Fidelity Aberdeen Street Trust
(formerly Fidelity Institutional Investors Trust)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-43529) UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [x]
and
REGISTRATION STATEMENT (No. 811-6448) UNDER THE INVESTMENT COMPANY ACT OF
1940
Amendment No. 18 [x]
Fidelity Aberdeen Street Trust
(Exact Name of Registrant as Specified in Trust Instrument)
1201 N. Market Street, P.O. Box 1347
Wilmington, DE 19899-1347
(Address Of Principal Executive Office)
Registrant's Telephone Number: (617) 570-7000
Siobhan Perkins
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street, P.O. Box 1347
Wilmington, DE 19899-1347
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
( ) immediately upon filing pursuant to paragraph (b)
(X) on October 11, 1996 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on (date) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule on or before May 29, 1997.
FIDELITY ABERDEEN STREET TRUST
(FORMERLY FIDELITY INSTITUTIONAL INVESTORS TRUST)
FIDELITY FREEDOM FUNDS
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
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1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; Who May Want to Invest
3 a .............................. *
b .............................. *
c, d .............................. *
4 a i............................. Charter
ii........................... Investment Principles and Risks
b .............................. Investment Principles and Risks
c .............................. Who May Want to Invest; Investment Principles
and Risks
5 a .............................. Charter
b i............................. Charter; Doing Business with Fidelity
ii........................... Charter
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Charter
f .............................. Expenses; Breakdown of Expenses
g i............................. Charter
.
ii............................ *
..
5 A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... Charter
b ............................. Charter
c .............................. Transaction Details; Exchange Restrictions
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
h .............................. *
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Cover Page; Charter
b .............................. Expenses; How to Buy Shares; Transaction Details
c .............................. *
d .............................. How to Buy Shares
e .............................. *
f .............................. Breakdown of Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the funds' Statement of Additional Information (SAI) dated October
11 , 1996. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials on
the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy, call Fidelity at 1-800-544-8888.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
FF-pro- 10 96
Funds of Fidelity Aberdeen Street Trust
FIDELITY
FREEDOM FUNDS(trademark)
PROSPECTUS
Fidelity Freedom 2000 Fund(trademark), Fidelity Freedom 2010
Fund(trademark), Fidelity Freedom 2020 Fund(trademark), and Fidelity
Freedom 2030 Fund(trademark)each seek s high total return.
Fidelity Freedom Income Fund(trademark) seeks high current income and, as a
secondary objective, capital appreciation. Each fund seeks to achieve its
objective by allocating its assets among other Fidelity mutual
funds, and, with the exception of Fidelity Freedom Income Fund(trademark),
by adopting a more conservative target asset allocation over time.
FIDELITY FREEDOM INCOME FUND(trademark)
FIDELITY FREEDOM 2000 FUND(trademark)
FIDELITY FREEDOM 2010 FUND(trademark)
FIDELITY FREEDOM 2020 FUND(trademark)
FIDELITY FREEDOM 2030 FUND(trademark)
PROSPECTUS
OCTOBER 11, 1996 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET,
BOSTON, MA 02109
CONTENTS
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KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Each Freedom Fund's yearly operating
expenses.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each Freedom Fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each Freedom
F und's overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES COMBINATION WITH FREEDOM INCOME FUND
DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Fidelity Freedom 2000 Fund(trademark) (Freedom 2000), Fidelity Freedom 2010
Fund(trademark) (Freedom 2010), Fidelity Freedom 2020 Fund(trademark)
(Freedom 2020), and Fidelity Freedom 2030 Fund(trademark) (Freedom
2030) are referred to collectively as the "Freedom Funds with
target retirement dates . " Each of these funds is designed
for long-term investors seeking high total return through a single
investment with an asset allocation strategy that becomes increasingly
conservative over time, reflecting an investor's changing financial needs
as he or she becomes older. Each fund's name refers to the approximate
retirement year of the investors for whom the fund's asset allocation
strategy is designed. That is, Freedom 2000 is designed for investors
planning to retire around the year 2000 (approximately three years from
now); Freedom 2010 is designed for investors planning to retire around the
year 2010 (approximately 13 years from now); and so on.
Freedom Income Fund is designed for investors seeking high current income
and, secondarily, capital appreciation during their retirement
years.
Each Freedom Fund seeks to achieve its investment objective by investing in
a combination of Fidelity equity, fixed-income, and money market funds
(underlying Fidelity funds). The performance of each Freedom Fund depends
on the performance of the underlying Fidelity funds in which it invests.
The performance of the underlying Fidelity funds, in turn, depends on the
performance of the stock, bond, and money markets in the U.S. and abroad.
The value of each Freedom Fund will vary from day to day, reflecting
changes in these markets and in the values of the underlying Fidelity
funds. When you sell your Freedom Fund shares, they may be worth more or
less than what you paid for them.
The Freedom Funds are designed to provide moderate asset allocation
programs for investors progressing through their work and retirement years.
No one fund, however, can provide an appropriate balanced investment
program for all investors and you should evaluate the Freedom Funds in the
context of your overall financial situation, investment goals, and other
retirement investments. If you consider yourself an especially aggressive
or conservative investor, you may want to add other investments to your
retirement portfolio to achieve the balance that is best for you.
INVESTMENT PROGRAM
Each Freedom Fund seeks to achieve its investment objective by
allocating its assets among underlying Fidelity funds. The
underlying Fidelity funds fall into three broad investment
categories: equity (stock) funds, fixed-income (bond) funds,
and money market funds. For additional information about the underlying
Fidelity funds, refer to "Securities and Investment Practices of the
Freedom Funds" beginning on page .
For each Freedom Fund with a target retirement date, the percentage of
assets invested in each of these categories depends on the number of years
remaining until that fund's target retirement year. For example, Freedom
2030, whose target retirement year is more than 30 years away, will start
with a relatively aggressive target asset allocation, with a substantial
investment in equity funds and a modest investment in fixed-income funds.
By contrast, Freedom 2000, whose target retirement year is approximately
three years away, will start with a relatively conservative target asset
allocation, investing less than half of its assets in equity funds and the
majority of its assets in fixed-income and money market funds.
FIDELITY FREEDOM 2030 FUND(TRADEMARK)
Equity
Funds 85%
Fixed-Income
Funds 15%
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 85.0
Row: 1, Col: 3, Value: 15.0
Money Market
Funds 0%
FIDELITY FREEDOM 2020 FUND(TRADEMARK)
Equity
Funds 8 3 %
Fixed-Income
Funds 17%
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 83.0
Row: 1, Col: 3, Value: 17.0
Money Market
Funds 0%
FIDELITY FREEDOM 2010 FUND(TRADEMARK)
Equity
Funds 69 %
Fixed-Income
Funds 3 1 %
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 69.0
Row: 1, Col: 3, Value: 31.0
Money Market
Funds 0%
FIDELITY FREEDOM 2000 FUND(TRADEMARK)
Equity
Funds 4 3 %
Fixed-Income
Funds 45%
Row: 1, Col: 1, Value: 12.0
Row: 1, Col: 2, Value: 43.0
Row: 1, Col: 3, Value: 45.0
Money Market
Funds 1 2 %
FIDELITY FREEDOM INCOME FUND(TRADEMARK)
Equity
Funds 20%
Fixed-Income
Funds 40%
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 40.0
Money Market
Funds 40%
The Freedom Funds with target retirement dates do not mature or
terminate when they reach their target retirement years. Instead, each of
these funds continues to invest according to an asset allocation strategy
that becomes increasingly conservative over time until the fund's target
allocation matches Freedom Income Fund's target allocation. At that time,
approximately five to ten years after a fund's target retirement date, it
is expected that the fund will be combined with Freedom Income Fund and the
fund's shareholders will become shareholders of Freedom Income Fund. For
additional information, refer to "Combination with Freedom Income Fund" on
page .
The charts on the left illustrate the target asset allocation of each
Freedom Fund as of October 11, 1996.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell,
exchange, or hold shares of a Freedom Fund.
Maximum sales charge on purchases None
and reinvested distributions
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
Annual account maintenance fee $12.0
(for accounts under $2,500) 0
ANNUAL OPERATING EXPENSES are paid out of each Freedom Fund's assets. Each
Freedom Fund pays a management fee to Strategic Advisers, Inc.
(Strategic Advisers), an affiliate of Fidelity Management & Research
Company (FMR) . Strategic Advisers is responsible for the payment of all
other Freedom Fund expenses with certain limited exceptions.
Each Freedom Fund's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page ).
The following figures are based on estimated expenses and are
calculated as a percentage of average net assets of each Freedom
Fund.
FIDELITY FREEDOM INCOME FUND(TRADEMARK)
Management fee 0.10%
12b-1 fee (Distribution Fee) None
Other expenses 0.00%
Total operating expenses 0.10%
FIDELITY FREEDOM 2000 FUND(TRADEMARK)
Management fee 0.10%
12b-1 fee (Distribution Fee) None
Other expenses 0.00%
Total operating expenses 0.10%
FIDELITY FREEDOM 2010 FUND(TRADEMARK)
Management fee 0.10%
12b-1 fee (Distribution Fee) None
Other expenses 0.00%
Total operating expenses 0.10%
FIDELITY FREEDOM 2020 FUND(TRADEMARK)
Management fee 0.10%
12b-1 fee (Distribution Fee) None
Other expenses 0.00%
Total operating expenses 0.10%
FIDELITY FREEDOM 2030 FUND(TRADEMARK)
Management fee 0.10%
12b-1 fee (Distribution Fee) None
Other expenses 0.00%
Total operating expenses 0.10%
A Freedom Fund will not incur any sales charges when it invests in
underlying Fidelity funds, but it may incur exchange or redemption fees, if
applicable. Such charges and fees may or may not have been incurred if a
shareholder had invested directly in the underlying Fidelity funds.
In addition to the estimated expenses shown above, each Freedom
Fund , as a shareholder in an underlying Fidelity fund, will
indirectly bear its pro rata share of the fees and expenses incurred by the
underlying Fidelity fund, and each Freedom Fund's investment return
will be net of underlying Fidelity fund expenses. The chart on
the following page provides the total operating expense ratios
for the underlying Fidelity funds .
The following figures are based on historical expenses for each underlying
Fidelity fund's most recently reported fiscal year end and are
calculated as a percentage of average net assets of each underlying
Fidelity fund . Where appropriate, expense ratios are adjusted to
reflect current fees.
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Underlying Fidelity Funds Expense
Ratio
Fidelity Blue Chip Growth Fund 0.95%
Fidelity Capital & Income Fund 0.98%
Fidelity Disciplined Equity Fund 0.93%
Fidelity Diversified International Fund 1.12%
Fidelity Equity - Income Fund 0.67%
Fidelity Europe Fund 1.18%
Fidelity Fund 0.60%
Fidelity Government Securities Fund 0.71%
Fidelity Growth & Income Portfolio 0.74%
Fidelity Growth Company Fund 0.95%
Fidelity Intermediate Bond Fund 0.71%
Fidelity Investment Grade Bond Fund 0.76%
Fidelity Japan Fund 1.15%
Fidelity Money Market Trust: Retirement Money Market Portfolio 0.42%
Fidelity OTC Portfolio 0.82%
Fidelity Overseas Fund 1.05%
Fidelity Southeast Asia Fund 1.10%
</TABLE>
Based on the estimated expense ratio of each Freedom Fund plus a
weighted average of the expense ratios of the u nderlying Fidelity
funds in which each Freedom Fund currently expect s to invest,
the total operating expenses of each Freedom Fund
(calculated as a percentage of average net assets) are estimated to
be as follows: Freedom Income: 0.72% ; Freedom 2000: 0.85% ;
Freedom 2010: 0.93% ; Freedom 2020: 0.95% ; and Freedom 2030:
0.97% . These expense ratios may be higher or lower depending on
the allocation of a Freedom Fund's assets among the underlying Fidelity
funds, and the actual expenses of the underlying Fidelity funds.
EXPENSE TABLE EXAMPLE: Based on each Freedom Fund's estimated total
operating expenses in the preceding paragraph, y ou would pay the
following expenses on a $1,000 investment, assuming a 5% annual return and
full redemption at the end of each time period:
1 3
Year Years
Freedom Income $ 7 $ 23
Freedom 2000 $ 9 $ 27
Freedom 2010 $ 10 $ 30
Freedom 2020 $ 10 $ 30
Freedom 2030 $ 10 $ 31
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN or
YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
Average annual total returns covering periods of less than one year assume
that performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
Each Freedom Fund may quote its adjusted net asset value including all
distributions paid. This value may be averaged over specified periods and
may be used to calculate a Freedom Fund's moving average.
Historical performance for each u nderlying Fidelity f und is
included in the Freedom Funds' SAI. The Freedom Funds' recent
strategies, performance, and holdings are detailed twice a year in
financial reports, which are sent to all shareholders.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each Freedom Fund is a diversified
fund of Fidelity Aberdeen Street Trust, an open-end management
investment company organized as a Delaware business trust on January 29,
1992.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the Freedom Funds'
activities, review contractual arrangements with companies that provide
services to the funds, and review the funds' performance. The majority of
trustees serve as trustees of other Fidelity funds, including the
underlying Fidelity funds, but otherwise are not affiliated with
Fidelity .
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. Y ou are
entitled to one vote for each share you own.
STRATEGIC ADVISERS AND ITS AFFILIATES
The Freedom Funds are managed by Strategic Advisers, which administers the
asset allocation program for each Freedom Fund and handles its
business affairs. Strategic Advisers has its principal address at 82
Devonshire Street, Boston, Massachusetts 02109.
Strategic Advisers has five separate business units and also markets
a financial software product. Three of these units provide
discretionary investment services to specific types of investors.
The fourth unit offers a variety of publications concerning
investments and personal finance , and the fifth unit is
responsible for managing the Freedom Funds. Strategic Advisers has no
previous experience managing mutual funds.
The underlying Fidelity funds are managed by FMR, which chooses
their investments and handles their business affairs. FMR chooses
investments with the assistance of foreign affiliates for all underlying
Fidelity funds except Fidelity Government Securities Fund and Fidelity
Money Market Trust: Retirement Money Market Portfolio.
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. V arious Fidelity companies perform
activities required for the Freedom Funds' operation.
Ren Cheng is co-portfolio manager of the Freedom Funds , which he has
managed since their inception . He is also manager of asset
allocation portfolios for Fidelity Management Trust Company, which he
has managed since he joined Fidelity in 1994. Previously, Mr. Cheng
was a senior portfolio manager for Putnam Investments from 1985 to 1993.
Scott Stewart is co-portfolio manager of the Freedom Funds , which he
has managed since their inception. He is also manager of
Fidelity Fifty, which he has managed since its inception in
1993 , group leader of the Structured Investments Group
for FMR, and manager of portfolios for Fidelity Management Trust
Company . Mr. Stewart joined Fidelity in 1987.
Fidelity investment personnel may invest in securities for their own
account s pursuant to a code of ethics that establishes procedures
for personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for each Freedom Fund.
FMR Corp. is the ultimate parent company of Strategic Advisers and
FMR. Members of the Edward C. Johnson 3d family are the predominant
owners of a class of shares of common stock representing approximately 49%
of the voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940 Act to
form a controlling group with respect to FMR Corp.
INVESTMENT PRINCIPLES AND RISKS
EACH FREEDOM FUND'S INVESTMENT APPROACH
Each Freedom Fund seeks to achieve its investment objective by investing
in a combination of equity, fixed-income, and money market underlying
Fidelity funds. The primary difference among the Freedom Funds is their
asset allocations among these investment categories.
Freedom Income Fund seeks high current income and, as a
secondary objective, capital appreciation. Strategic Advisers
allocates the fund's assets according to a stable asset allocation target
that emphasizes fixed-income and money market funds and also includes a
small amount of equity funds.
Each Freedom Fund with a target retirement date seeks high total return.
Strategic Advisers allocates each of these fund's assets among
underlying Fidelity funds according to an asset allocation strategy that
becomes increasingly conservative over time. When a fund's asset allocation
target matches Freedom Income Fund's target (approximately five to ten
years after the fund's target retirement date), it is expected that the
fund will be combined with Freedom Income Fund.
The target asset allocation strategy for each Freedom Fund is designed to
provide an approach to asset allocation that is neither overly aggressive
nor overly conservative. In general, Strategic Advisers intends to manage
each Freedom Fund according to its target asset allocation strategy, and
does not intend to trade actively among underlying Fidelity funds or
attempt to capture short-term market opportunities. However, Strategic
Advisers reserves the right to modify the target asset allocation strategy
for any Freedom Fund and to modify the selection of underlying Fidelity
funds for any Freedom Fund from time to time.
T he ability of each Freedom Fund to meet its investment objective is
directly related to its target asset allocation among underlying
Fidelity funds and the ability of those funds to meet their investment
objectives. Although the underlying Fidelity funds are categorized
generally as equity, fixed-income , and money market funds, many of
the underlying Fidelity funds may invest in a mix of stocks, bonds, and
other securities.
The table below lists the underlying Fidelity funds in which
the Freedom Fund s currently may invest and the approximate
percentage of assets that each Freedom Fund expects to allocate to each
underlying Fidelity fund as of October 11, 1996. Strategic Advisers may
change these percentages over time. For a brief description of each
underlying Fidelity fund , refer to "Descriptions of Underlying
Fidelity Funds," beginning on page .
Strategic Advisers normally invests each Freedom Fund's assets according
to its target asset allocation strategy. Each Freedom Fund reserves the
right to invest in futures contracts or other derivatives as a way of
managing its asset allocation on a temporary basis , and to invest
without limitation in Fidelity Money Market Trust: Retirement Money Market
Portfolio for temporary, defensive purposes. Each Freedom Fund also
reserves the right to invest directly in other types of securities.
<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Categories Freedo Freed Freed Freed Freed
m om om om om
Income 2000 2010 2020 2030
EQUITY FUNDS
Fidelity Blue Chip
Growth Fund 3% 6% 9% 10% 10%
Fidelity Disciplined
Equity Fund 3% 6% 9% 10% 10%
Fidelity Diversified
International Fund 0% 1% 2% 3% 4%
Fidelity Equity -
Income Fund 3% 6% 9% 10% 10%
Fidelity Europe Fund 0% 1% 2% 3% 4%
Fidelity Fund 3% 6% 9% 10% 10%
Fidelity Growth &
Income Portfolio 3% 6% 9% 10% 10%
Fidelity Growth
Company Fund 3% 6% 9% 10% 10%
Fidelity Japan Fund 0% 1% 2% 3% 3%
Fidelity OTC Portfolio 2% 4% 6% 7% 7%
Fidelity Overseas Fund 0% 1% 2% 3% 4%
Fidelity Southeast
Asia Fund 0% <1% <1% 1% 1%
FIXED-INCOME FUNDS
Fidelity Capital &
Income Fund 0% 4% 7% 8% 10%
Fidelity Government
Securities Fund 15% 15% 9% 4% 2%
Fidelity Intermediate
Bond Fund 10% 10% 6% 2% 1%
Fidelity Investment
Grade Bond Fund 15% 15% 9% 4% 2%
MONEY MARKET FUND
Fidelity Money
Market Trust: Retirement
Money Market 40% 12% 0% 0% 0%
Portfolio
Note: The allocation percentages may not add to 100% due to rounding.
</TABLE>
The chart below illustrates the Freedom Funds' current target asset
allocations among equity, fixed-income, and money market funds. The chart
also illustrates how the se allocations may change over
time . The Freedom Funds' future target asset
allocations may differ from this approximate illustration.
DESCRIPTION OF CHART WHICH APPEARS ON PAGE 11 OF THE FIDELITY FREEDOM
FUNDS' PROSPECTUS:
The chart is a rectangular box. The x-axis (the bottom of the box) charts,
from left to right, years to retirement and years after retirement in
five-year intervals, counting down from 40 years to retirement, reaching
retirement, and then counting up to 15 years after retirement. Immediately
below and parallel to the x-axis is a straight line with an arrow at each
end. A perpendicular line crosses the line at retirement and the word
"Retirement" appears below the perpendicular line. The words "Years to
Retirement" appear below the parallel line to the left of the perpendicular
line, and the words "Years after Retirement" appear below the parallel line
to the right of the perpendicular line. The y-axis (the left side of the
box) is marked in ten percentage point intervals up from 0% to 100% to
indicate the percentage of assets allocated to equity, fixed-income, and
money market funds.
The Freedom Funds are positioned along the top of the box at 33, 23, 13,
and three years to retirement for Freedom 2030 Fund, Freedom 2020 Fund,
Freedom 2010 Fund, and Freedom 2000 Fund, respectively. Freedom Income
Fund is positioned at the top of the box at seven years after retirement.
Each Fund's position is indicated with a downward pointing solid triangle.
Inside the box are vertical lines (from the top of the box to the bottom of
the box) at each of the five-year intervals marked on the x-axis. Also
inside the box, directly below each Fund's position, are data points that
indicate the current target asset allocation for that Fund. The first set
of data points is charted at 85%, 83%, 69%, 43%, and 20% for Freedom 2030
Fund, Freedom 2020 Fund, Freedom 2010 Fund, Freedom 2000 Fund, and Freedom
Income Fund, respectively. The second set of data points is charted at
100%, 88%, and 60% for Freedom 2010 Fund, Freedom 2000 Fund, and Freedom
Income Fund, respectively. The data points are indicated by a solid
circle.
The data points in each set are connected by a dotted line. The area on
the chart from the x-axis up to the dotted line connecting the first set of
data points (the "first dotted line") represents the percentage allocation
in equity funds. The words "Equity Funds" appear in this area. The area
on the chart from the first dotted line up to the dotted line that connects
the second set of data points (the "second dotted line") represents the
percentage allocation in fixed-income funds. The words "Fixed-Income
Funds" appear in this area. The area on the chart from the second dotted
line up to the top of the chart represents the percentage allocation in
money market funds. The words "Money Market Funds" appear in this area.
THE FUNDS IN DETAIL
SECURITIES AND INVESTMENT PRACTICES OF THE FREEDOM FUNDS
The following pages contain more detailed information about each
underlying Fidelity fund and other types of instruments in which a
Freedom Fund may invest , strategies Strategic Advisers may employ in
pursuit of a Freedom Fund's investment objective, and a summary of
related risks. Any restrictions listed supplement those discussed earlier
in this section. A complete listing of each Freedom Fund's limitations and
more detailed information about the underlying Fidelity
fund s ' investments are contained in the Freedom Funds' SAI.
Policies and limitations are considered at the time of purchase; the sale
of underlying Fidelity fund shares or other instruments is not
required in the event of a subsequent change in circumstances.
Strategic Advisers may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a Freedom
Fund's investment objective and policies and that doing so will help
the Freedom Fund achieve its goal. Fund holdings and recent
investment strategies are detailed in each Freedom F und's
financial reports, which are sent to shareholders twice a year. For a free
SAI or financial report, call Fidelity at 1-800-544-8888.
DESCRIPTIONS OF UNDERLYING FIDELITY FUNDS
The following descriptions summarize the investment policies of the
underlying Fidelity funds. For more information about an underlying
Fidelity fund , call Fidelity at 1-800-544-8888.
FIDELITY BLUE CHIP GROWTH FUND is an equity fund that seeks growth of
capital over the long - term by investing primarily in a diversified
portfolio of common stocks of well-known and established companies. FMR
normally invests at least 65% of the fund's total assets in the common
stock of blue chip companies. FMR defines blue chip companies to include
those with a market capitalization of at least $200 million if the
company's stock is included in the Standard & Poor's 500 Index (S&P 500) or
the Dow Jones Industrial Average, or $1 billion if not included in either
index. Blue chip companies typically have a large number of publicly held
shares and a high trading volume, resulting in a high degree of liquidity.
These tend to be quality companies with strong management organizations.
Companies that demonstrate the potential to become blue chip companies in
the future may also be selected by FMR for the fund's investments.
When choosing the fund's domestic or foreign investments, FMR seeks
companies that it expects will demonstrate greater long-term earnings
growth than the average company included in the S&P 500. This method of
selecting stocks is based on the belief that growth in a company's earnings
will eventually translate into growth in the price of its stock. FMR looks
at strong market sectors and then identifies those companies that offer the
most attractive values based on earnings prospects. The fund's sector
emphasis may shift based on changes in the sectors' earnings outlook.
FIDELITY CAPITAL & INCOME FUND is a fixed-income fund that seeks income and
capital growth by investing primarily in debt instruments , convertible
securities, and common and preferred stocks. The fund has broad
flexibility to pursue its goal by investing in instruments of any type or
quality, but FMR expects to invest the majority of the fund's assets in
debt instruments and convertible securities, with particular emphasis on
lower-quality securities. Many of these securities present the risk of
default or may be in default.
In pursuit of its goal, the fund may invest in the equity and debt
securities of domestic and foreign companies whose financial condition is
perceived to be troubled or uncertain. These companies may be involved in
bankruptcy proceedings, reorganizations, or financial restructurings. These
investments may be considered speculative and may present substantial
potential for loss as well as gain. As a result, the fund's share price may
be particularly volatile.
The fund's success depends on FMR's financial analysis and research, and
its ability to identify undervalued investments in the market. FMR's
analysis focuses on a company's relative values and its potential success
in light of its current financial situation, its industry position,
economic conditions, and interest rate trends. FMR also evaluates the
probable outcome of any pending restructurings and any legal or regulatory
risks. Because of the fund's investment strategy, its performance is
especially affected by individual company news.
FIDELITY DISCIPLINED EQUITY FUND is an equity fund that seeks capital
growth by investing primarily in a broadly diversified portfolio of
domestic common stocks. FMR normally invests at least 65% of the
fund's total assets in these securities. The fund has the flexibility,
however, to invest the balance in all types of domestic and foreign
securities .
