Exhibit m(10)
DISTRIBUTION AND SERVICE PLAN
Variable Insurance Products Fund II: Investment Grade Bond Portfolio
Service Class Shares
1. This Distribution and Service Plan (the "Plan"), when effective
in accordance with its terms, shall be the written plan contemplated
by Securities and Exchange Commission Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Act") for the Service Class
Shares of Investment Grade Bond Portfolio ("Service Class"), a class
of shares of Investment Grade Bond Portfolio (the "Fund"), a portfolio
of Variable Insurance Products Fund II (the "Trust"). The Fund's
shares of beneficial interest ("Shares") may from time to time be
offered to insurance companies for allocation to certain of their
separate accounts established for the purpose of funding variable
annuity contracts and variable life insurance policies ("Variable
Products").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the
"Distributor"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers of
the Fund's Shares. Such efforts may include, but neither are required
to include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass
media advertising; (2) preparation, printing and distribution of sales
literature; (3) preparation, printing and distribution of prospectuses
of the Fund and reports to recipients other than existing insurance
company shareholders; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the
Distributor may, from time to time, deem advisable; (5) making
payments to insurance companies and others engaged in the sale of
Shares or who engage in shareholder support services; and (6)
providing training, marketing and support to such insurance companies
and others with respect to Shares.
3. In consideration for the services provided and the expenses
incurred by the Distributor pursuant to the General Distribution
Agreement and paragraph 2 hereof, all with respect to Service Class
Shares, Service Class shall pay to the Distributor a fee at the annual
rate of 0.25% (or such lesser amount as the Trustees may, from time to
time, determine) of the average daily net assets of Service Class
throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and
computed in the manner specified in the Fund's then current Prospectus
for the determination of the net asset value of the Fund's Service
Class Shares:
4. The Distributor may use all or any portion of the fee received
pursuant to this Plan to compensate insurance companies or others who
have engaged in the sale of Service Class Shares or in shareholder
support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized
under paragraph 2 hereof. Such services may include, but are not
limited to, the following: (1) answering questions about the Fund
from owners of Variable Products; (2) receiving and answering
correspondence from owners of Variable Products (including requests
for prospectuses and statements of additional information for the
Fund); (3) performing sub-accounting with respect to Variable Product
values allocated to the Fund; (4) preparing, printing and distributing
reports of values to Variable Product owners who have values allocated
to the Fund; (5) printing and distributing prospectuses, statements of
additional information, any supplements thereto, and shareholder
reports; (6) preparing, printing and distributing marketing materials
for Variable Products; (7) assisting customers in completing
applications for Variable Products and selecting underlying mutual
fund investment options; (8) preparing, printing and distributing
sub-account performance figures for sub-accounts investing in Fund
Shares; and (9) providing other reasonable assistance in connection
with the distribution of Fund Shares to insurers.
5. The Fund presently pays, and will continue to pay, a management
fee to Fidelity Management & Research Company (the "Adviser") pursuant
to a management agreement between the Fund and the Adviser (the
"Management Contract"). It is recognized that the Adviser may use its
management fee revenue, as well as its past profits or its resources
from any other source, to make payment to the Distributor with respect
to any expenses incurred in connection with the distribution of
Service Class Shares, including the activities referred to in
paragraph 2 hereof. To the extent that the payment of management fees
by the Fund to the Adviser should be deemed to be indirect financing
of any activity primarily intended to result in the sale of Service
Class Shares within the meaning of Rule 12b-1, then such payment shall
be deemed to be authorized by this Plan.
6. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of
Trustees who are not "interested persons" of the Trust (as defined in
the Act) and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (the
"Independent Trustees"), cast in person at a meeting called for the
purpose of voting on this Plan.
7. This Plan shall, unless terminated as hereinafter provided,
remain in effect until April 30, 2001, and from year to year
thereafter; provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the
Trust, including a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on this Plan.
This Plan may be amended at any time by the Board of Trustees,
provided that (a) any amendment to increase materially the fee
provided for in paragraph 3 hereof shall be effective only upon
approval by a vote of a majority of the outstanding voting securities
of Service Class and (b) any material amendment of this Plan shall be
effective only upon approval in the manner provided in the first
sentence of this paragraph 7.
8. This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Trustees or by a
vote of a majority of the outstanding voting securities of Service
Class.
9. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any
activity primarily intended to result in the sale of shares of Service
Class (making estimates of such costs where necessary or desirable)
and the purposes for which such expenditures were made.
10. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any
specific level of expenses for activities primarily intended to result
in the sale of Service Class Shares.
11. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by
Service Class pursuant to this Plan and any agreement related to this
Plan shall be limited in all cases to Service Class and its assets and
shall not constitute an obligation of any shareholder of the Trust or
of any other class of the Fund, series of the Trust or class of such
series.
12. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
