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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY CALIFORNIA MUNICIPAL
MONEY MARKET FUND
SPARTAN(registered trademark) CALIFORNIA MUNICIPAL MONEY MARKET FUND
FUNDS OF
FIDELITY CALIFORNIA MUNICIPAL TRUST II
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity California Municipal Money Market Fund and Spartan
California Municipal Money Market Fund (the funds), will be held at the
office of Fidelity California Municipal Trust II (the trust), 82 Devonshire
Street, Boston, Massachusetts 02109 on March 19, 1997, at 9:00 a.m. The
purpose of the Meeting is to consider and act upon the following proposals,
and to transact such other business as may properly come before the Meeting
or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Price Waterhouse LLP as independent
accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based voting rights for
shareholders of the trust.
4. To adopt a new fundamental investment policy for Fidelity California
Municipal Money Market Fund to permit the fund to invest all of its assets
in another open-end investment company with substantially the same
investment objective and policies.
5. To approve an amended management contract for Fidelity California
Municipal Money Market Fund.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
6. To amend the fundamental investment limitation concerning senior
securities for each of the funds.
7. To amend Fidelity California Municipal Money Market Fund's fundamental
investment limitation concerning borrowing.
8. To amend Fidelity California Municipal Money Market Fund's fundamental
investment limitation concerning the underwriting of securities.
The Board of Trustees has fixed the close of business on January 20, 1997
as the record date for the determination of the shareholders of each of the
funds entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
January 20, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET FUND
SPARTAN(registered trademark) CALIFORNIA MUNICIPAL MONEY MARKET FUND
TO BE HELD ON MARCH 19, 1997
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
California Municipal Trust II (the trust) to be used at the Special Meeting
of Shareholders of Fidelity California Municipal Money Market Fund and
Spartan California Municipal Money Market Fund (the funds) and at any
adjournments thereof (the Meeting), to be held on March 19, 1997 at 9:00
a.m. at 82 Devonshire Street, Boston, Massachusetts 02109, the principal
executive office of the trust and Fidelity Management & Research Company
(FMR), the funds' investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about January 20, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition,
__________________ may be paid __________ to solicit shareholders on behalf
of the funds at an anticipated cost of approximately $______ (Fidelity
California Fund), and $____ (Spartan California Fund), respectively.
Fidelity California Fund will pay its expenses in connection with preparing
this Proxy Statement and its enclosures and of all solicitations, and will
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares. FMR
will bear Spartan California Fund's expenses in connection with preparing
this Proxy Statement and its enclosures and of all solicitations, and will
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares. The
principal business address of Fidelity Distributors Corporation (FDC), the
funds' principal underwriter and distribution agent, is 82 Devonshire
Street, Boston, Massachusetts 02109. The principal business address of FMR
Texas, Inc. (FMR Texas), subadviser to the funds, is 400 East Las Colinas
Boulevard, Irving, Texas 75039.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, 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. Only proxies that are voted will be counted
towards establishing a quorum. Broker non-votes are not considered voted
for this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. D.F. King
& Co. may be paid on a per call basis for vote-by-phone solicitations on
behalf of the funds at an anticipated cost of approximately $_______
(Fidelity California Fund) and $______ (Spartan California Fund). Fidelity
California Fund will pay its expenses in connection with telephone voting.
FMR will bear Spartan California Fund's expenses in connection with
telephone voting. If the funds record votes by telephone, they will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with
their instructions, and to confirm that their instructions have been
properly recorded. Proxies voted by telephone may be revoked at any time
before they are voted in the same manner that proxies voted by mail may be
revoked.
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.
Shares of each fund of the trust issued and outstanding as of __________,
1996 are indicated in the following table:
Fidelity California Fund ____________
Spartan California Fund ____________
To the knowledge of the trust, [no shareholder owned of record or
beneficially more than 5% of the outstanding shares of any of the funds on
that date.] To the knowledge of the trust, no other shareholder owned of
record or beneficially more than 5% of the outstanding shares of the funds
on that date. Shareholders of record at the close of business on January
20, 1997 will be entitled to vote at the Meeting. Each such shareholder
will be entitled to one vote for each share held on that date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
FEBRUARY 29, 1996 AND THE SEMIANNUAL REPORT FOR THE FISCAL PERIOD ENDED
AUGUST 31, 1996 CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
BOTH THE TRUST AND OF EACH FUND OF THE TRUST. APPROVAL OF PROPOSALS 4
THROUGH 8 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" OF THE APPROPRIATE FUNDS. UNDER THE INVESTMENT COMPANY
ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR
MORE OF THE VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY
PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES
ARE PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING
VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS
PURPOSE.
The following tables summarize the proposals applicable to each fund.
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Proposal # Proposal Description Applicable Fund(s)
1. To elect as Trustees the Fidelity California Fund
11 nominees presented in Spartan California Fund
proposal 1.
2. To ratify the selection of Fidelity California Fund
Price Waterhouse LLP as Spartan California Fund
independent accountants
of the trust.
3. To amend the Trust Fidelity California Fund
Instrument to provide Spartan California Fund
voting rights based on a
shareholder's total dollar
investment in a fund,
rather than on the number
of shares owned.
4. To adopt a new Fidelity California Fund
fundamental investment
policy for the fund that
would permit it to invest
all of its assets in another
open-end investment
company managed by
FMR or an affiliate with
substantially the same
investment objective and
policies.
5. To approve an amended Fidelity California Fund
management contract for
the fund that would
reduce the management
fee payable to FMR by
the fund as FMR's assets
under management
increase.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
6. SENIOR SECURITIES: To Fidelity California Fund
amend the fund's Spartan California Fund
fundamental investment
limitations concerning the
issuance of senior
securities.
7. BORROWING: To amend Fidelity California Fund
the borrowing limitation to
require a reduction in
borrowing if borrowings
exceed the 33 1/3% limit
for any reason rather than
solely because of a
decline in net assets.
8. UNDERWRITING: To clarify Fidelity California Fund
the fundamental policy
with respect to
underwriting.
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1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the Trust.
Pursuant to the provisions of the Trust Instrument of Fidelity California
Municipal Trust II, the Trustees have determined that the number of
Trustees shall be fixed at eleven. It is intended that the enclosed proxy
card will be voted for the election as Trustees of the eleven nominees
listed below, unless such authority has been withheld in the proxy card.
Except for William O. McCoy, all nominees named below are currently
Trustees of Fidelity California Municipal Trust II and have served in that
capacity continuously since originally elected or appointed. Mr. Cox, Mrs.