The fund invests in securities that FMR determines are undervalued compared
to industry norms. Using a highly disciplined approach to help identify
these instruments and focusing on domestic companies with market
capitalization of $100 million or more, FMR hopes to generate more capital
growth than that of the S&P 500 while maintaining similar industry
diversification.
The disciplined approach involves computer-aided, quantitative analysis
supported by fundamental research. FMR's computer model systematically
reviews thousands of stocks, using historical earnings, dividend yield,
earnings per share, and many other factors. Then, potential investments are
analyzed further using fundamental criteria, such as the company's growth
potential and estimates of current earnings.
FIDELITY DIVERSIFIED INTERNATIONAL FUND is an equity fund that seeks
capital growth by investing primarily in equity securities of companies
located anywhere outside the U.S. The fund normally invests in equity
securities of companies from at least three countries outside of the U.S.
The fund expects to invest most of its assets in equity securities, but may
also invest in debt securities of any quality.
The fund invests in securities that FMR determines are undervalued compared
to industry norms within their countries. Using a highly disciplined
approach to help identify these instruments and focusing on companies with
market capitalizations of $100 million or more, FMR hopes to generate more
capital growth than that of the Morgan Stanley Capital International
Europe, Australia, Far East Index (EAFE Index) (GDP-weighted).
The disciplined approach involves computer-aided, quantitative analysis
supported by fundamental research. FMR's computer model systematically
reviews thousands of stocks, using historical earnings, dividend yield,
earnings per share, and many other factors. Then, potential investments are
analyzed further using fundamental criteria, such as the company's growth
potential and estimates of current earnings.
FIDELITY EQUITY - INCOME FUND is an equity fund that seeks reasonable
income by investing primarily in income-producing equity securities. FMR
normally invests at least 65% of the fund's total assets in these
securities. The fund has the flexibility, however, to invest the balance in
all types of domestic and foreign securities, including bonds. The fund
seeks a yield for its shareholders that exceeds the yield on the securities
comprising the S&P 500. The fund does not expect to invest in debt
securities of companies that do not have proven earnings or credit . When
choosing the fund's investments, FMR also considers the potential for
capital appreciation .
FIDELITY EUROPE FUND is an equity fund that seeks growth of capital over
the long term by inves ting in securities of issuers that have
their principal activities in Western Europe. FMR normally invests at least
65% of the fund's total assets in these securities. Western European
countries include Austria, Belgium, Denmark, Germany, Finland, France,
Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, and the United Kingdom. The fund may also
invest in Eastern Europe. FMR expects that the fund will normally invest in
at least three different countries, although it may invest all of its
assets in a single country. The fund's performance is closely tied to
economic and political conditions within Europe. Some European countries,
particularly those in Eastern Europe, have less stable economies than those
in Western Europe. M ost of Europe remains in a recession. The
movement of many Eastern European countries toward market economies, and
the movement toward a unified common market may significantly affect
European economies and markets. Eastern European countries are considered
emerging markets.
FIDELITY FUND is an equity fund that seeks long-term capital growth by
investing mainly in common stocks and securities convertible into common
stocks. In pursuit of a current return, the fund invests in some securities
for their income characteristics. This two-fold approach, which may limit
the fund's growth potential, leads to investments in a broad range of
domestic and foreign equity and debt securities.
FIDELITY GOVERNMENT SECURITIES FUND is a fixed-income fund that seeks as
high a level of current income as is consistent with preservation of
principal by investing in U.S. Government securities. Under normal
conditions, the fund will invest at least 65% of its total assets in U.S.
Government securities. The fund invests so that the interest from its
security holdings is free from state and local taxes. Although the fund
does not maintain an average maturity within a specific range, FMR seeks to
manage the fund so that it generally reacts to changes in interest rates
similarly to government bonds with maturities of five to twelve years.
The fund may invest in other instruments which may include futures or
options on U.S. Government securities or interests in U.S. Government
securities that have been repackaged by dealers or other third parties.
As of September 30, 1996, the fund's dollar-weighted average maturity was
8.2 years. (In determining a security's maturity for purposes of
calculating the fund's maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter than
its stated final maturity.)
FIDELITY GROWTH & INCOME PORTFOLIO is an equity fund that seeks high total
return through a combination of current income and capital appreciation by
investing mainly in equity securities. The fund expects to invest the
majority of its assets in domestic and foreign equity securities, with a
focus on those that pay current dividends and show potential earnings
growth. However, the fund may buy debt securities as well as equity
securities that are not currently paying dividends, but offer prospects for
capital appreciation or future income.
FIDELITY GROWTH COMPANY FUND is an equity fund that seeks capital
appreciation b y inves ting primarily in common stock s
and securities convertible into common stock of companies that FMR
believes have above-average growth potential .
Growth may be measured by factors such as earnings or gross sales. In
selecting investments for the fund, FMR will tend to focus on smaller,
lesser known companies in new and emerging areas of the economy. However,
FMR may also pursue growth in larger or revitalized companies that hold a
strong position in the market. These may be found in mature or declining
industries.
FIDELITY INTERMEDIATE BOND FUND is a fixed-income fund that seeks a high
level of current income by investing primarily in investment-grade,
fixed-income obligations.
Although the fund can invest in securities of any maturity, the fund
maintains a dollar-weighted average maturity of three to ten years under
normal conditions. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average time
for its principal to be paid may be used. This can be substantially shorter
than its stated final maturity. As of April 30, 1996, the fund's
dollar-weighted average maturity was approximately 4.9 years.
FIDELITY INVESTMENT GRADE BOND FUND is a fixed-income fund that seeks high
current income, consistent with reasonable risk, by normally investing in
fixed-income obligations of investment-grade quality. The fund also
considers preservation of capital and, where appropriate, takes advantage
of opportunities to realize capital appreciation. Although the fund can
invest in securities of any maturity, FMR seeks to manage the fund so that
it generally reacts to changes in interest rates similarly to bonds with
maturities between four and ten years. As of April 30, 1996, the fund's
dollar-weighted average maturity was approximately 7.4 years.
FIDELITY JAPAN FUND is an equity fund that seeks long term growth of
capital by investing in securities of Japanese issuers. FMR normally
invests at least 65% of the fund's total assets in these securities. The
balance, however, may be invested in securities of other Southeast Asian
issuers.
Japan is a major force in the global economy. The country is heavily
dependent upon international trade, so its economy is especially sensitive
to trade barriers.
FIDELITY MONEY MARKET TRUST: RETIREMENT MONEY MARKET PORTFOLIO is a
money market fund that seeks to obtain as high a level of current income as
is consistent with the preservation of capital and liquidity by
investing in money market instruments. The fund invests in high quality,
U.S. dollar-denominated money market instruments of domestic and foreign
issuers. Under normal conditions, the fund intends to invest more than 25%
of its total assets in obligations of institutions in the financial
services industry. Companies in the financial services industry are
subject to various risks, related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers.
When shares of Retirement Money Market are sold, they should be worth the
same amount as when purchased. Of course, there is no guarantee that the
fund will maintain a stable $1.00 share price. The fund follows
industry-standard guidelines on the quality and maturity of its
investments, which are designed to help maintain a stable $1.00 share
price. The fund will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities it buys. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the fund's investments could cause its share price (and the
value of an investment in the fund) to change.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and income and does not seek the higher
yields or capital appreciation that more aggressive investments may
provide. The fund's yield will vary from day to day and generally reflects
current short-term interest rates and other market conditions.
FIDELITY OTC PORTFOLIO is an equity fund that seeks capital appreciation by
investing primarily in securities traded on the over-the-counter (OTC)
market. FMR normally invests at least 65% of the fund's total assets in
securities principally traded on the OTC market. The fund focuses on common
stock but may invest in securities of all types.
In the OTC market, securities are traded through a telephone or computer
network that connects securities dealers. A security that trades solely on
the OTC market is not traded on the floor of an organized exchange.
Securities that begin to trade principally on an exchange after purchase
continue to be considered OTC securities for the purposes of the 65%
policy. Securities traded on the OTC market tend to be those of smaller
companies, which carry more risk than investing in larger companies.
The fund does not place any emphasis on income, except when FMR believes
income will have a favorable influence on the security's market value.
FIDELITY OVERSEAS FUND is an equity fund that seeks long-term growth of
capital by investing primarily in securities of issuers whose
principal activities are outside of the U.S . FMR normally invests at
least 65% of the fund's total assets in securities of issuers from at least
three different countries outside of North America (the U.S., Canada,
Mexico, and Central America). The fund expects to invest a majority of its
assets in equity securities, but may also invest in debt securities of any
quality.
FIDELITY SOUTHEAST ASIA FUND is an equity fund that seeks capital
appreciation by investing in securities of Southeast Asian issuers. FMR
normally invests at least 65% of the fund's total assets in these
securities. Southeast Asia includes Hong Kong, Indonesia, South Korea,
Malaysia, the Philippines, the People's Republic of China, Singapore,
Taiwan, and Thailand, but the fund does not anticipate investing in Japan.
The balance, however, may be invested in securities of other Asian and
South Pacific issuers. In pursuit of its goal, the fund focuses on equity
securities, but it may also invest in other types of instruments, including
debt securities of any quality.
Countries in Southeast Asia are in various stages of economic
development - some are considered emerging markets - but each has unique
risks. Most countries in Southeast Asia are heavily dependent on
international trade. Some have prosperous economies but are sensitive to
world commodity prices. Others are especially vulnerable to recession in
other countries. Some countries in Southeast Asia have experienced rapid
growth, although may suffer with obsolete financial systems, economic
problems, or archaic legal systems. The return of Hong Kong to Chinese
dominion will affect Southeast Asia.
ADDITIONAL RISK CONSIDERATIONS OF THE UNDERLYING FIDELITY FUNDS
The value of an underlying Fidelity fund ' s domestic and
foreign investments varies in response to many factors.
Stock values fluctuate in response to the activities of individual
companies, and general market and economic conditions. Investments in
smaller, lesser-known companies carry more risk than investments in larger
companies. Their reliance on limited product lines and markets, financial
resources, or other factors may make small companies more susceptible to
set-backs or downturns. As a result, their stock prices may be particularly
volatile.
B ond values fluctuate based on changes in interest rates, market
conditions, other economic and political news, and on their quality and
maturity. In general, bond prices rise when interest rates fall, and vice
versa. This effect is usually more pronounced for longer-term securities.
L ower-quality securities (sometimes called "junk bonds") offer
higher yields, but also carry more risk.
I nvestments in foreign securities may involve risks in addition to
those of U.S. investments, including increased political and economic risk,
as well as exposure to currency fluctuations.
Underlying Fidelity f unds with an international focus have increased
economic and political risks as they are exposed to events and factors in
the various world markets. This is especially true for underlying
Fidelity funds that invest in emerging markets. The extent of
economic development, political instability, and market depth varies widely
in comparison to more developed markets. Emerging market economies may be
subject to greater social, economic, and political uncertainties, or may be
based on only a few industries. Also, to the extent that an
underlying Fidelity fund 's investments are denominated in foreign
currencies, changes in the value of foreign currencies can significantly
affect the fund's share price. Furthermore, to the extent that an
underlying Fidelity fund focuses its investments in a particular country or
group of countries, its performance is expected to be closely tied to
economic and political conditions within its focal area and more volatile
than the performance of more geographically diversified funds.
An underlying Fidelity fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currenc y exchange rates, commodity prices , or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities short.
There is no guarantee that these strategies will work as FMR
intends.
OTHER FREEDOM FUND INVESTMENTS
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a higher
price. Delays or losses could result if the other party to the agreement
defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. Each Freedom F und reserves the right
to invest in futures contracts or other derivatives temporarily in an
effort to remain fully invested, manag e cash flows efficiently,
or facilitat e asset allocation. Depending on how they are used,
these investments may effectively increase or decrease a Freedom
F und's stock or bond allocation .
CASH MANAGEMENT. Each Freedom Fund may invest in money market
securities, in a pooled account of repurchase agreements, and in a money
market fund available only to funds and accounts managed by FMR or its
affiliates, whose goal is to seek a high level of current income while
maintaining a stable $1.00 share price. A major change in interest rates or
a default on the money market fund's investments could cause its share
price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS: W ith respect to 75% of its total assets, each
Freedom F und may not purchase a security if, as a result, more than 5%
would be invested in the securities of any one issuer. Each Freedom
F und may not invest more than 25% of its total assets in any one
industry. These limitations do not apply to U.S. Government securities or
investment company securities (including shares of underlying
Fidelity funds) .
BORROWING. Each Freedom F und may borrow from banks or from other
funds advised by FMR or its affiliates, or through reverse
repurchase agreements. If a fund borrows money, its share price may be
subject to greater fluctuation until the borrowing is paid off. If a fund
makes additional investments while borrowings are outstanding, this may be
considered a form of leverage.
RESTRICTIONS: Each Freedom F und may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
Freedom Fund's securities. A Freedom Fund may also lend money to other
funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a Freedom
Fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS OF THE FREEDOM
FUNDS
Some of the policies and restrictions of the Freedom Funds discussed
on the preceding pages are fundamental, that is, subject to change only by
shareholder approval. The following paragraphs restate all those that are
fundamental. All policies of the Freedom Funds stated throughout
this prospectus, other than those identified in the following paragraphs,
can be changed without shareholder approval.
Each of Freedom 2000, Freedom 2010, Freedom 2020, and Freedom 2030 seeks
high total return. Freedom Income Fund seeks high current income and,
as a secondary objective, capital appreciation.
With respect to 75% of its total assets, each Freedom Fund may not
purchase a security if, as a result, more than 5% would be invested in
the securities of any one issuer. Each Freedom Fund may not invest more
than 25% of its total assets in any one industry. These limitations do not
apply to U.S. Government securities or investment company securities
(including shares of underlying Fidelity funds).
Each Freedom Fund may borrow only for temporary or emergency purposes, but
not in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of a Freedom Fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the Freedom Funds pay fees related to their daily
operations. Expenses paid out of each Freedom Fund's assets are reflected
in that fund's share price or dividends; they are neither billed
directly to shareholders nor deducted from shareholder accounts.
Strategic Advisers may, from time to time, agree to reim burse each
Freedom Fund for management fees above a specified limit. Reimbursement
arrangements, which may be terminated at any time without notice, can
decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
Each Freedom Fund's management fee is calculated and paid to
Strategic Advisers every month. Strategic Advisers is responsible for
paying all of the other expenses of each Freedom Fund with limited
exceptions. The annual management fee for each Freedom Fund is 0.10% of
its average net assets.
OTHER EXPENSES
FIIOC performs the transfer agency, dividend disbursing and shareholder
servicing functions for each Freedom Fund. Fidelity Service Co. (FSC)
calculates the net asset value per share (NAV) and dividends for each
Freedom Fund, maintains each Freedom Fund's general accounting records, and
administers the securities lending program for each Freedom Fund. Pursuant
to administration agreements between Strategic Advisers and FMR, FMR bears
the cost of these services and pays certain other expenses of the Freedom
Funds. Strategic Advisers pays FMR a monthly administration fee equal to
the monthly management fee Strategic Advisers receives from each Freedom
Fund, minus an amount equal to an annual rate of 0.02% of that Freedom
Fund's average net assets.
Each Freedom Fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each Plan
recognizes that Strategic Advisers or FMR may use its management or
administration fee revenues, respectively, as well as its past profits or
its resources from any other source, to pay FDC for expenses incurred in
connection with the distribution of Freedom Fund shares. FDC may make
payments to third parties, such as banks or broker-dealers, that engage
in the sale of the Freedom Funds' shares. The Board of Trustees of each
Freedom Fund has authorized such payments.
Each Freedom Fund pays other expenses, such as interest on borrowings,
taxes, and the compensation of trustees who are not affiliated with
Fidelity.
The portfolio turnover rate for each Freedom F und is not expected to
exceed 50 % for its first fiscal period ending March 31,
199 7 . These rates will vary from year to year.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in a fund.
The different ways to set up (register) your account with Fidelity are
listed in the table on page .
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL RETIREMENT NEEDS.
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES.
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called NAV, is calculated every business
day. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4:00 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person
or by wire as described on page . If there is no application accompanying
this prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND , you can:
(small solid bullet) Mail in an account application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call
1-800-544-8888 for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"REGULAR INVESTMENT PLANS", PAGE .
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
<TABLE>
<CAPTION>
<S> <C> <C>
Phone
1-800-544-777
(phone_graphic)(small solid bullet) Exchange from another Fidelity fund (small solid bullet) Exchange from another Fidelity
account with the same registration, fund account with the same
including name, address, and registration, including name,
taxpayer ID number. address, and taxpayer ID number.
(small solid bullet) Use Fidelity Money Line to transfer
from your bank account. Call
before your first use to verify that
this service is in place on your
account. Maximum Money Line:
$50,000.
</TABLE>
<TABLE>
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Mail(mail_graphic) (small solid bullet) Complete and sign the account (small solid bullet) Make your check payable to the
application. Make your check complete name of the Freedom
payable to the complete name of the Fund of your choice . Indicate your
Freedom F und of your choice. Mail Freedom F und account number on
to the address indicated on the your check and mail to the address
application. printed on your account statement.
(small solid bullet) Exchange by mail: call
1-800- 544-6666 for instructions.
In Person
(hand_graphic) (small solid bullet) Bring your application and
check to a (small solid bullet) Bring your check to a Fidelity
Fidelity Investor Center. Call Investor Center. Call
1-800- 544-9797 for the center 1-800- 544-9797 for the center
nearest you. nearest you.
Wire(wire_graphic) (small solid bullet) Call 1-800 544-7777 to set
up your (small solid bullet) Not available for retirement
account and to arrange a wire accounts.
transaction. Not available for (small solid bullet) Wire to:
retirement accounts. Bankers Trust Company,
(small solid bullet) Wire within 24 hours to: Bank Routing #021001033,
Bankers Trust Company, Account #00163053
Bank Routing #021001033, Specify the complete name of the
Account #00163053 Freedom Fund and include your
Specify the complete name of the account number and your name.
Freedom F und of your choice and
include your new account number
and your name.
Automatically
(automatic_graphic)(small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic Account
Builder. Sign up for this service
when opening your account, or call
1-800- 544-6666 to add it.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800- 544-6666 for a
retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
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ACCOUNT TYPE SPECIAL REQUIREMENTS
Phone 1-800-544-777
(phone_graphic) All account types except retirement (small solid bullet) Maximum check request: $100,000.
All account types (small solid bullet) For Money Line transfers to your
bank account; minimum: $10;
maximum: $100,000.
(small solid bullet) You may exchange to other Fidelity
funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
Mail or in Person
(mail_graphic)(hand_graphic) Individual, Joint Tenant, (small solid bullet) The letter of instruction must be
Sole Proprietorship, UGMA, UTMA signed by all persons required to
sign for transactions, exactly as
their names appear on the account.
Retirement account (small solid bullet) The account owner should complete
a retirement distribution form. Call
Trust 1-800 -544-6666 to request one.
(small solid bullet) The trustee must sign the letter
indicating capacity as trustee. If the
trustee's name is not in the account
Business or Organization registration, provide a copy of the
trust document certified within the
last 60 days.
(small solid bullet) At least one person authorized by
Executor, Administrator, Conservator, corporate resolution to act on the
Guardian account must sign the letter.
(small solid bullet) Include a corporate resolution with
corporate seal or a signature
guarantee.
(small solid bullet) Call 1-800- 544-6666 for
instructions.
Wire (wire_graphic) All account types except retirement (small solid bullet) You must sign up for the wire
feature before using it. To verify that
it is in place, call 1-800 -544-6666 .
Minimum wire: $5,000.
(small solid bullet) Your wire redemption request must
be received by Fidelity before 4
p.m. Eastern time for money to be
wired on the next business day.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more than
one account in a fund. Call 1-800- 544-6666 if you need copies of
financial reports, prospectuses, or historical account information.
24-HOUR SERVICE
ACCOUNT ASSISTANCE 1-800-544-6666
ACCOUNT TRANSACTIONS 1-800-544-7777
PRODUCT INFORMATION 1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE EXPRESS 1-800-544-5555
AUTOMATED SERVICE
(checkmark)
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800- 544-6666 for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or quarterly (small solid bullet) For a new account, complete the appropriate section on the
fund application.
(small solid bullet) For existing accounts, call 1-800 -544-6666 for an application.
(small solid bullet) To change the amount or frequency of your investment, call
1-800 -544-6666 at least three business days prior to your
next scheduled investment date.
</TABLE>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay period (small solid bullet) Check the appropriate box on the fund application, or call
1-800 -544-6666 for an authorization form.
(small solid bullet) Changes require a new authorization form.
</TABLE>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, bimonthly, (small solid bullet) To establish, call 1-800- 544-6666 after both accounts are
quarterly, or annually opened.
(small solid bullet) To change the amount or frequency of your investment, call
1-800- 544-6666.
</TABLE>
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
COMBINATION WITH FREEDOM INCOME FUND
Freedom Income Fund is designed to provide income and some growth to
investors in their retirement. It is expected that each Freedom Fund with a
target retirement date will combine its assets with Freedom Income Fund's
assets when the two funds' asset allocation targets match, approximately
five to ten years after the target retirement date. The funds may be
combined, without a vote of shareholders, if the trustees determine at the
time of the proposed combination that combining the funds is in the best
interests of the funds and their shareholders. When a Freedom Fund with a
target retirement date is combined with Freedom Income Fund, its
shareholders may have a capital gain or loss for federal tax purposes.
Prior to a combination, shareholders of a Freedom Fund with a target
retirement date will be notified of the combination and any tax
consequences.
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each Freedom Fund distributes substantially all of its net income and
capital gains to shareholders each year. Normally, dividends and capital
gains for each Freedom Fund with a target retirement date are
distributed in December and May. Normally, dividends for Freedom Income
Fund are distributed monthly, and capital gains for Freedom Income Fund
are distributed in December and May.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800- 544-6666 for instructions. Each fund offers
four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
When a fund deducts a distribution from its NAV, the reinvestment price is
the fund's NAV at the close of business that day. Cash distribution checks
will be mailed within seven days .
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price you
receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized
but not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in the
form of a taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
EACH F UND'S NAV is the value of a single share. The NAV is computed
by adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The assets of each Freedom Fund consist primarily of shares of the
underlying Fidelity funds, which are valued at their respective NAVs. Most
underlying Fidelity fund assets are valued primarily on the basis of market
quotations. Foreign securities held by an underlying Fidelity fund are
valued on the basis of quotations from the primary market in which they are
traded, and are translated from the local currency into U.S. dollars using
currency exchange rates. If quotations are not readily available, or if the
values have been materially affected by events occurring after the closing
of a foreign market, underlying Fidelity fund assets are valued by a method
that the Board of Trustees believes accurately reflects fair value.
Fidelity Money Market Trust: Retirement Money Market Portfolio values its
portfolio securities on the basis of amortized cost. This method minimizes
the effect of changes in a security's market value and helps the money
market fund maintain a stable $1.00 share price.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in Strategic
Advisers' opinion, they would disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH AN INVESTMENT PROFESSIONAL,
INCLUDING A BROKER, who may charge you a transaction fee for this
service. If you invest through an investment professional, read your
investment professional's program materials for any additional service
features or fees that may apply. Certain features of the fund, such as the
minimum initial or subsequent investment amounts, may be modified.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500, subject to an annual
maximum charge of $60.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets in
Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is
determined by aggregating Fidelity mutual fund accounts maintained by FSC
or FBSI which are registered under the same social security number or which
list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds, including any u nderlying Fidelity
f und. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in Strategic Advisers'
judgment, the fund would be unable to invest the money effectively in
accordance with its investment objective and policies, or would otherwise
potentially be adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC. This Prospectus and the related SAI do not
constitute an offer by the funds or by FDC to sell or to buy shares of the
funds to any person to whom it is unlawful to make such offer.
FIDELITY ABERDEEN STREET TRUST
(FORMERLY FIDELITY INSTITUTIONAL INVESTORS TRUST)
FIDELITY FREEDOM FUNDS
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION
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10, 11 ............................ Cover Page
12 ............................ Description of the Trust
13 a - c ............................ Investment Policies and Limitations
d ............................ *
14 a - c ............................ Trustees and Officers
15 a, b ............................ *
c ............................ Trustees and Officers
16 a i............................ Strategic Advisers and FMR; Portfolio
Transactions
ii........................... Trustees and Officers
.
iii.......................... Management Contracts
.
b ............................ Management Contracts
c, d ............................ Contracts with FMR Affiliates
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trust
i ............................ Contracts with FMR Affiliates
17 a ............................ Portfolio Transactions
b ............................ *
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trust
b ............................ *
19 a ............................ Additional Purchase, Exchange, and Redemption
Information
b ............................ Additional Purchase, Exchange, and Redemption
Information; Valuation
c ............................ *
20 ............................ Distributions and Taxes
21 a, b ............................ Contracts with FMR Affiliates
c ............................ *
22 ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
FIDELITY FREEDOM FUNDS(trademark):
FIDELITY FREEDOM INCOME FUND(trademark)
FIDELITY FREEDOM 2000 FUND(trademark)
FIDELITY FREEDOM 2010 FUND(trademark)
FIDELITY FREEDOM 2020 FUND(trademark)
FIDELITY FREEDOM 2030 FUND(trademark)
FUNDS OF FIDELITY ABERDEEN STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
OCTOBER 11, 1996
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
October 11, 1996). Please retain this document for future reference.
