SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-43529)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 19 [X]
and
REGISTRATION STATEMENT (No. 811-6440)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 19 [X]
Fidelity Aberdeen Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
(X) on May 20, 1997 pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on (date) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the Notice required by
such Rule on or before May 29, 1997.
FIDELITY ABERDEEN STREET TRUST
FIDELITY FREEDOM FUNDS
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; Who May Want to Invest
3 a .............................. Financial Highlights
b .............................. *
c, d .............................. Performance
4 a i............................. Charter
ii........................... Investment Principles and Risks
b .............................. Investment Principles and Risks; Securities and
Investment Practices
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 .............................. Performance
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' most recent financial report and portfolio listing or
a copy of the funds' Statement of Additional Information (SAI) dated
May 20 , 199 7 . The SAI has been filed with the Securities and
Exchange Commission (SEC) and is available along with other related
materials on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, call Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, Federal
Reserve Board or any other agency, and are subject to investment risks,
including possible loss of principal amount invested.
FIDELITY FREEDOM 2000 FUND
FIDELITY
FREEDOM
FUNDS
SM
SM
(fund number 370)
FIDELITY FREEDOM 2010 FUND
SM
(fund number 371)
FIDELITY FREEDOM 2020 FUND
SM
(fund number 372)
FIDELITY FREEDOM 2030 FUND
SM
(fund number 373)
each seeks high total return.
FIDELITY FREEDOM INCOME FUND
SM
(fund number 369)
seeks high current income and, as a secondary objective, capital
appreciation.
Each Freedom Fund seeks to achieve its objective by allocating its assets
among other Fidelity mutual funds, and, with the exception of Fidelity
Freedom Income Fund, by adopting a more conservative target asset
allocation over time.
PROSPECTUS
MAY 20, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
FF-pro-0597
CONTENTS
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Each Freedom Fund's
yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each Freedom Fund's financial
data.
PERFORMANCE How each Freedom
Fund has done over time.
THE FUNDS IN DETAIL CHARTER How each Freedom Fund
is organized.
INVESTMENT PRINCIPLES AND RISKS
Each Freedom Fund's overall
approach to investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND ACCOUNT COMBINATION WITH FIDELITY
POLICIES FREEDOM INCOME FUND
DIVIDENDS, CAPITAL GAINS, AND
TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
WHO MAY WANT TO INVEST
Fidelity Freedom 2000 Fund (Freedom 2000), Fidelity Freedom 2010 Fund
(Freedom 2010), Fidelity Freedom 2020 Fund (Freedom 2020), and Fidelity
Freedom 2030 Fund (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.
Fidelity Freedom Income Fund (Freedom Income) 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. There are two
subcategories for the equity funds - domestic and international, and
two subcategories for the fixed-income funds - investment grade and
high yield. 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 less than 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.
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'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 and the fund's
shareholders will become shareholders of Freedom Income. For additional
information, refer to "Combination with Fidelity Freedom Income
Fund" on page .
The charts on the right illustrate the target asset allocation of each
Freedom Fund as of March 31, 1997 .
FREEDOM INCOME FUND(trademark)
Domestic
Equity
Funds 20%
International
Equity Funds 0%
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 40.0
Investment
Grade Fixed-
Income
Funds 40%
High Yield
Fixed-Income
Funds 0%
Money Market
Funds 40%
FREEDOM 2000
Domestic
Equity
Funds 39%
International
Equity Funds 4%
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 39.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 13.0
Investment
Grade Fixed-
Income
Funds 40%
High Yield
Fixed-Income
Funds 4%
Money Market
Funds 13%
FREEDOM 2010
Domestic
Equity
Funds 58%
International
Equity Funds 9%
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 58.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 7.0
Row: 1, Col: 5, Value: 1.0
Investment
Grade Fixed-
Income
Funds 25%
High Yield
Fixed-Income
Funds 7%
Money Market
Funds 1%
FREEDOM 2020
Domestic
Equity
Funds 69%
International
Equity Funds
12%
Row: 1, Col: 1, Value: 11.0
Row: 1, Col: 2, Value: 69.0
Row: 1, Col: 3, Value: 12.0
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 5, Value: 0.0
Investment
Grade Fixed-
Income
Funds 11%
High Yield
Fixed-Income
Funds 8%
Money Market
Funds 0%
FREEDOM 2030
Domestic
Equity
Funds 70%
International
Equity Funds
15%
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 70.0
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 10.0
Row: 1, Col: 5, Value: 0.0
Investment
Grade Fixed-
Income
Funds 5%
High Yield
Fixed-Income
Funds 10%
Money Market
Funds 0%
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you
buy or sell shares of a Freedom Fund. In addition, you may be charged an
annual account maintenance fee if your account balance falls below $2,500.
See "Transaction Details," page , for an explanation of how and when these
charges apply.
Maximum sales charge on purchases and None
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 historical expenses incurred
directly by each Freedom Fund and are calculated as a percentage of average
net assets of each Freedom Fund.
FREEDOM INCOME
Management fee (after reimbursement) 0.08%
12b-1 fee (Distribution Fee) None
Other expenses (after reimbursement) 0.00%
Total operating expenses 0.08%
(after reimbursement)
FREEDOM 2000
Management fee (after reimbursement) 0.08%
12b-1 fee (Distribution Fee) None
Other expenses (after reimbursement) 0.00%
Total operating expenses 0.08%
(after reimbursement)
FREEDOM 2010
Management fee (after reimbursement) 0.08%
12b-1 fee (Distribution Fee) None
Other expenses (after reimbursement) 0.00%
Total operating expenses 0.08%
(after reimbursement)
FREEDOM 2020
Management fee (after reimbursement) 0.08%
12b-1 fee (Distribution Fee) None
Other expenses (after reimbursement) 0.00%
Total operating expenses 0.08%
(after reimbursement)
FREEDOM 2030
Management fee (after reimbursement) 0.08%
12b-1 fee (Distribution Fee) None
Other expenses (after reimbursement) 0.00%
Total operating expenses 0.08%
(after reimbursement)
Strategic Advisers has voluntarily agreed to reimburse each Freedom Fund
to the extent that total operating expenses are in excess of 0.08% of its
average net assets. If these agreements were not in effect, the management
fee, other expenses, and total operating expenses, as a percentage of
average net assets, of each Freedom Fund would have been the following
amounts, 0.10%, 0.00%, and 0.10%. Expenses eligible for reimbursement do
not include interest, taxes, brokerage commissions, shareholder charges,
and extraordinary expenses.
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 total operating expenses shown to the left, 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 following chart 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.
Underlying Fidelity Funds Expense
Ratio
Fidelity Blue Chip Growth Fund 0.95%
Fidelity Capital & Income Fund 0.98%
Fidelity Disciplined Equity Fund 0.75%
Fidelity Diversified International Fund 1.27%
Fidelity Equity-Income Fund 0.68%
Fidelity Europe Fund 1.27%
Fidelity Fund 0.60%
Fidelity Government Securities Fund 0.71%
Fidelity Growth & Income Portfolio 0.74%
Fidelity Growth Company Fund 0.85%
Fidelity Intermediate Bond Fund 0.71%
Fidelity Investment Grade Bond Fund 0.76%
Fidelity Japan Fund 1.14%
Fidelity Money Market Trust: Retirement Money Market Portfolio 0.39%
Fidelity OTC Portfolio 0.82%
Fidelity Overseas Fund 1.12%
Fidelity Southeast Asia Fund 1.12%
The total expense ratios of each Freedom Fund (calculated as a
percentage of average net assets) are as follows: Freedom Income:
0.6 8 %; Freedom 2000: 0.81%; Freedom 2010: 0.9 0 %; Freedom
2020: 0.91%; and Freedom 2030: 0.93%. Each Freedom Fund's total expense
ratio is based on its total operating expense ratio plus a weighted
average of the expense ratios of the underlying Fidelity funds (as
described above) in which it was invested as of March 31, 1997.
These total 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 total expenses
s hown in the preceding paragraph, you 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 Year
s
Freedom Income $ 7 $ 22
Freedom 2000 $ 8 $ 26
Freedom 2010 $ 9 $ 29
Freedom 2020 $ 9 $ 29
Freedom 2030 $ 10 $ 30
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Freedom Income, Freedom
2000, Freedom 2010, Freedom 2020, and Freedom 2030, have been audited by
Coopers & Lybrand L.L.P., independent accountants. The funds' financial
highlights, financial statements, and reports of the auditor are included
in the funds' Annual Report, and are incorporated by reference into (are
legally a part of) the funds' SAI. Contact Fidelity for a free copy of the
Annual Report or the SAI.
FREEDOM INCOME
Selected Per-Share Data and Ratios
Period ended March 31 1997G
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .22
Net realized and unrealized gain (loss) (.02)
Total from investment operations .20
Less Distributions
From net investment income (.14)
Net asset value, end of period $ 10.06
Total return, 1.99%
Net assets, end of period (000 omitted) $ 9,427
Ratio of expenses to average net assetsH .08%
,
Ratio of net investment income to average net assetsH 4.95%
Portfolio turnover rateH 32%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
G FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31,
1997.
H AMOUNTS DO NOT INCLUDE THE ACTIVITY OF THE UNDERLYING FIDELITY FUNDS.
FREEDOM 2000
Selected Per-Share Data and Ratios
Period ended March 31 1997G
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .18
Net realized and unrealized gain (loss) .03
Total from investment operations .21
Less Distributions
From net investment income (.09)
Net asset value, end of period $ 10.12
Total return, 2.09%
Net assets, end of period (000 omitted) $ 15,946
Ratio of expenses to average net assetsH .08%
,
Ratio of net investment income to average net assetsH 4.00%
Portfolio turnover rateH 19%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
G FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31,
1997.
H AMOUNTS DO NOT INCLUDE THE ACTIVITY OF THE UNDERLYING FIDELITY FUNDS.
FREEDOM 2010
Selected Per-Share Data and Ratios
Period ended March 31 1997G
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .11
Net realized and unrealized gain (loss) .15
Total from investment operations .26
Less Distributions
From net investment income (.11)
Net asset value, end of period $ 10.15
Total return, 2.59%
Net assets, end of period (000 omitted) $ 23,600
Ratio of expenses to average net assetsH .08%
,
Ratio of net investment income to average net assetsH 2.56%
Portfolio turnover rateH 3%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
G FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31,
1997.
H AMOUNTS DO NOT INCLUDE THE ACTIVITY OF THE UNDERLYING FIDELITY FUNDS.
FREEDOM 2020
Selected Per-Share Data and Ratios
Period ended March 31 1997G
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .08
Net realized and unrealized gain (loss) .22
Total from investment operations .30
Less Distributions
From net investment income (.09)
Net asset value, end of period $ 10.21
Total return, 2.99%
Net assets, end of period (000 omitted) $ 14,958
Ratio of expenses to average net assetsH .08%
,
Ratio of net investment income to average net assetsH 1.75%
Portfolio turnover rateH 21%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
G FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31,
1997.
H AMOUNTS DO NOT INCLUDE THE ACTIVITY OF THE UNDERLYING FIDELITY FUNDS.