Davis, and Mr. Mann, were selected by the trust's Nominating and
Administration Committee (see page ) and were appointed to the Board in
November 1991, December 1992, and October 1993, respectively. None of the
nominees is related to one another. Those nominees indicated by an asterisk
(*) are "interested persons" of the trust by virtue of, among other things,
their affiliation with either the trust, the funds' investment adviser
(FMR, or the Adviser), or the funds' distribution agent, FDC. The business
address of each nominee who is an "interested person" is 82 Devonshire
Street, Boston, Massachusetts 02109, and the business address of all other
nominees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts
02205-9235. Except for Peter S. Lynch and William O. McCoy, each of the
nominees is currently a Trustee or General Partner, as the case may be, of
____ other funds advised by FMR. Mr. Lynch is currently a Trustee or
General Partner, as the case may be, of __ other funds advised by FMR.
In the election of Trustees, those eleven nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
*J. Gary Burkhead Senior Vice President, is 1986
(55) President of FMR; and President
and a Director of FMR Texas
Inc., Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
Ralph F. Cox Management consultant (1994). 1991
(64) Prior to February 1994, he was
President of Greenhill Petroleum
Corporation (petroleum
exploration and production).
Until March 1990, Mr. Cox was
President and Chief Operating
Officer of Union Pacific
Resources Company
(exploration and production). He
is a Director of Sanifill
Corporation (non-hazardous
waste, 1993), CH2M Hill
Companies (engineering), Rio
Grande, Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition, he is
a member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
(65) September 1991, Mrs. Davis
was the Senior Vice President of
Corporate Affairs of Avon
Products, Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX Companies,
Inc. (retail stores), and
previously served as a Director
of Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition, she is a
member of the President's
Advisory Council of The
University of Vermont School of
Business Administration.
*Edward C. Johnson President, is Chairman, Chief 1968
3d Executive Officer and a Director
(66) of FMR Corp.; a Director and
Chairman of the Board and of
the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
(69) Mr. Jones was Chairman and
Chief Executive Officer of LTV
Steel Company. He is a Director
of TRW Inc. (original equipment
and replacement products),
Cleveland-Cliffs Inc (mining),
Consolidated Rail Corporation,
Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of
chemical products), and he
previously served as a Director
of NACCO Industries, Inc.
(mining and marketing,
1985-1995) and Hyster-Yale
Materials Handling, Inc.
(1985-1995). In addition, he
serves as a Trustee of First
Union Real Estate Investments,
a Trustee and member of the
Executive Committee of the
Cleveland Clinic Foundation, a
Trustee and member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
(64) at Columbia University Graduate
School of Business and a
financial consultant. From 1987
to January 1995, Mr. Kirk was a
Professor at Columbia University
Graduate School of Business.
Prior to 1987, he was Chairman
of the Financial Accounting
Standards Board. Mr. Kirk is a
Director of General Re
Corporation (reinsurance), and
he previously served as a
Director of Valuation Research
Corp. (appraisals and
valuations, 1993-1995). In
addition, he serves as Chairman
of the Board of Directors of the
National Arts Stabilization Fund,
Vice Chairman of the Board of
Trustees of the Greenwich
Hospital Association, a Member
of the Public Oversight Board of
the American Institute of
Certified Public Accountants'
SEC Practice Section (1995),
and as a Public Governor of the
National Association of
Securities Dealers, Inc. (1996).
*Peter S. Lynch Vice Chairman and Director of 1990
(54) FMR (1992). Prior to May 31,
1990, he was a Director of FMR
and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
He is a Director of W.R. Grace &
Co. (chemicals) and Morrison
Knudsen Corporation
(engineering and construction).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston.
William O. McCoy Vice President of Finance for the [1997]
(63) University of North Carolina
(16-school system, 1995). Prior to
his retirement in December 1994,
Mr. McCoy was Vice Chairman of
the Board of BellSouth
Corporation (telecommunications)
and President of BellSouth
Enterprises. He is currently a
Director of Liberty Corporation
(holding company), Weeks
Corporation of Atlanta (real
estate, 1994), and Carolina
Power and Light Company
(electric utility, 1996). Previously,
he was a Director of First
American Corporation (bank
holding company, 1979-1996). In
addition, Mr. McCoy serves as a
member of the Board of Visitors
for the University of North
Carolina at Chapel Hill (1994) and
for the Kenan Flager Business
School (University of North
Carolina at Chapel Hill).
Gerald C. McDonough Chairman of G.M. Management 1989
(68) Group (strategic advisory
services). Prior to his retirement
in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems, and
metal products, 1992), CUNO,
Inc. (liquid and gas filtration
products, 1996), and Associated
Estates Realty Corporation (a
real estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products) from
1987-1996.
Marvin L. Mann Chairman of the Board, 1993
(63) President, and Chief Executive
Officer of Lexmark International,
Inc. (office machines, 1991).
Prior to 1991, he held the
positions of Vice President of
International Business Machines
Corporation ("IBM") and
President and General Manager
of various IBM divisions and
subsidiaries. Mr. Mann is a
Director of M.A. Hanna
Company (chemicals, 1993) and
Infomart (marketing services,
1991), a Trammell Crow Co. In
addition, he serves as the
Campaign Vice Chairman of the
Tri-State United Way (1993) and
is a member of the University of
Alabama President's Cabinet.
Thomas R. Williams President of The Wales Group, 1989
(68) Inc. (management and financial
advisory services). Prior to
retiring in 1987, Mr. Williams
served as Chairman of the
Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
_______________
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
As of __________, the nominees and officers of the trust owned, in the
aggregate, less than __% of each fund's outstanding shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
eight non-interested Trustees, met eleven times during the twelve months
ended February 29, 1996. It is expected that the Trustees will meet at
least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets
four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, __________ (Chairman, __________, and __________ are
members of the Committee. This Committee overseas and monitors the
financial reporting process, including recommending to the Board the
independent accountants to be selected for the trust (see Proposal 2),
reviewing internal controls and the auditing function (both internal and
external), reviewing the qualifications of key personnel performing audit
work, and overseeing compliance procedures. During the twelve months ended
February 29, 1996, the Committee held _____ meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. McDonough and Williams. The Committee members confer
periodically and hold meetings as required. The Committee is charged with
the duties of reviewing the composition and compensation of the Board of
Trustees, proposing additional non-interested Trustees, monitoring the
performance of legal counsel employed by the funds and the non-interested
Trustees, and acting as the administrative committee under the Retirement
Plan for non-interested Trustees. During the twelve months ended February
29, 1996, the Committee held five meetings. The Nominating and
Administration Committee will consider nominees recommended by
shareholders. Recommendations should be submitted to the Committee in care
of the Secretary of the Trust. The trust does not have a compensation
committee; such matters are considered by the Nominating and Administration
Committee.