To obtain an additional copy of the Prospectus, please call Fidelity
Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Investment Practices of the Freedom Funds
Investment Practices of the Underlying Fidelity Funds
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange, and Redemption Information
Distributions and Taxes
Strategic Advisers and FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trust
Appendix
Financial Statements
INVESTMENT ADVISER
Strategic Advisers, Inc. (Strategic Advisers)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
The Bank of New York (BONY)
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a Freedom Fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the Freedom Fund's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets, or other circumstances will not be considered
when determining whether the investment complies with a Freedom
F und's investment policies and limitations.
A Freedom F und ' s fundamental investment policies and
limitations cannot be changed without approval by a "majority of the
outstanding voting securities" (as defined in the Investment Company Act of
1940 (1940 Act)) of th e fund. However, except for the fundamental
investment limitations listed below, the investment policies and
limitations described in this SAI are not fundamental and may be changed
without shareholder approval.
THE FOLLOWING ARE THE FREEDOM FUNDS' FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. EACH FREEDOM FUND MAY NOT:
(1) With respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities, or securities of
other investment companies) if, as a result, (a) more than 5% of the fund's
total assets would be invested in the securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of that
issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
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;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry (provided that investments in
other investment companies shall not be considered an investment in any
particular industry for purposes of this investment limitation);
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) Each 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.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) Each fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) Each fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) Each fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which Fidelity Management & Research
Company or an affiliate serves as investment adviser or (b) by engaging
in reverse repurchase agreements with any party (reverse repurchase
agreements are treated as borrowings for purposes of fundamental investment
limitation (3)). Each fund will not purchase any security
while borrowings representing more than 5% of its total assets are
outstanding. Each fund will not borrow from other funds
advised by Fidelity Management & Research Company or its affiliates
if total outstanding borrowings immediately after such borrowing would
exceed 15% of the fund's total assets.
(iv) Each fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) Each fund does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid under limitation
(iv) would exceed 10% of the fund's net assets.
(vi) Each fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5% of the
fund's net assets) to a registered investment company or portfolio for
which Fidelity Management & Research Company or an affiliate serves
as investment adviser or (b) acquiring loans, loan participations, or other
forms of direct debt instruments and, in connection therewith, assuming any
associated unfunded commitments of the sellers. (This limitation does not
apply to purchases of debt securities or to repurchase agreements.)
(vii) Each fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends,
through offers of exchange, or as a result of reorganization,
consolidation, or merger , or (ii) to securities of other open-end
investment companies managed by Fidelity Management & Research
Company or a successor or affiliate purchased pursuant to an
exemptive order granted by the Securities and Exchange Commission .
(viii) Each fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(ix) Each fund does not currently intent to invest in oil, gas, or other
mineral exploration or development programs or leases.
( x ) Each 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.
For purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the Freedom Funds' limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions" on
page .
Notwithstanding the foregoing investment limitations , the underlying
Fidelity fund s in which the Freedom Funds may invest have adopted
certain investment limitations that may be more or less restrictive
than those listed above, thereby permitting a Freedom Fund to engage
indirectly in investment strategies that are prohibited under the
investment limitations listed above. The investment
limitations of each underlying Fidelity fund are set forth in its
SAI.
In accordance with each Freedom Fund' s investment program
as set forth in the prospectus, a Freedom Fund may invest
more than 25% of its assets in any one underlying Fidelity fund.
However, each of the underlying Fidelity funds in which a Freedom
Fund may invest (other than Fidelity Money Market Trust:
Retirement Money Market Portfolio) will not concentrate more than 25%
of its total assets in any one industry , except that Retirement
Money Market Portfolio will invest more than 25% of its total assets in the
financial services industry.
INVESTMENT PRACTICES OF THE FREEDOM FUNDS
The following pages contain more detailed information about types of
instruments in which a Freedom Fund may invest, strategies Strategic
Advisers may employ in pursuit of a Freedom Fund's investment objective,
and a summary of related risks. Strategic Advisers may not buy all of these
instruments or use all of these techniques unless it believes that doing so
will help the Freedom Fund achieve its goal.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Index (S&P 500) or the
Bond Buyer Municipal Bond Index. Futures can be held until their delivery
dates, or can be closed out before then if a liquid secondary market is
available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this SAI, may be changed as regulatory agencies
permit.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, Strategic
Advisers determines the liquidity of a fund's investments and, through
reports from Strategic Advisers, the Board monitors investments in illiquid
instruments. In determining the liquidity of a fund's investments,
Strategic Advisers may consider various factors, including (1) the
frequency of trades and quotations, (2) the number of dealers and
prospective purchasers in the marketplace, (3) dealer undertakings to make
a market, (4) the nature of the security (including any demand or tender
features), and (5) the nature of the marketplace for trades (including the
ability to assign or offset the fund's rights and obligations relating to
the investment).
Investments currently considered by a fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days .
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the Securities and Exchange Commission (SEC), each fund has
received permission to lend money to, and borrow money from, other funds
advised by Fidelity Management & Research Company (FMR) or its affiliates.
Interfund loans and borrowings normally extend overnight, but can have a
maximum duration of seven days. Loans may be called on one day's notice. A
fund will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect a fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by Strategic Advisers.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, a fund will maintain appropriate liquid assets in a segregated
custodial account to cover its obligation under the agreement. A fund will
enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by Strategic Advisers. Such
transactions may increase fluctuations in the market value of a fund's
assets and may be viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by Strategic Advisers to be of good standing.
Furthermore, they will only be made if, in Strategic Advisers' judgment,
the consideration to be earned from such loans would justify the risk.
Strategic Advisers understands that it is the current view of the SEC Staff
that a fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of cash
or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower;
(2) the borrower must increase the collateral whenever the market value of
the securities loaned (determined on a daily basis) rises above the value
of the collateral; (3) after giving notice, the fund must be able to
terminate the loan at any time; (4) the fund must receive reasonable
interest on the loan or a flat fee from the borrower, as well as amounts
equivalent to any dividends, interest, or other distributions on the
securities loaned and to any increase in market value; (5) the fund may pay
only reasonable custodian fees in connection with the loan; and (6) the
Board of Trustees must be able to vote proxies on the securities loaned,
either by terminating the loan or by entering into an alternative
arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SOURCES OF CREDIT OR LIQUIDITY SUPPORT . Strategic Advisers may rely
on its evaluation of the credit of a bank or another entity in determining
whether to purchase a security supported by a letter of credit guarantee,
insurance or other source of credit or liquidity. In evaluating the credit
of a foreign bank or other foreign entities, Strategic Advisers will
consider whether adequate public information about the entity is available
and whether the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment.
INVESTMENT PRACTICES OF THE UNDERLYING FIDELITY FUNDS
The following pages contain more detailed information about types of
instruments in which an underlying Fidelity fund may invest, strategies FMR
may employ in pursuit of an underlying Fidelity fund's investment
objective, and a summary of related risks. FMR may not buy all of these
instruments or use all of these techniques unless it believes that doing so
will help the underlying Fidelity fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions
with financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act . These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S.
G overnment securities with affiliated financial institutions that
are primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued by
the SEC, the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
ASSET-BACKED SECURITIES. Asset-backed securities represent interests in
pools of consumer loans (generally unrelated to mortgage loans) and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend upon payment of the underlying loans by
individuals, although the securities may be supported by letters of credit
or other credit enhancements. The value of asset-backed securities may also
depend on the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing the
credit enhancement.
CLOSED-END INVESTMENT COMPANIES . The fund may purchase the shares of
closed-end investment companies to facilitate investment in certain
countries. Shares of closed-end investment companies may trade at a premium
or a discount to their net asset value.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The
fund may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the fund
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because the fund is not required to pay for
securities until the delivery date, these risks are in addition to the
risks associated with the fund's other investments. If the fund
remains substantially fully invested at a time when delayed-delivery
purchases are outstanding, the delayed-delivery purchases may result in a
form of leverage. When delayed-delivery purchases are outstanding, the fund
will set aside appropriate liquid assets in a segregated custodial account
to cover its purchase obligations. When the fund has sold a security
on a delayed-delivery basis, the fund does not participate in further gains
or losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund may renegotiate delayed-delivery transactions after they
are entered into, and may sell underlying securities before they are
delivered, which may result in capital gains or losses.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and bankers'
acceptances of U.S. banks and their branches located outside of the United
States, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. The fund may also invest in U.S.
dollar-denominated securities issued or guaranteed by other U.S. or foreign
issuers, including U.S. and foreign corporations or other business
organizations, foreign governments, foreign government agencies or
instrumentalities, and U.S. and foreign financial institutions, including
savings and loan institutions, insurance companies, mortgage bankers, and
real estate investment trusts, as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental
regulation. Payment of interest and principal on these obligations may also
be affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidence of
ownership of portfolio securities may be held outside of the United States
and the fund may be subject to the risks associated with the holding
of such property overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation, as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic developments,
withholding taxes, seizures of foreign deposits, currency controls,
interest limitations, or other governmental restrictions that might affect
payment of principal or interest, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. Foreign issuers may be subject to less governmental
regulation and supervision than U.S. issuers. Foreign issuers also
generally are not bound by uniform accounting, auditing, and financial
reporting requirements comparable to those applicable to U.S. issuers.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Deposit a ry Receipts (ADRs) as well as other "hybrid" forms
of ADRs including European Deposit a ry Receipts (EDRs) and Global
Deposit a ry Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
deposit a ry banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by a
custodian bank or similar financial institution in the issuer's home
country. The deposit a ry bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are an alternative to directly purchasing the underlying
foreign securities in their national markets and currencies. However, ADRs
continue to be subject to many of the risks associated with investing
directly in foreign securities. These risks include foreign exchange risk
as well as the political and economic risks of the underlying issuer's
country.
FOREIGN CURRENCY TRANSACTIONS. The fund may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. The fund will convert currency on a spot basis from time to
time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers generally do not charge a fee for
conversion, they do realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the fund at one rate,
while offering a lesser rate of exchange should the fund desire to resell
that currency to the dealer. Forward contracts are generally traded in an
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. The parties to a forward contract
may agree to offset or terminate the contract before its maturity, or may
hold the contract to maturity and complete the contemplated currency
exchange.
The fund may use currency forward contracts for any purpose
consistent with its investment objective. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the fund. The fund may also
use swap agreements, indexed securities, and options and futures contracts
relating to foreign currencies for the same purposes.
When the fund agrees to buy or sell a security denominated in a
foreign currency, it may desire to "lock in" the U.S. dollar price of the
security. By entering into a forward contract for the purchase or sale, for
a fixed amount of U.S. dollars, of the amount of foreign currency involved
in the underlying security transaction, the fund will be able to protect
itself against an adverse change in foreign currency values between the
date the security is purchased or sold and the date on which payment is
made or received. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." The fund may also enter into forward
contracts to purchase or sell a foreign currency in anticipation of future
purchases or sales of securities denominated in foreign currency, even if
the specific investments have not yet been selected by FMR.
The fund may also use forward contracts to hedge against a decline
in the value of existing investments denominated in foreign currency. For
example, if the fund owned securities denominated in pounds
sterling, it could enter into a forward contract to sell pounds sterling in
return for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge," would
tend to offset both positive and negative currency fluctuations, but would
not offset changes in security values caused by other factors. The
fund could also hedge the position by selling another currency expected to
perform similarly to the pound sterling - for example, by entering into a
forward contract to sell Deutschemarks or European Currency Units in return
for U.S. dollars. This type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.
The fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting exposure
from U.S. dollars to a foreign currency, or from one foreign currency to
another foreign currency. For example, if the fund held investments
denominated in Deutschemarks, the fund could enter into forward contracts
to sell Deutschemarks and purchase Swiss Francs. This type of strategy,
sometimes known as a "cross-hedge," will tend to reduce or eliminate
exposure to the currency that is sold, and increase exposure to the
currency that is purchased, much as if the fund had sold a security
denominated in one currency and purchased an equivalent security
denominated in another. Cross-hedges protect against losses resulting from
a decline in the hedged currency, but will cause the fund to assume the
risk of fluctuations in the value of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the fund
will segregate assets to cover currency forward contracts, if any, whose
purpose is essentially speculative. The fund will not segregate
assets to cover forward contracts entered into for hedging purposes,
including settlement hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing and predicting currency values. Currency management strategies
may substantially change the fund's investment exposure to changes
in currency exchange rates, and could result in losses to the fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged the fund by selling that
currency in exchange for dollars, the fund would be unable to participate
in the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, the fund could realize currency losses from the hedge
and the security position at the same time if the two currencies do not
move in tandem. Similarly, if FMR increases the fund's exposure to a
foreign currency, and that currency's value declines, the fund will realize
a loss. There is no assurance that FMR's use of currency management
strategies will be advantageous to the fund or that it will hedge at
an appropriate time.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by the fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUND ' S RIGHTS AS A SHAREHOLDER. The fund do es not
intend to direct or administer the day-to-day operations of any company.
The fund, however, may exercise its rights as a shareholder and may
communicate its views on important matters of policy to management, the
Board of Directors, and shareholders of a company when FMR determines that
such matters could have a significant effect on the value of the fund's
investment in the company. The activities that the fund may engage
in, either individually or in conjunction with others, may include, among
others, supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's directors
or management; seeking changes in a company's direction or policies;
seeking the sale or reorganization of the company or a portion of its
assets; or supporting or opposing third party takeover efforts. This area
of corporate activity is increasingly prone to litigation and it is
possible that the fund could be involved in lawsuits related to such
activities. FMR will monitor such activities with a view to mitigating, to
the extent possible, the risk of litigation against the fund and the
risk of actual liability if the fund is involved in litigation. No
guarantee can be made, however, that litigation against the fund
will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, Options and Futures Relating to Foreign
Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put
and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will
comply with guidelines established by the SEC with respect to coverage of
options and futures strategies by mutual funds, and if the guidelines so
require will set aside appropriate liquid assets in a segregated custodial
account in the amount prescribed. Securities held in a segregated account
cannot be sold while the futures or option strategy is outstanding, unless
they are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the fund's
assets could impede portfolio management or the fund's ability to meet
redemption requests or other current obligations.
COMBINED POSITIONS. The fund may purchase and write options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the overall
position. For example, the fund may purchase a put option and write
a call option on the same underlying instrument, in order to construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call option
at a lower price, in order to reduce the risk of the written call option in
the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction costs
and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the fund's current
or anticipated investments exactly. The fund may invest in options
and futures contracts based on securities with different issuers,
maturities, or other characteristics from the securities in which it
typically invests, which involves a risk that the options or futures
position will not track the performance of the fund's other
investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the
fund's investments well. Options and futures prices are affected by such
factors as current and anticipated short-term interest rates, changes in
volatility of the underlying instrument, and the time remaining until
expiration of the contract, which may not affect security prices the same
way. Imperfect correlation may also result from differing levels of demand
in the options and futures markets and the securities markets, from
structural differences in how options and futures and securities are
traded, or from imposition of daily price fluctuation limits or trading
halts. The fund may purchase or sell options and futures contracts
with a greater or lesser value than the securities it wishes to hedge or
intends to purchase in order to attempt to compensate for differences in
volatility between the contract and the securities, although this may not
be successful in all cases. If price changes in the fund's options
or futures positions are poorly correlated with its other investments, the
positions may fail to produce anticipated gains or result in losses that
are not offset by gains in other investments.
FUTURES CONTRACTS. When the fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future
date. When the fund sells a futures contract, it agrees to sell the
underlying instrument at a specified future date. The price at which the
purchase and sale will take place is fixed when the fund enters into the
contract. Some currently available futures contracts are based on specific
securities, such as U.S. Treasury bonds or notes, and some are based on
indices of securities prices, such as the Standard & Poor's 500 Index
(S&P 500) or the Bond Buyer Municipal Bond Index. Futures can be held
until their delivery dates, or can be closed out before then if a liquid
secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund sells a
futures contract, by contrast, the value of its futures position will tend
to move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. In the event of the
bankruptcy of an FCM that holds margin on behalf of the fund, the
fund may be entitled to return of margin owed to it only in proportion to
the amount received by the FCM's other customers, potentially resulting in
losses to the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund intends
to file a notice of eligibility for exclusion from the definition of
the term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets , before engaging in any purchases or
sales of futures contracts or options on futures contracts. The fund
intends to comply with Rule 4.5 under the Commodity Exchange Act, which
limits the extent to which the fund can commit assets to initial margin
deposits and option premiums.
In addition, the fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of the
fund's total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the fund 's investments in futures
contracts and options, and the fund's policies regarding futures
contracts and options discussed elsewhere in this SAI, may be changed as
regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for
the fund to enter into new positions or close out existing
positions. If the secondary market for a contract is not liquid because of
price fluctuation limits or otherwise, it could prevent prompt liquidation
of unfavorable positions, and potentially could require the fund to
continue to hold a position until delivery or expiration regardless of
changes in its value. As a result, the fund's access to other assets
held to cover its options or futures positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above.
The fund may purchase and sell currency futures and may purchase and
write currency options to increase or decrease its exposure to different
foreign currencies. The fund may also purchase and write currency
options in conjunction with each other or with currency futures or forward
contracts. Currency futures and options values can be expected to correlate
with exchange rates, but may not reflect other factors that affect the
value of the fund's investments. A currency hedge, for example,
should protect a Yen-denominated security from a decline in the Yen, but
will not protect the fund against a price decline resulting from
deterioration in the issuer's creditworthiness. Because the value of
the fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to match the
amount of currency options and futures to the value of the fund's
investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the fund greater flexibility to tailor an option to its needs, OTC
options generally involve greater credit risk than exchange-traded options,
which are guaranteed by the clearing organization of the exchanges where
they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
fund obtains the right (but not the obligation) to sell the option's
underlying instrument at a fixed strike price. In return for this right,
the fund pays the current market price for the option (known as the option
premium). Options have various types of underlying instruments, including
specific securities, indices of securities prices, and futures contracts.
The fund may terminate its position in a put option it has purchased
by allowing it to expire or by exercising the option. If the option is
allowed to expire, the fund will lose the entire premium it paid. If the
fund exercises the option, it completes the sale of the underlying
instrument at the strike price. The fund may also terminate a put
option position by closing it out in the secondary market at its current
price, if a liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it
takes the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the fund assumes the obligation to pay
the strike price for the option's underlying instrument if the other party
to the option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund may seek to
terminate its position in a put option it writes before exercise by closing
out the option in the secondary market at its current price. If the
secondary market is not liquid for a put option the fund has written,
however, the fund must continue to be prepared to pay the strike price
while the option is outstanding, regardless of price changes, and must
continue to set aside assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options are
similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the effects
of a price decline. At the same time, because a call writer must be
prepared to deliver the underlying instrument in return for the strike
price, even if its current value is greater, a call writer gives up some
ability to participate in security price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from
FMR, the Board monitors investments in illiquid instruments. In determining
the liquidity of the fund's investments, FMR may consider various
factors, including (1) the frequency of trades and quotations, (2) the
number of dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by a fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, non-government stripped fixed-rate
mortgage-backed securities, and over-the-counter options. Also, FMR may
determine some restricted securities, time-deposits,
government-stripped fixed-rate mortgage-backed securities, loans and
other direct debt instruments, emerging market securities, and swap
agreements to be illiquid. However, with respect to over-the-counter
options a fund writes, all or a portion of the value of the underlying
instrument may be illiquid depending on the assets held to cover the option
and the nature and terms of any agreement the fund may have to close out
the option before expiration.
In the absence of market quotations, illiquid investments are priced
at fair value (and, for Retirement Money Market Portfolio, are valued
for purposes of monitoring amortized cost valuation at fair value) as
determined in good faith by a committee appointed by the Board of Trustees.
If through a change in values, net assets, or other circumstances, a fund
were in a position where more than 10% or 15% of its net assets,
depending upon the fund, was invested in illiquid securities, it would
seek to take appropriate steps to protect liquidity.
INDEXED SECURITIES. The fund may purchase securities whose prices
are indexed to the prices of other securities, securities indices,
currencies, precious metals or other commodities, or other financial
indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is determined
by reference to a specific instrument or statistic. Gold-indexed
securities, for example, typically provide for a maturity value that
depends on the price of gold, resulting in a security whose price tends to
rise and fall together with gold prices. Currency-indexed securities
typically are short-term to intermediate-term debt securities whose
maturity values or interest rates are determined by reference to the values
of one or more specified foreign currencies, and may offer higher yields
than U.S. dollar-denominated securities of equivalent issuers.
Currency-indexed securities may be positively or negatively indexed; that
is, their maturity value may increase when the specified currency value
increases, resulting in a security that performs similarly to a
foreign-denominated instrument, or their maturity value may decline when
foreign currencies increase, resulting in a security whose price
characteristics are similar to a put on the underlying currency.
Currency-indexed securities may also have prices that depend on the values
of a number of different foreign currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. Government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates.
Fidelity Government Securities Fund currently intends to participate in
this program only as a borrower. A fund will borrow through the program
only when the costs are equal to or lower than the cost of bank loans.
Interfund loans and borrowings normally extend overnight, but can have
a maximum duration of seven days. Loans may be called on one day's notice.
A fund will lend through the program only when the returns are
higher than those available from an investment in repurchase
agreements. A fund may have to borrow from a bank at a higher interest rate
if an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs.
ISSUER LOCATION. FMR determines where an issuer or its principal business
activities are located by looking at such factors as its country of
organization, the primary trading market for its securities, and the
location of its assets, personnel, sales, and earnings. The issuer of a
security is considered to be located in a particular country if (1) the
security is issued or guaranteed by the government of the country or any of
its agencies, political subdivisions, or instrumentalities; (2) the
security has its primary trading market in that country; or (3) the issuer
is organized under the laws of that country, derives at least 50% of its
revenues or profits from goods sold, investments made, or services
performed in the country, or has at least 50% of its assets located in the
country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
to lenders or lending syndicates (loans and loan participations), to
suppliers of goods or services (trade claims or other receivables), or to
other parties. Direct debt instruments are subject to the fund's
policies regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If the fund does not receive scheduled
interest or principal payments on such indebtedness, the fund's share price
and yield could be adversely affected. Loans that are fully secured offer
the fund more protections than an unsecured loan in the event of
non-payment of scheduled interest or principal. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off their
indebtedness, or may pay only a small fraction of the amount owed. Direct
indebtedness of developing countries also involves a risk that the
governmental entities responsible for the repayment of the debt may be
unable, or unwilling, to pay interest and repay principal when due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to the
fund. For example, if a loan is foreclosed, the fund could become part
owner of any collateral, and would bear the costs and liabilities
associated with owning and disposing of the collateral. In addition, it is
conceivable that under emerging legal theories of lender liability, the
fund could be held liable as a co-lender. Direct debt instruments may also
involve a risk of insolvency of the lending bank or other intermediary.
Direct debt instruments that are not in the form of securities may offer
less legal protection to the fund in the event of fraud or
misrepresentation. In the absence of definitive regulatory guidance,
the fund relies on FMR's research in an attempt to avoid situations
where fraud or misrepresentation could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, the fund has direct recourse against the
borrower, it may have to rely on the agent to apply appropriate credit
remedies against a borrower. If assets held by the agent for the benefit of
the fund were determined to be subject to the claims of the agent's
general creditors, the fund might incur certain costs and delays in
realizing payment on the loan or loan participation and could suffer a loss
of principal or interest.
Direct indebtedness purchased by the fund may include letters of
credit, revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
The fund will set aside appropriate liquid assets in a segregated
custodial account to cover its potential obligations under standby
financing commitments.
The fund limits the amount of total assets that it will invest in
any one issuer or in issuers within the same industry. For purposes of
these limitations, the fund generally will treat the borrower as the
"issuer" of indebtedness held by the fund. In the case of loan
participations where a bank or other lending institution serves as
financial intermediary between the fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor
relationship with the borrower, SEC interpretations require the fund, in
appropriate circumstances, to treat both the lending bank or other lending
institution and the borrower as "issuers" for these purposes. Treating a
financial intermediary as an issuer of indebtedness may restrict the
fund's ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities (those
rated below Baa by Moody's Investors Service or BBB by Standard and Poor's,
and unrated securities judged by FMR to be of equivalent quality) have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
speculative and involve greater risk of loss or price changes due to
changes in the issuer's capacity to pay. The market prices of lower-quality
debt securities may fluctuate more than those of higher-quality debt
securities and may decline significantly in periods of general economic
difficulty, which may follow periods of rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such securities to fund
highly leveraged corporate acquisitions and restructurings. Past experience
may not provide an accurate indication of the future performance of the
high-yield bond market, especially during periods of economic recession.
The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not
available, lower-quality debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-quality debt
securities and the fund's ability to dispose of these securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type held by the fund. In considering
investments for the fund, FMR will attempt to identify those issuers
of high-yielding securities whose financial condition is adequate to meet
future obligations, has improved, or is expected to improve in the future.
FMR's analysis focuses on relative values based on such factors as interest
or dividend coverage, asset coverage, earnings prospects, and the
experience and managerial strength of the issuer.
The fund may choose, at its expense or in conjunction with others,
to pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the fund.