FREEDOM 2030
Selected Per-Share Data and Ratios
Period ended March 31 1997G
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .08
Net realized and unrealized gain (loss) .22
Total from investment operations .30
Less Distributions
From net investment income (.09)
Net asset value, end of period $ 10.21
Total return, 2.99%
Net assets, end of period (000 omitted) $ 5,725
Ratio of expenses to average net assetsH .08%
,
Ratio of net investment income to average net assetsH 1.71%
Portfolio turnover rateH 19%
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
G FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31,
1997.
H AMOUNTS DO NOT INCLUDE THE ACTIVITY OF THE UNDERLYING FIDELITY FUNDS.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or YIELD.
Each Freedom Fund's fiscal year runs from April 1 to March 31. The table
below shows each Freedom Fund's performance over its first fiscal period.
CUMULATIVE TOTAL RETURNS
Fiscal period ended March Life of
31, 1997 FundA,B
Freedom Income 1.99%
Freedom 2000 2.09%
Freedom 2010 2.59%
Freedom 2020 2.99%
Freedom 2030 2.99%
A FROM OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS).
B IF STRATEGIC ADVISERS HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING
THIS PERIOD, TOTAL RETURNS WOULD HAVE BEEN LOWER.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results. Average annual total returns covering periods
of less than one year assume that performance will remain constant for the
rest of the year.
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.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a widely
recognized, unmanaged index of common stocks.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value weighted performance
benchmark for investment-grade fixed-rate debt issues, including
government, corporate, asset-backed, and mortgage-backed securities, with
maturities of at least one year.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
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 underlying Fidelity fund 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. For current performance or a free annual report call
1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
I NDICATION OF FUTURE PERFORMANCE.
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. You are entitled
to one vote for each share you own.
STRATEGIC ADVISERS AND ITS
AFFILIATES
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. Various Fidelity companies perform
activities required for the Freedom Funds' operation.
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, other than
the Freedom 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.
Ren Cheng is co-manager of the Freedom Funds, which he has managed since
inception. He also is manager of structured investments for Fidelity
Management Trust Company, which he has managed since 1994. Mr. Cheng
joined Fidelity as a manager in 1994. Previously, he was a senior portfolio
manager for Putnam Investments from 1985 to 1994.
Scott Stewart is co-manager of the Freedom F unds, which he has
managed since inception. He also is Senior Vice President and head of
Fidelity's structured equity group and manager of other Fidelity
funds. Mr. Stewart joined Fidelity as a portfolio manager in 1987.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations
Compan y, Inc. (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.
As of March 31, 1997, approximately 38.97% of Freedom Income's total
outstanding shares were held by General Motors Corporation; approximately
40.41% of Freedom 2000's total outstanding shares were held by General
Motors Corporation; approximately 36.88% of Freedom 2010's total
outstanding shares were held by General Motors Corporation; approximately
26.72% of Freedom 2020's total outstanding shares were held by Winthrop,
Stimson, Putnam, and Roberts; approximately 29.90% of Freedom 2030's total
outstanding shares were held by General Motors Corporation.
A broker-dealer may use a portion of the commissions paid by a Freedom Fund
to reduce custodian or transfer agent fees for that fund. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry out
a fund's transactions, provided that the fund receives brokerage services
and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FREEDOM FUND'S INVESTMENT APPROACH
Each Freedom Fund seeks to achieve its investment objective by investing in
a combination of underlying Fidelity funds: domestic and international
equity funds, investment grade and high yield fixed-income funds, and money
market funds. The primary difference among the Freedom Funds is their asset
allocations among these types of funds .
Freedom Income 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'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.
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.
The 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 (domestic or international) , fixed-income (investment
grade or high yield) , and money market funds, many of the underlying
Fidelity funds may invest in a mix of foreign and domestic
stocks, investment grade and high yield bonds, and other
securities.
The table on the following page lists the underlying Fidelity funds
in which each Freedom Fund currently may invest and the
approximate target asset allocation of each Freedom Fund to each
underlying Fidelity fund as of March 31, 1997 . Strategic Advisers
may change these percentages over time. For a brief description of each
underlying Fidelity fund, refer to "Description 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>
<CAPTION>
<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
DOMESTIC EQUITY FUNDS
Fidelity Blue Chip Growth Fund 3% 6% 9% 1 0 % 11%
Fidelity Disciplined Equity Fund 3% 6% 9% 1 0 % 11%
Fidelity Equity-Income Fund 3% 6% 9% 1 0 % 11%
Fidelity Fund 3% 6% 9% 1 0 % 11%
Fidelity Growth & Income 3% 6% 9% 1 0 % 11%
Portfolio
Fidelity Growth Company Fund 3% 6% 9% 1 0 % 11%
Fidelity OTC Portfolio 2% 4% 6% 7% 7%
INTERNATIONAL EQUITY FUNDS
Fidelity Diversified International 0% 1% 2% 3% 4%
Fund
Fidelity Europe Fund 0% 1% 2% 3% 4%
Fidelity Japan Fund 0% <1% 2% 2% 3%
Fidelity Overseas Fund 0% 1% 2% 3% 4%
Fidelity Southeast Asia Fund 0% <1% <1% <1% <1%
FIXED-INCOME FUNDS
INVESTMENT GRADE
FIXED-INCOME FUNDS
Fidelity Government Securities 15% 15% 9% 4% 2%
Fund
Fidelity Intermediate Bond Fund 10% 10% 6% 3% 1%
Fidelity Investment Grade Bond 15% 15% 9% 4% 2%
Fund
HIGH YIELD FIXED-INCOME
FUNDS
Fidelity Capital & Income Fund 0% 4% 7% 8% 10%
MONEY MARKET FUNDS
Fidelity Money Market Trust: 40% 12% <1% 0% 0%
Retirement Money Market
Portfolio
Note: The allocation percentages may not add to
100% due to rounding.
</TABLE>
The chart below illustrates the Freedom Funds' approximate target asset
allocations among equity, fixed-income, and money market funds as of
March 31, 1997 . The chart also illustrates how these allocations may
change over time. The Freedom Funds' future target asset allocations may
differ from this illustration.
Freedom Freedom Freedom Freedom Freedom
2030 2020 2010 2000 Income
Weight (%)
Row: 1, Col: 1, Value: 85.0
Row: 1, Col: 2, Value: nil
Row: 1, Col: 3, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 2, Col: 3, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 3, Col: 3, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 4, Col: 3, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 5, Col: 3, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 6, Col: 3, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 7, Col: 3, Value: nil
Row: 8, Col: 1, Value: 85.0
Row: 8, Col: 2, Value: 19.0
Row: 8, Col: 3, Value: nil
Row: 9, Col: 1, Value: nil
Row: 9, Col: 2, Value: nil
Row: 9, Col: 3, Value: nil
Row: 10, Col: 1, Value: nil
Row: 10, Col: 2, Value: nil
Row: 10, Col: 3, Value: nil
Row: 11, Col: 1, Value: nil
Row: 11, Col: 2, Value: nil
Row: 11, Col: 3, Value: nil
Row: 12, Col: 1, Value: nil
Row: 12, Col: 2, Value: nil
Row: 12, Col: 3, Value: nil
Row: 13, Col: 1, Value: nil
Row: 13, Col: 2, Value: nil
Row: 13, Col: 3, Value: nil
Row: 14, Col: 1, Value: nil
Row: 14, Col: 2, Value: nil
Row: 14, Col: 3, Value: nil
Row: 15, Col: 1, Value: nil
Row: 15, Col: 2, Value: nil
Row: 15, Col: 3, Value: nil
Row: 16, Col: 1, Value: nil
Row: 16, Col: 2, Value: nil
Row: 16, Col: 3, Value: nil
Row: 17, Col: 1, Value: nil
Row: 17, Col: 2, Value: nil
Row: 17, Col: 3, Value: nil
Row: 18, Col: 1, Value: 81.0
Row: 18, Col: 2, Value: nil
Row: 18, Col: 3, Value: nil
Row: 19, Col: 1, Value: nil
Row: 19, Col: 2, Value: nil
Row: 19, Col: 3, Value: nil
Row: 20, Col: 1, Value: nil
Row: 20, Col: 2, Value: nil
Row: 20, Col: 3, Value: nil
Row: 21, Col: 1, Value: nil
Row: 21, Col: 2, Value: nil
Row: 21, Col: 3, Value: nil
Row: 22, Col: 1, Value: nil
Row: 22, Col: 2, Value: nil
Row: 22, Col: 3, Value: nil
Row: 23, Col: 1, Value: nil
Row: 23, Col: 2, Value: nil
Row: 23, Col: 3, Value: nil
Row: 24, Col: 1, Value: nil
Row: 24, Col: 2, Value: nil
Row: 24, Col: 3, Value: nil
Row: 25, Col: 1, Value: nil
Row: 25, Col: 2, Value: nil
Row: 25, Col: 3, Value: nil
Row: 26, Col: 1, Value: nil
Row: 26, Col: 2, Value: nil
Row: 26, Col: 3, Value: nil
Row: 27, Col: 1, Value: nil
Row: 27, Col: 2, Value: nil
Row: 27, Col: 3, Value: nil
Row: 28, Col: 1, Value: 67.0
Row: 28, Col: 2, Value: 32.0
Row: 28, Col: 3, Value: nil
Row: 29, Col: 1, Value: nil
Row: 29, Col: 2, Value: nil
Row: 29, Col: 3, Value: nil
Row: 30, Col: 1, Value: nil
Row: 30, Col: 2, Value: nil
Row: 30, Col: 3, Value: nil
Row: 31, Col: 1, Value: nil
Row: 31, Col: 2, Value: nil
Row: 31, Col: 3, Value: nil
Row: 32, Col: 1, Value: nil
Row: 32, Col: 2, Value: nil
Row: 32, Col: 3, Value: nil
Row: 33, Col: 1, Value: nil
Row: 33, Col: 2, Value: nil
Row: 33, Col: 3, Value: nil
Row: 34, Col: 1, Value: nil
Row: 34, Col: 2, Value: nil
Row: 34, Col: 3, Value: nil
Row: 35, Col: 1, Value: nil
Row: 35, Col: 2, Value: nil
Row: 35, Col: 3, Value: nil
Row: 36, Col: 1, Value: nil
Row: 36, Col: 2, Value: nil
Row: 36, Col: 3, Value: nil
Row: 37, Col: 1, Value: nil
Row: 37, Col: 2, Value: nil
Row: 37, Col: 3, Value: nil
Row: 38, Col: 1, Value: 43.0
Row: 38, Col: 2, Value: 44.0
Row: 38, Col: 3, Value: nil
Row: 39, Col: 1, Value: nil
Row: 39, Col: 2, Value: nil
Row: 39, Col: 3, Value: nil
Row: 40, Col: 1, Value: nil
Row: 40, Col: 2, Value: nil
Row: 40, Col: 3, Value: nil
Row: 41, Col: 1, Value: nil
Row: 41, Col: 2, Value: nil
Row: 41, Col: 3, Value: nil
Row: 42, Col: 1, Value: nil
Row: 42, Col: 2, Value: nil
Row: 42, Col: 3, Value: nil
Row: 43, Col: 1, Value: nil
Row: 43, Col: 2, Value: nil
Row: 43, Col: 3, Value: nil
Row: 44, Col: 1, Value: nil
Row: 44, Col: 2, Value: nil
Row: 44, Col: 3, Value: nil
Row: 45, Col: 1, Value: nil
Row: 45, Col: 2, Value: nil
Row: 45, Col: 3, Value: nil
Row: 46, Col: 1, Value: nil
Row: 46, Col: 2, Value: nil
Row: 46, Col: 3, Value: nil
Row: 47, Col: 1, Value: nil
Row: 47, Col: 2, Value: nil
Row: 47, Col: 3, Value: nil
Row: 48, Col: 1, Value: nil
Row: 48, Col: 2, Value: nil
Row: 48, Col: 3, Value: nil
Row: 49, Col: 1, Value: 20.0
Row: 49, Col: 2, Value: 40.0
Row: 49, Col: 3, Value: nil
Row: 50, Col: 1, Value: nil
Row: 50, Col: 2, Value: nil
Row: 50, Col: 3, Value: nil
Row: 51, Col: 1, Value: nil
Row: 51, Col: 2, Value: nil
Row: 51, Col: 3, Value: nil
Row: 52, Col: 1, Value: nil
Row: 52, Col: 2, Value: nil
Row: 52, Col: 3, Value: nil
Row: 53, Col: 1, Value: nil
Row: 53, Col: 2, Value: nil
Row: 53, Col: 3, Value: nil
Row: 54, Col: 1, Value: nil
Row: 54, Col: 2, Value: nil
Row: 54, Col: 3, Value: nil
Row: 55, Col: 1, Value: nil
Row: 55, Col: 2, Value: nil
Row: 55, Col: 3, Value: nil
Row: 56, Col: 1, Value: 20.0
Row: 56, Col: 2, Value: 40.0
Row: 56, Col: 3, Value: nil
Money Market
Funds
Fixed-Income
Funds
Equity Funds
40 35 30 25 20 15 10 5 Retirement 5 10 15
Years to Retirement Years after Retirement
SECURITIES AND INVESTMENT PRACTICES
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 funds' 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 the Freedom Funds' financial reports, which are
sent to shareholders twice a year. For a free SAI or financial report, call
Fidelity at 1-800-544-8888.