COMPENSATION TABLE
Aggregate Compensation from each
Fund#
Trustees Fidelity California Spartan
Fund California
Fund
J. Gary Burkhead** $ $
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d**
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch**
Gerald C. McDonough
Edward H. Malone
Marvin L. Mann
Thomas R. Williams
William O. McCoy
# Information is [for the fiscal year ended February 29, 1996]\[estimated
for the fiscal year ending February 28, 1997].
Trustees Pension or Estimated Total
Retirement Annual Benefits Compensatio
Benefits Upon n
Accrued as Part Retirement from from the
of the Fund Fund
Fund Expenses Complex* Complex*
from
the Fund
Complex*
J. Gary $ 0 $ 0 $ 0
Burkhead**
Ralph F. Cox 5,200 52,000 128,000
Phyllis Burke 5,200 52,000 125,000
Davis
Richard J. Flynn 0 52,000 160,500
Edward C. 0 0 0
Johnson 3d**
E. Bradley Jones 5,200 49,400 128,000
Donald J. Kirk 5,200 52,000 129,500
Peter S. Lynch** 0 0 0
Gerald C. 5,200 52,000 128,000
McDonough
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 128,000
Thomas R. 5,200 52,000 125,000
Williams
William O. McCoy N/A N/A
* Information is as of December 31, 1995 for 219 funds in the complex.
** Interested trustees of the funds are compensated by FMR.
*** For the fiscal year ended ________, 1996, certain of the non-interested
trustees' aggregate compensation from a fund includes accrued deferred
compensation as follows: [trustee name, dollar amount of deferred
compensation, fund name]; [trustee name, dollar amount of deferred
compensation, fund name]; and, [trustee name, dollar amount of deferred
compensation, fund name].
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a Fidelity
fund during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee becomes eligible to participate in
the program at the end of the calendar year in which he or she reaches age
72, provided that, at the time of retirement, he or she has served as a
Fidelity fund Trustee for at least five years. Currently, Messrs. Ralph S.
Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all
former non-interested Trustees, receive retirement benefits under the
program.
2. TO RATIFY THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees' the firm of Price Waterhouse LLP
has been selected as independent accountants for the trust to sign or
certify any financial statements of the trust required by any law or
regulation to be certified by an independent accountant and filed with the
Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition,
as required by the 1940 Act, the vote of the Trustees is subject to the
right of the trust, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Price Waterhouse LLP has
advised the trust that it has no direct or material indirect ownership
interest in the trust.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of the trust's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including non-audit
services) and whether the performance of such services would affect the
accountants' independence. Representatives of Price Waterhouse LLP are not
expected to be present at the Meeting, but have been given the opportunity
to make a statement if they so desire and will be available should any
matter arise requiring their presence.
3. TO AMEND THE TRUST INSTRUMENT TO PROVIDE DOLLAR-BASED VOTING RIGHTS FOR
SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve a proposal to amend Article VII, Section 7.01 of the
Trust Instrument. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Fidelity California Fund and Spartan California Fund are funds
of Fidelity California Municipal Trust II, an open-end management
investment company organized as a Delaware business trust. Currently, there
are two funds in the trust. Shareholders of each fund vote separately on
matters concerning only that fund and vote on a trust-wide basis on matters
that effect the trust as a whole, such as electing trustees or amending the
Trust Instrument. Currently, under the Trust Instrument, each share is
entitled to one vote, regardless of the relative value of the shares of
each fund in the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights to all shareholders as required by the 1940 Act. In
the case where a trust has several series or funds, such as Fidelity
California Municipal Trust II, voting rights may have become
disproportionate since the net asset value per share (NAV) of the separate
funds generally diverge over time. The Staff of the Securities and Exchange
Commission (SEC) has issued a "no-action" letter permitting a trust to seek
shareholder approval of a dollar-based voting system. The proposed
amendment will comply with the conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of each
shareholder would be commensurate with the value of the shareholder's
dollar investment rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. Currently, since there are only money
market funds in the trust, the proposal will not affect the voting rights
of fund shareholders on votes requiring trust-wide participation since
money market funds are managed to maintain a $1.00 NAV. However, if
additional funds with fluctuating NAVs are added to the trust, relative
voting rights would be changed under the proposal. To illustrate the
potentially disproportionate calculation of voting power currently in
place, the table below shows a hypothetical example of a trust with funds
with fluctuating NAVs.
Fund Net Asset Value $1,000
investment in
terms of
number of shares
A $ 10.00 100.000
B $ 7.57 132.100
C $ 10.93 91.491
D $ 1.00 1,000.000
For example, Fund D shareholders would have ten times the voting power of
Fund A shareholders, because a $1,000 investment in Fund D would buy ten
times as many shares as a $1,000 investment in Fund A. Accordingly, a
one-share, one-vote system may provide certain shareholders with a
disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares. Their voting power would be
proportionate to their economic interest, which FMR believes is a more
equitable result, and which is the result with respect to a typical
corporation where each voting share generally has an equal market price.
On matters requiring trust-wide votes where all funds are required to
vote, shareholders who own shares with a lower NAV than other funds in the
trust would be giving other shareholders in the trust more voting "power"
than they currently have. On matters affecting only one fund, only
shareholders of that fund vote on the issue. In this instance, under both
the current Trust Instrument and an amended Trust Instrument, all
shareholders of the fund would have the same voting rights, since the NAV
is the same for all shares in a single fund.
AMENDMENT TO THE TRUST INSTRUMENT. Article VII, Section 7.01 sets forth
the method of calculating voting rights for all shareholder votes for the
trust. If approved, Article VII, Section 7.01 will be amended as follows
(material to be added is underlined and material to be deleted is
[bracketed]):
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 7.01 The Shareholders shall have power to vote . . . On any matter
submitted to a vote of the Shareholders, all Shares shall be voted
separately by individual Series, except (i) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series; and
(ii) when the Trustees have determined that the matter affects the
interests of one or more [than one] Series, then the Shareholders of all
such Series shall be entitled to vote thereon. The Trustees may also
determine that a matter affects only the interests of one or more classes
of a Series, in which case any such matters shall be voted on by such class
or classes. [Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote.] A Shareholder of each Series
shall be entitled to one vote for each dollar of net asset value (number of
shares owned times net asset value per share) of such Series, on any matter
on which such Shareholder is entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. There shall be
no cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy, or in any manner provided for in the Bylaws. A proxy
may be given in writing. The Bylaws may provide that proxies may also, or
may instead, be given by any electronic or telecommunications device or in
any other manner. Notwithstanding anything else herein or in the Bylaws, in
the event a proposal by anyone other than the officers or Trustees of the
Trust is submitted to a vote of the Shareholders of one or more Series or
of the Trust, or in the event of any proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees of the
Trust, Shares may be voted only in person or by written proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may
take any action required or permitted by law, this Trust Instrument or any
[of the] Bylaws of the Trust to be taken by Shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Trust Instrument will
become effective immediately. If the proposal is not approved by the
shareholders of trust, the Trust Instrument will remain unchanged.
4. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR FIDELITY CALIFORNIA
FUND PERMITTING THE FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END
INVESTMENT COMPANY WITH SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND
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 managed by FMR or its affiliates or successor with
substantially the same investment objective and policies ("Master Feeder
Fund Structure"). The purpose of the Master Feeder Fund Structure 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 "master" fund. In order to implement a
Master Feeder Fund Structure, the adoption of a new fundamental investment
policy is proposed. This proposal would add a fundamental policy for the
fund that permits a Master Feeder 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 Master Fund,
without a further vote of shareholders. The Trustees will authorize such an
investment only if they determine that action to be in the best interests
of the fund and its shareholders and if, upon advice of counsel, they
determine that the investment will not have material adverse consequences
to the fund. Approval of Proposal 4 provides the Trustees with explicit
authority to approve a Master Feeder Fund Structure. 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 not apply to permit the investment in a Master
Fund managed by FMR or its affiliates or successor. These policies include
the fund's limitations on investing more than 25% of total assets in 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 Master
Feeder 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 Master 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 Master Fund, it would hold only a single
investment security, and the Master Fund would directly invest in
individual securities pursuant to its investment objective. The Master Fund
would be managed by FMR or an affiliate, such as FMR Texas, Inc. in the
case of a money market fund. The Trustees would retain the right to
withdraw the fund's investments from a Master Fund at any time and would do
so if the Master 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 Feeder Fund is asked
to vote at a shareholder meeting of the Master Fund, the Feeder Fund will
hold a meeting of its shareholders if required by applicable law or the
Feeder Fund's policies to vote on the matters to be considered at the
Master Fund shareholder meeting. The fund will cast its votes at the Master
Fund meeting in the same proportion as the fund's shareholders voted at
their meeting.
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 Master 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 Master 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 Master Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR may benefit from the use of a Master Feeder Fund Structure if overall
assets under management 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 Master 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 Master
Feeder Fund Structure is implemented.
PROPOSED FUNDAMENTAL POLICY. To allow the fund to invest in a Master 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 has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the fundamental limitation will
become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current fundamental investment
policies will remain unchanged with respect to potential investment in
Master Funds.
5. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY CALIFORNIA FUND.
The Trustees recommend that the shareholders of the fund approve an
amendment to the fund's management contract with Fidelity Management &
Research Company (FMR) (the Amended Contract). The Amended Contract
modifies the management fee that FMR receives from the fund to provide for
lower fees when FMR's assets under management exceed certain levels. The
Amended Contract also includes a discussion of FMR's ability to use brokers
and dealers to execute portfolio transactions. THE AMENDED CONTRACT WILL
RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER THAN, THE FEE
PAYABLE UNDER THE PRESENT MANAGEMENT CONTRACT (THE PRESENT CONTRACT). (For
information on FMR, see the section entitled "Activities and Management of
FMR" on page .)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is supplied
as Exhibit 1 on page . Except for the modifications discussed above, it is
substantially identical to the Present Contract. (For a detailed discussion
of the fund's Present Contract, refer to the section entitled "Present
Management Contract" beginning on page .) If approved by shareholders, the
Amended Contract will take effect on March 19, 1997 (or, if later, the
first day of the first month following approval) and will remain in effect
through May 31, 1997 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of those Trustees who are not
"interested persons" of the trust or FMR (the Independent Trustees) and
(ii) the vote of either a majority of the Trustees or by the vote of a
majority of the outstanding shares of the fund. If the Amended Contract is
not approved, the Present Contract will continue in effect through May 31,
1997, and thereafter only as long as its continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of the Independent Trustees and (ii) the vote of
either a majority of the Trustees or by the vote of a majority of the
outstanding shares of the fund.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate, which
varies according to assets under management by FMR, and a fixed Individual
Fund Fee Rate. The Amended Contract modifies the Group Fee Rate by
providing for lower fee rates if FMR's assets under management remain above
$120 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon the
monthly average of the aggregate net assets of all registered investment
companies having management contracts with FMR (assets under management by
FMR). For example, as assets under management by FMR increase, the Group
Fee Rate declines. The Amended Contract would not change the group fee
calculation for assets under management by FMR of $120 billion or less.
Above $120 billion in assets under FMR's management, the Group Fee Rate
declines under the Amended Contact, but not under the Present Contract.
However, Group Fee Rates that are lower than those contained in the fund's
Present Contract have been voluntarily implemented by FMR on January 1,
1992, November 1, 1993, August 1, 1994, and January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds twelve new fee breakpoints for
assets under FMR's management above $120 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used to
calculate the management fee, see the section entitled "Present Management
Contract" beginning on page .)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Average Group Average Group
Assets Present Assets Amended
($ billions) Contract* ($ billions) Contract
Over 84 .1500% 84-120 .1500%
120-156 .1450%
156-192 .1400%
192-228 .1350%
228-264 .1300%
264-300 .1275%
300-336 .1250%
336-372 .1225%
372-408 .1200%
408-444 .1175%
444-480 .1150%
480-516 .1125%
Over 516 .1100%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Present Amended
Assets Contract* Contract
($ billions)
150 % .----%
200 % .----%
250 % .1587%
300 % .1536%
350 % .1494%
400 % .1459%
450 % .1427%
500 % .1399%
550 % .1372%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
Assets under FMR's management for ____________________ 199_ were
approximately $___ billion.
COMPARISON OF MANAGEMENT FEES. For _______________________ 199_, average
assets under management by FMR were $___ billion. The fund's management fee
rate under the Amended Contract would have been __%, compared to __% under
the Present Contract. The management fee rate will remain the same under
both the Present Contract and the Amended Contract until assets under FMR's
management exceed $___ billion, at which point the management fee rate
under the Amended Contract begins to decline relative to the Present
Contract. The following chart compares the fund's management fee under the
terms of the Present Contract for the period ended ______________, 1996 to
the management fee the fund would have incurred if the Amended Contract had
been in effect.