MORTGAGE-BACKED SECURITIES. The fund may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security is an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations
(CMOs), make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and
the fund may invest in them if FMR determines they are consistent
with the fund ' s investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. The fund may own a
municipal security directly or through a participation interest.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY ( M ONEY M ARKET FUNDS ). Pursuant to
procedures adopted by the Board of Trustees, the fund may purchase only
high-quality securities that FMR believes present minimal credit risks. To
be considered high quality, a security must be rated in accordance with
applicable rules in one of the two highest categories for short-term
securities by at least two nationally recognized rating services (or by
one, if only one rating service has rated the security); or, if unrated,
judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1), and second tier securities
are those deemed to be in the second highest rating category (e.g.,
Standard & Poor's A-2). Split-rated securities may be determined to be
either first tier or second tier based on applicable regulations.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases
a security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect
the fund from the risk that the original seller will not fulfill its
obligation, the securities are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to the
sale price plus the accrued incremental amount. While it does not presently
appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is the fund's current
policy to engage in repurchase agreement transactions with parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, Retirement Money Market Portfolio
anticipates holding restricted securities to maturity or selling them in an
exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement,
the fund sells a portfolio instrument to another party, such as a
bank or broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, the fund will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation under the
agreement. The fund will enter into reverse repurchase agreements
only with parties whose creditworthiness has been found satisfactory by
FMR. Such transactions may increase fluctuations in the market value of
the fund's assets and may be viewed as a form of leverage.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows the fund to retain ownership of the
securities loaned and, at the same time, to earn additional income. Since
there may be delays in the recovery of loaned securities, or even a loss of
rights in collateral supplied should the borrower fail financially, loans
will be made only to parties deemed by FMR to be of good standing.
Furthermore, they will only be made if, in FMR's judgment, the
consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that
the fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of cash
or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower;
(2) the borrower must increase the collateral whenever the market value of
the securities loaned (determined on a daily basis) rises above the value
of the collateral; (3) after giving notice, the fund must be able to
terminate the loan at any time; (4) the fund must receive reasonable
interest on the loan or a flat fee from the borrower, as well as amounts
equivalent to any dividends, interest, or other distributions on the
securities loaned and to any increase in market value; (5) the fund may pay
only reasonable custodian fees in connection with the loan; and (6) the
Board of Trustees must be able to vote proxies on the securities loaned,
either by terminating the loan or by entering into an alternative
arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which the fund is authorized to invest. Investing this cash subjects
that investment, as well as the security loaned, to market forces (i.e.,
capital appreciation or depreciation).
SHORT SALES (GROWTH & INCOME AND HIGH INCOME FUNDS). The fund may enter
into short sales with respect to stocks underlying its convertible security
holdings. For example, if FMR anticipates a decline in the price of the
stock underlying a convertible security the fund holds, it may sell the
stock short. If the stock price subsequently declines, the proceeds of the
short sale could be expected to offset all or a portion of the effect of
the stock's decline on the value of the convertible security. The fund
currently intends to hedge no more than 15% of its total assets with short
sales on equity securities underlying its convertible security holdings
under normal circumstances.
When the fund enters into a short sale, it will be required to set aside
securities equivalent in kind and amount to those sold short (or securities
convertible or exchangeable into such securities) and will be required to
hold them aside while the short sale is outstanding. The fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales.
SHORT SALES "AGAINST THE BOX" (GROWTH AND MONEY MARKET FUNDS). If the fund
enters into a short sale against the box, it will be required to set aside
securities equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities) and will be
required to hold such securities while the short sale is outstanding. The
fund will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against the
box.
A money market fund may sell securities short when it owns or has the right
to obtain securities equivalent in kind or amount to the securities sold
short. Short sales could be used to protect the net asset value per share
of a money market fund in anticipation of increased interest rates, without
sacrificing the current yield of the securities sold short.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity. In evaluating the credit of a foreign bank
or other foreign entities, FMR will consider whether adequate public
information about the entity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
SOVEREIGN DEBT OBLIGATIONS. Sovereign debt instruments are issued or
guaranteed by foreign governments or their agencies, including debt of
Latin American nations or other developing countries. Sovereign debt may be
in the form of conventional securities or other types of debt instruments
such as loans or loan participations. sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal and
interest when due, and may require renegotiation or rescheduling of debt
payments. In addition, prospects for repayment of principal and interest
may depend on political as well as economic factors.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are
created by separating the income and principal components of a U.S.
Government security and selling them separately. STRIPS (Separate
Trading of Registered Interest and Principal of Securities) are created
when the coupon payments and the principal payment are stripped from an
outstanding U.S. Treasury security by a Federal
Reserve Bank.
Privately stripped government securities are created when a dealer deposits
a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping . The custodian issues separate receipts
for the coupon payments and the principal payments, which the dealer
then sells. Proprietary receipts, such as Certificates of Accrual on
Treasury Securities (CATS), and Treasury Investment Growth Receipts
(TIGRS), and generic receipts, such as Treasury Receipts (TRs), are
privately stripped U.S. Treasury securities .
Because the SEC does not consider privately stripped government securities
to be U.S. Government s ecurities for purposes of Rule 2a-7, a
money market fund must evaluate them as it would non-government
securities pursuant to regulatory guidelines applicable to all money market
funds.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. Government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of investments or market
factors. Depending on their structure, swap agreements may increase or
decrease the fund's exposure to long- or short-term interest rates
(in the United States or abroad), foreign currency values, mortgage
securities, corporate borrowing rates, or other factors such as security
prices or inflation rates. Swap agreements can take many different forms
and are known by a variety of names. The fund is not limited to any
particular form of swap agreement if FMR determines it is consistent with
the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure
from one type of investment to another. For example, if the fund
agreed to exchange payments in dollars for payments in foreign currency,
the swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and interest
rates. Caps and floors have an effect similar to buying or writing options.
Depending on how they are used, swap agreements may increase or decrease
the overall volatility of the fund's investments and its share price
and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from the fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. The fund expects to be
able to eliminate its exposure under swap agreements either by assignment
or other disposition, or by entering into an offsetting swap agreement with
the same party or a similarly creditworthy party.
The fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap agreements.
If the fund enters into a swap agreement on a net basis, it will
segregate assets with a daily value at least equal to the excess, if any,
of the fund's accrued obligations under the swap agreement over the accrued
amount the fund is entitled to receive under the agreement. If the
fund enters into a swap agreement on other than a net basis, it will
segregate assets with a value equal to the full amount of the fund's
accrued obligations under the agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
VARIABLE AND FLOATING RATE SECURITIES (MONEY MARKET FUNDS) provide for
periodic adjustments of the interest rate paid on the security. Variable
rate securities provide for a specified periodic adjustment in the interest
rate, while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some variable or
floating rate securities have put features.
WARRANTS. Warrants are securities that give the fund the right to purchase
equity securities from the issuer at a specific price (the strike price)
for a limited period of time. The strike price of warrants typically is
much lower than the current market price of the underlying securities, yet
they are subject to similar price fluctuations. As a result, warrants may
be more volatile investments than the underlying securities and may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets
of the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to expiration date. These factors
can make warrants more speculative than other types of investments.
ZERO COUPON BONDS do not make regular interest payments; instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its dividends, the fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) can also be separated in this fashion. ORIGINAL ISSUE
ZEROS are zero coupon securities originally issued by the U.S. Government,
a government agency, or a corporation in zero coupon form.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities (normally,
shares of the underlying Fidelity funds) are placed on behalf of each
Freedom F und by Strategic Advisers , either itself or through its
affiliates, pursuant to authority contained in each Freedom
Fund's management contract. A Freedom Fund will not incur any
commissions or sales charges when it invests in underlying Fidelity funds,
but it may incur such costs if it invests directly in other types of
securities.
All orders for the purchase or sale of portfolio securities are placed on
behalf of each underlying Fidelity fund by FMR pursuant to authority
contained in each underlying Fidelity fund's management contract. Because
the market for most OTC securities is made by market or dealers, rather
than on an exchange, FMR will place most of its orders on behalf of
Fidelity OTC Portfolio with dealers. Ordinarily commissions are not charged
on such orders. Thus, Fidelity OTC Portfolio should incur a relatively
small amount of commission expenses. When Fidelity OTC Portfolio places an
order with a dealer, it pays a spread, which is included in the cost of the
security, and is the difference between the dealer's cost and the cost to
the fund. If FMR grants investment management authority to an underlying
Fidelity fund's sub-adviser, the sub-adviser is authorized to place orders
for the purchase and sale of portfolio securities on behalf of that fund,
and will do so in accordance with the policies described below.
Strategic Advisers and FMR each is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. Money market securities
generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, Strategic Advisers and FMR consider various relevant
factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability, and
financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness of
any commissions; and, for certain underlying Fidelity funds, arrangements
for payment of fund expenses. Generally, commissions for investments traded
on foreign exchanges will be higher than for investments traded on U.S.
exchanges and may not be subject to negotiations.
The Freedom Funds and underlying Fidelity funds may execute
portfolio transactions with broker-dealers who provide research and
execution services to the funds or other accounts over which Strategic
Advisers , FMR or their affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or sellers
of securities. In addition, such broker-dealers may furnish analyses and
reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy, and performance of accounts; effect securities
transactions, and perform functions incidental thereto (such as clearance
and settlement). Strategic Advisers and FMR may maintain listings of
broker-dealers who provide such services on a regular basis. However, as
many transactions in money market securities are placed with broker-dealers
(including broker-dealers on the list) without regard to the furnishing of
such services, it is not possible to estimate the proportion of
transactions in such securities directed to such broker-dealers solely
because such services were provided. The selection of such
broker-dealers generally is made by Strategic Advisers or FMR (to
the extent possible consistent with execution considerations) in accordance
with a ranking of broker-dealers determined periodically by Strategic
Advisers' or FMR's investment staff (for equity funds), and is based
upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Freedom Funds or the underlying Fidelity funds may be
useful to Strategic Advisers or FMR, as the case may be, in
rendering investment management services to the respective funds or
its other clients, and conversely, such research provided by broker-dealers
who have executed transaction orders on behalf of other Strategic Advisers
or FMR clients may be useful to Strategic Advisers or FMR, as the
case may be, in carrying out its obligations to the respective
funds. The receipt of such research has not reduced Strategic Advisers'
or FMR's normal independent research activities; however, it enables
Strategic Advisers and FMR to avoid the additional expenses that
could be incurred if Strategic Advisers or 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
a Freedom Fund or an underlying Fidelity fund to pay such higher
commissions, Strategic Advisers or FMR, as the case may be, 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 Strategic
Advisers' or FMR's, as the case may be, overall responsibilities to
the fund and its other clients. In reaching this determination, Strategic
Advisers or 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.
Strategic Advisers and FMR are authorized to use research services
provided by and to place portfolio transactions with brokerage firms
that have provided assistance in the distribution of shares of the funds or
shares of other Fidelity funds to the extent permitted by law. Strategic
Advisers and FMR may use research services provided by and place
agency transactions with Fidelity Brokerage Services, Inc. (FBSI) and
Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. From
September 1992 through December 1994, FBS operated under the name Fidelity
Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was
converted to an unlimited liability company and assumed the name FBS.
FMR may allocate brokerage transactions to broker-dealers who have
entered into arrangements with FMR under which the broker-dealer
allocates a portion of the commissions paid by each of certain
underlying Fidelity fund s toward payment of that fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board s of Trustees
of the trust and of the underlying Fidelity funds have authorized
FBSI to execute portfolio transactions on national securities exchanges in
accordance with approved procedures and applicable SEC rules.
The Trustees periodically review Strategic Advisers' or FMR's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the Freedom Funds or the underlying
Fidelity funds , respectively, and review the commissions paid by
each fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
Each Freedom Fund's annualized turnover rate for its first fiscal
period is not expected to exceed 50 %. For their most recently
ended fiscal periods, t he u nderlying Fidelity fund s'
portfolio turnover rates ranged from 3 9 % to 391% . There
can be no assurance that the turnover rates for the underlying Fidelity
funds will remain within this range during subsequent fiscal
period s. A high turnover rate increases transaction costs and may
increase taxable gains.
From time to time the Trustees will review whether the recapture for the
benefit of the Freedom Funds or the underlying Fidelity funds of
some portion of the brokerage commissions or similar fees paid by the funds
on portfolio transactions is legally permissible and advisable. Each fund
seeks to recapture soliciting broker-dealer fees on the tender of portfolio
securities, but at present no other recapture arrangements are in effect.
The Trustees intend to continue to review whether recapture opportunities
are available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for each
fund to seek such recapture.
Although the Trustees and officers of each Freedom Fund are
substantially the same as those of the underlying Fidelity funds and
other funds managed by FMR or its affiliates , investment
decisions for each Freedom F und are made independently from those of
other funds managed by FMR or accounts managed by FMR affiliates. It
sometimes happens that the same security is held in the portfolio of more
than one of these funds or accounts. Simultaneous transactions are
inevitable when several funds and accounts are managed by the same
investment adviser, or an affiliate thereof, particularly when the
same security is suitable for the investment objective of more than one
fund or account.
When two or more Freedom Funds and/or underlying Fidelity funds are
simultaneously engaged in the purchase or sale of the same security, the
prices and amounts are allocated in accordance with procedures believed to
be appropriate and equitable for each fund. In some cases this system could
have a detrimental effect on the price or value of the security as far as
each fund is concerned. In other cases, however, the ability of the funds
to participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that the
desirability of retaining Strategic Advisers or FMR as investment
adviser to each Freedom Fund or underlying Fidelity fund, as the case
may be, outweighs any disadvantages that may be said to exist from
exposure to simultaneous transactions.
VALUATION
Fidelity Service Company (FSC) normally determines each Freedom
Fund's net asset value per share (NAV) as of the close of the New York
Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time). The valuation of
portfolio securities is determined as of this time for the purpose of
computing each fund's NAV.
The assets of each Freedom Fund consist primarily of shares of the
underlying Fidelity funds, which are valued at their respective NAVs.
VALUATION OF UNDERLYING FIDELITY FUNDS' PORTFOLIO SECURITIES
EQUITY FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade. Most
equity securities for which the primary market is the U.S. are valued at
last sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the U.S. are
valued using the official closing price or the last sale price in the
principal market in which they are traded. If the last sale price (on the
local exchange) is unavailable, the last evaluated quote or last bid price
normally is used. Short-term securities are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. Convertible securities and fixed-income securities are
valued primarily by a pricing service that uses a vendor security valuation
matrix which incorporates both dealer-supplied valuations and electronic
data processing techniques. This two-fold approach is believed to more
accurately reflect fair value because it takes into account appropriate
factors such as institutional trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading
characteristics, and other market data, without exclusive reliance upon
quoted, exchange, or over-the-counter prices. Use of pricing services has
been approved by the Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by a fund if, in the opinion of a committee appointed
by the Board of Trustees, some other method (e.g., closing over-the-counter
bid prices in the case of debt instruments traded on an exchange) would
more accurately reflect the fair market value of such securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bonds, U.S. Government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by a fund are
determined as of such time for the purpose of computing the fund's net
asset value. Foreign security prices are furnished by independent brokers
or quotation services which express the value of securities in their local
currency. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the
value of foreign securities from their local currency into U.S. dollars.
Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of net
asset value. If an extraordinary event that is expected to materially
affect the value of a portfolio security occurs after the close of an
exchange on which that security is traded, then the security will be value
as determined in good faith by a committee appointed by the Board of
Trustees.
FIXED-INCOME FUNDS. Generally, securities and other assets for which market
quotations are readily available are valued at market values determined by
their most recent bid prices (sales prices if the principal market is an
exchange) in the principal market in which such securities normally are
traded. Securities and other assets for which market quotations are not
readily available (including restricted securities, if any) are appraised
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Securities may also be valued on the basis of valuations furnished by a
pricing service that uses both dealer-supplied valuations and evaluations
based on expert analysis of market data and other factors if such
valuations are believed to reflect more accurately the fair value of such
securities. Use of pricing services has been approved by the Board of
Trustees. There are a number of pricing services available, and the
Trustees, or officers acting on behalf of the Trustees, on the basis of
ongoing evaluation of these pricing services, may use other pricing
services or may discontinue the use of any pricing service in whole or in
part.
Securities not valued by the pricing service, and for which quotations are
readily available, are valued at market values determined on the basis of
their latest available bid prices as furnished by recognized dealers in
such securities. Futures contracts and options are valued on the basis of
market quotations, if available.
MONEY MARKET FUND. Portfolio securities and other assets are valued on the
basis of amortized cost. This technique involves initially valuing an
instrument at its cost as adjusted for amortization of premium or accretion
of discount rather than its current market value. The amortized cost value
of an instrument may be higher or lower than the price the fund would
receive if it sold the instrument.
During periods of declining interest rates, the fund's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing the fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. The fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The fund's Board of Trustees oversees FMR's adherence to the provisions of
Rule 2a-7 and has established procedures designed to stabilize the fund's
NAV at $1.00. At such intervals as they deem appropriate, the Trustees
consider the extent to which NAV calculated by using market valuations
would deviate from $1.00 per share. If the Trustees believe that a
deviation from the fund's amortized cost per share may result in material
dilution or other unfair results to shareholders, the Trustees have agreed
to take such corrective action, if any, as they deem appropriate to
eliminate or reduce, to the extent reasonably practicable, the dilution or
unfair results. Such corrective action could include selling portfolio
instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; redeeming shares
in kind; establishing NAV by using available market quotations; and such
other measures as the Trustees may deem appropriate.
PERFORMANCE
The Freedom Funds and the underlying Fidelity funds may quote
performance in various ways , and the Freedom Funds may quote the
performance of various underlying Fidelity funds . All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. S hare price (except for a
money market fund) , yield, and total return fluctuate in response to
market conditions and other factors, and (except for a money market
fund) the value of shares when redeemed may be more or less than their
original cost. The following paragraphs describe how yield and total
return are calculated by the Freedom Funds and the underlying Fidelity
funds.
YIELD CALCULATIONS. Yields for a non-money market fund are computed
by dividing the fund's interest and dividend income, if any, for a given
30-day or one-month period, net of expenses, by the average number of
shares entitled to receive distributions during the period, dividing this
figure by the fund's NAV or offering price, as applicable, at the
end of the period, and annualizing the result (assuming compounding of
income) in order to arrive at an annual percentage rate. Yields do not
reflect a fund's redemption fee, if any. Income is calculated for
purposes of yield quotations in accordance with standardized methods
applicable to all stock and bond funds. Dividends from equity investments
are treated as if they were accrued on a daily basis, solely for the
purposes of yield calculations. In general, interest income is reduced with
respect to bonds trading at a premium over their par value by subtracting a
portion of the premium from income on a daily basis, and is increased with
respect to bonds trading at a discount by adding a portion of the discount
to daily income. For a fund's investments denominated in foreign
currencies, income and expenses are calculated first in their respective
currencies, and are then converted to U.S. dollars, either when they are
actually converted or at the end of the 30-day or one month period,
whichever is earlier. Capital gains and losses generally are excluded from
the calculation as are gains and losses from currency exchange rate
fluctuations.
Income calculated for the purposes of calculating a non-money market
fund's yield differs from income as determined for other accounting
purposes. Because of the different accounting methods used, and because of
the compounding of income assumed in yield calculations, a non-money
market fund's yield may not equal its distribution rate, the income
paid to your account, or the income reported in the fund's financial
statements.
In calculating a fund's yield, a fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in order
to reflect the risk premium on that security. This practice will have the
effect of reducing the fund's yield.
To compute a money market fund's yield for a period, the net change in
value of a hypothetical account containing one share reflects the value of
additional shares purchased with dividends from the one original share and
dividends declared on both the original share and any additional shares.
The net change is then divided by the value of the account at the beginning
of the period to obtain a base period return. This base period return is
annualized to obtain a current annualized yield. A money market fund also
may calculate a compound effective yield by compounding the base period
return over a one-year period. In addition the current yield, a money
market fund may quote yields in advertising based on any historical
seven-day period. Yields for a money market fund are calculated on the same
basis as other money market funds, as required by regulation.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a fund's yield will tend to
be somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
Government Securities Fund's tax-equivalent yield is the rate an
investor would have to earn from a fully taxable investment to equal the
fund's tax-free yield. For funds such as this fund, earning interest free
from state (and sometimes local) taxes in most states, tax-equivalent
yields may be calculated by dividing the fund's yield by the result of one
minus a specified tax rate.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. Average
annual total returns covering periods of less than one year are calculated
by determining a fund's total return for the period, extending that return
for a full year (assuming that return remains constant over the year), and
quoting the result as an annual return. While average annual total returns
are a convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time, but
changes from year to year, and that average annual total returns represent
averaged figures as opposed to the actual year-to-year performance of the
fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis , may be quoted with or without taking a
fund's maximum sales charge, if any, into account, and may or may not
include the effect of a fund's redemption fee, if any. Excluding a fund's
sales charge or redemption fee, if any, from a total return calculation
produces a higher total return figure. Total returns, yields, and other
performance information may be quoted numerically or in a table, graph, or
similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's NAVs, adjusted NAVs, and
benchmark indices may be used to exhibit performance. An adjusted NAV
includes any distributions paid by a fund and reflects all elements of its
return. Unless otherwise indicated, a fund's adjusted NAVs are not adjusted
for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average.
A fund may compare its performance to the record of the S&P 500, the
Dow Jones Industrial Average (DJIA), a foreign stock market index (as
appropriate), and the cost of living (measured by the Consumer Price
Index, or CPI) over the same period. The S&P 500 and DJIA comparisons would
show how a fund's total return compared to the record of a broad
average of U.S. common stock prices and a narrower set of stocks of
major U.S. industrial companies, respectively, over the same period.
Of course, since a bond or money market fund invest s
in fixed-income securities, common stocks represent a different type of
investment from the fund. Common stocks generally offer greater
growth potential than a bond or money market fund, but
generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than a fixed-income investment such as a bond or money
market fund. A fund has the ability to invest in securities not
included in the ind ices , and its investment portfolio may or
may not be similar in composition to the indices. Figures for the S&P
500 , DJIA , and foreign stock market indices are based on the
prices of unmanaged groups of stocks and, unlike a fund's returns,
do not include the effect of paying brokerage commissions and other costs
of investing.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rank ing s
are based on total return, assum e reinvestment of
distributions, do not take sales charges or redemption fees into
consideration, and are prepared without regard to tax consequences.
Lipper may also rank funds based on yield. In addition to the mutual fund
rankings, a fund's performance may be compared to stock, bond, and money
market mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to remember
the risk and return characteristics of each type of investment. For
example, while stock mutual funds may offer higher potential returns, they
also carry the highest degree of share price volatility. Likewise, money
market funds may offer greater stability of principal, but generally do not
offer the higher potential returns available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, a fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A money market or bond fund may compare its performance or the
performance of securities in which it may invest to averages
published by IBC USA (Publications), Inc. of Ashland, Massachusetts. These
averages assume reinvestment of distributions. The IBC / MONEY FUND
AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND
REPORT(registered trademark), covers over 814 taxable money market
funds. The IBC/ Bond Fund Report
AverageS(trademark)/ Corporate , which is reported in the BOND FUND
REPORT(registered trademark), covers over 246 taxable bond funds
and over 65 high yield funds . When evaluating comparisons to money
market funds, investors should consider the relevant differences in
investment objectives and policies. Specifically, money market funds invest
in short-term, high-quality instruments and seek to maintain a stable $1.00
share price. Bond funds, however, invest in longer-term instruments and
their share prices change daily in response to a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
Each Freedom Fund may also reference, illustrate or discuss the
performance of the underlying Fidelity funds.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager(s).
VOLATILITY. A fund may quote v arious measures of volatility and
benchmark correlation in advertising. In addition, a fund may
compare these measures to those of other funds. Measures of volatility seek
to compare a fund's historical share price fluctuations or total returns to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise e xamples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of August 31 , 1996, FMR advised over $ 27 billion in
tax-free fund assets, $ 90 billion in money market fund assets,
$ 271 billion in equity fund assets, $ 55 billion in
international fund assets, and $ 24 billion in Spartan fund assets.
The funds may reference the growth and variety of money market mutual funds
and FMR's innovation and participation in the industry. The equity funds
under management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, a bond or money market
fund may compare its total expense ratio to the average total expense ratio
of similar funds tracked by Lipper. A fund's total expense ratio is a
significant factor in comparing bond and money market investments because
of its effect on yield.
HISTORICAL RESULTS - UNDERLYING FIDELITY FUNDS. The following table
shows the underlying Fidelity funds' 7-day or 30-day yields and/or total
returns for the periods ended June 30, 1996. Total return figures include
the effect of a fund's maximum sales charge, if any, but do not include the
effect of a fund's redemption fee, if any.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
Underlying Fidelity Fund Yield
(dagger) One Five Ten One Five Ten
Year Years Years/ Year Years Years/
Life of Life of
Fund* Fund*
Fidelity Blue Chip Growth Fund1 N/A 11.05% 19.43% 18.96% 11.05% 143.02% 337.86%
Fidelity Capital & Income Fund2 6.98% 9.77% 15.50% 10.38% 9.77% 105.57% 168.56%
Fidelity Disciplined Equity Fund N/A 17.64% 16.41% 17.70% 17.64% 113.77% 240.10%
Fidelity Diversified International
Fund N/A 22.53% N/A 10.49% 22.53% N/A 56.92%
Fidelity Equity-Income Fund N/A 24.00% 17.62% 12.38% 24.00% 125.09% 221.25%
Fidelity Europe Fund3 N/A 17.19% 13.71% 11.73% 17.19% 90.07% 195.15%
Fidelity Fund N/A 27.00% 15.68% 12.96% 27.00% 107.13% 238.38%
Fidelity Government Securities
Fund 5.93% 3.86% 8.33% 7.95% 3.86% 49.16% 114.83%
Fidelity Growth & Income Portfolio N/A 27.78% 18.03% 15.89% 27.78% 129.07% 337.05%
Fidelity Growth Company Fund4 N/A 20.31% 17.46% 15.08% 20.31% 123.57% 307.44%
Fidelity Intermediate Bond Fund 6.12% 4.52% 7.62% 7.51% 4.52% 44.36% 106.32%
Fidelity Investment Grade Bond
Fund 6.00% 4.25% 8.73% 8.10% 4.25% 51.98% 117.93%
Fidelity Japan Fund5 N/A 10.98% N/A 8.75% 10.98% N/A 37.48%
Fidelity Money Market Trust: 5.15% 5.49% 4.40% 5.66% 5.49% 24.00% 51.81%
Retirement Money Market Portfolio
Fidelity OTC Portfolio6 N/A 17.72% 16.87% 13.71% 17.72% 118.00% 261.38%
Fidelity Overseas Fund N/A 12.84% 10.33% 9.75% 12.84% 63.51% 153.56%
Fidelity Southeast Asia Fund7 N/A 7.86% N/A 14.05% 7.86% N/A 52.37%
</TABLE>
* Fidelity Blue Chip Growth Fund commenced operations on December 31,
1987.