DESCRIPTION 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.
EQUITY FUNDS
DOMESTIC EQUITY FUNDS
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 DISCIPLINED EQUITY FUND is an equity fund that seeks growth of
capital by investing primarily in a diversified portfolio of common
stocks. FMR normally invests at least 65% of the fund's total assets in
domestic common stocks and American Depositary Receipts. The fund
has the flexibility, however, to invest the balance in all types of
domestic and foreign securities. The fund seeks to maintain industry
diversification similar to that of the S&P 500.
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 .
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 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 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 by investing primarily in common stocks 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 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.
INTERNATIONAL EQUITY FUNDS
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 EUROPE FUND is an equity fund that seeks growth of capital over
the long term by investing 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, Finland, France, Germany, 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 and the European Economic Area (formerly the
Common Market). Some European countries, particularly those in Eastern
Europe, have less stable economies than those in Western Europe. A majority
of the European economies continue to be weak, and business and consumer
confidence remains low. 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 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 's economic growth has declined significantly since 1990. The
general government position has deteriorated as a result of weakening
economic growth and stimulative measures taken to support economic activity
and to restore financial stability. Although the decline in interest rates
and fiscal stimulus packages have helped to contain recessionary forces,
uncertainties remain. Japan is also heavily dependent upon international
trade, so its economy is especially sensitive to trade barriers. In
addition, Japan's banking industry is undergoing problems related to bad
loans and declining values of real estate.
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
ma ny suffer with obsolete financial systems, economic problems, or
archaic legal systems. The return of Hong Kong to Chinese dominion will
affect Southeast Asia.
FIXED-INCOME FUNDS
INVESTMENT GRADE
FIXED-INCOME FUNDS
FIDELITY GOVERNMENT SECURITIES FUND is a fixed-income fund that seeks a
high level of current income, consistent with preservation of principal by
investing mainly in U.S. Government securities. Under normal conditions,
Government Securities 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 speci fied 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 a ver age 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 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. (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.)
HIGH YIELD FIXED-INCOME FUNDS
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.
MONEY MARKET FUND S
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 only in high-quality,
U.S. dollar-denominated money market securities of domestic and foreign
issuers , including U.S. Government securities and repurchase
agreements . The fund also may en ter into reverse repurchase
agreements. 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 Fidelity Money Market Trust: Retirement Money
Market Portfolio 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, maturi ty, and diversification 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.
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.
Bond 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 fall
when interest rates rise. This effect is usually more pronounced for
longer-term bonds and zero coupon bonds. Lower-quality debt securities
(sometimes called "junk bonds") offer higher yields, but also carry more
risk.
Investments in foreign securities may involve risks in addition to those of
U.S. investments, including increased political and economic risk, as well
as exposure to currency fluctuations.
Underlying Fidelity funds 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, currency
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 Fund reserves the right to
invest in futures contracts or other derivatives temporarily in an effort
to remain fully invested, manage cash flows efficiently, or facilitate
asset allocation. Depending on how they are used, these investments may
effectively increase or decrease a Freedom Fund's stock or bond allocation.
CASH MANAGEMENT. Each Freedom Fund may invest in money market securities,
in repur chase 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: 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 issuer. This limitation does not apply to U.S.
Government Securities or to securities of other investment companies.
Each Freedom Fund may not invest more than 25% of its total assets in any
one industry. This limitation does not apply to U.S. Government
securities or to securities of other investment companies (including
underlying Fidelity funds).
BORROWING. Each Freedom Fund 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 Fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
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 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 issuer. This limitation does not apply to U.S.
Government securities or to securities of other investment companies.
Each Freedom Fund may not invest more than 25% of its total assets in any
one industry. This limitation does not apply to U.S. Government securities
or to securities of other investment companies (including 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.
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. The Freedom Funds do not bear
the cost of these services pe rformed by FIIOC. Fidelity Service
Com pany, Inc. (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 the services performed by
FSC 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 a lso pays other expenses, such as interest on
borrowings, taxes, and the compensation of trustees who are not affiliated
with Fidelity.
T he portfolio turnover rates fo r Freedom Income, Freedom
2000, Freedom 2010, Freedom 2020, and Freedom 2030, were 32%, 19%,
3%, 21%, and 19%, respectively, for each fund ' s first fiscal
period end ed March 31, 1997. 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 on page .
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the funds through a retirement program, you may be subject
to additional fees. For more information, please refer to your program
materials, contact your employer, or call your retirement benefits number
o r call Fidelity directly, as appropriate.
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 OR 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 IRA, Rollover IRA, SEP-IRA
and Keogh accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $250
Through regular investment plans* $100
MINIMUM BALANCE $2,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $500
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PA GE .
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. There is no minimum account balance or initial or subsequent
investment minimums for certain retirement accounts funded through salary
reduction, or accounts opened with the proceeds of distributions from such
Fidelity retirement accounts. Refer to the program material for details.
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
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PHONE (small solid bullet) Exchange from another (small solid bullet) Exchange from another
1-800-544-7777 Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(phone_graphic) (small solid bullet) Use Fidelity Money Line
to transfer from your
bank account. Call
before your first use to
verify that this service is
in place on your
account. Maximum
Money Line: Up to
$100,000.
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Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
account application. payable to the complete
Make your check name of the Freedom
payable to the Fund of your choice.
complete name of the Indicate your Freedom
Freedom Fund of your Fund account number
choice. Mail to the on your check and mail
address indicated on to the address printed
the application. 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 (small solid bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053
Company, Specify the complete
Bank Routing name of the Freedom
#021001033, Fund of your choice
Account #00163053 and include your
Specify the complete account number and
name of the Freedom your name.
Fund of your choice
and include your new
account number and
your name.
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Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
(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, please leave at least
$ 2,000 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 (small solid bullet) Maximum check
retirement request: $100,000.
All account types (small solid bullet) For Money Line
transfers to your bank
account; minimum: $10;
maximum: Up to
$100,000.
(small solid bullet) You may exchange to
other Fidelity funds if
both accounts are
registered with the
same name(s),
address, and taxpayer
ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint Tenant, (small solid bullet) The letter of instruction
Sole Proprietorship, must be signed by all
UGMA, UTMA persons required to sign
for transactions, exactly
as their names appear
Retirement account on the account.
(small solid bullet) The account owner
Trust should complete a
retirement distribution
form. Call
1-800-544-6666 to
Business or request one.
Organization (small solid bullet) The trustee must sign
the letter indicating
capacity as trustee. If
the trustee's name is
Executor, Administrator, not in the account
Conservator, Guardian registration, provide a
copy of the trust
document certified
within the last 60 days.
(small solid bullet) At least one person
authorized by corporate
resolution to act on the
account must sign the
letter.
(small solid bullet) Include a corporate
resolution with
corporate seal or a
signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types except (small solid bullet) You must sign up for
retirement 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 and accepted
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.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544 - 5555
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more than
one account in a fund. Call 1-800-544-6666 if you need copies of financial
reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
</TABLE>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUNDA
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.
</TABLE>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
COMBINATION WITH FIDELITY FREEDOM INCOME FUND
Freedom Income 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'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, 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 are distributed
monthly, and capital gains for Freedom Income 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 shares of
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.
SM
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 FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
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 or on the basis of information furnished by a pricing service.
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 current
exchange rates. Shor t-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued on
the basis of amortized cost. This method minimizes the effect of changes in
a security's market value. In addition, i f 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 may be valued by another method that the Board of Trustees
believes accurately reflects fair value. An underlying Fidelity money
market fund's portfolio securities are valued on the basis of amortized
cost. This method helps a money market fund maintain a stable $1.00 share
price.
EACH FUND'S OFFERING PRICE (price to buy one share) i s it s NAV. Each
fund's REDEMPTION PRICE (price to sell one share) is 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.
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 $ 24 .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.
T his fee will not be deducted from Fide lity brokerage
accounts, retirement accounts (except non-prototype retirement
accounts), accounts using regular investment plans, or if total assets with
Fidelity exceed $3 0 ,000. Eligibility for the $3 0 ,000 waiver
is determined by aggregating Fidelity 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 $ 2,000 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 underlying Fidelity fund.
However, you should note the following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in 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 fees
of up to 1.00% on purchases, administrative fees of up to $7.50, and
redemption fees of up to 1.50% on exchanges. Check each fund's prospectus
for details.
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.
This prospectus is printed on recycled paper using soy-based inks.
DESCRIPTION OF CHART WHICH APPEARS ON PAGE 19 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 target asset allocation for that Fund as of March 31, 1997.
The first set of data points is charted at 85%, 81%, 67%, 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 99%, 87%, 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 connecting
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.
FIDELITY ABERDEEN STREET TRUST
FIDELITY FREEDOM FUNDS
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page
12 ............................ Description of the Trust
13 a - c ............................ Investment Policies and Limitations
d ............................ Portfolio Transactions
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 SM :
FIDELITY FREEDOM INCOME FUND SM
FIDELITY FREEDOM 2000 FUND SM
FIDELITY FREEDOM 2010 FUND SM
FIDELITY FREEDOM 2020 FUND SM
FIDELITY FREEDOM 2030 FUND SM
FUNDS OF FIDELITY ABERDEEN STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
MAY 20 , 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
May 20 , 199 7 ). Please retain this document for future
reference. The funds' Annual Report is a separate document supplied with
this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity 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
Financial Statements
Appendix
INVESTMENT ADVISER
Strategic Advisers, Inc. (Strategic Advisers)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Co mpany, Inc. (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 Fund's
investment policies and limitations.