Present Contract Amended Contract
Management Management Percentage
Fee* Fee Difference
$ $ %
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
TRANSACTIONS WITH BROKERS-DEALERS. The fund may execute portfolio
transactions with broker-dealers who provide research and execution
services to the fund or other accounts over which FMR or its affiliates
exercise investment discretion. The selection of such broker-dealers is
generally made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff based upon the quality of research
and execution services provided. If FMR grants investment management
authority to a sub-adviser pursuant to a Sub-advisory Agreement, the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund and to its other clients, and conversely, such
research provided by broker-dealers who execute transaction orders on
behalf of other FMR clients may be useful to FMR in carrying out its
obligations to the fund. The receipt of such research has not reduced FMR's
normal independent research activities; however, it enables FMR to avoid
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
The fund has already been authorized by the Board of Trustees, consistent
with the federal securities laws and the rules and regulations of the
Securities and Exchange Commission, to place portfolio transactions through
broker-dealers who are affiliated with FMR and through broker-dealers who
provide research. The Amended Contract expressly recognizes this authority.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of the fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contract was approved by the Board of Trustees of the fund,
including all of the Independent Trustees on October 9, 1996. The Board of
Trustees considered and approved the modifications to the Group Fee Rate
schedule during the two-month periods from November to December 1995, June
to July 1994, September to October 1993, and November to December 1991. The
Board of Trustees considered and approved the modification describing
portfolio transactions during the two-month period from
________________________. The Board of Trustees received materials relating
to the Amended Contract in advance of the meeting at which the Amended
Contract was considered, and had the opportunity to ask questions and
request further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating to the
Amended Contract. These materials include: (i) information on the
investment performance of the fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption data
in respect of the fund, (iii) the economic outlook and the general
investment outlook in the markets in which the fund invests, and (iv)
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) the procedures employed to determine
the value of the fund's assets, (4) the allocation of the fund's brokerage,
if any, including allocations to brokers affiliated with FMR, (5) FMR's
management of the relationships with the fund's custodian and
subcustodians, and (6) the resources devoted to and the record of
compliance with the fund's investment policies and restrictions and with
policies on personal securities transactions.
In response to questions raised by the Independent Trustees, additional
information was furnished by FMR including, among other items, information
on and analysis of (a) the overall organization of FMR, (b) the choice of
performance indices and benchmarks, (c) the composition of peer groups of
funds, (d) transfer agency and bookkeeping fees paid to affiliates of FMR,
(e) investment performance, (f) investment management staffing, (g) the
potential for achieving further economies of scale, (h) operating expenses
paid to third parties, and (i) the information furnished to investors,
including the fund's shareholders.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contract include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly the fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of the fund's
portfolio manager, and the fund's investment objective and discipline. The
Independent Trustees have also had discussions with senior management of
FMR responsible for investment operations, and the senior management of
Fidelity's money market group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Amended Contract and under separate agreements
covering transfer agency functions and pricing, bookkeeping and securities
lending services, if any. The Board of Trustees and the Independent
Trustees have also considered the nature and extent of FMR's supervision of
third party service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered
the fund's expense ratio and expense ratios of a peer group of funds. They
also considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of the fund and whether the amount of profit is a fair
entrepreneurial profit for the management of the fund. They also considered
the profits realized from non-fund businesses which may benefit from or be
related to the fund's business. The Board of Trustees and the Independent
Trustees also considered FMR's profit margins in comparison with available
industry data, both accounting for and ignoring market expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including the
fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structure should
be continued but determined that it would be appropriate to change the
group fee structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by the fund and the
fund's shareholders for services provided by FMR and its affiliates,
including fees for services like transfer agency, fund accounting and
direct shareholder services. They also considered the allocation of fund
brokerage to brokers affiliated with FMR and the receipt of sales loads and
payments under Rule 12b-1 plans in respect of certain of the Fidelity
funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
With regard to the section of the proposed contract describing the changes
to portfolio transactions, the Trustees considered the value of research
provided by the broker-dealers, the quality of the execution services
provided, and the level of commissions paid. While the fund does not
generally purchase securities through a broker-dealer by paying
commissions, the Board of Trustees determined that amending the management
contract to expressly recognize the authority of FMR to use affiliated
broker-dealers and broker-dealers who provide research services furthers
the goal of standardizing management contracts for Fidelity funds, and that
explicitly permitting all Fidelity funds to utilize certain broker-dealers
is beneficial to the fund.
CONCLUSION. In considering the Amended Contract, the Board of Trustees and
the Independent Trustees did not identify any single factor as
all-important or controlling, and the foregoing summary does not detail all
of the matters considered. Based on their evaluation of all material
factors and assisted by the advice of independent counsel, the Trustees
concluded (i) that the existing management fee structure is fair and
reasonable and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule and the
addition of the discussion of FMR's ability to use brokers and dealers to
execute portfolio transactions, are in the best interest of the fund's
shareholders. The Board of Trustees, including the Independent Trustees,
voted to approve the submission of the Amended Contract to shareholders of
the fund and recommends that shareholders of the fund vote FOR the Amended
Contract.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 6 through 8 is to revise several of the
funds' investment limitations to conform to limitations which are standard
for similar types of funds managed by FMR. The Board of Trustees asked FMR
to analyze the various fundamental and non-fundamental investment
limitations of the Fidelity funds, and, where practical and appropriate to
a fund's investment objective and policies, propose to shareholders
adoption of standard fundamental limitations and elimination of certain
other fundamental limitations. Generally, when fundamental limitations are
eliminated, Fidelity's standard non-fundamental limitations replace them.
By making these limitations non-fundamental, the Board of Trustees may
amend a limitation as they deem appropriate, without seeking shareholder
approval. The Board of Trustees would amend the limitations to respond, for
instance, to developments in the marketplace, or changes in federal or
state law. The costs of shareholder meetings called for these purposes are
generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect the
way a fund is currently managed. However, FMR is presenting them to you for
your approval because FMR believes that increased standardization will help
to promote operational efficiencies and facilitate monitoring of compliance
with fundamental and non-fundamental investment limitations. Although
adoption of a new or revised limitation is not likely to have any impact on
the current investment techniques employed by a fund, it will contribute to
the overall objectives of standardization.
6. TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE
ISSUANCE OF SENIOR SECURITIES.
Fidelity California Fund's current fundamental investment limitation
regarding the issuance of senior securities states:
"The fund may not issue senior securities."
Spartan California 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 Fidelity California Municipal Trust II may issue additional
series of shares in accordance with its Declaration of Trust."
The Trustees recommend that shareholders vote to replace these limitations
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 primary purpose of the proposal is to revise each fund's fundamental
senior securities limitation to conform to a limitation that is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) If the proposal is
approved, the new fundamental senior securities limitation cannot be
changed without the approval of shareholders.