Fidelity Disciplined Equity Fund commenced operations on December 28,
1988.
Fidelity Diversified International Fund commenced operations on December
27, 1991.
Fidelity Europe Fund commenced operations on October 1, 1986.
Fidelity Japan Fund commenced operations on September 15, 1992.
Fidelity Money Market Trust: Retirement Money Market Portfolio commenced
operations on December 2, 1988.
Fidelity Southeast Asia Fund commenced operations on April 19, 1993.
(dagger) Yields shown are for the 30-day period ended June 30, 1996, except
for the yield shown for Fidelity Money Market Trust: Retirement Money
Market Portfolio, which is for the seven-day period ended June 30, 1996.
1 Total return figures include the effect of Fidelity Blue Chip Growth
Fund's 3.0% sales charge.
2 Total return figures do not include the effect of Fidelity Capital &
Income Fund's 1.5% redemption fee, applicable to shares held less than 365
days. In addition, when considering historical performance, be aware that
effective December 30, 1990, the fund adopted a new investment objective
and changed its name from Fidelity High Income Fund to Fidelity Capital &
Income Fund. Accordingly, historical performance may not be representative
of the fund's future performance under its current investment objective and
policies.
3 Total return figures include the effect of Fidelity Europe Fund's 3.0%
sales charge, but do not include the effect of the fund's 1.0% redemption
fee, applicable to shares held less than 90 days.
4 Total return figures include the effect of Fidelity Growth Company's 3.0%
sales charge (the sales charge has been waived through December 31, 1996).
5 Total return figures include the effect of Fidelity Japan Fund's 3.0%
sales charge, but do not include the effect of the fund's 1.5% redemption
fee, applicable to shares held less than 90 days.
6 Total return figures include the effect of Fidelity OTC Portfolio's 3.0%
sales charge.
7 Total return figures include the effect of Fidelity Southeast Asia Fund's
3.0% sales charge, but do not include the effect of the fund's 1.5%
redemption fee, applicable to shares held less than 90 days.
Note: If FMR had not reimbursed certain funds' expenses during these
periods, the funds' total returns would have been lower.
The performance data relating to the u nderlying Fidelity
f unds set forth above is not indicative of future performance of
either the u nderlying Fidelity f unds or the Freedom Funds.
The performance reflects the impact of sales charges that will not be
incurred by the Freedom Funds when they purchase shares of the
u nderlying Fidelity f unds.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Each Freedom F und is open for business and its NAV is calculated
each day the NYSE is open for trading. The NYSE has designated the
following holiday closings for 1996: New Year's Day, Washington's
Birthday , Good Friday, Memorial Day (observed) , Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. Although Strategic
Advisers expects the same holiday schedule to be observed in the future,
the NYSE may modify its holiday schedule at any time. In addition, the
funds will not process wire purchases and redemptions on days when the
Federal Reserve Wire System is closed.
FSC normally determines each Freedom F und's NAV as of the close of
the NYSE (normally 4:00 p.m. Eastern time). However, NAV may be calculated
earlier if trading on the NYSE is restricted or as permitted by the SEC. To
the extent that portfolio securities are traded in other markets on days
when the NYSE is closed, a fund's NAV may be affected on days when
investors do not have access to the fund to purchase or redeem shares. In
addition, trading in some of a fund's portfolio securities may not occur on
days when the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each Freedom F und is
required to give shareholders at least 60 days' notice prior to terminating
or modifying its exchange privilege. Under the Rule, the 60-day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the P rospectus, each Freedom F und has notified
shareholders that it reserves the right at any time, without prior notice,
to refuse exchange purchases by any person or group if, in Strategic
Advisers' judgment, the fund would be unable to invest effectively in
accordance with its investment objective and policies, or would otherwise
potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of each Freedom F und's income may
qualify for the dividends-received deduction available to corporate
shareholders to the extent that the Freedom Fund's income is derived
from qualifying dividends or from the qualifying portion of dividends
from an underlying Fidelity fund . For the Freedom Funds and for
those underlying Fidelity funds that may earn other types of income
that do not qualify for the dividends-received deduction available to
corporate shareholders, such as interest , income from securities
loans, non-qualifying dividends, and short-term capital gains, the
percentage of fund dividends that qualif ies for the deduction
generally will be less than 100%. Each Freedom F und will
notify corporate shareholders annually of the percentage of fund dividends
that qualifies for the dividends-received deduction. A portion of each
Freedom F und's dividends derived from certain U.S. Government
obligations, including the portion of dividends from an underlying
Fidelity fund derived from certain U.S. Government obligations, may be
exempt from state and local taxation. Short-term capital gains
(including short-term capital gains distributed by an underlying Fidelity
fund as a dividend as well as short-term capital gains earned on the sale
of underlying Fidelity fund shares or other securities) are distributed as
dividend income. Each Freedom Fund will send each shareholder a notice in
January describing the tax status of dividends and capital gain
distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each
Freedom F und ( including amounts attributable to an
u nderlying Fidelity f und's capital gain distributions as well
as long-term capital gains earned on the sale of underlying Fidelity
fund shares or other securities ) a nd distributed to
shareholders are federally taxable as long-term capital gains, regardless
of the length of time shareholders have held their shares. If a shareholder
receives a long-term capital gain distribution on shares of a Freedom
Fund, and such shares are held six months or less and are sold at a
loss, the portion of the loss equal to the amount of the long-term capital
gain distribution will be considered a long-term loss for tax purposes.
Short-term capital gains distributed by each Freedom Fund are
taxable to shareholders as dividends, not as capital gains.
TAX STATUS OF THE FUNDS. Each Freedom F und intends to qualify each
year as a " regulated investment company" for tax purposes so that it will
not be liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each Freedom F und intends to distribute substantially all of its net
investment income and net realized capital gains. Each Freedom
F und intends to comply with other tax rules applicable to
regulated investment companies, including a requirement that capital gains
from the sale of securities ( including underlying Fidelity
fund s hares) held less than three months constitute less than
30% of the fund's gross income for each fiscal year. Gains from some
futures contracts and options are included in this 30% calculation, which
may limit a Freedom F und's investments in such instruments.
Each Freedom F und is treated as a separate entity from the other
funds of the trust for tax purposes.
Five to ten years after a Freedom Fund with a target retirement date
reaches its target retirement year, its asset allocation target is expected
to match Freedom Income Fund's asset allocation target. It is expected that
at such time the assets of the Freedom Fund with a target retirement date
will be combined with the assets of Freedom Income Fund. The Trustees
reserve the right to engage in such transactions in the best interests of
the funds, taking into account then existing laws and regulations. The
trust's Trust Instrument empowers the Trustees to take these actions with
or without seeking shareholder approval. A combination of assets may result
in a capital gain or loss for shareholders of a Freedom Fund with a target
retirement date.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each Freedom F und and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be
subject to state and local taxes on fund distributions, and shares may be
subject to state and local personal property taxes. Investors should
consult their tax advisers to determine whether a Freedom F und is
suitable to their particular tax situation.
STRATEGIC ADVISERS AND FMR
All of the stock of FMR and Strategic Advisers is owned by FMR Corp., their
parent organized in 1972. The voting common stock of FMR Corp. is divided
into two classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter acted
upon by the voting common stock. Class A is held predominantly by
non-Johnson family member employees of FMR Corp. and its affiliates and is
entitled to 51% of the vote on any such matter. The Johnson family group
and all other Class B shareholders have entered into a shareholders' voting
agreement under which all Class B shares will be voted in accordance with
the majority vote of Class B shares. Under the 1940 Act, control of a
company is presumed where one individual or group of individuals owns more
than 25% of the voting stock of that company. Therefore, through their
ownership of voting common stock and the execution of the shareholders'
voting agreement, members of the Johnson family may be deemed, under the
1940 Act, to form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account s pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees , Members of the Advisory Board, and executive officers
of the trust are listed below. Except as indicated, each individual has
held the office shown or other offices in the same company for the last
five years. All persons named as Trustees and Members of the Advisory
Board also serve in similar capacities for other funds advised by FMR,
including the underlying Fidelity funds. If the interests of a Freedom Fund
and an underlying Fidelity fund were to diverge, a conflict of interest
could arise and affect how the Trustees and Members of the Advisory
Board fulfill their fiduciary duties to the affected funds. Strategic
Advisers has structured the Freedom Funds to avoid these potential
conflicts, although there may be situations where a conflict of interest is
unavoidable. In such instances, Strategic Advisers , the Trustees
and the Members of the Advisory Board would take reasonable steps to
minimize and, if possible, eliminate the conflict.
The business address of each Trustee and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business address
of all the other Trustees and Members of the Advisory Board is
Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235.
Those Trustees who are "interested persons" by virtue of their affiliation
with either the trust, Strategic Advisers, or FMR are indicated by an
asterisk (*).
*EDWARD C. JOHNSON 3d (66 ), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman and a
Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD ( 55 ), Trustee and Senior Vice President, is
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 ( 64 ), Trustee (1991), is a management consultant
(1994) . Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production). Until March
1990, Mr. Cox was President and Chief Operating Officer of Union Pacific
Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) , CH2M Hill
Companies (engineering) , Rio Grande, Inc. (oil and gas production), and
Daniel Industries (petroleum measurement equipment manufacturer) . In
addition, he is a member of advisory boards of Texas A&M University and the
University of Texas at Austin.
PHYLLIS BURKE DAVIS ( 64 ), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN ( 72 ), Trustee and Chairman of the non-interested
Trustees, is a financial consultant. Prior to September 1986, Mr. Flynn was
Vice Chairman and a Director of the Norton Company (manufacturer of
industrial devices). He is currently a Trustee of College of the Holy Cross
and Old Sturbridge Village, Inc., and he previously served as a Director of
Mechanics Bank (1971-1995).
E. BRADLEY JONES ( 68 ), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
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 ( 63 ), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, 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 ( 53 ), Trustee (1990) is Vice Chairman and Director
of FMR (1992). Prior to May 31, 1990, he was a Director of FMR and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals) and Morrison Knudsen Corporation (engineering
and construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
GERALD C. McDONOUGH ( 67 ), Trustee and Vice-Chairman of the
non-interested Trustees, is Chairman of G.M. Management Group (strategic
advisory services). Prior to his retirement in July 1988, he was Chairman
and Chief Executive Officer of Leaseway Transportation Corp. (physical
distribution services). Mr. McDonough is a Director of Brush-Wellman Inc.
(metal refining), York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. ( hydraulic systems, building
systems, and metal products , 1992), CUNO, Inc. (liquid and gas
filtration products, 1996), and Associated Estates Realty Corporation
(a real estate investment trust, 1993). Mr. McDonough served as a
Director of ACME - Cleveland Corp. (metal working, telecommunications, and
electronic products) from 1987-1996.
EDWARD H. MALONE ( 71 ), Trustee. Prior to his retirement in 1985, Mr.
Malone was Chairman, General Electric Investment Corporation and a Vice
President of General Electric Company. He is a Director of Allegheny Power
Systems, Inc. (electric utility), General Re Corporation (reinsurance) and
Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of the
Naples Philharmonic Center for the Arts and Rensselaer Polytechnic
Institute, and he is a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN ( 63 ), Trustee (1993) is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart
(marketing services, 1991), a Trammell Crow Co. In addition, he serves as
the Campaign Vice Chairman of the Tri-State United Way (1993) and is a
member of the University of Alabama President's Cabinet.
THOMAS R. WILLIAMS ( 68 ), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring in
1987, Mr. Williams served as Chairman of the Board of First Wachovia
Corporation (bank holding company), and Chairman and Chief Executive
Officer of The First National Bank of Atlanta and First Atlanta Corporation
(bank holding company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth Corporation (telecommunications) 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).
WILLIAM J. HAYES ( 62 ), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
FRED L. HENNING, JR. ( 57 ), Vice President, is Vice President of
Fidelity's fixed-income funds (1995) and Senior Vice President of
FMR (1995) .
ARTHUR S. LORING ( 48 ), Secretary, is Senior Vice President (1993)
and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER ( 49 ), Treasurer (1995), is Treasurer of the
Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr.
Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he
served in various positions, including Vice President of Proprietary
Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief
Operations Officer of Goldman Sachs (Asia) LLC (1994-1995).
ROBERT H. MORRISON (56), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
JOHN H. COSTELLO ( 50 ), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH ( 50 ), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity funds,
Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each current trustee of each Freedom F und for his or her services as
trustee for the fiscal year end ing March 31, 1997 .
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas William O.
Burkhead* F. Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonoug H. Mann R. McCoy
* Davis Jones h Malone Williams
Freedom $ 10 $ 10 $ 10 $ 13 $ 10 $ 10 $ 10 $ 10 $ 10 $ 10 $ 10 $ 10 $ 10
Income[+]
Freedom 10 10 10 13 10 10 10 10 10 10 10 10 10
2000[+]
Freedom 10 10 10 13 10 10 10 10 10 10 10 10 10
2010[+]
Freedom 10 10 10 13 10 10 10 10 10 10 10 10 10
2020[+]
Freedom 10 10 10 13 10 10 10 10 10 10 10 10 10
2030[+]
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 128,000
Phyllis Burke Davis 5,200 52,000 125,000
Richard J. Flynn 0 52,000 160,500
Edward C. Johnson 3d** 0 0 0
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. McDonough 5,200 52,000 128,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 128,000
Thomas R. Williams 5,200 52,000 125,000
William O. McCoy N/A N/A 0
</TABLE>
* Information is as of December 31, 1995 for 219 funds in the complex.
** Interested trustees of each fund are compensated by FMR.
+ Estimated
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 calender 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.
On October 11 , 199 6 , FMR owned the majority of the
outstanding shares of each Freedom F und.
On October 11 , 1996, the Trustees , Members of the Advisory
Board, and officers of the Freedom F und s owned, in the
aggregate, less than 1% of each Freedom F und's outstanding shares.
MANAGEMENT CONTRACTS
Each Freedom F und employs Strategic Advisers to furnish investment
advisory and other services. Under its management contract with each fund,
Strategic Advisers acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of each fund
in accordance with its investment objective, policies, and limitations.
Strategic Advisers is authorized, in its discretion, to allocate each
fund's assets among the underlying Fidelity funds in which the fund may
invest. Strategic Advisers also provides each fund with all
necessary office facilities and personnel for servicing the fund's
investments, and compensates all personnel of each fund or
Strategic Advisers performing services relating to research, statistical,
and investment activities.
Strategic Advisers is responsible for the payment of all expenses of
each Freedom F und with the following exceptions: fees and expenses
of all Trustees of the trust who are not "interested persons" of the trust,
Strategic Advisers, or FMR (the non-interested Trustees); interest on
borrowings; taxes; brokerage commissions (if any); shareholder charges
(if any) associated with investing in the underlying Fidelity funds;
and such nonrecurring expenses as may arise, including costs of any
litigation to which a fund may be a party, and any obligation it may have
to indemnify the officers and Trustees with respect to litigation.
Strategic Advisers is each Freedom F und's manager pursuant to
management contracts dated July 18 , 1996, which were approved by
FMR, as the then sole shareholder of each Freedom Fund on
October 11 , 1996. The management fee paid to Strategic Advisers is
reduced by an amount equal to the fees and expenses paid by the Freedom
Fund to the non-interested Trustees.
For the services of Strategic Advisers under each management contract, each
Freedom Fund pays Strategic Advisers a monthly management fee at the
annual rate of 0.10% of the fund's average net assets throughout the
month.
Strategic Advisers may, from time to time, voluntarily reimburse all or a
portion of each Freedom F und's operating expenses (exclusive of
interest, taxes, brokerage commissions, shareholder charges, and
extraordinary expenses). Strategic Advisers 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 Strategic Advisers will increase each Freedom F und's total
returns and yield and repayment of the reimbursement by each fund will
lower its total returns and yield.
Strategic Advisers has entered into administration agreements with FMR,
under the terms of which FMR provides the management and administrative
services (other than the investment advisory services) necessary for the
operation of each Freedom Fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
FMR pays all expenses of each Freedom Fund with certain exceptions as
described above. Specific expenses payable by FMR include, without
limitation, expenses for typesetting, printing, and mailing proxy materials
to shareholders; legal expenses, and the fees of the custodian, auditor and
interested Trustees; costs of typesetting, printing, and mailing
prospectuses and statements of additional information, notices and reports
to shareholders; each fund's proportionate share of insurance premiums and
Investment Company Institute dues. FMR also compensates all officers of
each fund and all Trustees who are "interested persons" of the trust,
Strategic Advisers, or FMR. FMR also provides for transfer agent and
dividend disbursing services through FIIOC, and portfolio and general
accounting record maintenance through FSC.
For the services of FMR under each administration agreement, Strategic
Advisers pays FMR a monthly administration fee equal to the monthly
management fee received by Strategic Advisers from each Freedom Fund, minus
an amount equal to an annual rate of 0.02% of that fund's average net
assets throughout the month.
CONTRACTS WITH FMR AFFILIATES
FIIOC, an affiliate of Strategic Advisers and FMR, is the transfer,
dividend disbursing, and shareholder servicing agent for shares of each
Freedom F und.
Under this arrangement , FIIOC receives an annual account fee and an
asset-based fee each based on account size and fund type for each retail
account and certain institutional accounts. With respect to certain
institutional retirement accounts, FIIOC receives an annual account fee and
an asset - based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate change s .
The asset-based fees of Freedom 2000, Freedom 2010, Freedom 2020, and
Freedom 2030 are subject to adjustment if the year-to-date total return of
the S &P 500 exceeds positive or negative 15%.
FIIOC bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements. Also,
FIIOC pays out-of-pocket expenses associated with transfer agent services.
FSC, an affiliate of Strategic Advisers and FMR, performs the calculations
necessary to determine the NAV and dividends for shares of each Freedom
F und, maintains each fund's accounting records, and administers each
fund's securities lending program. For pricing and bookkeeping services,
FSC receives a fee based on each fund's average net assets. FSC also
receives fees for administering each fund's securities lending program.
FMR must bear the cost of transfer, dividend disbursing, shareholder
servicing , and pricing and bookkeeping services pursuant to its
administration agreement s with Strategic Advisers.
Each Freedom F und has a distribution agreement with FDC, a
Massachusetts corporation organized on July 18, 1960. FDC is a
broker-dealer registered under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers, Inc. The
distribution agreements call for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of each
fund, which are continuously offered at NAV. Promotional and administrative
expenses in connection with the offer and sale of shares are paid by
Strategic Advisers or FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on behalf of
each Freedom F und (the Plans) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is primarily
intended to result in the sale of shares of the fund except pursuant
to a plan approved on behalf of the fund under the Rule. The Plans, as
approved by the Trustees, allow the Freedom F unds, Strategic
Advisers, and FMR to incur certain expenses that might be considered to
constitute indirect payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the Freedom
F unds to Strategic Advisers , or the payment of administration fees
by Strategic Advisers to FMR out of the management fees, is deemed to
be indirect financing by the funds of the distribution of their shares,
such payment is authorized by the Plans. Each Plan specifically recognizes
that Strategic Advisers or FMR may use its resources, including management
fees paid to Strategic Advisers by the funds, or administration fees
paid to FMR by Strategic Advisers out of the management fees , to pay
FDC for expenses incurred in connection with the distribution
of Freedom F und shares , includ ing payments made
to third parties that assist in selling Freedom Fund shares or to
third parties, including banks, that render shareholder support
services. The Trustees have authorized such payments for the Freedom
Funds.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
each Freedom F und and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by each fund other than
those made to Strategic Advisers under its management contract with the
fund. To the extent that each Plan gives Strategic Advisers, FMR, and FDC
greater flexibility in connection with the distribution of shares of each
fund, additional sales of fund shares may result. Furthermore, certain
shareholder support services may be provided more effectively under the
Plans by local entities with whom shareholders have other relationships.
The Plans were approved by FMR, as the then sole shareholder of each
Freedom F und on October 11, 1996.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretation of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
Each Freedom F und may execute portfolio transactions with, and
purchase securities issued by, depository institutions that receive
payments under the Plans. No preference for the instruments of such
depository institutions will be shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. The Freedom F unds are funds of Fidelity
Aberdeen Street Trust, an open-end management investment company
organized as a Delaware business trust on January 29, 1992. Currently,
there are five funds of Fidelity Aberdeen Street Trust: Freedom
Income, Freedom 2000, Freedom 2010, Freedom 2020, and Freedom 2030. The
Trust Instrument permits the Trustees to create additional funds.
In the event that Strategic Advisers ceases to be the investment adviser to
the trust or a fund, the right of the trust or fund to use the identifying
name "Fidelity" may be withdrawn. There is a remote possibility that one
fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trust and requires
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instrument provides for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which Delaware law does not apply, no contractual
limitation of liability was in effect, and the fund is unable to meet its
obligations. Strategic Advisers believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege of
exchange are described in the Prospectus. Shares are fully paid and
nonassessable, except as set forth under the heading "Shareholder and
Trustee Liability" above. Shareholders representing 10% or more of the
trust or a fund may, as set forth in the Trust Instrument, call meetings of
the trust or fund for any purpose related to the trust or fund, as the case
may be, including, in the case of a meeting of the entire trust, the
purpose of voting on removal of one or more Trustees.
On matters submitted for consideration by shareholders of an underlying
Fidelity fund, a Freedom Fund will vote its shares in proportion to the
vote of all other holders of shares of that underlying Fidelity fund or, in
certain limited instances, the Freedom Fund will vote its shares in the
manner indicated by a vote of its shareholders.
The trust or any fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the trust or the fund; however, the Trustees
may, without prior shareholder approval, (i) authorize a transfer of all
assets of a Freedom Fund with a target retirement date into Freedom Income
Fund, or any successor thereto, or (ii) change the form of organization of
the trust by merger, consolidation, or incorporation. If not so terminated
or reorganized, the trust and its funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the trust registration
statement. Each fund may invest all of its assets in another investment
company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York,
New York, is custodian of the assets of the funds. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of
any subcustodian banks and clearing agencies. The custodian takes no
part in determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. The Chase Manhattan Bank, headquartered
in New York, also may serve as a special purpose custodian of certain
assets in connection with pooled repurchase agreement transactions.
Strategic Advisers, FMR, its officers and directors, its affiliated
companies, and the Board of Trustees may, from time to time, conduct
transactions with various banks, including banks serving as custodians for
certain funds advised by FMR. Transactions that have occurred to date
include mortgages and personal and general business loans. In the judgment
of FMR, the terms and conditions of those transactions were not influenced
by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand, L.L.P. serves as the trust's independent
accountant. The auditor examines financial statements for the funds and
provides other audit, tax, and related services.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a stated
final maturity basis, although there are some exceptions to this rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
Also, the maturities of mortgage-backed securities, including
collateralized mortgage obligations, and some asset-backed securities are
determined on a weighted average life basis, which is the average time for
principal to be repaid. For a mortgage security, this average time is
calculated by estimating the timing of principal payments, including
unscheduled prepayments, during the life of the mortgage. The weighted
average life of these securities is likely to be substantially shorter than
their stated final maturity.
The descriptions that follow are examples of eligible ratings for each
underlying Fidelity fund. A fund may, however, consider the ratings
for other types of investments and the ratings assigned by other rating
organizations when determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE CORPORATE BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds which are rated C are the lowest-rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate d BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating will also
be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
DESCRIPTION OF MOODY'S INVESTORS SERVICE COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earnings coverage of fixed financial charges and with
high internal cash generation.
Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
DESCRIPTION OF STANDARD & POOR'S COMMERCIAL PAPER RATINGS:
A - Issuers assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2, and 3 to indicate the relative degree of
safety.
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 8, 1996
FIDELITY FREEDOM INCOME FUND
ASSETS
CASH $ 20,000
NET ASSETS $ 20,000
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($20,000/2,000 SHARES OUTSTANDING) $ 10.00
FIDELITY FREEDOM 2000 FUND
ASSETS
CASH $ 20,000
NET ASSETS $ 20,000
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($20,000/2,000 SHARES OUTSTANDING) $ 10.00
FIDELITY FREEDOM 2010 FUND
ASSETS
CASH $ 20,000
NET ASSETS $ 20,000
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($20,000/2,000 SHARES OUTSTANDING) $ 10.00
FIDELITY FREEDOM 2020 FUND
ASSETS
CASH $ 20,000
NET ASSETS $ 20,000
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($20,000/2,000 SHARES OUTSTANDING) $ 10.00
FIDELITY FREEDOM 2030 FUND
ASSETS
CASH $ 20,000
NET ASSETS $ 20,000
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
($20,000/2,000 SHARES OUTSTANDING) $ 10.00
NOTE 1. :
Fidelity Freedom Income Fund, Fidelity Freedom 2000 Fund, Fidelity Freedom
2010 Fund, Fidelity Freedom 2020 Fund and Fidelity Freedom 2030 Fund (the
funds) are diversified funds of Fidelity Aberdeen Street Trust (the trust)
and are authorized to issue an unlimited number of shares. The trust,
organized as a Delaware business trust on January 29, 1992, is registered
under the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company. The funds have had no operations to
date other than matters relating to their organization and registration and
the sale and issuance by each fund to Fidelity Management & Research
Company (FMR) of 2,000 shares for an aggregate purchase price of $20,000.
