Spartan Short-
Intermediate
Municipal 8/31/93# 819.9 0.55(dagger) 0.55(dagger) 0.55(dagger)
Advisor High Income
Municipal 10/31/93 316.4 0.42 0.42 0.92
Daily Tax-Exempt
Money (4) 10/31/93 504.9 0.50 0.50 0.61
Spartan New Jersey
Municipal Money
Market (4) 10/31/93 329.1 0.50 0.44 0.44
Tax-Exempt Money
Market Trust (4) 10/31/93 2,789.6 0.27 0.27 0.49
Advisor Institutional
Limited Term
Tax-Exempt:
Class A 11/30/93 22.1 0.42 0.24 0.65
Institutional Class 11/30/93 15.4 0.42 - 0.90
Advisor Short-Inter-
Mediate Tax Exempt 11/30/94** 6.5 0.41(dagger) - 0.75(dagger)
Connecticut Municipal
Money Market (4) 11/30/93 300.3 0.42 0.42 0.61
High Yield Tax-Free 11/30/93 2,161.9 0.42 0.42 0.56
New Jersey Tax-Free
Money Market (4) 11/30/93 357.5 0.42 0.42 0.63
Spartan Connecticut
Municipal:
High Yield 11/30/93 450.4 0.55 0.55 0.55
Money Market (4) 11/30/93 128.5 0.50 0.24 0.24
Spartan Florida Municipal:
Income 11/30/93 $ 377.5 0.55% 0.25% 0.25%
Money Market (4) 11/30/93 204.4 0.50 0.18 0.18
Spartan New Jersey
Municipal High Yield 11/30/93 399.2 0.55 0.55 0.55
Aggressive Tax-Free 12/31/93 891.9 0.47 0.47 0.64
Insured Tax-Free 12/31/93 426.3 0.42 0.42 0.61
Limited Term
Municipals 12/31/93 1,174.6 0.41 0.41 0.57
Michigan Tax-Free:
High Yield 12/31/93 528.9 0.42 0.42 0.59
Money Market (4) 12/31/93 161.3 0.42 0.41 0.62
Minnesota Tax-Free 12/31/93 320.0 0.42 0.42 0.61
Municipal Bond 12/31/93 1,279.8 0.37 0.37 0.49
Ohio Tax-Free:
High Yield 12/31/93 442.1 0.41 0.41 0.57
Money Market (4) 12/31/93 244.4 0.42 0.42 0.59
Spartan Pennsylvania
Municipal:
High Yield 12/31/93 283.2 0.55 0.55 0.55
Money Market (4) 12/31/93 218.8 0.50 0.50 0.50
Massachusetts Tax-Free:
High Yield 1/31/94 1,365.4 0.41 0.41 0.54
Money Market (4) 1/31/94 577.0 0.41 0.41 0.66
New York Tax-Free:
High Yield 1/31/94 477.9 0.41 0.41 0.58
Insured 1/31/94 395.2 0.41 0.41 0.58
Money Market (4) 1/31/94 564.0 0.41 0.41 0.62
Spartan Massachusetts
Municipal Money
Market (4) 1/31/94 339.5 0.50 0.40 0.40
Spartan New York
Municipal:
High Yield 1/31/94 427.7 0.55 0.55 0.55 Intermediate 1/31/94** 4.3
0.55(dagger) - -
Money Market (4) 1/31/94 446.6 0.50 0.50 0.50
California Tax-Free:
High Yield 2/28/94 588.0 0.41 0.41 0.57
Insured 2/28/94 299.5 0.41 0.29 0.48
Money Market (4) 2/28/94 540.0 0.41 0.41 0.64
Spartan California
Municipal:
High Yield 2/28/94 598.5 0.55 0.52 0.52
Intermediate 2/28/94** $ 7.7 0.55(dagger)% -% -%
Money Market (4) 2/28/94 944.0 0.50 0.21 0.21
Institutional Tax-
Exempt Cash (4) 5/31/94 2,549.9 0.20 0.14 0.18
(a) All fund data are as of the fiscal year end noted in the chart or as of
June 30, 1994, if fiscal year end figures are not yet available. Average
net assets are computed on the basis of average net assets of each fund at
the close of business on each business day throughout its fiscal period.
(b) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations, or paid by or due
from brokers to which cer
tain portfolio trades have been directed.
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
(1) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: Fidelity Management & Research
(U.K.) Inc. (FMR U.K.), Fidelity Management & Research (Far East) Inc. (FMR
Far East), Fidelity Investments Japan Ltd. (FIJ), Fidelity International
Investment Advisors (FIIA), and Fidelity International Investment Advisors
(U.K.) Limited (FIIAL U.K.), with respect to the fund.
(2) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: FMR U.K., FMR Far East, FIJ (New
Markets Income and Advisor Emerging Markets only), FIIA, and FIIAL U.K.,
with respect to the fund.
(3) Fidelity Management & Research Company has entered into sub-advisory
agreements with FMR U.K. and FMR Far East, with respect to the fund.
(4) Fidelity Management & Research Company has entered into a sub-advisory
agreement with FMR Texas Inc., with respect to the fund.
(5) Fidelity Management & Research Company has entered into sub-advisory
agreements with FIIA and FIJ, with respect to the fund.
(6) Effective April 25, 1994, Select Broadcast and Media Portfolio has been
renamed to Multimedia Portfolio.
TMM-PXS-195 CUSIP #846823102/FUND #415
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
SPARTAN U.S. TREASURY MONEY MARKET FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint Edward C.
Johnson 3d, Arthur S. Loring and ____, or any one or more of them,
attorneys, with full power of substitution, to vote all shares of SPARTAN
U.S. TREASURY MONEY MARKET FUND which the undersigned is entitled to vote
at the Special Meeting of Shareholders of the fund to be held at the office
of the trust at 82 Devonshire St., Boston, MA 02109, on April 19, 1995 at
10:00 a.m. and at any adjournments thereof. All powers may be exercised by
a majority of said proxy holders or substitutes voting or acting or, if
only one votes and acts, then by that one. This Proxy shall be voted on
the proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1995
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # 846823102/fund# 415]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
fund permitting the fund to invest all of its assets in
another open-end investment company with the same
investment objective and investment policies.
2. To approve an Agreement and Plan providing for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
conversion of the fund into a separate fund of a
Delaware business trust.
3. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
fund.
4. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
limitation concerning borrowing.
5. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
limitation concerning the issuance of senior securities.
</TABLE>
[TMM-PXC-295] [cusip # 846823102/fund# 415]