A Freedom Fund'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 the 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 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.)
(vi) 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 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 funds 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 Fidelity Money
Market Trust: 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 an investment in repurchase agreements, and
will borrow through the program only when the costs are equal to or lower
than the cost of bank loans. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed. Any
delay in repayment to a lending fund could result in a lost investment
opportunity or additional borrowing costs.
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 other entity in determining whether
to purchase a security supported by a letter of credit guarantee, put or
demand feature, 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. A 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. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the 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. A 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. A 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. A
fund may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, a fund
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because a 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 a 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, a
fund will set aside appropriate liquid assets in a segregated custodial
account to cover its purchase obligations. When a 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,
a fund could miss a favorable price or yield opportunity, or could
suffer a loss.
A 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 Depositary Receipts (ADRs) as well as other "hybrid" forms of ADRs
including European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depositary 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 depositary bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e.,
by entering into forward contracts to purchase or sell foreign
currencies ). Although foreign exchange dealers generally do not
charge a fee for such conversion s , they do realize a profit
based on the difference between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer.
Forward contracts are customized transactions that require a specific
amount of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The parties
to a forward contract may agree to offset or terminate the contract before
its maturity, or may hold the contract to maturity and complete the
contemplated currency exchange. A fund may use currency forward
contracts for any purpose consistent with its investment objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund.
A fund may also use swap agreements, indexed securities, and options
and futures contracts relating to foreign currencies for the same purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the date
a security is purchased or sold and the date on which payment is made or
received. Entering into a forward contract for the purchase or sale of the
amount of foreign currency involved in an underlying security transaction
for a fixed amount of U.S. dollars "locks in" the U.S. dollar price of the
security. Forward contracts to purchase or sell a foreign currency may also
be used by a fund in anticipation of future purchases or sales of
securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
A fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could
enter into a forward contract to sell pounds sterling in return for U.S.
dollars to hedge against possible declines in the pound's value. Such a
hedge, sometimes referred to as a "position hedge," would tend to offset
both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. A fund could
also hedge the position by selling another currency expected to perform
similarly to the pound sterling. This type of hedge, sometimes referred to
as a "proxy hedge," could offer advantages in terms of cost, yield, or
efficiency, but generally would not hedge currency exposure as effectively
as a direct hedge into U.S. dollars. Proxy hedges may result in
losses if the currency used to hedge does not perform similarly to the
currency in which the hedged securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting exposure
from U.S. dollars to a foreign currency, or from one foreign currency to
another foreign currency. This type of strategy, sometimes known as a
"cross-hedge," will tend to reduce or eliminate exposure to the currency
that is sold, and increase exposure to the currency that is purchased, much
as if a fund had sold a security denominated in one currency and
purchased an equivalent security denominated in another. Cross-hedges
protect against losses resulting from a decline in the hedged currency, but
will cause a fund to assume the risk of fluctuations in the value of
the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, a fund
will segregate assets to cover currency forward contracts, if any, whose
purpose is essentially speculative. A fund will not segregate assets
to cover forward contracts entered into for hedging purposes, including
settlement hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a currency's
value rose at a time when FMR had hedged a fund by selling that
currency in exchange for dollars, a fund would not
participate in the currency's appreciation. If FMR hedges currency exposure
through proxy hedges, a fund could realize currency losses from
both the hedge and the security position if the two currencies do not
move in tandem. Similarly, if FMR increases a fund's exposure to a
foreign currency and that currency's value declines, a fund will
realize a loss. There is no assurance that FMR's use of currency management
strategies will be advantageous to a fund or that it will hedge at
appropriate time s .
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.
FUNDS' RIGHTS AS A SHAREHOLDER. A fund does not intend to direct or
administer the day-to-day operations of any company. A 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 a fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that a fund could be involved in
lawsuits related to such activities. 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 a
fund will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following sections pertain to futures and options:
Asset Coverage for Futures and Options Positions, Combined Positions,
Correlation of Price Changes, Futures Contracts, Futures Margin Payments,
Limitations on Futures and Options Transactions, Liquidity of Options and
Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC
Options, Purchasing Put and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The 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. Fidelity Government Securities Fund further limits
its options and futures investments to options and futures contracts
relating to U.S. Government Securities.
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 Fidelity Money Market Trust: 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. A 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.
A 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 (MONEY MARKET 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, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is 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, Fidelity Money Market Trust:
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, a
fund sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
A fund will enter into reverse repurchase agreements only with
parties whose creditworthiness has been found satisfactory by 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 other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, 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 securities 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 a 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 a 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. A 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.
A fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap agreements.
If a 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 a
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 Fund 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
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
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 National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services (FBS), indirect 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. (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
funds 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 of Trustees has
authorized NFSC 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.
The turnover rates for Freedom Income, Freedom 2000, Freedom 2010,
Freedom 2020, and Freedom 2030, were 32%, 19%, 3%, 21%, and 19%,
respectively, for each fund's first fiscal period ending March 31, 1997.
For their most recently ended fiscal periods, the underlying Fidelity
funds' portfolio turnover rates ranged from 30% to 297%. There can be no
assurance that the turnover rates for the underlying Fidelity funds will
remain within this range during subsequent fiscal periods. A high turnover
rate increases transaction costs and may increase taxable gains.
For the fiscal period ended March 1997, the funds paid no brokerage
commissions.
During the fiscal period ended March 1997, the funds paid no fees to
brokerage firms that provided research services.
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 Fund 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 C ompany, Inc. (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 nited States are
valued at last sale price or, if no sale has occurred, at the closing bid
price. Most equity securities for which the primary market is outside the
U nited States are valued using the official closing price or the
last sale price in the principal market in which they are traded. If the
last sale price (on the local exchange) is unavailable, the last evaluated
quote or last bid price normally is used. Securities of other open-end
investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets. Or
fixed-income securities and convertible securities may be valued on the
basis of information furnished by a pricing service that uses a valuation
matrix which incorporates both dealer-supplied valuations and electronic
data processing techniques. Use of pricing services has been approved by
the Board of Trustees. A number of pricing services are available, and the
funds may use various pricing services or discontinue the use of any
pricing service.
Futures contracts and options are valued on the basis of market quotations,
if available.
Foreign securities are valued based on prices furnished by independent
brokers or 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 currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value may be valued in
good faith by a committee appointed by the Board of Trustees. The
procedures set forth above need not be used to determine the value of the
securities owned by a fund if, in the opinion of a committee appointed by
the Board of Trustees, some other method would more accurately reflect the
fair market value of such securities.
FIXED-INCOME FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the
principal market is an exchange) in the principal market in which they
normally are traded , as furnished by recognized dealers in such
securities or assets.
Or fixed-income securities and convertible securities may be valued on
the basis of information furnished by a pricing service that uses
a valuation matrix which incorporates both dealer-supplied valuations
and electronic data processing techniques. Use of pricing services has been
approved by the Board of Trustees. A number of pricing services are
available, and the funds may use various pricing services or discontinue
the use of any pricing service.
Futures contracts and options are valued on the basis of market quotations,
if available. Securities of other open-end investment companies are valued
at their respective NAVs.
Foreign securities are valued based on prices 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 currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less for
which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value may be valued in good
faith by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities owned
by a fund if, in the opinion of a committee appointed by the Board of
Trustees, some other method would more accurately reflect the fair market
value of such securities.
MONEY MARKET FUNDS. 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 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. Share 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.
Fidelity 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.
HISTORICAL FUND RESULTS. The following table shows the funds' cumulative
total returns for the period October 17, 1996 through March 31 ,
1997.
Cumulative Total Returns
Life of Fund*
Freedom Income 1.99%
Freedom 2000 2.09%
Freedom 2010 2.59%
Freedom 2020 2.99%
Freedom 2030 2.99%
* From October 17, 1996 (commencement of operations).
Note: If Strategic Advisers had not reimbursed certain fund expenses during
the period, each fund's total returns would have been lower.
The following tables show the income and capital elements of each fund's
cumulative total return. The tables compare each fund's return to the
record of the S&P 500, the Dow Jones Industrial Average (DJIA),
and the cost of living , as measured by the Consumer Price Index
( CPI) , over the same period. The CPI information is as of
the month end closest to the initial investment date for each fund. The
S&P 500 and DJIA comparisons are provided to show how each
fund's total return compared to the record of a broad unmanaged
index of common stock s and a narrower set of stocks of major
industrial companies, respectively over the same period . Because
a bond or money market fund invests in fixed-income securities, common
stocks represent a different type of investment from the fund s .
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. Each fund has the ability to invest in securities not included
in either inde x , and its investment portfolio may or may not
be similar in composition to the inde x es. Th e S& P 500 and
DJIA returns are based on the prices of unmanaged groups of
stocks and, unlike each fund's returns, do not include the effect of
paying brokerage commissions and other costs of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in each fund during the period from October 17, 1996
(commencement of operations) to March 31, 1997, assuming all distributions
were reinvested. The figures below reflect the fluctuating interest rates,
bond prices, and stock prices of the specified periods and should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in a fund today. Tax consequences
of different investments have not been factored into the figures below.
During the period from October 17, 1996 (commencement of operations) to
March 31, 1997, a hypothetical $10,000 investment in Freedom Income would
have grown to $10,199.
FREEDOM INCOME INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
March 31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
*1997 $ 10,060 $ 139 $ 0 $ 10,199 $ 10,846 $ 11,037 $ 10,107
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom Income
on October 17, 1996, the net amount invested in Freedom Income shares was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested)
amounted to $10,140. If distributions had not been reinvested, the amount
of distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $140 for dividends
and $0 for capital gain distributions.
During the period from October 17, 1996 (commencement of operations) to
March 31, 1997, a hypothetical $10,000 investment in Freedom 2000 would
have grown to $10,209.
FREEDOM 2000 INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
March 31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
*1997 $ 10,120 $ 89 $ 0 $ 10,209 $ 10,846 $ 11,037 $ 10,107
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom 2000 on
October 17, 1996, the net amount invested in Freedom 2000 shares was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested)
amounted to $10,090. If distributions had not been reinvested, the amount
of distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $90 for dividends
and $0 for capital gain distributions.
During the period from October 17, 1996 (commencement of operations) to
March 31, 1997, a hypothetical $10,000 investment in Freedom 2010 would
have grown to $10,259.
FREEDOM 2010 INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
March 31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
*1997 $ 10,150 $ 109 $ 0 $ 10,259 $ 10,846 $ 11,037 $ 10,107
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom 2010 on
October 17, 1996, the net amount invested in Freedom 2010 shares was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested)
amounted to $10,110. If distributions had not been reinvested, the amount
of distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $110 for dividends
and $0 for capital gain distributions.
During the period from October 17, 1996 (commencement of operations) to
March 31, 1997, a hypothetical $10,000 investment in Freedom 2020 would
have grown to $10,299.