NOTE 2. :
The funds have entered into management agreements with Strategic Advisers,
Inc. (Strategic Advisers), an affiliate of FMR, pursuant to which Strategic
Advisers will act as the funds' investment adviser and perform (or arrange
for its affiliates to perform) management and administrative services for
the funds, including monitoring the performance of the funds' service
providers. As the funds' investment adviser, Strategic Advisers receives a
monthly fee that is calculated on the basis of a fixed individual fund fee
rate applied to the average net assets of each fund.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Aberdeen Street Trust and the Shareholders
of Fidelity Freedom Income Fund, Fidelity Freedom 2000 Fund, Fidelity
Freedom 2010 Fund, Fidelity Freedom 2020 Fund and Fidelity Freedom 2030
Fund:
We have audited the accompanying statements of assets and liabilities of
each of the funds of the Fidelity Aberdeen Street Trust (comprised of
Fidelity Freedom Income Fund, Fidelity Freedom 2000 Fund, Fidelity Freedom
2010 Fund, Fidelity Freedom 2020 Fund and Fidelity Freedom 2030 Fund), as
of October 8, 1996. These financial statements are the responsibility of
the funds' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of assets and
liabilities are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
statements of assets and liabilities. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall statement of assets and liabilities
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the statements of assets and liabilities referred to above
present fairly, in all material respects, the financial position of each of
the funds of the Fidelity Aberdeen Street Trust above as of October 8,
1996, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 9, 1996
PART C. OTHER INFORMATION
Item 24.
(a) Financial Statements
(1) Report of Independent Accountants.
(2) Statement of Assets and Liabilities dated October 8, 1996.
(b) Exhibits:
(1)(a) Trust Instrument of the Trust dated June 20, 1991, was
electronically filed in and is incorporated herein by reference to Exhibit
1 to Post-Effective Amendment No. 13.
(b) Supplemental Trust Instrument dated July 18, 1996, was
electronically filed in and is incorporated herein by reference to Exhibit
1(b) to Post-Effective Amendment No. 16.
(c) Certificate of Amendment of the Trust Instrument dated July 18,
1996, was electronically filed in and is incorporated herein by reference
as Exhibit 1(c) to Post-Effective Amendment No. 16.
(2) By-Laws of the Trust effective May 19, 1994, were electronically
filed in and are incorporated herein by reference to Exhibit 2 of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(3) None.
(4) None.
(5)(a) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2030 Fund, and Strategic Advisers, Inc. is electronically filed
herein as Exhibit 5(a).
(b) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2020 Fund, and Strategic Advisers, Inc. is electronically filed
herein as Exhibit 5(b).
(c) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2010 Fund, and Strategic Advisers, Inc. is electronically filed
herein as Exhibit 5(c).
(d) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2000 Fund, and Strategic Advisers, Inc. is electronically filed
herein as Exhibit 5(d).
(e) Management Contract between the Registrant, on behalf of Fidelity
Freedom Income Fund, and Strategic Advisers, Inc. is electronically filed
herein as Exhibit 5(e).
(f) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2030 Fund is
electronically filed herein as Exhibit 5(f).
(g) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2020 Fund is
electronically filed herein as Exhibit 5(g).
(h) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2010 Fund is
electronically filed herein as Exhibit 5(h).
(i) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2000 Fund is
electronically filed herein as Exhibit 5(i).
(j) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom Income Fund is
electronically filed herein as Exhibit 5(j).
(6)(a) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2030 Fund, and Fidelity Distributors Corporation is
electronically filed herein as Exhibit 6(a).
(b) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2020 Fund, and Fidelity Distributors Corporation is
electronically filed herein as Exhibit 6(b).
(c) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2010 Fund, and Fidelity Distributors Corporation is
electronically filed herein as Exhibit 6(c).
(d) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2000 Fund, and Fidelity Distributors Corporation is
electronically filed herein as Exhibit 6(d).
(e) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom Income Fund, and Fidelity Distributors Corporation is
electronically filed herein as Exhibit 6(e).
(7)(a) Retirement Plan for Non-Interested Persons, Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein by
reference to Exhibit 7 of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(b) The Fee Deferral Plan for Non-Interested Persons, Directors, or
Trustees of the Fidelity Funds, effective December 1, 1995, is incorporated
herein by reference to Exhibit 7(b) of Fidelity School Street Trust's (File
No. 2-57167) Post-Effective Amendment No. 47.
(8)(a) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and the registrant is incorporated herein by
reference to Exhibit 8(a) of Fidelity Hereford Street Trust's
Post-Effective Amendment No. 4 (File No. 33-52577).
(b) Form of Appendix A, dated August 31, 1996, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New York and the
registrant, is electronically filed herein as Exhibit 8(b).
(c) Appendix, dated September 14, 1995, to the Custodian
Agreement, dated December 1, 1994, between The Bank of New York and the
registrant is incorporated herein by reference to Exhibit 8(e) of Fidelity
Charles Street Trust's Post-Effective Amendment No. 54 (File No. 2-73133).
(d) Form of Addendum, dated August 31, 1996, to Custodian
Agreement, dated December 1, 1994, between The Bank of New York and the
registrant, is electronically filed herein as Exhibit 8(d).
(9) Not applicable.
(10) None.
(11) Consent of Coopers & Lybrand, L.L.P., independent accountants is
electronically filed herin as Exhibit 11.
(12) None.
(13) Representation by FMR, as initial shareholder, of agreement to
purchase shares of beneficial interest of the trust for investment is
electronically filed herein as Exhibit 13.
(14)(a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(h) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(i) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401k Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity Commonwealth
Trust's (File No. 2-52322) Post-Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(d) of Fidelity Commonwealth Trust's (File No.
2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Pension Plan and Trust Basic Plan
Document and Adoption Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Securities Fund's (File
No. 2-93601) Post-Effective Amendment No. 33.
(l) The Institutional Prototype Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k)
Basic Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) of Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) The Fidelity Investments 403(b) Sample Plan Basic Plan Document
and Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(c) of Fidelity Securities Fund's (File No. 2-93601) Post
Effective Amendment No. 33.
(15)(a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Freedom 2030 Fund is electronically filed herein as Exhibit 15(a).
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2020 Fund is electronically filed herein as Exhibit 15(b).
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2010 Fund is electronically filed herein as Exhibit 15(c).
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2000 Fund is electronically filed herein as Exhibit 15(d).
(e) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom Income Fund is electronically filed herein as Exhibit
15(e).
(16)(a) A schedule for computation of 30-day yields and total return is
electronically filed herein as Exhibit 16(a).
(b) A schedule for computation of moving averages is electronically
filed herein as Exhibit 16(b).
(17) Not applicable.
(18) None.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of the Registrant is the same as the Boards of other
Fidelity funds managed by Fidelity Management & Research Company. In
addition, the officers of these funds are substantially identical.
Nonetheless, Registrant takes the position that it is not under common
control with these other funds because the power residing in the respective
Boards and officers arises as the result of an official position with the
respective funds.
Item 26. Number of Holders of Securities
As of October 10, 1996
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Freedom 2030 Fund 2,000
Fidelity Freedom 2020 Fund 2,000
Fidelity Freedom 2010 Fund 2,000
Fidelity Freedom 2000 Fund 2,000
Fidelity Freedom Income Fund 2,000
Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article X, Section 10.02 of the Trust
Instrument states that the Registrant shall indemnify any present trustee
or officer to the fullest extent permitted by law against liability, and
all expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by virtue
of his or her service as a trustee, officer, or both, and against any
amount incurred in settlement thereof. Indemnification will not be provided
to a person adjudged by a court or other adjudicatory body to be liable to
the Registrant or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her duties
(collectively, "disabling conduct"), or not to have acted in good faith in
the reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may be
provided unless there has been a determination, as specified in the Trust
Instrument, that the officer or trustee did not engage in disabling
conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Service Company ("Service") is
appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to the
extent the Transfer Agent is entitled to and receives indemnification from
the Registrant for the same events. Under the Transfer Agency Agreement,
the Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, which names the Transfer Agent and/or the Registrant as a party
and is not based on and does not result from the Transfer Agent's willful
misfeasance, bad faith, negligence or reckless disregard of its duties, and
arises out of or in connection with the Transfer Agent's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith, negligence or
reckless disregard of its duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon advice reasonably believed by the Transfer
Agent to have been given by counsel for the Registrant, or as a result of
the Transfer Agent's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) STRATEGIC ADVISERS, INC.
Strategic Advisers, Inc. serves as investment adviser to the Fidelity
Freedom Funds and provides investment supervisory services to individuals,
banks, thrifts, pension and profit sharing plans, trusts, estates,
charitable organizations, corporations, and other business organizations,
and provides a variety of publications on investment and personal finance.
In addition to the other offices in FMR Corp. affiliates, the directors and
officers of Strategic Advisers have held, during the past two fiscal years,
the following positions of a substantial nature.
James C. Curvey Director and Chairman of the Board of Strategic Advisers,
Inc. (1990); Director (1990) and Senior Vice President (1986) of FMR Corp.
Roger T. Servison Director and President of Strategic Advisers, Inc.
(1996); Director of Fidelity Brokerage Services, Inc. (1994).
Rodney R. Rohda Director of Strategic Advisers, Inc. (1995); President -
Premium Assets Group of Fidelity Investments (1995); Managing Director of
Fidelity Capital (1993).
Stephanie Andrews Vice President - Charitable Advisory Services of
Strategic Advisers, Inc. (1996); Vice President - Marketing of Fidelity
Investments (1982).
Edward L. Martin Vice President of Strategic Advisers, Inc. (1996);
Director -Sales /Client Relations of Strategic Advisers, Inc. (1995) and an
employee of Strategic Advisers, Inc. (1992).
John D. Crumrine Treasurer of Strategic Advisers, Inc. (1995); Vice
President and Treasurer of FMR Corp. (1993).
Gary Greenstein Assistant Treasurer of Strategic Advisers, Inc. (1993);
Vice President, Taxation FMR Corp. (1993).
Linda C. Holland Compliance Officer of Strategic Advisers, Inc. (1996);
Employee of Fidelity Investments (1979).
Jay Freedman Clerk of Strategic Advisers, Inc. (1995); Associate General
Counsel FMR Corp. (1995); Senior Legal Counsel (1987).
Susan Shields Assistant Clerk of Strategic Advisers, Inc. (1996); Employee
of Fidelity Investments (1991).
Steven Chmielewski Assistant Clerk of Strategic Advisers, Inc. (1996);
Employee of Fidelity Investments (1991).
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Neal Litvak President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Strategic Advisers,
Inc., or Fidelity Service Co., 82 Devonshire Street, Boston, MA 02109, or
the funds' custodian, The Bank of New York, 110 Washington Street, New
York, N.Y.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of each of Freedom 2030 Fund, Freedom 2020 Fund,
Freedom 2010 Fund, Freedom 2000 Fund, and Freedom Income Fund, undertakes
to deliver to each person who has received the prospectus or annual or
semiannual financial report for a fund in an electronic format, upon their
request and without charge, a paper copy of the prospectus or annual or
semi-annual report for the fund.
The Registrant, on behalf of Fidelity Freedom 2030 Fund, Fidelity Freedom
2020 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2000 Fund, and
Fidelity Freedom Income Fund, provided the information required by Item 5A
is contained in the annual report, undertakes to furnish to each person to
whom a prospectus has been delivered, upon their request and without
charge, a copy of the Registrant's latest annual report to shareholders.
The Registrant undertakes to file a Post-Effective Amendment, using
financial statements for Fidelity Freedom 2030 Fund, Fidelity Freedom 2020
Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2000 Fund, and Fidelity
Freedom Income Fund, which need not be certified, within six months of the
fund's effectiveness, unless permitted by the SEC to extend this period.
The Registrant undertakes for Fidelity Freedom 2030 Fund, Fidelity Freedom
2020 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2000 Fund, and
Fidelity Freedom Income Fund: (1) to call a meeting of shareholders for the
purpose of voting upon the question of removal of a trustee or trustees,
when requested to do so by record holders of not less than 10% of its
outstanding shares; and (2) to assist in communications with other
shareholders pursuant to Section 16(c)(1) and (2), whenever shareholders
meeting the qualifications set forth in Section 16(c) seek the opportunity
to communicate with other shareholders with a view toward requesting a
meeting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 18 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 10th day
of October, 1996.
FIDELITY ABERDEEN STREET TRUST
(formerly Fidelity Institutional Investors Trust)
By /s/Edward C. Johnson 3d
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Edward C. Johnson 3d President and Trustee October 10, 1996
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/ Kenneth A. Rathgeber Treasurer October 10, 1996
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee October 10, 1996
J. Gary Burkhead
/s/Ralph F. Cox Trustee October 10, 1996
Ralph F. Cox
/s/Phyllis Burke Davis Trustee October 10, 1996
Phyllis Burke Davis
/s/ Richard J. Flynn Trustee October 10, 1996
Richard J. Flynn
/s/E. Bradley Jones Trustee October 10, 1996
E. Bradley Jones
/s/Donald J. Kirk Trustee October 10, 1996
Donald J. Kirk
/s/Peter S. Lynch Trustee October 10, 1996
Peter S. Lynch
/s/Edward H. Malone Trustee October 10, 1996
Edward H. Malone
/s/Marvin L. Mann Trustee October 10, 1996
Marvin L. Mann
/s/Gerald C. McDonough Trustee October 10, 1996
Gerald C. McDonough
/s/Thomas R. Williams Trustee October 10, 1996
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994, and filed herewith.
* Signatures affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Director, Trustee or General Partner (collectively,
the "Funds"), hereby severally constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt
and Stephanie A. Djinis, each of them singly, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and my name in the appropriate capacities any
Registration Statements of the Funds on Form N-1A or any successor thereto,
any and all subsequent Pre-Effective Amendments or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity any
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Pre-Effective Amendments or
Post-Effective Amendments to said Registration Statements on Form N-1A or
any successor thereto, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to
do all such things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994
Edward C. Johnson 3d
Exhibit 5(a)
MANAGEMENT CONTRACT
between
FIDELITY ABERDEEN STREET TRUST:
FIDELITY FREEDOM 2030 FUND
and
STRATEGIC ADVISERS, INC.
AGREEMENT made this 18th day of July 1996, by and between Fidelity
Aberdeen Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Freedom 2030 Fund (hereinafter called the
"Portfolio"), and Strategic Advisers, Inc., 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 of 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 allocate
the Portfolio's assets among the various underlying Fidelity funds in which
the Portfolio may invest and to otherwise buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments
on behalf of the Portfolio as permitted under the Portfolio's investment
policies. The Adviser shall from time to time make recommendations to the
Fund's Board of Trustees with respect to the Portfolio's investment
policies provided that 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,
subject to review by the Board of Trustees, furnish such other services as
the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser undertakes to pay, either itself or through an affiliated
company, all expenses involved in the operation of the Portfolio, except
the following, which shall be paid by the Portfolio: (i) taxes; (ii) the
fees and expenses of all Trustees of the Fund who are not "interested
persons" of the Fund or of the Adviser; (iii) brokerage fees and
commissions; (iv) redemption fees and other shareholder charges associated
with investments in other mutual funds, (v) interest expenses with respect
to borrowings by the Portfolio; and (vi) such non-recurring and
extraordinary expenses as may arise, including actions, suits or
proceedings to which the Portfolio is or is threatened to be a party and
the legal obligation that the Portfolio may have to indemnify the Fund's
Trustees and officers with respect thereto. It is understood that service
charges billed directly to shareholders of the Portfolio, including charges
for exchanges, redemptions, sub-accounting or other services, shall not be
payable by the Adviser, but may be received and retained by the Adviser or
its affiliates.
(d) The Adviser, either itself or through an affiliated company or
through the Portfolio's custodian, shall place all orders for the purchase
and sale of Fidelity mutual fund shares for the Portfolio's account with
such underlying funds' transfer agents. With respect to portfolio
securities other than Fidelity mutual fund shares, the Adviser, either
itself or through an affiliated company, shall place all purchase and sale
orders for the Portfolio's account with brokers or dealers selected by the
Adviser, which may include brokers or dealers affiliated with the Adviser.
The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of 10/100
of 1% of the average daily net assets of the Portfolio (computed in the
manner set forth in the Fund's Trust Instrument) throughout the month;
provided that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until July 31, 1997
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument or other
organizational documents 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 or other
organizational documents are separate and distinct from those of any and
all other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY ABERDEEN STREET TRUST
on behalf of FIDELITY FREEDOM 2030 FUND
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(b)
MANAGEMENT CONTRACT
between
FIDELITY ABERDEEN STREET TRUST:
FIDELITY FREEDOM 2020 FUND
and
STRATEGIC ADVISERS, INC.
AGREEMENT made this 18th day of July 1996, by and between Fidelity
Aberdeen Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Freedom 2020 Fund (hereinafter called the
"Portfolio"), and Strategic Advisers, Inc., 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 of 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 allocate
the Portfolio's assets among the various underlying Fidelity funds in which
the Portfolio may invest and to otherwise buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments
on behalf of the Portfolio as permitted under the Portfolio's investment
policies. The Adviser shall from time to time make recommendations to the
Fund's Board of Trustees with respect to the Portfolio's investment
policies provided that 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,
subject to review by the Board of Trustees, furnish such other services as
the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser undertakes to pay, either itself or through an affiliated
company, all expenses involved in the operation of the Portfolio, except
the following, which shall be paid by the Portfolio: (i) taxes; (ii) the
fees and expenses of all Trustees of the Fund who are not "interested
persons" of the Fund or of the Adviser; (iii) brokerage fees and
commissions; (iv) redemption fees and other shareholder charges associated
with investments in other mutual funds, (v) interest expenses with respect
to borrowings by the Portfolio; and (vi) such non-recurring and
extraordinary expenses as may arise, including actions, suits or
proceedings to which the Portfolio is or is threatened to be a party and
the legal obligation that the Portfolio may have to indemnify the Fund's
Trustees and officers with respect thereto. It is understood that service
charges billed directly to shareholders of the Portfolio, including charges
for exchanges, redemptions, sub-accounting or other services, shall not be
payable by the Adviser, but may be received and retained by the Adviser or
its affiliates.
(d) The Adviser, either itself or through an affiliated company or
through the Portfolio's custodian, shall place all orders for the purchase
and sale of Fidelity mutual fund shares for the Portfolio's account with
such underlying funds' transfer agents. With respect to portfolio
securities other than Fidelity mutual fund shares, the Adviser, either
itself or through an affiliated company, shall place all purchase and sale
orders for the Portfolio's account with brokers or dealers selected by the
Adviser, which may include brokers or dealers affiliated with the Adviser.
The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of 10/100
of 1% of the average daily net assets of the Portfolio (computed in the
manner set forth in the Fund's Trust Instrument) throughout the month;
provided that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until July 31, 1997
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument or other
organizational documents 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 or other
organizational documents are separate and distinct from those of any and
all other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY ABERDEEN STREET TRUST
on behalf of FIDELITY FREEDOM 2020 FUND
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(c)
MANAGEMENT CONTRACT
between
FIDELITY ABERDEEN STREET TRUST:
FIDELITY FREEDOM 2010 FUND
and
STRATEGIC ADVISERS, INC.
AGREEMENT made this 18th day of July 1996, by and between Fidelity
Aberdeen Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Freedom 2010 Fund (hereinafter called the
"Portfolio"), and Strategic Advisers, Inc., 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 of 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 allocate
the Portfolio's assets among the various underlying Fidelity funds in which
the Portfolio may invest and to otherwise buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments
on behalf of the Portfolio as permitted under the Portfolio's investment
policies. The Adviser shall from time to time make recommendations to the
Fund's Board of Trustees with respect to the Portfolio's investment
policies provided that 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,
subject to review by the Board of Trustees, furnish such other services as
the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser undertakes to pay, either itself or through an affiliated
company, all expenses involved in the operation of the Portfolio, except
the following, which shall be paid by the Portfolio: (i) taxes; (ii) the
fees and expenses of all Trustees of the Fund who are not "interested
persons" of the Fund or of the Adviser; (iii) brokerage fees and
commissions; (iv) redemption fees and other shareholder charges associated
with investments in other mutual funds, (v) interest expenses with respect
to borrowings by the Portfolio; and (vi) such non-recurring and
extraordinary expenses as may arise, including actions, suits or
proceedings to which the Portfolio is or is threatened to be a party and
the legal obligation that the Portfolio may have to indemnify the Fund's
Trustees and officers with respect thereto. It is understood that service
charges billed directly to shareholders of the Portfolio, including charges
for exchanges, redemptions, sub-accounting or other services, shall not be
payable by the Adviser, but may be received and retained by the Adviser or
its affiliates.
(d) The Adviser, either itself or through an affiliated company or
through the Portfolio's custodian, shall place all orders for the purchase
and sale of Fidelity mutual fund shares for the Portfolio's account with
such underlying funds' transfer agents. With respect to portfolio
securities other than Fidelity mutual fund shares, the Adviser, either
itself or through an affiliated company, shall place all purchase and sale
orders for the Portfolio's account with brokers or dealers selected by the
Adviser, which may include brokers or dealers affiliated with the Adviser.
The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of 10/100
of 1% of the average daily net assets of the Portfolio (computed in the
manner set forth in the Fund's Trust Instrument) throughout the month;
provided that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until July 31, 1997
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument or other
organizational documents 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 or other
organizational documents are separate and distinct from those of any and
all other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY ABERDEEN STREET TRUST
on behalf of FIDELITY FREEDOM 2010 FUND
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(d)
MANAGEMENT CONTRACT
between
FIDELITY ABERDEEN STREET TRUST:
FIDELITY FREEDOM 2000 FUND
and
STRATEGIC ADVISERS, INC.
AGREEMENT made this 18th day of July 1996, by and between Fidelity
Aberdeen Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Freedom 2000 Fund (hereinafter called the
"Portfolio"), and Strategic Advisers, Inc., 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 of 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 allocate
the Portfolio's assets among the various underlying Fidelity funds in which
the Portfolio may invest and to otherwise buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments
on behalf of the Portfolio as permitted under the Portfolio's investment
policies. The Adviser shall from time to time make recommendations to the
Fund's Board of Trustees with respect to the Portfolio's investment
policies provided that 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,
subject to review by the Board of Trustees, furnish such other services as
the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser undertakes to pay, either itself or through an affiliated
company, all expenses involved in the operation of the Portfolio, except
the following, which shall be paid by the Portfolio: (i) taxes; (ii) the
fees and expenses of all Trustees of the Fund who are not "interested
persons" of the Fund or of the Adviser; (iii) brokerage fees and
commissions; (iv) redemption fees and other shareholder charges associated
with investments in other mutual funds, (v) interest expenses with respect
to borrowings by the Portfolio; and (vi) such non-recurring and
extraordinary expenses as may arise, including actions, suits or
proceedings to which the Portfolio is or is threatened to be a party and
the legal obligation that the Portfolio may have to indemnify the Fund's
Trustees and officers with respect thereto. It is understood that service
charges billed directly to shareholders of the Portfolio, including charges
for exchanges, redemptions, sub-accounting or other services, shall not be
payable by the Adviser, but may be received and retained by the Adviser or
its affiliates.
(d) The Adviser, either itself or through an affiliated company or
through the Portfolio's custodian, shall place all orders for the purchase
and sale of Fidelity mutual fund shares for the Portfolio's account with
such underlying funds' transfer agents. With respect to portfolio
securities other than Fidelity mutual fund shares, the Adviser, either
itself or through an affiliated company, shall place all purchase and sale
orders for the Portfolio's account with brokers or dealers selected by the
Adviser, which may include brokers or dealers affiliated with the Adviser.
The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of 10/100
of 1% of the average daily net assets of the Portfolio (computed in the
manner set forth in the Fund's Trust Instrument) throughout the month;
provided that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until July 31, 1997
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument or other
organizational documents 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 or other
organizational documents are separate and distinct from those of any and
all other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY ABERDEEN STREET TRUST
on behalf of FIDELITY FREEDOM 2000 FUND
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(e)
MANAGEMENT CONTRACT
between
FIDELITY ABERDEEN STREET TRUST:
FIDELITY FREEDOM INCOME FUND
and
STRATEGIC ADVISERS, INC.
AGREEMENT made this 18th day of July, 1996, by and between Fidelity
Aberdeen Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity Freedom Income Fund (hereinafter called the
"Portfolio"), and Strategic Advisers, Inc., 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 of 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 allocate
the Portfolio's assets among the various underlying Fidelity funds in which
the Portfolio may invest and to otherwise buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments
on behalf of the Portfolio as permitted under the Portfolio's investment
policies. The Adviser shall from time to time make recommendations to the
Fund's Board of Trustees with respect to the Portfolio's investment
policies provided that 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,
subject to review by the Board of Trustees, furnish such other services as
the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser undertakes to pay, either itself or through an affiliated
company, all expenses involved in the operation of the Portfolio, except
the following, which shall be paid by the Portfolio: (i) taxes; (ii) the
fees and expenses of all Trustees of the Fund who are not "interested
persons" of the Fund or of the Adviser; (iii) brokerage fees and
commissions; (iv) redemption fees and other shareholder charges associated
with investments in other mutual funds, (v) interest expenses with respect
to borrowings by the Portfolio; and (vi) such non-recurring and
extraordinary expenses as may arise, including actions, suits or
proceedings to which the Portfolio is or is threatened to be a party and
the legal obligation that the Portfolio may have to indemnify the Fund's
Trustees and officers with respect thereto. It is understood that service
charges billed directly to shareholders of the Portfolio, including charges
for exchanges, redemptions, sub-accounting or other services, shall not be
payable by the Adviser, but may be received and retained by the Adviser or
its affiliates.