Adoption of the proposed limitation on senior securities is not expected
to affect the way in which each fund is managed, the investment performance
of each fund, or the securities or instruments in which each fund invests.
However, the proposed limitation clarifies that each fund may issue senior
securities to the extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings
that takes precedence over the claims of the fund's shareholders. The 1940
Act generally prohibits mutual funds from issuing senior securities;
however, mutual funds are permitted to engage in certain types of
transactions that might be considered "senior securities" as long as
certain conditions are satisfied. For example, a transaction which
obligates a fund to pay money at a future date (e.g., the purchase of
securities for settlement on a date that is further away than the normal
settlement period) may be considered a "senior security." A mutual fund,
however, is permitted to enter into this type of transaction if it
maintains a segregated account containing liquid securities in an amount
equal to its obligation to pay cash for the securities at a future date.
Each fund utilizes transactions that may be considered "senior securities"
only in accordance with applicable regulatory requirements under the 1940
Act.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit each fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of a fund, that fund's current limitation will remain
unchanged.
7. TO AMEND FIDELITY CALIFORNIA 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 to exceed 33 1/3% of the value of its total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that came to exceed 33 1/3% of the fund's total assets by reason
of a decline in net assets will be reduced within 3 business days to the
extent necessary to comply with the 33 1/3% limitation."
The Trustees recommend that shareholders of the fund vote to replace the
fund's fund's current fundamental investment limitation with the following
amended fundamental investment limitation governing borrowing:
"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 its 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 revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page .) If the proposal is approved, the amended
fundamental borrowing limitation cannot be changed without the approval of
shareholders.
Adoption of the proposed fundamental limitation concerning borrowing is
not expected to affect the way in which the fund is managed, the investment
performance of the the fund, or the securities or instruments in which the
the fund invests. However, the proposed fundamental limitation would
clarify two points. First, under the proposed limitation, the fund must
reduce borrowings that come to exceed 33 1/3% of its total assets for any
reason. While under the current limitation, the fund must reduce borrowings
that come to exceed 33 1/3% of total assets only when there is a decline in
net assets. Second, the proposed limitation differs from that of the fund's
current limitation because it specifically defines "three days" to exclude
Sundays and holidays, while the funds' current limitation simply states
"three business days".
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
8. TO AMEND FIDELITY CALIFORNIA FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING UNDERWRITING.
The fund's current fundamental investment limitation concerning
underwriting states:
"The fund may not underwrite any issue of securities, except to the extent
that the purchase of municipal bonds in accordance with the fund's
investment objective policies, and limitations, either directly from the
issuer, or from an underwriter for an issuer, may be deemed to be
underwriting."
The trustees recommend that shareholders of the fund vote to replace this
limitation with the following fundamental limitation governing
underwriting:
"The fund may not underwrite securities issued by others, except to the
extent that the fund may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of restricted securities."
The primary purpose of the proposed amendment is to clarify the fund's
fundamental policy with respect to underwriting. The proposal also serves
to conform the fund's fundamental investment limitation concerning
underwriting to a limitation which is expected to become standard for all
funds managed by FMR. (See "Adoption of Standardized Investment
Limitations" on page .) If the proposal is approved, the new limitation may
not be changed without the approval of shareholders.
The proposed limitation would also broaden the exception within the
current limitation by eliminating the specific reference to municipal
bonds. However, since the fund, pursuant to its investment objective, seeks
to provide investors with a yield exempt from federal income tax, FMR
regards it as unlikely under present federal tax laws that the fund will
use the broader authority to purchase any securities other than municipal
securities and certain derivatives thereof. Nevertheless, by eliminating
the reference to municipal bonds, the revised limitation would eliminate
any suggestion that the exemption does not apply to notes or other
instruments.
Adoption of the proposed limitation concerning underwriting is not
expected to affect the way in which the fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of the fund, the fund's current limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to Fidelity California Fund and advised by FMR is contained in the Table of
Average Net Assets and Expense Ratios in Exhibit 2 beginning on page __.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks for certain of the funds advised by FMR. Those
transactions that have occurred to date have included mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Arthur S. Loring, Thomas D. Maher, Kenneth A. Rathgeber,
Leonard M. Rush, Thomas J. Simpson, Sarah H. Zenoble, and Deborah F. Watson
are currently officers of the trust and officers or employees of FMR or FMR
Corp. With the exception of Mr. Costello, Mr. Maher, Mr. Rathgeber, Mr.
Rush, Mr. Simpson, Ms. Zenoble and Deborah F. Watson, all of these persons
are stockholders of FMR Corp. The principal business address of each of the
Directors of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period __________, 199_ through ______, 199__, the following
transactions were entered into by Trustees and nominees as Trustee of the
trust involving more than 1% of the voting common, non-voting common and
equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF 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 Fidelity California Fund 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 in Exhibit 2 beginning 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
trust and of other funds advised by FMR; Chairman, Chief Executive Officer,
President, and a Director of FMR Corp.; Chairman of the Board and of the
Executive Committee of FMR; a Director of FMR; and Chairman and Director of
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 trust and of other funds advised by FMR; a Director of
FMR Corp.; President and Director of FMR; and President and Director of FMR
U.K. and FMR Far East. Each of the Directors is a stockholder of FMR Corp.
The principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACT
OF FIDELITY CALIFORNIA FUND
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,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the fund. These services include providing
facilities for maintaining the fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees. Services provided by affiliates of FMR will continue under
the proposed management contract as described in Proposal 5.
In addition to the management fee payable to FMR, the fund reimburses UMB
Bank, n.a. (UMB) for its services as the fund's custodian and transfer
agent. Although the fund's current management contract provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to shareholders,
the trust, on behalf of the fund has entered into a revised transfer agent
agreement with UMB, pursuant to which UMB bears the costs of providing
these services to existing shareholders. Other expenses paid by the fund
include interest, taxes, brokerage commissions, and the fund's
proportionate share of insurance premiums and Investment Company Institute
dues. The fund is also liable for such non-recurring expenses as may arise,
including costs of any litigation to which the fund may be a party, and any
obligation it may have to indemnify the trust's officers and Trustees with
respect to litigation.
UMB has entered into a sub-contract with Fidelity Service Co. (FSC), an
affiliate of FMR, under the terms of which FSC performs the processing
activities associated with providing transfer agent and shareholder
servicing functions for the fund. Under the sub-contract, FSC bears the
expense of typesetting, printing, and mailing prospectuses, statements of
additional information, and all other reports, notices, and statements to
shareholders, except proxy statements. FSC also pays all out-of-pocket
expenses associated with transfer agent services. Transfer agent fees and
pricing and bookkeeping fees, including reimbursement for out-of-pocket
expenses, paid to FSC by UMB on behalf of the fund for the fiscal year
ended _______, 199_ were $____.
The fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the fund, which are continuously offered
at net asset value per share. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
FMR is the fund's manager pursuant to a management contract dated December
30, 1991, which was approved by California Municipal Trust, then sole
shareholder of the fund on December 30, 1991, pursuant to an Agreement and
Plan of Conversion approved by public shareholders of the fund on October
23, 1991. The terms of the fund's current contract with FMR duplicate those
of its previous contract, which was dated November 1, 1989.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management contracts
and is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $___ billion of group net assets
- - the approximate level for February 1996 - was ___%, which is the weighted
average of the respective fee rates for each level of group net assets up
to $__ billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Fee Rate Net Annual
Assets Assets Fee Rate
$0 - 3 billion .3700% $ 0.5 .3700%
billion
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Under the fund's current management contract with FMR, the group fee rate
is based on a schedule with breakpoints ending at .1500% for average group
assets in excess of $84 billion. The group fee rate breakpoints shown above
for average group assets in excess of $120 billion and under $228 billion
were voluntarily adopted by FMR on January 1, 1992. The additional
breakpoints shown above for average group assets in excess of $228 billion
were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $156 billion and under $372 billion as shown in the schedule
below, pending shareholder approval of a new management contract reflecting
the revised schedule. The revised group fee rate schedule provides for
lower management fees as FMR's assets under management increase. The
revised group fee rate schedule was identical to the above schedule for
average group assets under $156 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $372 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $156
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
120 - $156 .145% $150 billion .173%
billion
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The individual fund fee rate is .25%. Based on the average group net
assets of the funds advised by FMR for February 1996, the annual management
fee rate would be calculated as follows:
Group Fee Rate Individual Fund Management Fee
Fee Rate Rate
.____% + .25% = .____%
One-twelfth of this annual management fee rate is applied to the fund's
net assets averaged for the month, giving a dollar amount, which is the fee
for that month.
During fiscal 1996, FMR received $_______ for its services as investment
adviser to the fund. This fee was equivalent to __% of the average net
assets of the fund.
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
On behalf of Fidelity California Fund, FMR has entered into a sub-advisory
agreement with FMR Texas Inc. (FMR Texas) pursuant to which FMR Texas has
primary responsibility for providing portfolio investment management
services to the fund. Fidelity California Fund's sub-advisory agreement,
dated December 30, 1991, was approved by California Municipal Trust as sole
shareholder of the fund on December 30, 1991 pursuant to an Agreement and
Plan of Conversion approved by shareholders of the fund on October 23,
1991. The terms of the fund's current sub-advisory agreement with FMR Texas
duplicate those of its previous sub-advisory agreement, which was dated
_______________.
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 the fiscal year ended February 29, 1996, FMR paid FMR Texas fees of
$1,462,591.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the fund's
management contract.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI), a subsidiary of FMR Corp., if the commissions are fair, reasonable,
and comparable to commissions charged by non-affiliated, qualified
brokerage firms for similar services.
During fiscal 1996 the funds paid no brokerage commissions to affiliated
brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of __________________, whether other
persons are beneficial owners of shares for which proxies are being
solicited and, if so, the number of copies of the Proxy Statement and
Annual Reports you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
EXHIBIT
[TABLE WILL BE UPDATED IN A SUBSEQUENT FILING]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET RATIO OF
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES EXPENSES TO
(MILLIONS)(B) TO AVERAGE AVERAGE NET
NET ASSETS ASSETS (C)
PAID
TO FMR (C)
<S> <C> <C> <C> <C> <C> <C>
TAX-EXEMPT INCOME
California Tax-Free:
High Yield 2/28/94 $ 588.0 0.41% 0.57%
Insured 2/28/94 299.5 0.29* 0.48*
Money Market ((yen)) 2/28/94 540.0 0.41 0.64
Spartan Arizona:
Municipal Income 2/28/95** 4.2 -* -*
Money Market ((yen)) 2/28/95** 12.0 -* -*
Spartan California
Municipal:
High Yield 2/28/94 598.5 0.52* 0.52*
Intermediate 2/28/94** 7.7 -* -*
Money Market ((yen)) 2/28/94 944.0 0.21* 0.21*
Institutional Tax-Exempt 5/31/94 2,549.9 0.14* 0.18*
Cash ((yen))
Daily Money Fund:
Capital Reserves:
Municipal Money 7/31/94 132.6 0.44* 0.98*
Market ((yen))
Spartan Aggressive 8/31/94 40.6 0.60 0.60
Municipal
Spartan Intermediate 8/31/94 265.6 0.20* 0.20*
Municipal
Spartan Maryland 8/31/94 39.2 0.03* 0.03*
Municipal Income
Spartan Municipal 8/31/94 792.2 0.55 0.55
Income
Spartan Municipal Money 8/31/94 2,123.9 0.33* 0.33*
Market ((yen))
Spartan Short- 8/31/94 1,110.3 0.47* 0.47*
Intermediate Municipal
Advisor High Income
Municipal:
Class A 10/31/94 549.7 0.41 0.89
Class B 10/31/94 3.8 0.41 2.09
Daily Tax-Exempt Money 10/31/94 518.4 0.48* 0.65*
((yen))
Spartan New Jersey 10/31/94 $ 364.5 0.28*% 0.28*%
Municipal Money
Market ((yen))
Tax-Exempt Money 10/31/94 3,388.7 0.31 0.52*
Market Trust ((yen))
Advisor Limited Term
Tax-Exempt:
Class A 11/30/94 55.4 0.41 0.90*
Class B 11/30/94** 0.9 0.41 1.65(dagger)*
Institutional Class 11/30/94 14.1 0.41 0.65*
Advisor 11/30/94** 10.7 -* 0.75(dagger)*
Short-Intermediate Tax
Exempt
Connecticut Municipal 11/30/94 309.7 0.41 0.60
Money Market ((yen))
High Yield Tax-Free 11/30/94 2,161.9 0.41 0.56
New Jersey Tax-Free 11/30/94 393.7 0.41 0.62
Money Market ((yen))
Spartan Connecticut
Municipal:
High Yield 11/30/94 395.5 0.55 0.55
Money Market ((yen)) 11/30/94 160.9 0.50 0.50
Spartan Florida 11/30/94 403.1 0.54* 0.54*
Municipal: Income
Money Market ((yen)) 11/30/94 364.1 0.46* 0.46*
Spartan New Jersey 11/30/94 381.1 0.55 0.55
Municipal High Yield
Aggressive Tax-Free 12/31/94 880.7 0.46 0.63
Insured Tax-Free 12/31/94 388.6 0.41 0.58
Limited Term Municipals 12/31/94 1,024.2 0.40 0.56
Michigan Tax-Free:
High Yield 12/31/94 506.4 0.41 0.57
Money Market ((yen)) 12/31/94 197.0 0.41 0.61
Minnesota Tax-Free 12/31/94 312.4 0.41 0.59
Municipal Bond 12/31/94 1,126.0 0.41 0.53
Ohio Tax-Free:
High Yield 12/31/94 401.9 0.41 0.57
Money Market ((yen)) 12/31/94 284.8 0.41 0.57
Spartan Pennsylvania
Municipal:
High Yield 12/31/94 $ 274.4 0.55% 0.55%
Money Market ((yen)) 12/31/94 228.4 0.50 0.50
Massachusetts Tax-Free: 1/31/95 1,144.3 0.41 0.54
High Yield
Money Market ((yen)) 1/31/95 677.7 0.41 0.63
New York Tax-Free:
High Yield 1/31/95 420.7 0.41 0.58
Insured 1/31/95 345.9 0.41 0.58
Money Market ((yen)) 1/31/95 678.1 0.41 0.60
Spartan Massachusetts 1/31/95 376.1 0.50 0.50
Municipal Money
Market ((yen))
Spartan New York
Municipal:
High Yield 1/31/95 352.1 0.55 0.55
Intermediate 1/31/95 28.5 0.04* 0.04*
Money Market ((yen)) 1/31/95 529.0 0.50 0.50
</TABLE>
(a) All data are as of the fiscal year end noted in the chart or as of
January 31,1995, if fiscal year end figures are not yet available.