FREEDOM 2020 INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
March 31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
*1997 $ 10,210 $ 89 $ 0 $ 10,299 $ 10,846 $ 11,037 $ 10,107
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom 2020 on
October 17, 1996, the net amount invested in Freedom 2020 shares was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested)
amounted to $10,090. If distributions had not been reinvested, the amount
of distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $90 for dividends
and $0 for capital gain distributions.
During the period from October 17, 1996 (commencement of operations) to
March 31, 1997, a hypothetical $10,000 investment in Freedom 2030 would
have grown to $10,299.
FREEDOM 2030 INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
March 31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
*1997 $ 10,210 $ 89 $ 0 $ 10,299 $ 10,846 $ 11,037 $ 10,107
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom 2030 on
October 17, 1996, the net amount invested in Freedom 2030 shares was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested)
amounted to $10,090. If distributions had not been reinvested, the amount
of distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $90 for dividends
and $0 for capital gain distributions.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. 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's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The
total return of a benchmark index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike a fund's
returns, however, the index returns do not reflect brokerage commissions,
transaction fees, or other costs of investing directly in the securities
included in the index.
The performance of each Freedom Fund may be compared to the performance of
a Target Asset Allocation Composite Index (Composite Index). A Freedom
Fund's Composite Index is a representation of the performance of the asset
classes (domestic and international equity funds, investment grade and high
yield fixed-income funds, and money market funds) in which a Freedom Fund
is invested and is based on the weightings of each asset class in a Freedom
Fund. The following indices are used to calculate a Freedom Fund's
Composite Index: Standard & Poor's 500 Index (S&P 500) for the domestic
equity fund class, Morgan Stanley Capital International Europe,
Australasia, Far East Index (MSCI EAFE) for the international equity fund
class, Lehman Brothers Aggregate Bond Index for the investment grade
fixed-income fund class, Merrill Lynch High Yield Master Index for the high
yield fixed-income fund class, and Salomon Brothers 3-Month T-Bill Total
Rate of Return Index for the money market fund class. The index weightings
of each Composite Index are rebalanced monthly.
The index weightings in the Fidelity Freedom 2000 Composite Index, Fidelity
Freedom 2010 Composite Index, Fidelity Freedom 2020 Composite Index, and
Fidelity Freedom 2030 Composite Index, are adjusted semi-annually to
reflect the changing asset allocations of the Freedom Funds with target
retirement dates. On June 30 of each calendar year, the index weightings
will be adjusted to reflect the average of the Freedom Fund's actual asset
allocation as of March 31 and its projected target asset allocation as of
September 30, as reported in the Freedom Funds' Annual Report for the
fiscal year ended March 31. On December 31, the index weightings will be
adjusted to reflect the Freedom Fund's actual asset allocation as of
September 30 and its projected target asset allocation as of March 31, as
reported in the Freedom Funds' Semi-Annual Report for the period ended
September 30. The index weightings in the Fidelity Freedom Income Composite
Index are not adjusted semi-annually, as Freedom Income maintains a stable
asset allocation strategy.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THE FREEDOM FUNDS' COMPOSITE INDEX WEIGHTINGS:
OCTOBER 17, 1996 THROUGH JUNE 30, 1997*
S&P 500 MSCI EAFE Lehman Brothers Merrill Lynch High Salomon Brothers
Aggregate Bond Yield Master Index 3-Month T-Bill
Index Total Rate of
Return Index
Freedom Income 20.0% -- 40.0% -- 40.0%
Freedom 2000 39.2% 4.4% 40.9% 4.0% 11.5%
Freedom 2010 59.2% 9.7% 24.1% 7.0% --
Freedom 2020 70.0% 12.4% 10.1% 7.5% --
Freedom 2030 70.0% 15.0% 5.0% 10.0% --
</TABLE>
* The weightings of the Composite Indices of the Freedom Funds' did not
change on December 31, 1996.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THE FREEDOM FUNDS' COMPOSITE INDEX WEIGHTINGS:
JUNE 30, 1997 THROUGH DECEMBER 31, 1997
S&P 500 MSCI EAFE Lehman Brothers Merrill Lynch High Salomon Brothers
Aggregate Bond Yield Master Index 3-Month T-Bill
Index Total Rate of
Return Index
Freedom Income 19.7% -- 40.3% -- 40.0%
Freedom 2000 38.2% 4.5% 40.8% 4.0% 12.5%
Freedom 2010 57.7% 9.5% 25.0% 7.1% 0.7%
Freedom 2020 69.1% 12.6% 10.7% 7.6% --
Freedom 2030 69.6% 15.1% 5.3% 10.0% --
</TABLE>
S&P 500. The Standard & Poor's 500 Index is a widely recognized,
unmanaged index of common stocks.
MSCI EAFE. The Morgan Stanley Capital International Europe, Australasia,
Far East Index, is a market capitalization weighted, unmanaged index of
over 1,000 foreign stocks. Stocks are selected for the Morgan Stanley
Capital International (MSCI) indexes on the basis of industry
representation, liquidity, sufficient float, and avoidance of
cross-ownership. The MSCI Free indexes exclude those stocks that cannot be
purchased by foreign investors in otherwise free markets.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value weighted performance
benchmark for investment-grade fixed-rate debt issues, including
government, corporate, asset-backed, and mortgage-backed securities. Issues
included in the index have an outstanding par value of at least $100
million and maturities of at least one year. Government and corporate
issues include all public obligations of the U.S. Treasury (excluding
flower bonds and foreign-targeted issues) and U.S. Government agencies, as
well as nonconvertible investment-grade, SEC-registered corporate debt.
Mortgage-backed securities include 15- and 30-year fixed-rate securities
backed by mortgage pools of the Government National Mortgage Association
(GNMA), Federal Home Loan Mortgage Corporation (FHLMC), and Fannie Mae.
Asset-backed securities include credit card, auto, and home equity loans.
MERRILL LYNCH HIGH YIELD MASTER INDEX is a market capitalization weighted
index of all domestic and yankee high-yield bonds with an outstanding par
value of at least $50 million and maturities of at least one year. Issues
included in the index have a credit rating lower than BBB-/Baa3 but are not
in default (DDD1 or lower). Split-rated issues (i.e., rated
investment-grade by one rating agency and high-yield by another) are
included in the index based on the issue's corresponding composite rating.
Structured-note issues, deferred interest bonds, and pay-in-kind bonds are
excluded.
SALOMON BROTHERS 3-MONTH T-BILL TOTAL RATE OF RETURN INDEX is a
representation of the average of T-Bill rates for each of the prior three
months, adjusted to a bond equivalent yield basis (short-term instruments).
The following table represents the comparative indices' calendar
year-to-year performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
S&P 500 MSCI EAFE Lehman Brothers
Merrill Lynch High Salomon Brothers
Aggregate Bond
Yield
3-Month T-Bill
Index Master Index Total Rate of
Return Index
1996 22.96% 6.05% 3.63% 11.06% 5.25%
1995 37.58% 11.21% 18.47% 19.91% 5.75%
1994 1.32% 7.78% (2.92)% (1.17)% 4.24%
1993 10.08% 32.56% 9.75% 17.18% 3.09%
1992 7.62% (12.17)% 7.40% 18.16% 3.61%
1991 30.47% 12.13% 16.00% 34.58% 5.75%
1990 (3.10)% (23.45)% 8.96% (4.35)% 7.90%
1989 31.69% 10.53% 14.53% 4.23% 8.64%
1988 16.61% 28.27% 7.89% 13.47% 6.76%
1987 5.10% 24.63% 2.76% 4.67% 5.91%
</TABLE>
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.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio managers.
VOLATILITY. A fund may quote various 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 examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of March 3 1 , 199 7 , FMR advised over $28 billion in
tax-free fund assets, $96 billion in money market fund assets, $306 billion
in equity fund assets, $64 billion in international fund assets, and $27
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.
Each Freedom Fund may reference, illustrate or discuss the performance of
the underlying Fidelity funds.
Each Freedom Fund may also reference, illustrate, or discuss the fund's
composite portfolio returns. Composite portfolio returns show the change in
value of an investment in a composite portfolio of underlying funds for the
periods shown based on the asset allocation for each Freedom Fund as of the
end of the most recent semi-annual period, including reinvestment of
dividends and capital gains, and deduction of expenses at the Freedom Fund
and underlying fund levels. Composite portfolio returns do not reflect any
Freedom Fund's actual performance and should not be considered indicative
of past or future performance. In addition, composite portfolio returns
should not be considered as a substitute for any Freedom Fund's own
performance. Composite portfolio returns are intended to demonstrate how
hypothetical investments based on a Freedom Fund's last reported asset
allocation would have performed over the periods shown. Unlike the actual
asset allocation of a Freedom Fund over time, composite portfolio returns
assume that the asset allocation of a composite portfolio remained fixed
during the periods shown. As Freedom 2030, Freedom 2020, Freedom 2010, and
Freedom 2000 near their target retirement dates, asset allocations become
increasingly conservative and scheduled adjustments to the target asset
allocations increase in magnitude. Because Freedom Income is designed for
individuals already in retirement, the fund's assets are allocated
according to a stable asset allocation target.
In addition, Strategic Advisers retains discretion to modify a Freedom
Fund's target asset allocation and the identity of one or more of the
underlying funds from time to time. The composite portfolio returns do not
represent actual trading or reflect the effect that economic or market
conditions might have had on Strategic Adviser's decisions to make
adjustments if it had actually managed the Freedom Funds during the periods
shown. Although composite portfolio returns do not reflect either target or
discretionary adjustments, such adjustments will have a significant impact
on a Freedom Fund's actual performance.
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 March 31, 1997. 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> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Underlying Fidelity Fund Yield(dagger) One Five Ten One Five Ten
Year Years Years/ Year Years Years/
Life of Life of
Fund* Fund*
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Blue Chip
Growth Fund1 N/A 9.95% 17.12% 18.52% 9.95% 120.42% 382.31%
Fidelity Capital & Income
Fund2 5.02 % 9.28% 11.60% 9.99% 9.28% 73.12% 159.16%
Fidelity Disciplined Equity
Fund N/A 12.75% 14.12% 17.22% 12.75% 93.53% 271.6 2 %
Fidelity Diversified
International Fund N/A 17.04% 13.73% 11.08% 17.04% 9 0.24% 73.88%
Fidelity Equity-Income Fund N/A 16.55% 17.24% 12.16% 16.55% 121.54% 214.95%
Fidelity Europe Fund3 N/A 18.56% 15.03% 9.88% 18.56% 101.38% 156.54%
Fidelity Fund N/A 13.43% 15.67% 12.29% 13.43% 107.02% 218.82%
Fidelity Government
Securities Fund 6.03 % 3.69% 7.01% 7.67% 3.69% 40.33% 109.47%
Fidelity Growth & Income
Portfolio N/A 15.20% 16.93% 15.23% 15.20% 11 8 .60% 312.89%
Fidelity Growth Company
Fund4 N/A 7.59% 15.00% 14.78% 7.59% 101.13% 296.96%
Fidelity Intermediate Bond
Fund 6.17 % 4.45% 6.62% 7.26% 4.45% 37.76% 101.63%
Fidelity Investment Grade
Bond Fund 6.30 % 4.20% 7.22% 7.90% 4.20% 41.72% 113.91%
Fidelity Japan Fund5 N/A (19.02)% N/A 2.11% (19.02)% N/A 9.96%
Fidelity Money Market
Trust: 5.18 % 5.28% 4.42% 5.63% 5.28% 24.14% 57.82%
Retirement Money Market Portfolio
Fidelity OTC Portfolio6 N/A 5.97% 12.68% 13.10% 5.97% 81.62% 242.51%
Fidelity Overseas Fund N/A 12.66% 10.5 1 % 6.25% 12.66% 64.83% 83.32%
Fidelity Southeast Asia
Fund7 N/A (7.28)% N/A 10.09% (7.28)% N/A 46.21%
</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 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 March 31,
1997 , except for the yield shown for Fidelity Money Market Trust:
Retirement Money Market Portfolio, which is for the seven-day period ended
March 31 , 199 7 .