(d) The Adviser, either itself or through an affiliated company or
through the Portfolio's custodian, shall place all orders for the purchase
and sale of Fidelity mutual fund shares for the Portfolio's account with
such underlying funds' transfer agents. With respect to portfolio
securities other than Fidelity mutual fund shares, the Adviser, either
itself or through an affiliated company, shall place all purchase and sale
orders for the Portfolio's account with brokers or dealers selected by the
Adviser, which may include brokers or dealers affiliated with the Adviser.
The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of 10/100
of 1% of the average daily net assets of the Portfolio (computed in the
manner set forth in the Fund's Trust Instrument) throughout the month;
provided that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until July 31, 1997
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument or other
organizational documents 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 or other
organizational documents are separate and distinct from those of any and
all other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY ABERDEEN STREET TRUST
on behalf of FIDELITY FREEDOM INCOME FUND
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(f)
ADMINISTRATION AGREEMENT
between
STRATEGIC ADVISERS, INC.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT dated as of this 18th day of July, 1996 between Strategic
Advisers, Inc., a Massachusetts corporation (the "Adviser"), and Fidelity
Management & Research Company, a Massachusetts corporation (the
"Administrator").
WHEREAS, the Adviser has entered into a Management Agreement (the
"Management Agreement"), dated July 18, 1996, with Fidelity Aberdeen Street
Trust (the "Fund") on behalf of Fidelity Freedom 2030 Fund (the
"Portfolio");
WHEREAS, pursuant to the Management Agreement, the Adviser has agreed to
perform (or arrange for the performance by its affiliates of) certain
investment advisory and other management services on behalf of the
Portfolio; and
WHEREAS, the Adviser desires to appoint the Administrator as its agent to
perform on behalf of the Portfolio all services enumerated in the
Management Agreement other than investment advisory services, and the
Administrator is willing to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Adviser and the Administrator hereby agree
as follows:
1. The Adviser hereby appoints the Administrator as its agent to perform
(or arrange for the performance by its affiliates of) the services
described herein, and the Administrator hereby accepts such appointment,
subject to and in accordance with the following provisions.
2.(a) The Administrator shall perform (or arrange for the performance by
its affiliates of) all of the management and administrative services to be
performed on behalf of the Portfolio by the Adviser pursuant to the
Management Agreement other than those services described in paragraphs 1(a)
and 1(d) thereof.
(b) Without limiting the foregoing, the Administrator shall, subject to
the supervision of the Adviser, perform (or arrange for the performance by
its affiliates of) the management and administrative services necessary for
the operation of the Fund set forth in paragraph 1(b) of the Management
Agreement. Such services shall include, but not be 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 Administrator shall also furnish such reports, evaluations, information
or analyses to the Fund or the Adviser as the Fund's Board of Trustees or
the Adviser may request from time to time or as the Administrator may deem
to be desirable. The Administrator shall, subject to review by the Adviser
and the Board of Trustees, furnish such other services as the Administrator
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement.
(c) The Administrator undertakes to pay, either itself or through an
affiliated company, all expenses involved in the operation of the
Portfolio, except (i) the management fee payable by the Portfolio pursuant
to paragraph 3 of the Management Agreement, (ii) the other expenses payable
by the Portfolio pursuant to paragraph 1(c) of the Management Agreement,
and (iii) the expenses of the Adviser incurred in the performance of its
obligations pursuant to paragraphs 1(a) and 1(d) of the Management
Agreement, except that the Administrator shall be responsible for paying
the salaries and fees of all officers of the Fund and of all Trustees of
the Fund who are "interested persons" of the Fund or of the Administrator.
It is understood that service charges billed directly to shareholders of
the Portfolio, including charges for exchanges, redemptions, sub-accounting
or other services, shall not be payable by the Administrator, but may be
received and retained by the Administrator or its affiliates.
3. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Administrator as directors,
officers or otherwise and that directors, officers and stockholders of the
Administrator are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a
shareholder or otherwise.
4. For the services and facilities to be furnished hereunder, the Adviser
shall pay the Administrator a fee, payable monthly as soon as practicable
after the last day of each month, equal to the monthly management fee
received from the Portfolio by the Adviser under the Management Agreement,
less an amount equal to an annual rate of 02/100 of 1% of the average daily
net assets of the Portfolio (computed in the manner set forth in the Fund's
Trust Instrument) throughout the month, provided that if the fee calculated
in accordance with the preceding clause for any month shall be less than
zero, the Administrator shall not receive any fee for such month but shall
have no obligation to reimburse the Adviser.
5. The services of the Administrator to the Portfolio are not to be
deemed exclusive, the Administrator 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 Agreement, interfere in a
material manner with the Administrator'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
Administrator, the Administrator shall not be subject to liability to the
Adviser, 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 Agreement shall continue in force until July 31,
1997 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 Agreement may be modified by mutual consent of the parties
hereto, provided that any such modification shall be authorized by the vote
of the Trustees of the Fund or by a 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 Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Agreement, the Management Agreement 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 Agreement without payment of
any penalty. This Agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of those Trustees of the Fund who
are not parties to this Agreement, the Management Agreement or interested
persons of any such party, or by vote of a majority of the outstanding
voting securities of the Portfolio. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Management Agreement.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
8. The terms "vote of a majority of outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
meanings specified in the Investment Company Act of 1940 and rules
thereunder, 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 duly executed this Agreement as of
the day and year first above written.
FIDELITY MANAGEMENT & RESEARCH
COMPANY
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(g)
ADMINISTRATION AGREEMENT
between
STRATEGIC ADVISERS, INC.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT dated as of this 18th day of July, 1996 between Strategic
Advisers, Inc., a Massachusetts corporation (the "Adviser"), and Fidelity
Management & Research Company, a Massachusetts corporation (the
"Administrator").
WHEREAS, the Adviser has entered into a Management Agreement (the
"Management Agreement"), dated July 18, 1996, with Fidelity Aberdeen Street
Trust (the "Fund") on behalf of Fidelity Freedom 2020 Fund (the
"Portfolio");
WHEREAS, pursuant to the Management Agreement, the Adviser has agreed to
perform (or arrange for the performance by its affiliates of) certain
investment advisory and other management services on behalf of the
Portfolio; and
WHEREAS, the Adviser desires to appoint the Administrator as its agent to
perform on behalf of the Portfolio all services enumerated in the
Management Agreement other than investment advisory services, and the
Administrator is willing to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Adviser and the Administrator hereby agree
as follows:
1. The Adviser hereby appoints the Administrator as its agent to perform
(or arrange for the performance by its affiliates of) the services
described herein, and the Administrator hereby accepts such appointment,
subject to and in accordance with the following provisions.
2.(a) The Administrator shall perform (or arrange for the performance by
its affiliates of) all of the management and administrative services to be
performed on behalf of the Portfolio by the Adviser pursuant to the
Management Agreement other than those services described in paragraphs 1(a)
and 1(d) thereof.
(b) Without limiting the foregoing, the Administrator shall, subject to
the supervision of the Adviser, perform (or arrange for the performance by
its affiliates of) the management and administrative services necessary for
the operation of the Fund set forth in paragraph 1(b) of the Management
Agreement. Such services shall include, but not be 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 Administrator shall also furnish such reports, evaluations, information
or analyses to the Fund or the Adviser as the Fund's Board of Trustees or
the Adviser may request from time to time or as the Administrator may deem
to be desirable. The Administrator shall, subject to review by the Adviser
and the Board of Trustees, furnish such other services as the Administrator
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement.
(c) The Administrator undertakes to pay, either itself or through an
affiliated company, all expenses involved in the operation of the
Portfolio, except (i) the management fee payable by the Portfolio pursuant
to paragraph 3 of the Management Agreement, (ii) the other expenses payable
by the Portfolio pursuant to paragraph 1(c) of the Management Agreement,
and (iii) the expenses of the Adviser incurred in the performance of its
obligations pursuant to paragraphs 1(a) and 1(d) of the Management
Agreement, except that the Administrator shall be responsible for paying
the salaries and fees of all officers of the Fund and of all Trustees of
the Fund who are "interested persons" of the Fund or of the Administrator.
It is understood that service charges billed directly to shareholders of
the Portfolio, including charges for exchanges, redemptions, sub-accounting
or other services, shall not be payable by the Administrator, but may be
received and retained by the Administrator or its affiliates.
3. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Administrator as directors,
officers or otherwise and that directors, officers and stockholders of the
Administrator are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a
shareholder or otherwise.
4. For the services and facilities to be furnished hereunder, the Adviser
shall pay the Administrator a fee, payable monthly as soon as practicable
after the last day of each month, equal to the monthly management fee
received from the Portfolio by the Adviser under the Management Agreement,
less an amount equal to an annual rate of 02/100 of 1% of the average daily
net assets of the Portfolio (computed in the manner set forth in the Fund's
Trust Instrument) throughout the month, provided that if the fee calculated
in accordance with the preceding clause for any month shall be less than
zero, the Administrator shall not receive any fee for such month but shall
have no obligation to reimburse the Adviser.
5. The services of the Administrator to the Portfolio are not to be
deemed exclusive, the Administrator 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 Agreement, interfere in a
material manner with the Administrator'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
Administrator, the Administrator shall not be subject to liability to the
Adviser, 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 Agreement shall continue in force until July 31,
1997 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 Agreement may be modified by mutual consent of the parties
hereto, provided that any such modification shall be authorized by the vote
of the Trustees of the Fund or by a 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 Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Agreement, the Management Agreement 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 Agreement without payment of
any penalty. This Agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of those Trustees of the Fund who
are not parties to this Agreement, the Management Agreement or interested
persons of any such party, or by vote of a majority of the outstanding
voting securities of the Portfolio. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Management Agreement.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
8. The terms "vote of a majority of outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
meanings specified in the Investment Company Act of 1940 and rules
thereunder, 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 duly executed this Agreement as of
the day and year first above written.
FIDELITY MANAGEMENT & RESEARCH
COMPANY
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(h)
ADMINISTRATION AGREEMENT
between
STRATEGIC ADVISERS, INC.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT dated as of this 18th day of July, 1996 between Strategic
Advisers, Inc., a Massachusetts corporation (the "Adviser"), and Fidelity
Management & Research Company, a Massachusetts corporation (the
"Administrator").
WHEREAS, the Adviser has entered into a Management Agreement (the
"Management Agreement"), dated July 18, 1996, with Fidelity Aberdeen Street
Trust (the "Fund") on behalf of Fidelity Freedom 2010 Fund (the
"Portfolio");
WHEREAS, pursuant to the Management Agreement, the Adviser has agreed to
perform (or arrange for the performance by its affiliates of) certain
investment advisory and other management services on behalf of the
Portfolio; and
WHEREAS, the Adviser desires to appoint the Administrator as its agent to
perform on behalf of the Portfolio all services enumerated in the
Management Agreement other than investment advisory services, and the
Administrator is willing to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Adviser and the Administrator hereby agree
as follows:
1. The Adviser hereby appoints the Administrator as its agent to perform
(or arrange for the performance by its affiliates of) the services
described herein, and the Administrator hereby accepts such appointment,
subject to and in accordance with the following provisions.
2.(a) The Administrator shall perform (or arrange for the performance by
its affiliates of) all of the management and administrative services to be
performed on behalf of the Portfolio by the Adviser pursuant to the
Management Agreement other than those services described in paragraphs 1(a)
and 1(d) thereof.
(b) Without limiting the foregoing, the Administrator shall, subject to
the supervision of the Adviser, perform (or arrange for the performance by
its affiliates of) the management and administrative services necessary for
the operation of the Fund set forth in paragraph 1(b) of the Management
Agreement. Such services shall include, but not be 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 Administrator shall also furnish such reports, evaluations, information
or analyses to the Fund or the Adviser as the Fund's Board of Trustees or
the Adviser may request from time to time or as the Administrator may deem
to be desirable. The Administrator shall, subject to review by the Adviser
and the Board of Trustees, furnish such other services as the Administrator
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement.
(c) The Administrator undertakes to pay, either itself or through an
affiliated company, all expenses involved in the operation of the
Portfolio, except (i) the management fee payable by the Portfolio pursuant
to paragraph 3 of the Management Agreement, (ii) the other expenses payable
by the Portfolio pursuant to paragraph 1(c) of the Management Agreement,
and (iii) the expenses of the Adviser incurred in the performance of its
obligations pursuant to paragraphs 1(a) and 1(d) of the Management
Agreement, except that the Administrator shall be responsible for paying
the salaries and fees of all officers of the Fund and of all Trustees of
the Fund who are "interested persons" of the Fund or of the Administrator.
It is understood that service charges billed directly to shareholders of
the Portfolio, including charges for exchanges, redemptions, sub-accounting
or other services, shall not be payable by the Administrator, but may be
received and retained by the Administrator or its affiliates.
3. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Administrator as directors,
officers or otherwise and that directors, officers and stockholders of the
Administrator are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a
shareholder or otherwise.
4. For the services and facilities to be furnished hereunder, the Adviser
shall pay the Administrator a fee, payable monthly as soon as practicable
after the last day of each month, equal to the monthly management fee
received from the Portfolio by the Adviser under the Management Agreement,
less an amount equal to an annual rate of 02/100 of 1% of the average daily
net assets of the Portfolio (computed in the manner set forth in the Fund's
Trust Instrument) throughout the month, provided that if the fee calculated
in accordance with the preceding clause for any month shall be less than
zero, the Administrator shall not receive any fee for such month but shall
have no obligation to reimburse the Adviser.
5. The services of the Administrator to the Portfolio are not to be
deemed exclusive, the Administrator 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 Agreement, interfere in a
material manner with the Administrator'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
Administrator, the Administrator shall not be subject to liability to the
Adviser, 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 Agreement shall continue in force until July 31,
1997 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 Agreement may be modified by mutual consent of the parties
hereto, provided that any such modification shall be authorized by the vote
of the Trustees of the Fund or by a 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 Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Agreement, the Management Agreement 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 Agreement without payment of
any penalty. This Agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of those Trustees of the Fund who
are not parties to this Agreement, the Management Agreement or interested
persons of any such party, or by vote of a majority of the outstanding
voting securities of the Portfolio. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Management Agreement.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
8. The terms "vote of a majority of outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
meanings specified in the Investment Company Act of 1940 and rules
thereunder, 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 duly executed this Agreement as of
the day and year first above written.
FIDELITY MANAGEMENT & RESEARCH
COMPANY
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(i)
ADMINISTRATION AGREEMENT
between
STRATEGIC ADVISERS, INC.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT dated as of this 18th day of July, 1996 between Strategic
Advisers, Inc., a Massachusetts corporation (the "Adviser"), and Fidelity
Management & Research Company, a Massachusetts corporation (the
"Administrator").
WHEREAS, the Adviser has entered into a Management Agreement (the
"Management Agreement"), dated July 18, 1996, with Fidelity Aberdeen Street
Trust (the "Fund") on behalf of Fidelity Freedom 2000 Fund (the
"Portfolio");
WHEREAS, pursuant to the Management Agreement, the Adviser has agreed to
perform (or arrange for the performance by its affiliates of) certain
investment advisory and other management services on behalf of the
Portfolio; and
WHEREAS, the Adviser desires to appoint the Administrator as its agent to
perform on behalf of the Portfolio all services enumerated in the
Management Agreement other than investment advisory services, and the
Administrator is willing to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Adviser and the Administrator hereby agree
as follows:
1. The Adviser hereby appoints the Administrator as its agent to perform
(or arrange for the performance by its affiliates of) the services
described herein, and the Administrator hereby accepts such appointment,
subject to and in accordance with the following provisions.
2.(a) The Administrator shall perform (or arrange for the performance by
its affiliates of) all of the management and administrative services to be
performed on behalf of the Portfolio by the Adviser pursuant to the
Management Agreement other than those services described in paragraphs 1(a)
and 1(d) thereof.
(b) Without limiting the foregoing, the Administrator shall, subject to
the supervision of the Adviser, perform (or arrange for the performance by
its affiliates of) the management and administrative services necessary for
the operation of the Fund set forth in paragraph 1(b) of the Management
Agreement. Such services shall include, but not be 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 Administrator shall also furnish such reports, evaluations, information
or analyses to the Fund or the Adviser as the Fund's Board of Trustees or
the Adviser may request from time to time or as the Administrator may deem
to be desirable. The Administrator shall, subject to review by the Adviser
and the Board of Trustees, furnish such other services as the Administrator
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement.
(c) The Administrator undertakes to pay, either itself or through an
affiliated company, all expenses involved in the operation of the
Portfolio, except (i) the management fee payable by the Portfolio pursuant
to paragraph 3 of the Management Agreement, (ii) the other expenses payable
by the Portfolio pursuant to paragraph 1(c) of the Management Agreement,
and (iii) the expenses of the Adviser incurred in the performance of its
obligations pursuant to paragraphs 1(a) and 1(d) of the Management
Agreement, except that the Administrator shall be responsible for paying
the salaries and fees of all officers of the Fund and of all Trustees of
the Fund who are "interested persons" of the Fund or of the Administrator.
It is understood that service charges billed directly to shareholders of
the Portfolio, including charges for exchanges, redemptions, sub-accounting
or other services, shall not be payable by the Administrator, but may be
received and retained by the Administrator or its affiliates.
3. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Administrator as directors,
officers or otherwise and that directors, officers and stockholders of the
Administrator are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a
shareholder or otherwise.
4. For the services and facilities to be furnished hereunder, the Adviser
shall pay the Administrator a fee, payable monthly as soon as practicable
after the last day of each month, equal to the monthly management fee
received from the Portfolio by the Adviser under the Management Agreement,
less an amount equal to an annual rate of 02/100 of 1% of the average daily
net assets of the Portfolio (computed in the manner set forth in the Fund's
Trust Instrument) throughout the month, provided that if the fee calculated
in accordance with the preceding clause for any month shall be less than
zero, the Administrator shall not receive any fee for such month but shall
have no obligation to reimburse the Adviser.
5. The services of the Administrator to the Portfolio are not to be
deemed exclusive, the Administrator 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 Agreement, interfere in a
material manner with the Administrator'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
Administrator, the Administrator shall not be subject to liability to the
Adviser, 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 Agreement shall continue in force until July 31,
1997 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 Agreement may be modified by mutual consent of the parties
hereto, provided that any such modification shall be authorized by the vote
of the Trustees of the Fund or by a 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 Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Agreement, the Management Agreement 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 Agreement without payment of
any penalty. This Agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of those Trustees of the Fund who
are not parties to this Agreement, the Management Agreement or interested
persons of any such party, or by vote of a majority of the outstanding
voting securities of the Portfolio. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Management Agreement.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
8. The terms "vote of a majority of outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
meanings specified in the Investment Company Act of 1940 and rules
thereunder, 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 duly executed this Agreement as of
the day and year first above written.
FIDELITY MANAGEMENT & RESEARCH
COMPANY
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 5(j)
ADMINISTRATION AGREEMENT
between
STRATEGIC ADVISERS, INC.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT dated as of this 18th day of July, 1996 between Strategic
Advisers, Inc., a Massachusetts corporation (the "Adviser"), and Fidelity
Management & Research Company, a Massachusetts corporation (the
"Administrator").
WHEREAS, the Adviser has entered into a Management Agreement (the
"Management Agreement"), dated July 18, 1996, with Fidelity Aberdeen Street
Trust (the "Fund") on behalf of Fidelity Freedom Income Fund (the
"Portfolio");
WHEREAS, pursuant to the Management Agreement, the Adviser has agreed to
perform (or arrange for the performance by its affiliates of) certain
investment advisory and other management services on behalf of the
Portfolio; and
WHEREAS, the Adviser desires to appoint the Administrator as its agent to
perform on behalf of the Portfolio all services enumerated in the
Management Agreement other than investment advisory services, and the
Administrator is willing to accept such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Adviser and the Administrator hereby agree
as follows:
1. The Adviser hereby appoints the Administrator as its agent to perform
(or arrange for the performance by its affiliates of) the services
described herein, and the Administrator hereby accepts such appointment,
subject to and in accordance with the following provisions.
2.(a) The Administrator shall perform (or arrange for the performance by
its affiliates of) all of the management and administrative services to be
performed on behalf of the Portfolio by the Adviser pursuant to the
Management Agreement other than those services described in paragraphs 1(a)
and 1(d) thereof.
(b) Without limiting the foregoing, the Administrator shall, subject to
the supervision of the Adviser, perform (or arrange for the performance by
its affiliates of) the management and administrative services necessary for
the operation of the Fund set forth in paragraph 1(b) of the Management
Agreement. Such services shall include, but not be 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 Administrator shall also furnish such reports, evaluations, information
or analyses to the Fund or the Adviser as the Fund's Board of Trustees or
the Adviser may request from time to time or as the Administrator may deem
to be desirable. The Administrator shall, subject to review by the Adviser
and the Board of Trustees, furnish such other services as the Administrator
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement.
(c) The Administrator undertakes to pay, either itself or through an
affiliated company, all expenses involved in the operation of the
Portfolio, except (i) the management fee payable by the Portfolio pursuant
to paragraph 3 of the Management Agreement, (ii) the other expenses payable
by the Portfolio pursuant to paragraph 1(c) of the Management Agreement,
and (iii) the expenses of the Adviser incurred in the performance of its
obligations pursuant to paragraphs 1(a) and 1(d) of the Management
Agreement, except that the Administrator shall be responsible for paying
the salaries and fees of all officers of the Fund and of all Trustees of
the Fund who are "interested persons" of the Fund or of the Administrator.
It is understood that service charges billed directly to shareholders of
the Portfolio, including charges for exchanges, redemptions, sub-accounting
or other services, shall not be payable by the Administrator, but may be
received and retained by the Administrator or its affiliates.
3. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Administrator as directors,
officers or otherwise and that directors, officers and stockholders of the
Administrator are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a
shareholder or otherwise.
4. For the services and facilities to be furnished hereunder, the Adviser
shall pay the Administrator a fee, payable monthly as soon as practicable
after the last day of each month, equal to the monthly management fee
received from the Portfolio by the Adviser under the Management Agreement,
less an amount equal to an annual rate of 02/100 of 1% of the average daily
net assets of the Portfolio (computed in the manner set forth in the Fund's
Trust Instrument) throughout the month, provided that if the fee calculated
in accordance with the preceding clause for any month shall be less than
zero, the Administrator shall not receive any fee for such month but shall
have no obligation to reimburse the Adviser.
5. The services of the Administrator to the Portfolio are not to be
deemed exclusive, the Administrator 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 Agreement, interfere in a
material manner with the Administrator'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
Administrator, the Administrator shall not be subject to liability to the
Adviser, 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 Agreement shall continue in force until July 31,
1997 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 Agreement may be modified by mutual consent of the parties
hereto, provided that any such modification shall be authorized by the vote
of the Trustees of the Fund or by a 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 Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Agreement, the Management Agreement 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 Agreement without payment of
any penalty. This Agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of those Trustees of the Fund who
are not parties to this Agreement, the Management Agreement or interested
persons of any such party, or by vote of a majority of the outstanding
voting securities of the Portfolio. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Management Agreement.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
8. The terms "vote of a majority of outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
meanings specified in the Investment Company Act of 1940 and rules
thereunder, 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 duly executed this Agreement as of
the day and year first above written.
FIDELITY MANAGEMENT & RESEARCH
COMPANY
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
STRATEGIC ADVISERS, INC.
By /s/Roger T. Servison
Roger T. Servison, President
Exhibit 6(a)
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ABERDEEN STREET TRUST
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 18th day of July, 1996, between Fidelity Aberdeen
Street Trust, a Delaware business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Fidelity Freedom
2030 Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR") or any of its affiliates.
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that Strategic Advisers, Inc. ("Strategic
Advisers"), an affiliate of FMR, and/or FMR may make payments to
Distributors with respect to any expenses incurred in the distribution of
shares of the Issuer, such payments payable from the past profits or other
resources of Strategic Advisers or FMR, as the case may be, including
management fees paid to Strategic Advisers by the Issuer, or fees paid to
FMR by Strategic Advisers out of such management fees.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until March 31,
1997, and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument or other organizational document of the Issuer and agrees that
the obligations assumed by the Issuer under this contract shall be limited
in all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Trust Instrument or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
FIDELITY ABERDEEN STREET TRUST
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/Arthur S. Loring
Arthur S. Loring, Senior Vice President
Exhibit 6(b)
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ABERDEEN STREET TRUST
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 18th day of July, 1996, between Fidelity Aberdeen
Street Trust, a Delaware business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Fidelity Freedom
2020 Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR") or any of its affiliates.
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that Strategic Advisers, Inc. ("Strategic
Advisers"), an affiliate of FMR, and/or FMR may make payments to
Distributors with respect to any expenses incurred in the distribution of
shares of the Issuer, such payments payable from the past profits or other
resources of Strategic Advisers or FMR, as the case may be, including
management fees paid to Strategic Advisers by the Issuer, or fees paid to
FMR by Strategic Advisers out of such management fees.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until March 31,
1997, and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument or other organizational document of the Issuer and agrees that
the obligations assumed by the Issuer under this contract shall be limited
in all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Trust Instrument or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
FIDELITY ABERDEEN STREET TRUST
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/Arthur S. Loring
Arthur S. Loring, Senior Vice President
Exhibit 6(c)
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ABERDEEN STREET TRUST
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 18th day of July, 1996, between Fidelity Aberdeen
Street Trust, a Delaware business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Fidelity Freedom
2010 Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR") or any of its affiliates.