(b) Average net assets are computed on the basis of average net assets of
each fund or class at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(dagger) Annualized
** Less than a complete fiscal year
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to the fund.
LG913180012 CUSIP #316061100/FUND #097
EXHIBIT
UNDERLINED DISCLOSURE WILL BE ADDED;
BRACKETED DISCLOSURE WILL BE DELETED
FORM OF MANAGEMENT CONTRACT
BETWEEN
FIDELITY CALIFORNIA MUNICIPAL TRUST II:
FIDELITY CALIFORNIA [TAX-FREE] MUNICIPAL MONEY MARKET
[PORTFOLIO] FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT [made] AMENDED and RESTATED as of this [30th] day of [December]
[1991] 19__, by and between Fidelity California Municipal Trust II, a
Delaware business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Fund"), on behalf of Fidelity
California [Tax-free] Municipal Money Market [Portfolio] Fund (hereinafter
called the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser") as set forth
in its entirety below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio office
space and all necessary office facilities, equipment and personnel for
servicing the investments of the Portfolio; and shall pay the salaries and
fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a Group Fee [Rate] and an Individual
Fund Fee [Rate].
(a) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in
the manner set forth in the [charter of each investment company] fund's
Declaration of Trust or other organizational document) determined as of the
close of business on each business day throughout the month. The Group Fee
Rate shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each
level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 120 .1500
120 - 156 .1450
156 - 192 .1400
192 - 228 .1350
228 - 264 .1300
264 - 300 .1275
300 - 336 .1250
336 - 372 .1225
372 - 408 .1200
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
Over - 516 .1100
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .25%
[of average daily net assets of the Portfolio].
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the
Annual Management Fee Rate. One-twelfth of the Annual Management Fee Rate
shall be applied to the average of the net assets of the Portfolio
(computed in the manner set forth in the [Trust Instrument of the Fund]
Fund's Declaration of Trust or other organizational document) determined as
of the close of business on each business day throughout the month.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Advisor hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until [June 30] May
31, [1992] 19__ 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 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may
be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Trust Instrument are separate and
distinct from those of any and all other Portfolios.
8. This Contract shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY CALIFORNIA MUNICIPAL TRUST II
on behalf of Fidelity California [Tax-Free]
Municipal Money Market [Portfolio] Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
Vote this proxy card TODAY! Your prompt response will
save Fidelity California Municipal Money Market Fund the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ---------------------------------------------------------------------------
FIDELITY CALIFORNIA MUNICIPAL TRUST II: FIDELITY CALIFORNIA MUNICIPAL MONEY
MARKET FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, Gerald C. McDonough, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity California Municipal Trust II: Fidelity California Municipal 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 March 19, 1997 at 9:00 AM 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 _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # XXXXXXXXX/fund# XXX]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 11 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Edward C. Johnson 3d, E. Bradley marked to the contrary authority to
Jones, Donald J. Kirk, Peter S. Lynch, William O. below). vote for all
McCoy, Gerald C. McDonough, Marvin L. Mann nominees.
and Thomas R. Williams. (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), WRITE THE NAME(S) OF THE NOMINEE(S)
ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Price Waterhouse LLP as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to revise FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To adopt a new fundamental investment policy FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
permitting the fund to invest all of its assets in another
open-ended investment company with substantially
the same investment objective and policies.
5. To approve an amended management contract. FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
6. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
limitation concerning the issuance of senior securities.
7. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
limitation concerning borrowing.
8. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
limitation concerning underwriting.
</TABLE>
[maps product code-PXC-month and year of mail date (i.e., 894)] [cusip #
XXXXXXXXX/fund# XXX]
Vote this proxy card TODAY! Your prompt response will
save Spartan California Municipal Money Market Fund the expense of
additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ------------------------------------------------------------------------
FIDELITY CALIFORNIA MUNICIPAL TRUST II: SPARTAN CALIFORNIA MUNICIPAL MONEY
MARKET FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, Gerald C. McDonough, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity California Municipal Trust II: Spartan California Municipal 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 March 19, 1997 at 9:00 AM 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 _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # XXXXXXXXX/fund# XXX]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 11 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Edward C. Johnson 3d, E. Bradley marked to the contrary authority to
Jones, Donald J. Kirk, Peter S. Lynch, William O. below). vote for all
McCoy, Gerald C. McDonough, Marvin L. Mann nominees.
and Thomas R. Williams. (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE(S), WRITE THE NAME(S) OF THE NOMINEE(S)
ON THE LINE BELOW.)
</TABLE>
___________________________________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Price Waterhouse LLP as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to revise FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
limitation concerning the issuance of senior securities.
</TABLE>
[maps product code-PXC-month and year of mail date (i.e., 894)] [cusip #
XXXXXXXXX/fund# XXX]