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 which was in effect prior to January 1, 1997.
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 underlying Fidelity funds set forth
above is not indicative of future performance of either the underlying
Fidelity funds 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 underlying Fidelity funds.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Each Freedom Fund 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 fo r 1997 : New Year's Day, Washington's Birthday, Good
Friday, Memorial Day, 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 Fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the 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 Fund is required to
give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60-day notification
requirement may be waived if (i) the only effect of a modification would be
to reduce or eliminate an administrative fee, redemption fee, or deferred
sales charge ordinarily payable at the time of an exchange, or (ii) the
fund suspends the redemption of the shares to be exchanged as permitted
under the 1940 Act or the rules and regulations thereunder, or the fund to
be acquired suspends the sale of its shares because it is unable to invest
amounts effectively in accordance with its investment objective and
policies.
In the Prospectus, each Freedom Fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse exchange
purchases by any person or group if, in 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 Fund'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 qualifies
for the deduction generally will be less than 100%. Each Freedom Fund will
notify corporate shareholders annually of the percentage of fund dividends
that qualifies for the dividends-received deduction. A portion of each
Freedom Fund'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
Fund (including amounts attributable to an underlying Fidelity fund's
capital gain distributions as well as long-term capital gains earned on the
sale of underlying Fidelity fund shares or other securities) and
distributed to shareholders are federally taxable as long-term capital
gains, regardless of the length of time shareholders have held their
shares. If a shareholder receives a long-term capital gain distribution on
shares of a 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.
As of March 31, 1997, Freedom Income, Freedom 2000, Freedom 2010, Freedom
2020, and Freedom 2030 hereby designates approximately $5,000, $13,000,
$4,000, $8,000, and $3,000, respectively, as a capital gain dividend for
the purpose of the dividend paid deduction.
TAX STATUS OF THE FUNDS. Each Freedom Fund intends to qualify each year as
a " regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each Freedom Fund intends to distribute substantially all of its net
investment income and net realized capital gains. Each Freedom Fund 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 shares) 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 Fund's investments in such
instruments.
Each Freedom Fund 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 Fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be
subject to state and local taxes on fund distributions, and shares may be
subject to state and local personal property taxes. Investors should
consult their tax advisers to determine whether a Freedom Fund 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 its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within the
Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts 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 and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR, 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 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
and the Trustees 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 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 Vice Chairman
of FMR Corp.; President of Fidelity Investments Institutional Services
Company, (FIIS) Inc.; and President and a Director of FMR Texas Inc.,
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994). Prior
to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993), CH2M Hill Companies (engineering), Rio Grande,
Inc. (oil and gas production), and Daniel Industries (petroleum measurement
equipment manufacturer). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS ( 65 ), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
ROBERT M. GATES (53), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence Agency
(CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to
the President of the United States and Deputy National Security Advisor.
Mr. Gates is currently a Trustee for the Forum For International Policy, a
Board Member for the Virginia Neurological Institute, and a Senior Advisor
of the Harvard Journal of World Affairs. In addition, Mr. Gates also serves
as a member of the corporate board for LucasVarity PLC (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and TRW
Inc. (original equipment and replacement products).
E. BRADLEY JONES ( 69 ), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
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
manufacturing, 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 ( 64 ), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH ( 54 ), Trustee, is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (63), Trustee (1997), is the Vice President of Finance
for the University of North Carolina (16-school system, 1995). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of
BellSouth Corporation (telecommunications, 1984) and President of BellSouth
Enterprises (1986). He is currently a Director of Liberty Corporation
(holding company, 1984), Weeks Corporation of Atlanta (real estate, 1994),
Carolina Power and Light Company (electric utility, 1996), and the Kenan
Transport Co. (1996). Previously, he was a Director of First American
Corporation (bank holding company, 1979-1996). In addition, Mr. McCoy
serves as a member of the Board of Visitors for the University of North
Carolina at Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (67), Trustee and 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.
MARVIN L. MANN ( 63 ), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart
(marketing services, 1991), a Trammell Crow Co. In addition, he serves as
the Campaign Vice Chairman of the Tri-State United Way (1993) and is a
member of the University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (68), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
WILLIAM J. HAYES (62), Vice President (1994), is Vice President of
Fidelity's equity funds; Senior Vice President of FMR; and Managing
Director of FMR Corp.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
ROBERT H. MORRISON (56), Manager of Security Transactions of Fidelity's
equity funds is Vice President of FMR.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (51), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each Trustee of each Freedom Fund for his or her services for the
fiscal year ended March 31, 1997, or calendar year ended December 31,
1996, as applicable .
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGGREGATE
J. Gary Ralph Phyllis Richard Robert Edward E. Donald Peter William Gerald C. Edward Marvin Thomas
COMPENSATI
Burkhead** F. Cox Burke J. M. C. Bradley J. S. O. McDonough H. L. Mann R.
ON FROM Davis Flynn Gates Johnson Jones Kirk Lynch McCoy Malone Williams
A FUND *** **** 3d.** ** ***** ***
Freedom
$ 0 $ 2 $ 2 $ 0 $ 0 $ 0 $ 2 $ 2 $ 0 $ 2 $ 3 $ 0 $ 2 $ 2
IncomeB,+
Freedom
0 4 4 0 1 0 4 4 0 4 5 0 4 4
2000B,+
Freedom
0 5 5 1 1 0 5 5 0 5 6 1 5 5
2010B,+
Freedom
0 3 3 0 0 0 3 3 0 3 4 0 3 3
2020B,+
Freedom
0 1 1 0 0 0 1 1 0 1 1 0 1 1
2030B,+
TOTAL
$ 0 $137,000 $ 134,700 $ 168,000 $ 0 $ 0 $ 134,700 $ 136,200 $ 0 $ 85,333 $ 136,200 $ 136,200 $ 134,700 $ 136,200
COMPENSATI
ON FROM
THE FUND
COMPLEX*,A
</TABLE>
+ Estimated
* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the funds are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** Mr. Gates was appointed to the Board of Trustees effective March 1,
1997.
***** During the period from May 1, 1996 through December 31, 1996, William
O. McCoy served as a Member of the Advisory Board of the Trust. Mr. McCoy
was appointed to the Board of Trustees effective January 1, 1997.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B Compensation figures include cash, and may include amounts required to be
deferred, a pro rata portion of benefits accrued under the retirement
program for the period ended December 30, 1996 and required to be deferred,
and amounts deferred at the election of Trustees.
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996 , each non-interested Trustee who retired
before December 30, 1996 may receive payments from a Fidelity fund
during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee bec a me eligible to participate
in the program at the end of the calendar year in which he or she
reache d age 72, provided that, at the time of retirement, he or she
ha d served as a Fidelity fund Trustee for at least five years.
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 fees in accordance with the Plan will have a
negligible effect on the fund's assets, liabilities, and net income per
share, and will not obligate a fund to retain the services of any Trustee
or to pay any particular level of compensation to the Trustee. A fund may
invest in such designated securities under the Plan without shareholder
approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each then-existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
As of March 31, 1997, approximately 1.38 % of Freedom
2010's total outstanding shares was held by an FMR affiliate.
FMR Corp. is the ultimate parent company of this FMR affiliate. By virtue
of his ownership interest in FMR Corp., as described in the "FMR" section
on page , Mr. Edward C. Johnson 3d, President and Trustee of the
fund, may be deemed to be a beneficial owner of these shares. As of the
above date, with the exception of Mr. Johnson 3d's deemed ownership of
Freedom 2010 's shares, the Trustees and officers of the funds owned,
in the aggregate, less than 1 % of each fund's total outstanding
shares.
As of March 31, 1997, the following owned of record or beneficially
5% or more of a fund's outstanding shares : General Motors
Corporation, New York, NY (38.97%) (Freedom Income); General Motors
Corporation, New York, NY (40.41%); Winthrop, Stimson, Putnam, and Roberts,
New York, NY (5.70%) (Freedom 2000); General Motors Corporation, New York,
NY (36.88%); Bridgestone/Firestone, Inc. (7.29%) (Freedom 2010); Winthrop,
Stimson, Putnam, and Roberts, New York, NY (16.94%) (Freedom 2010); General
Motors Corporation, New York, NY (21.87%) (Freedom 2020); Winthrop,
Stimson, Putnam, and Roberts, New York, NY (26.72%) (Freedom 2020); General
Motors Corporation, New York, NY (29.90%) (Freedom 2030); Winthrop,
Stimson, Putnam, and Roberts, New York, NY(9.81%) (Freedom 2030).
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each Freedom Fund employs Strategic Advisers to furnish investment
advisory and other services. Under the terms of 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 the
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 in turn has entered into administration agreements with
FMR on behalf of each Freedom Fund. Under the terms of each administration
agreement, FMR or its affiliates provide the management and administrative
services (other than 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
securities laws and making necessary filings under state laws; developing
management and shareholder services for each fund; and furnishing reports,
evaluations, and analyses on a variety of subjects to the Trustees.
Under the terms of each Freedom Fund's management contract, Strategic
Advisers, either itself or through an affiliate, is responsible for payment
of all operating expenses of each Freedom Fund with certain exceptions.
Under the terms of each administration agreement, FMR pays all management
and administrative expenses (other than investment advisory expenses) for
which Strategic Advisers is responsible. Specific expenses payable by FMR
include expenses for typesetting, printing, and mailing proxy materials to
shareholders; legal expenses; fees of the custodian and auditor; and each
fund's proportionate share of insurance premiums and Investment Company
Institute dues. In addition, FMR compensates all officers of each fund and
all Trustees who are "interested persons" of the trust, Strategic Advisers,
or FMR. FMR also arranges for the performance of transfer agent, dividend
disbursing, and shareholder services, pricing and bookkeeping services, and
administration of each Freedom Fund's securities lending program.
Each Freedom Fund pays the following expenses: fees and expenses of 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 Fund'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. Fees
received by Strategic Advisers for the fiscal period ended March 31, 1997
are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Period Ended March 31 Amount of Credits Reducing Management Fees Paid to
Management Fees Strategic Advisers
Freedom Income 1997 $ 50 $ 1,478*
Freedom 2000 1997 $ 27 $ 2,718*
Freedom 2010 1997 $ 31 $ 3,682*
Freedom 2020 1997 $ 32 $ 2,501*
Freedom 2030 1997 $ 27 $ 719*
</TABLE>
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
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. Fees received by FMR for the fiscal period
ended March 31, 1997 are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Fiscal Period Ended March 31 Administrative Fees Paid to FMR
Freedom Income 1997 $ 888
Freedom 2000 1997 $ 1,635
Freedom 2010 1997 $ 2,196
Freedom 2020 1997 $ 1,485
Freedom 2030 1997 $ 432
</TABLE>
Strategic Advisers may, from time to time, voluntarily reimburse all or
a portion of each Freedom Fund'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 Fund's total returns and yield and
repayment of the reimbursement by each fund will lower its total returns
and yield.