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that Strategic Advisers, Inc. ("Strategic
Advisers"), an affiliate of FMR, and/or FMR may make payments to
Distributors with respect to any expenses incurred in the distribution of
shares of the Issuer, such payments payable from the past profits or other
resources of Strategic Advisers or FMR, as the case may be, including
management fees paid to Strategic Advisers by the Issuer, or fees paid to
FMR by Strategic Advisers out of such management fees.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until March 31,
1997, and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument or other organizational document of the Issuer and agrees that
the obligations assumed by the Issuer under this contract shall be limited
in all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Trust Instrument or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
FIDELITY ABERDEEN STREET TRUST
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/Arthur S. Loring
Arthur S. Loring, Senior Vice President
Exhibit 6(e)
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ABERDEEN STREET TRUST
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 18th day of July, 1996, between Fidelity Aberdeen
Street Trust, a Delaware business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Fidelity Freedom
Income Fund, a series of the Issuer, and Fidelity Distributors Corporation,
a Massachusetts corporation having its principal place of business in
Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR") or any of its affiliates.
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that Strategic Advisers, Inc. ("Strategic
Advisers"), an affiliate of FMR, and/or FMR may make payments to
Distributors with respect to any expenses incurred in the distribution of
shares of the Issuer, such payments payable from the past profits or other
resources of Strategic Advisers or FMR, as the case may be, including
management fees paid to Strategic Advisers by the Issuer, or fees paid to
FMR by Strategic Advisers out of such management fees.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until March 31,
1997, and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument or other organizational document of the Issuer and agrees that
the obligations assumed by the Issuer under this contract shall be limited
in all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Trust Instrument or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
FIDELITY ABERDEEN STREET TRUST
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/Arthur S. Loring
Arthur S. Loring, Senior Vice President
Exhibit 6(d)
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ABERDEEN STREET TRUST
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 18th day of July, 1996, between Fidelity Aberdeen
Street Trust, a Delaware business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Fidelity Freedom
2000 Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR") or any of its affiliates.
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that Strategic Advisers, Inc. ("Strategic
Advisers"), an affiliate of FMR, and/or FMR may make payments to
Distributors with respect to any expenses incurred in the distribution of
shares of the Issuer, such payments payable from the past profits or other
resources of Strategic Advisers or FMR, as the case may be, including
management fees paid to Strategic Advisers by the Issuer, or fees paid to
FMR by Strategic Advisers out of such management fees.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until March 31,
1997, and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument or other organizational document of the Issuer and agrees that
the obligations assumed by the Issuer under this contract shall be limited
in all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Trust Instrument or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
FIDELITY ABERDEEN STREET TRUST
By /s/J. Gary Burkhead
J. Gary Burkhead, Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/Arthur S. Loring
Arthur S. Loring, Senior Vice President
EXHIBIT 8(B)
FORM OF
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
The Bank of New York and each of the following Investment Companies
Dated as of August 31, 1996
The following is a list of the Funds and their respective Portfolios for
which the Custodian shall serve under a Custodian Agreement dated as of
December 1, 1994:
FUND Portfolio Effective as of:
Fidelity Aberdeen Street Trust Fidelity Freedom Income Fund August 31,
1996
Fidelity Freedom 2000 Fund August 31, 1996
Fidelity Freedom 2010 Fund August 31, 1996
Fidelity Freedom 2020 Fund August 31, 1996
Fidelity Freedom 2030 Fund August 31, 1996
Fidelity Advisor Annuity Fund Fidelity Advisor Annuity Government
Investment Fund December 1, 1994
Fidelity Advisor Annuity High Yield Fund December 1, 1994
Fidelity Advisor Annuity Money Market Fund September 14, 1995
Fidelity Advisor Series II Fidelity Advisor Government Investment Fund
December 1, 1994
Fidelity Advisor High Yield Fund December 1, 1994
Fidelity Advisor Short Fixed-Income Fund December 1, 1994
Fidelity Advisor IV Fidelity Advisor Limited Term Bond Fund December 1,
1994
Fidelity Institutional Short-Intermediate Government Portfolio December 1,
1994
Fidelity Real Estate High Income Fund December 1, 1994
Fidelity Advisor Series VIII Fidelity Advisor Strategic Income Fund
December 1, 1994
Fidelity Boston Street Trust Fidelity Target Timeline 1999 January 18,
1996
Fidelity Target Timeline 2001 January 18, 1996
Fidelity Target Timeline 2003 January 18, 1996
Fidelity Charles Street Trust Fidelity Short-Intermediate Government Fund
December 1, 1994
Spartan Short-Term Income Fund December 1, 1994
Spartan Investment-Grade Bond Fund December 1, 1994
Fidelity Commonwealth Trust Fidelity Intermediate Bond Fund December 1,
1994
Fidelity Covington Trust Fidelity Real Estate High Income Fund II May 16,
1996
Daily Money Fund Capital Reserves: Money Market Portfolio September 14,
1995
Capital Reserves: U.S. Government Portfolio September 14, 1995
Treasury only (f/k/a Fidelity U.S.
Treasury Income Portfolio) September 14, 1995
Money Market Portfolio September 14, 1995
U. S. Treasury Portfolio September 14, 1995
Fidelity Devonshire Trust Spartan Long-Term Government Bond Fund December
1, 1994
Spartan Adjustable Rate Government Fund December 1, 1994
Fidelity Fixed-Income Trust Fidelity Short-Term Bond Portfolio December 1,
1994
Fidelity Investment Grade Bond Fund December 1, 1994
Spartan Government Income Fund December 1, 1994
Spartan High Income Fund December 1, 1994
Spartan Short-Intermediate Government Fund December 1, 1994
Fidelity Government Securities Fund Fidelity Government Securities Fund
December 1, 1994
Fidelity Hereford Street Trust Spartan Money Market Fund December 1, 1994
Spartan U.S. Government Money Market Fund September 14, 1995
Spartan U.S. Treasury Money Market Fund September 14, 1995
Fidelity Income Fund Fidelity Ginnie Mae Portfolio December 1, 1994
Fidelity Mortgage Securities Portfolio December 1, 1994
Spartan Limited Maturity Government Fund December 1, 1994
Fidelity Institutional Cash Portfolios Domestic (f/k/a Domestic Money
Market Portfolio) September 14, 1995
Money Market (f/k/a Money Market Portfolio) September 14, 1995
Government (f/k/a U.S. Government Portfolio) September 14, 1995
Treasury II (f/k/a U.S. Treasury Portfolio II) September 14, 1995
Fidelity Institutional Trust Fidelity U.S. Bond Index Portfolio December 1,
1994
Fidelity Money Market Trust Domestic Money Market Portfolio September 14,
1995
Retirement Government Money Market Portfolio September 14, 1995
Retirement Money Market Portfolio September 14, 1995
Fidelity Phillips Street Trust Fidelity Cash Reserves December 1, 1994
Fidelity U.S. Government Reserves September 14, 1995
Fidelity School Street Trust Spartan Bond Strategist December 1, 1994
Fidelity Select Portfolios Money Market Portfolio December 1, 1994
Fidelity Summer Street Trust Fidelity Capital & Income Fund December 1,
1994
Fidelity Union Street Trust Spartan Ginnie Mae Fund December 1, 1994
Fidelity Union Street Trust II Fidelity Daily Income Trust December 1,
1994 Spartan World Money Market Fund December 1, 1994
Variable Insurance Products Fund High Income Portfolio December 1, 1994
Variable Insurance Products Fund II Investment Grade Bond Portfolio
December 1, 1994
Variable Insurance Products Fund Money Market Portfolio September 14,
1995
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
Each of the Investment Companies The Bank of New York
listed on this Appendix "A", on behalf
of each of their respective Portfolios
EXHIBIT 8(D)
FORM OF ADDENDUM TO CUSTODIAN AGREEMENT
[Fidelity Funds Letterhead]
The Bank of New York
90 Washington Street
New York, New York 10286
Attn: Stephen E. Grunston
Re: Addendum to Custodian Agreement, effective August 31, 1996, between
Fidelity Aberdeen Street Trust, on behalf of each of its series portfolios
known as the Fidelity Freedom Funds, and The Bank of New York
Dear Sirs and Mesdames:
This letter agreement shall serve as an addendum to the Custodian
Agreement (the "Custodian Agreement"), effective August 31, 1996, between
Fidelity Aberdeen Street Trust (the "Fund"), on behalf of each of its
series portfolios, Fidelity Freedom Income Fund, Fidelity Freedom 2000
Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund and Fidelity
Freedom 2030 Fund (each a "Freedom Portfolio" and collectively the "Freedom
Portfolios"), and The Bank of New York (the "Custodian"). This Addendum
shall also apply to any future Freedom portfolio of the Fund added to
Appendix A in accordance with the terms of the Custodian Agreement.
Capitalized terms not otherwise defined herein shall have the meanings
specified in the Custodian Agreement.
Each Freedom Portfolio seeks to meet its investment objective by investing
primarily in shares of other open-end mutual funds (the "Underlying Funds")
managed by Fidelity Management & Research Company ("FMR") or its affiliates
or successors. The Fund, on behalf of each of the Freedom Portfolios, and
the Custodian hereby agree that the Bank shall maintain custody of the
Freedom Portfolios' investments in Underlying Fund shares in accordance
with the following provisions:
1. Manner of Holding Underlying Fund Shares. Notwithstanding the
provisions of Section 2.02 of the Custodian Agreement, the Custodian is
hereby authorized to maintain the shares of the Underlying Funds owned by
the Freedom Portfolios in book entry form directly with the transfer agent
or a designated sub-transfer agent of each such Underlying Fund (an
"Underlying Fund Transfer Agent"), subject to and in accordance with the
following provisions:
a. Such Underlying Fund shares shall be maintained in separate custodian
accounts for each such Freedom Portfolio in the Custodian's name or
nominee, as custodian for such Freedom Portfolio.
b. The Custodian will implement appropriate control procedures (the
"Control Procedures") to ensure that (i) only authorized personnel of the
Custodian will be authorized to give instructions to an Underlying Fund
Transfer Agent in connection with a Freedom Portfolio's purchase or sale of
Underlying Fund shares, and (ii) that confirmations received from the
Underlying Fund Transfer Agents are properly affirmed through the
Custodian's standard affirmation matching procedure.
2. Purchases of Underlying Fund Shares. Notwithstanding the provisions
of Section 2.03 of the Custodian Agreement, upon receipt of Proper
Instructions, the Custodian shall pay for and receive Underlying Fund
shares purchased for the account of a Freedom Portfolio, provided that (i)
the Custodian shall only send instructions to purchase such shares to an
Underlying Fund Transfer Agent in accordance with the Control Procedures
("Purchase Instructions") upon receipt of matching instructions from FMR's
custody operations, on the one hand, and FMR's trading operations, on the
other, and (ii) the Custodian shall release funds to an Underlying Fund
Transfer Agent only after receiving confirmation from such Underlying Fund
Transfer Agent that it has received the Purchase Instructions.
3. Sales of Underlying Fund Shares. Notwithstanding the provisions of
Section 2.05 of the Custodian Agreement, upon receipt of Proper
Instructions, the Custodian shall release Underlying Fund shares sold for
the account of a Freedom Portfolio, provided that the Custodian shall only
send instructions to sell such shares to an Underlying Fund Transfer Agent
in accordance with the Control Procedures upon receipt of matching
instructions from FMR's custody operations, on the one hand, and FMR's
trading operations, on the other.
4. Fee Schedule. Notwithstanding the provisions of the fee schedule
currently in effect pursuant to Article VI of the Custodian Agreement, the
Custodian will charge each Freedom Portfolio $10.00 for each transaction in
Underlying Fund shares by such Freedom Portfolio. Such $10.00 transaction
fee will cover all services (other than corresponding wire transfers) to be
performed by the Custodian in connection with transactions in Underlying
Fund shares by the Freedom Portfolios. All other account activity by the
Freedom Portfolios will be charged in accordance with the fee schedule in
effect from time to time in accordance with the terms of Article VI of the
Custodian Agreement, provided that, notwithstanding anything herein to the
contrary, the Custodian will not charge any Asset Fee on the Freedom
Portfolio accounts.
5. Other Provisions of the Custodian Agreement Remain in Effect. The
terms of this Addendum apply solely to shares of the Underlying Funds held
in custody by the Custodian on behalf of the Freedom Portfolios.
Notwithstanding anything herein to the contrary, this Addendum shall not
apply to any investment company listed on Appendix "A" attached to the
Custodian Agreement, other than the Fund on behalf of the Freedom
Portfolios, and this Addendum shall have no force or effect upon the terms
and conditions of the Custodian Agreement, except to the extent such terms
and conditions are expressly modified or supplemented by the provisions of
this Addendum in respect of shares of the Underlying Funds held by the
Freedom Portfolios.
If you are in agreement with the foregoing, please execute the enclosed
counterpart to this letter and return it to the undersigned, whereupon this
letter shall become an binding Addendum to the Custodian Agreement,
enforceable by the Custodian and the Fund in accordance with its terms.
FIDELITY ABERDEEN STREET TRUST, on behalf of Fidelity Freedom Income Fund,
Fidelity Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom
2020 Fund and Fidelity Freedom 2030 Fund
Agreed and Accepted as of the Date Hereof:
THE BANK OF NEW YORK
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Exhibit included in Part C of this
Post-Effective Amendment No. 18 to the registration statement on Form N-1A
(the "Registration Statement") of our report dated October 9, 1996,
relating to the financial statements of the five series of Fidelity
Aberdeen Street Trust, Fidelity Freedom 2030 Fund, Fidelity Freedom 2020
Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2000 Fund, and Fidelity
Freedom Income Fund, which is included in such Exhibit. We also consent to
the reference to our firm under the heading "Auditor" in the Statement of
Additional Information.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 9, 1996
EXHIBIT 13
October 8, 1996
Fidelity Aberdeen Street Trust
82 Devonshire Street
Boston, MA 02109
Ladies and Gentlemen:
Fidelity Management & Research Company ("FMR") agrees to purchase 10,000
shares of beneficial interest, without par value (the "Shares"), of the
trust at a price of $10.00 per share. FMR shall tender to the trust the
amount of $100,000 in full payment for the Shares.
FMR represents and warrants to the trust that the Shares are being acquired
for investment and not with a view to distribution thereof, and that FMR
has no present intention to redeem or dispose of any of the Shares.
Very truly yours,
Fidelity Management & Research
Company
By: /s/Arthur S. Loring
Name: Arthur S. Loring
Title: Senior Vice President and
General Counsel
Exhibit 15(a)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Aberdeen Street Trust:
Fidelity Freedom 2030 Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Freedom 2030 Fund (the "Portfolio"), a series of shares of Fidelity
Aberdeen Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company ("FMR"), under which the Distributor uses all reasonable efforts,
consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest (the "shares"). Under the
agreement, the Distributor pays the expenses of printing and distributing
any prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that Strategic Advisers, Inc. ("Strategic Advisers"), an
affiliate of FMR, and/or FMR may use its revenues, including management
fees paid to Strategic Advisers by the Portfolio, or fees paid to FMR by
Strategic Advisers out of such management fees, as well as its past profits
or its resources from any other source, to make payment to the Distributor
with respect to any expenses incurred in connection with the distribution
of shares of the Portfolio, including the activities referred to above.
3. Strategic Advisers and/or FMR directly, or through the Distributor, may,
subject to the approval of the Trustees, make payments to securities
dealers and other third parties who engage in the sale of shares or who
render shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions and
providing such other shareholder services as the Fund may reasonably
request.
4. The Portfolio will not make separate payments as a result of this Plan
to Strategic Advisers, FMR, the Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to pay, a
management fee to Strategic Advisers. To the extent that any payments made
by the Portfolio to Strategic Advisers, including payment of management
fees, out of which management fees Strategic Advisers may pay fees to FMR,
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of shares of the Portfolio within the
context of Rule 12b-1 under the Act, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1997, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by a vote of a majority of the Independent Trustees or by a vote
of a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require Strategic
Advisers and/or FMR and/or the Distributor to provide the Fund, for review
by the Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of shares
of the Portfolio (making estimates of such costs where necessary or
desirable) and the purposes for which such expenditures were made.
9. This Plan does not require Strategic Advisers, FMR, or the Distributor
to perform any specific type or level of distribution activities or to
incur any specific level of expenses for activities primarily intended to
result in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth in
the Fund's Trust Instrument or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
Exhibit 15(b)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Aberdeen Street Trust:
Fidelity Freedom 2020 Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Freedom 2020 Fund (the "Portfolio"), a series of shares of Fidelity
Aberdeen Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company ("FMR"), under which the Distributor uses all reasonable efforts,
consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest (the "shares"). Under the
agreement, the Distributor pays the expenses of printing and distributing
any prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that Strategic Advisers, Inc. ("Strategic Advisers"), an
affiliate of FMR, and/or FMR may use its revenues, including management
fees paid to Strategic Advisers by the Portfolio, or fees paid to FMR by
Strategic Advisers out of such management fees, as well as its past profits
or its resources from any other source, to make payment to the Distributor
with respect to any expenses incurred in connection with the distribution
of shares of the Portfolio, including the activities referred to above.
3. Strategic Advisers and/or FMR directly, or through the Distributor, may,
subject to the approval of the Trustees, make payments to securities
dealers and other third parties who engage in the sale of shares or who
render shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions and
providing such other shareholder services as the Fund may reasonably
request.
4. The Portfolio will not make separate payments as a result of this Plan
to Strategic Advisers, FMR, the Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to pay, a
management fee to Strategic Advisers. To the extent that any payments made
by the Portfolio to Strategic Advisers, including payment of management
fees, out of which management fees Strategic Advisers may pay fees to FMR,
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of shares of the Portfolio within the
context of Rule 12b-1 under the Act, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1997, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by a vote of a majority of the Independent Trustees or by a vote
of a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require Strategic
Advisers and/or FMR and/or the Distributor to provide the Fund, for review
by the Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of shares
of the Portfolio (making estimates of such costs where necessary or
desirable) and the purposes for which such expenditures were made.
9. This Plan does not require Strategic Advisers, FMR, or the Distributor
to perform any specific type or level of distribution activities or to
incur any specific level of expenses for activities primarily intended to
result in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth in
the Fund's Trust Instrument or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
Exhibit 15(c)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Aberdeen Street Trust:
Fidelity Freedom 2010 Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Freedom 2010 Fund (the "Portfolio"), a series of shares of Fidelity
Aberdeen Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company ("FMR"), under which the Distributor uses all reasonable efforts,
consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest (the "shares"). Under the
agreement, the Distributor pays the expenses of printing and distributing
any prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that Strategic Advisers, Inc. ("Strategic Advisers"), an
affiliate of FMR, and/or FMR may use its revenues, including management
fees paid to Strategic Advisers by the Portfolio, or fees paid to FMR by
Strategic Advisers out of such management fees, as well as its past profits
or its resources from any other source, to make payment to the Distributor
with respect to any expenses incurred in connection with the distribution
of shares of the Portfolio, including the activities referred to above.
3. Strategic Advisers and/or FMR directly, or through the Distributor, may,
subject to the approval of the Trustees, make payments to securities
dealers and other third parties who engage in the sale of shares or who
render shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions and
providing such other shareholder services as the Fund may reasonably
request.
4. The Portfolio will not make separate payments as a result of this Plan
to Strategic Advisers, FMR, the Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to pay, a
management fee to Strategic Advisers. To the extent that any payments made
by the Portfolio to Strategic Advisers, including payment of management
fees, out of which management fees Strategic Advisers may pay fees to FMR,
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of shares of the Portfolio within the
context of Rule 12b-1 under the Act, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1997, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by a vote of a majority of the Independent Trustees or by a vote
of a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require Strategic
Advisers and/or FMR and/or the Distributor to provide the Fund, for review
by the Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of shares
of the Portfolio (making estimates of such costs where necessary or
desirable) and the purposes for which such expenditures were made.
9. This Plan does not require Strategic Advisers, FMR, or the Distributor
to perform any specific type or level of distribution activities or to
incur any specific level of expenses for activities primarily intended to
result in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth in
the Fund's Trust Instrument or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
Exhibit 15(d)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Aberdeen Street Trust:
Fidelity Freedom 2000 Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Freedom 2000 Fund (the "Portfolio"), a series of shares of Fidelity
Aberdeen Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company ("FMR"), under which the Distributor uses all reasonable efforts,
consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest (the "shares"). Under the
agreement, the Distributor pays the expenses of printing and distributing
any prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that Strategic Advisers, Inc. ("Strategic Advisers"), an
affiliate of FMR, and/or FMR may use its revenues, including management
fees paid to Strategic Advisers by the Portfolio, or fees paid to FMR by
Strategic Advisers out of such management fees, as well as its past profits
or its resources from any other source, to make payment to the Distributor
with respect to any expenses incurred in connection with the distribution
of shares of the Portfolio, including the activities referred to above.
3. Strategic Advisers and/or FMR directly, or through the Distributor, may,
subject to the approval of the Trustees, make payments to securities
dealers and other third parties who engage in the sale of shares or who
render shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions and
providing such other shareholder services as the Fund may reasonably
request.
4. The Portfolio will not make separate payments as a result of this Plan
to Strategic Advisers, FMR, the Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to pay, a
management fee to Strategic Advisers. To the extent that any payments made
by the Portfolio to Strategic Advisers, including payment of management
fees, out of which management fees Strategic Advisers may pay fees to FMR,
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of shares of the Portfolio within the
context of Rule 12b-1 under the Act, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1997, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by a vote of a majority of the Independent Trustees or by a vote
of a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require Strategic
Advisers and/or FMR and/or the Distributor to provide the Fund, for review
by the Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of shares
of the Portfolio (making estimates of such costs where necessary or
desirable) and the purposes for which such expenditures were made.
9. This Plan does not require Strategic Advisers, FMR, or the Distributor
to perform any specific type or level of distribution activities or to
incur any specific level of expenses for activities primarily intended to
result in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth in
the Fund's Trust Instrument or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
Exhibit 15(e)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Aberdeen Street Trust:
Fidelity Freedom Income Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Freedom Income Fund (the "Portfolio"), a series of shares of Fidelity
Aberdeen Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company ("FMR"), under which the Distributor uses all reasonable efforts,
consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest (the "shares"). Under the
agreement, the Distributor pays the expenses of printing and distributing
any prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of shares of the Portfolio for sale to the public. It is
recognized that Strategic Advisers, Inc. ("Strategic Advisers"), an
affiliate of FMR, and/or FMR may use its revenues, including management
fees paid to Strategic Advisers by the Portfolio, or fees paid to FMR by
Strategic Advisers out of such management fees, as well as its past profits
or its resources from any other source, to make payment to the Distributor
with respect to any expenses incurred in connection with the distribution
of shares of the Portfolio, including the activities referred to above.
3. Strategic Advisers and/or FMR directly, or through the Distributor, may,
subject to the approval of the Trustees, make payments to securities
dealers and other third parties who engage in the sale of shares or who
render shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Portfolio, processing shareholder transactions and
providing such other shareholder services as the Fund may reasonably
request.
4. The Portfolio will not make separate payments as a result of this Plan
to Strategic Advisers, FMR, the Distributor or any other party, it being
recognized that the Portfolio presently pays, and will continue to pay, a
management fee to Strategic Advisers. To the extent that any payments made
by the Portfolio to Strategic Advisers, including payment of management
fees, out of which management fees Strategic Advisers may pay fees to FMR,
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of shares of the Portfolio within the
context of Rule 12b-1 under the Act, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until April 30, 1997, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by a vote of a majority of the Independent Trustees or by a vote
of a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require Strategic
Advisers and/or FMR and/or the Distributor to provide the Fund, for review
by the Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of shares
of the Portfolio (making estimates of such costs where necessary or
desirable) and the purposes for which such expenditures were made.
9. This Plan does not require Strategic Advisers, FMR, or the Distributor
to perform any specific type or level of distribution activities or to
incur any specific level of expenses for activities primarily intended to
result in the sale of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth in
the Fund's Trust Instrument or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
EXHIBIT 16A
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
Included in this exhibit is a chart showing the data used to calculate the
30-Day Yield as of the fund's fiscal year end.
The 30-DAY YIELD is calculated according to the methods prescribed in Form
N-1A Item 22(b)(ii).
30-Day Total Net Income
30-Day Yield = 2<UNDEF>(--------------------------------------------------)
+ 1)6 - 1<UNDEF>
(30-Day Average Shares Outstanding)(Prior Day Price)
EXHIBIT 16B
SCHEDULE FOR THE COMPUTATION OF MOVING AVERAGES
The 13-week and 39-week moving averages are long-term or weekly moving
averages. As such, they are based upon the closing adjusted NAV (presented
here) on the last business day of each week for the past 13 and 39 weeks
through the last business day of the week closest to the fund's fiscal year
end.
Adjusted Net Asset Value:
Following Day Dividend + Following Day Capital Gains
Current Day Factor = <UNDEF>----------------------------------------------
+ 1<UNDEF> (Following Day Factor)
Following Day NAV
Where:
Following Day Factor = 1.0 until the day preceding the first distribution.
Current Day NAV
Adjusted NAV = ---------------
Current Day Factor
13-week Moving Average is calculated as follows:
Sum of the end-of-week Adjusted Navs for the time period
13
39-week Moving Average is calculated as follows:
Sum of the end-of-week Adjusted NAVs for the time period
39