Effective November 1, 1996, Strategic Advisers voluntarily agreed, subject
to revision or termination, to reimburse each Freedom Fund if and to the
extent that each Freedom Fund's aggregate operating expenses, including
management fees, were in excess of the annual rate of 0.08% of its average
net assets.
The table below identifies the dollar amount reimbursed to management fees
for each Freedom Fund beginning November 1, 1996 through the funds' first
fiscal period ended March 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Fiscal Period Ended March 31 Dollar Amount Reimbursed
Freedom Income 1997 $ 283
Freedom 2000 1997 $ 444
Freedom 2010 1997 $ 623
Freedom 2020 1997 $ 436
Freedom 2030 1997 $ 118
</TABLE>
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 Fund.
Under this arrangement, FIIOC receives no fees for providing these
services to the Freedom Funds. However, each underlying Fidelity fund pays
its respective transfer, dividend disbursing, and shareholder servicing
agent (either FIIOC or an affiliate of FIIOC) fees based, in part, on the
number of accounts in and assets of the Freedom Funds invested in such
underlying Fidelity fund.
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
Fund, 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 Freedom Fund's average net assets. FSC also
receives fees for administering each fund's securities lending program.
FMR must bear the cost of pricing and bookkeeping services pursuant to its
administration agreements with Strategic Advisers.
Each Freedom Fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at 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 Fund (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 Funds, 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 Funds 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 Fund shares,
including 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 Fund 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 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 Fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments under
the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. The Freedom Funds are funds of Fidelity Aberdeen
Street Trust, an open-end management investment company organized as a
Delaware business trust under the name Income Portfolios II on June 20,
1991. The name of the Trust was changed to Fidelity Institutional Investors
Trust on January 16, 1992, pursuant to a Certificate of Amendment. On
August 21, 1996, pursuant to a Certificate of Amendment, the name of the
Trust was changed to Fidelity Aberdeen Street Trust. Currently, there
are five funds of Fidelity Aberdeen Street Trust: Fidelity Freedom
Income Fund , Fidelity Freedom 2000 Fund , Fidelity
Freedom 2010 Fund , Fidelity Freedom 2020 Fund ,
and Fidelity Freedom 2030 Fund . 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
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., One Post Office Square, Boston,
Massachusetts serves as the trust's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
period ended March 31, 1997, and reports of the auditor, are included in
the funds' Annual Report, which is a separate report supplied with this
SAI. The funds' financial statements, including the financial highlights,
and reports of the auditors are incorporated herein by reference. For a
free additional copy of the funds' Annual Report, contact Fidelity at
1-800-544-8888, 82 Devonshire Street, Boston, MA 02109.
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 RATINGS OF CORPORATE
BOND S
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody applies numerical modifiers
of 1, 2, or 3 to each generic rating classification from Aa through B. 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 on the lower end of its
generic rating category.
AAA - Bonds that 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 that 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 that 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 that 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 that 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 that 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 that 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 that 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 that 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.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BOND S
Debt issues may be designated by Standard & Poor's as either investment
grade ("AAA" through "BBB") or speculative grade ("BB" through "D"). While
speculative grade debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
exposures to adverse conditions. Ratings from AA to CCC may be modified by
the addition of a plus sign (+) or minus sign (-) to show relative standing
within the major rating categories.
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 rated 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.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF COMMERCIAL PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a superior
ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be assigned a
Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+)
designation.
A-2 - Capacity for timely payment on issues with this designation is
s atisfactory . However, the relative degree of safety is not as high
as for issues designated A-1.
PART C. OTHER INFORMATION
Item 24.
(a) (1) Financial Statements and Financial Highlights included in the
Annual Report for Fidelity Freedom Income Fund, Fidelity Freedom 2000 Fund,
Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund, and Fidelity
Freedom 2030 Fund, for the fiscal year ended March 31, 1997, are
incorporated by reference into the funds' Statement of Additional
Information, and were filed on May 16, 1997 for Fidelity Aberdeen Street
Trust (File No. 811-6440), pursuant to Rule 30d-1 under the Investment
Company Act of 1940 and are incorporate herein by reference.
(b) Exhibits:
(1)(a) Trust Instrument of the Trust dated June 20, 1991, was
electronically filed and is incorporated herein by reference as Exhibit 1
to Post-Effective Amendment No. 13.
(b) Certificate of Amendment of the Trust Instrument dated January
16, 1992, was electronically filed and is incorporated herein as Exhibit
1(b) to Post-Effective Amendment No. 13.
(c) Supplemental Trust Instrument dated August 21, 1996, was
electronically filed and is incorporated herein by reference as Exhibit
1(b) of Post-Effective Amendment No. 16.
(d) Certificate of Amendment of the Trust Instrument dated August
22, 1996, was electronically filed and is incorporated herein by reference
as Exhibit 1(c) to Post-Effective Amendment No. 16.
(e) Supplemental Trust Instrument dated March 31, 1997, is
electronically filed herein as Exhibit 1(e).
(2) Bylaws 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. was electronically filed
and is incorporated herein by reference as Exhibit 5(a) to Post-Effective
Amendment No. 18.
(b) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2020 Fund, and Strategic Advisers, Inc. was electronically filed
and is incorporated herein by reference as Exhibit 5(b) to Post-Effective
Amendment No. 18.
(c) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2010 Fund, and Strategic Advisers, Inc. was electronically filed
and is incorporated herein by reference as Exhibit 5(c) to Post-Effective
Amendment No. 18.
(d) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2000 Fund, and Strategic Advisers, Inc. was electronically filed
and is incorporated herein by reference as Exhibit 5(d) to Post-Effective
Amendment No. 18.
(e) Management Contract between the Registrant, on behalf of Fidelity
Freedom Income Fund, and Strategic Advisers, Inc. was electronically filed
and is incorporated herein by reference as Exhibit 5(e) to Post-Effective
Amendment No. 18.
(f) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2030 Fund was
electronically filed and is incorporated herein by reference as Exhibit
5(f) to Post-Effective Amendment No. 18.
(g) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2020 Fund was
electronically filed and is incorporated herein by reference as Exhibit
5(g) to Post-Effective Amendment No. 18.
(h) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2010 Fund was
electronically filed and is incorporated herein by reference as Exhibit
5(h) to Post-Effective Amendment No. 18.
(i) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2000 Fund was
electronically filed and is incorporated herein by reference as Exhibit
5(i) to Post-Effective Amendment No. 18.
(j) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom Income Fund was
electronically filed and is incorporated herein by reference as Exhibit
5(j) to Post-Effective Amendment No. 18.
(6)(a) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2030 Fund, and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as Exhibit
6(a) to Post-Effective Amendment No. 18.
(b) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2020 Fund, and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as Exhibit
6(b) to Post-Effective Amendment No. 18.
(c) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2010 Fund, and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as Exhibit
6(c) to Post-Effective Amendment No. 18.
(d) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2000 Fund, and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as Exhibit
6(d) to Post-Effective Amendment No. 18.
(e) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom Income Fund, and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference as Exhibit
6(e) to Post-Effective Amendment No. 18.
(7)(a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, as amended on November 16, 1995, is incorporated herein
by reference to Exhibit 7(a) of Fidelity Select Portfolio's (File No.
2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Persons, Directors, and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is electronically filed herein as
Exhibit 7(b).
(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) Appendix A, dated August 31, 1996, 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(b) of Daily Money Fund's
Post-Effective Amendment No. 40 (File No. 2-77909).
(c) Appendix B, dated July 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the Registrant is
incorporated herein by reference to Exhibit 8(c) of Fidelity Income Fund's
Post-Effective Amendment No. 35 (File No. 2-92661).
(d) 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).
(e) Forms of Fidelity Group Repo Custodian Agreement and Schedule 1
among The Bank of New York, J. P. Morgan Securities, Inc., and the
Registrant, on behalf of Fidelity Freedom Funds, are filed herein as
Exhibit 8(e).
(f) Forms of Fidelity Group Repo Custodian Agreement and Schedule 1
among Chemical Bank, Greenwich Capital Markets, Inc., and the Registrant,
on behalf of Fidelity Freedom Funds, are filed herein as Exhibit 8(f).
(g) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between The Bank of
New York and the Registrant, on behalf of Fidelity Freedom Funds, are filed
herein as Exhibit 8(g).
(9) Not applicable.
(10) Not applicable.
(11) Consent of Coopers & Lybrand, L.L.P., independent accountants, is
electronically filed herein 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 was
electronically filed and is incorporated herein by reference as Exhibit 13
to Post-Effective Amendment No. 18.
(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.
(q) Fidelity SIMPLE-IRA Plan Adoption Agreement, Company Profile
Form, and Plan Document, as currently in effect, is electronically filed
herein as Exhibit 14(q).
(15)(a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Freedom 2030 Fund was electronically filed and is incorporated herein by
reference as Exhibit 15(a) to Post-Effective Amendment No. 18.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2020 Fund was electronically filed and is incorporated
herein by reference as Exhibit 15(b) to Post-Effective Amendment No. 18.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2010 Fund was electronically filed and is incorporated
herein by reference as Exhibit 15(c) to Post-Effective Amendment No. 18.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2000 Fund was electronically filed and is incorporated
herein by reference as Exhibit 15(d) to Post-Effective Amendment No. 18.
(e) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom Income Fund was electronically filed and is incorporated
herein by reference as Exhibit 15(e) to Post-Effective Amendment No. 18.
(16)(a) A schedule for computation of 30-day yields and total return was
electronically filed and is incorporated herein by reference as Exhibit
16(a) to Post-Effective Amendment No. 18.
(b) A schedule for computation of moving averages was electronically
filed and is incorporated herein by reference as Exhibit 16(b) to
Post-Effective Amendment No. 18.
(17) Financial Data Schedules are filed herein for Fidelity Freedom
Income Fund, Fidelity Freedom 2000 Fund, Fidelity Freedom 2010 Fund,
Fidelity Freedom 2020 Fund, and Fidelity Freedom 2030 Fund, as Exhibit 27,
respectively.
(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 March 31, 1997
Name of Series Number of Record Holders
Fidelity Freedom Income Fund 28
Fidelity Freedom 2000 Fund 71
Fidelity Freedom 2010 Fund 130
Fidelity Freedom 2020 Fund 147
Fidelity Freedom 2030 Fund 131
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 Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) 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.
Rodney R. Rohda Director of Strategic Advisers, Inc. (1995); President -
Premium Assets Group of Fidelity Investments (1995); Managing Director of
Fidelity Capital (1993).
Paul J. Hondros Director of Strategic Advisers, Inc. (1997); President and
Director of Fidelity Retail Marketing, Inc. (1996).
Roger T. Servison Director and President of Strategic Advisers, Inc.
(1996); Director of Fidelity Brokerage Services, Inc. (1994).
Lynn Davis Vice President -Portfolio Advisory Services of Strategic
Advisers, Inc. (1997).
Donald Alhart Vice President -Crosby Advisors of Strategic Advisers, Inc.
(1996).
Amy F. Barnwell Vice President -Charitable Advisory Services of Strategic
Advisers, Inc. (1997).
Stephen G. Manning Treasurer of Strategic Advisers, Inc. (1997); Vice
President and Treasurer of FMR Corp. (1997).
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).
Page Pennell Assistant Clerk of Strategic Advisers, Inc. (1997).
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Strategic Advisers,
Inc., or Fidelity Service Company, Inc. 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 Fidelity Freedom Income Fund,
Fidelity Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom
2020 Fund, and Fidelity Freedom 2030 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 Income Fund, Fidelity
Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund,
and Fidelity Freedom 2030 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, so long as the staff of the Securities and
Exchange Commission continues to require such an undertaking in the
registration statement for a new portfolio, to file a Post-Effective
Amendment, using financial statements for Fidelity Freedom Income Fund,
Fidelity Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom
2020 Fund, and Fidelity Freedom 2030 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 Income Fund, Fidelity
Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund,
and Fidelity Freedom 2030 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. 19 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 15th day
of May 1997.
FIDELITY ABERDEEN STREET TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee May 15, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber * Treasurer May 15, 1997
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee May 15, 1997
J. Gary Burkhead
/s/Ralph F. Cox ** Trustee May 15, 1997
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee May 15, 1997
Phyllis Burke Davis
/s/Robert M. Gates *** Trustee May 15, 1997
Robert M. Gates
/s/E. Bradley Jones ** Trustee May 15, 1997
E. Bradley Jones
/s/Donald J. Kirk ** Trustee May 15, 1997
Donald J. Kirk
/s/Peter S. Lynch ** Trustee May 15, 1997
Peter S. Lynch
/s/Marvin L. Mann ** Trustee May 15, 1997
Marvin L. Mann
/s/William O. McCoy ** Trustee May 15, 1997
William O. McCoy
/s/Gerald C. McDonough ** Trustee May 15, 1997
Gerald C. McDonough
/s/Thomas R. Williams ** Trustee May 15, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated January 3, 1997 and filed herewith.
* Signature affixed by John H. Costello pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
*** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated March 6, 1997 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Plans Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Union Street Trust II
Fidelity Exchange Fund Fidelity Yen Performance Portfolio, L.P.
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, Form N-8B-2, or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorney-in-fact or
his substitutes may do or cause to be done by virtue hereof. This power of
attorney is effective for all documents filed on or after January 3, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d January 3, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
John H. Costello and John E. Ferris each of them singly my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorneys-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or
after January 1, 1997.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber__________ December 19, 1996
Kenneth A. Rathgeber
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact or their substitutes may
do or cause to be done by virtue hereof. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Director, Trustee, or General Partner
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, my
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for me and in my name in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof. This power of attorney is effective for
all documents filed on or after March 1, 1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
EXHIBIT 1(E)
Supplement To
Trust Instrument of
Fidelity Aberdeen Street Trust
This Supplement to the Trust Instrument of Fidelity Aberdeen Street Trust,
(the "Trust"), formed pursuant to a Trust Instrument dated June 20, 1991
under the name of Income Portfolios II, is adopted by the Trustees pursuant
to Article XI, Section 11.06, of the Trust and incorporates all amendments
to the Trust Instrument (other than prior amendments to the name of the
Trust) in effect as of the date hereof as follows:
1. The Trust Instrument is amended by a resolution of the Trustees adopted
at a meeting on
September 14, 1995, by adding Section 7.04 as follows:
DERIVATIVE ACTIONS.
Section 7.04. Except as otherwise provided in Section 3816 of the
Delaware Act, all matters relating to the bringing of derivative actions in
the right of the Trust shall be governed by the General Corporation Law of
the State of Delaware relating to derivative actions, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Shareholders were shareholders of a Delaware corporation.
2. Section 11.05 of the Trust Instrument is amended and restated by a
resolution of the Trustees
adopted at a meeting on September 14, 1995, as follows:
MERGERS.
Section 11.05. (a) Notwithstanding anything else herein, the Trustees, in
order to change the form of organization of the Trust, may, without prior
Shareholder approval, (i) cause the Trust to merge or consolidate with or
into one or more trusts, partnerships (general or limited), associations,
limited liability companies or corporations so long as the surviving or
resulting entity is an open-end management investment company under the
1940 Act, or is a Series thereof, that will succeed to or assume the
Trust's registration under that Act and which is formed, organized or
existing under the laws of a state, commonwealth, possession or colony of
the United States or (ii) cause the Trust to incorporate under the laws of
Delaware.
(b) The Trustees may, subject to a Majority Shareholder Vote of the
Trust, and subject to a vote of a majority of the Trustees, cause the Trust
to merge or consolidate with or into one or more trusts, partnerships
(general or limited), associations, limited liability companies or
corporations.
(c) Any agreement of merger or consolidation or certificate of merger or
consolidation may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be
valid.
(d) Pursuant to and in accordance with the provisions of Section 3815 (f)
of the Delaware Act, and notwithstanding anything to the contrary contained
in this Trust Instrument, an agreement of merger or consolidation approved
by the Trustees in accordance with paragraphs (a) or (b) of this Section
11.05 may effect any amendment to the Trust Instrument or effect the
adoption of a new trust instrument of the Trust if it is the surviving or
resulting trust in the merger or consolidation.
3. Section 10.01 of the Trust Instrument is amended and restated by a
resolution of the Trustees
adopted at a meeting on September 14, 1995, as follows:
LIMITATION OF LIABILITY.
Section 10.01. Neither a Trustee nor an officer of the Trust, when acting
in such capacity, shall be personally liable to any person other than the
Trust or a beneficial owner for any act, omission or obligation of the
Trust, any Trustee or any officer of the Trust. Neither a Trustee nor an
officer of the Trust shall be liable for any act or omission or any conduct
whatsoever in his capacity as Trustee or as an officer of the Trust,
provided that nothing contained herein or in the Delaware Act shall protect
any Trustee or any officer of the Trust against any liability to the Trust
or to Shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee or officer of
the Trust hereunder.
4. Section 11.02 is amended and restated by a resolution of the Trustees
adopted at a meeting on
September 14, 1995, as follows:
TRUSTEES' AND OFFICERS' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND
OR SURETY.
Section 11.02. The exercise by the Trustees or the officers of the Trust
of their powers and discretions hereunder in good faith and with reasonable
care under the circumstances then prevailing shall be binding upon everyone
interested. Subject to the provisions of Article X hereof and to Section
11.01 of this Article XI, the Trustees and the officers of the Trust shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees and the officers of the Trust may take advice of counsel or other
experts with respect to the meaning and operation of this Trust Instrument,
and subject to the provisions of Article X hereof and Section 11.01 of this
Article XI, shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The
Trustees and the officers of the Trust shall not be required to give any
bond as such, nor any surety if a bond is obtained.
5. Section 4.01 of the Trust Instrument is amended by resolution of the
Trustees acting pursuant to the last sentence of Section 7.01 thereof and
adopted by Unanimous Written Consent dated August 30, 1991, by
redesignating subsections (w) and (x) as subsections (x) and (y),
respectively, and by adding new subsection (w) as follows:
(w) Notwithstanding any other provisions hereof, to invest all of the
assets of any Series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company;
6. Section 11.06 is amended by a resolution of the Trustees adopted at a
meeting on September 14,
1995 by adding after the first sentence the following:
A supplemental trust instrument executed by any one Trustee may be relied
upon as a Supplement hereof.
IN WITNESS WHEREOF, the undersigned, being a trustee of the Trust, has
executed this instrument.
/s/J. Gary Burkhead
J. Gary Burkhead, as Trustee
and not individually.
Dated: March 31, 1997
FEE DEFERRAL PLAN FOR NON-INTERESTED
PERSON DIRECTORS AND TRUSTEES
OF THE FIDELITY FUNDS
(Effective as of September 14, 1995,
as Amended through November 14, 1996)
1. Purpose.
The purpose of this Fee Deferral Plan for Non-Interested Person Directors
and Trustees (this "Plan") is to provide eligible directors and trustees of
each investment company that has adopted this Plan and any other investment
company advised by Fidelity Management & Research Company that adopts this
Plan (a "Fund") with the opportunity to defer the receipt of compensation
earned by them as directors or trustees in lieu of receiving payment of
such compensation currently, and to treat any deferred amount as though an
equivalent dollar amount had been invested in shares of certain of the
Funds.
2. Eligibility.
Each "director" who is not an "interested person" of the Fund, as such
terms are defined in the Investment Company Act of 1940 (an "Independent
Trustee"), as amended, shall be eligible to participate in this Plan. The
"directors" (as so defined) of each Fund are referred to collectively as
the Fund's "Board."
3. Amount and Terms of Deferral.
(a) Mandatory Fixed Deferred Fees. Each Independent Trustee shall defer
pursuant to this section 3(a) receipt of a portion of the compensation (the
"Board Fees") earned by such Independent Trustee for serving as a member of
the Board or as a member of any committee (or any subcommittee of such
committee) of which such Independent Trustee from time to time may be a
member, in such amount and upon such terms as may be specified from time to
time by resolution of the Independent Trustees. The portion of Board Fees
deferred under this Section 3(a) shall be referred to as the "Mandatory
Fixed Deferred Fees."
(b) Mandatory Contingent Deferred Fees. Each Independent Trustee shall
defer pursuant to this Section 3(b) receipt of a portion of such
Independent Trustee's Board Fees in such amount and upon such terms as may
be specified from time to time by resolution of the Independent Trustees.
The portion of Board Fees deferred under this Section 3(b) shall be
referred to as the "Mandatory Contingent Deferred Fees". An Independent
Trustee's period of "Eligible Service" shall commence on the date on which
such Independent Trustee is elected to the Board of any Fund, and shall end
on the date on which such Independent Trustee is no longer a member of the
Board of any Fund (the "Termination Date"). Each Independent Trustee's
"Vested Percentage" of such Independent Trustee's Mandatory Contingent
Deferred Fees shall be as follows:
Period of Eligible Service Vested Percentage
Less than 5 years 0%
5 years or more, but less than 6 years 50%
6 years or more, but less than 7 years 60%
7 years or more, but less than 8 years 70%
8 years or more, but less than 9 years 80%
9 years or more, but less than 10 years 90%
10 years or more 100%
An Independent Trustee's Vested Percentage shall, notwithstanding the
foregoing table, be zero if the Nominating and Procedures Committee shall
have determined that such Independent Trustee's termination as a Board
member resulted from such Independent Trustee's willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
office of Independent Trustee. The Administrator (as defined in Section
12) shall maintain separate records of the balances in an Independent
Trustee's Deferred Fee Account (as defined in Section 4) to the extent that
such balances result from Mandatory Contingent Deferred Fees; the amount of
such balances shall be adjusted as of the end of each Independent Trustee's
period of Eligible Service to give effect to such Independent Trustee's
Vested Percentage.
(c) Grandfathered Deferred Amounts. The Funds' "Retirement Plan for
Non-Interested Person Trustees, Directors or General Partners" (the
"Non-Qualified Pension Plan") has been amended, effective December 30,
1996, to provide that Independent Trustees with Retirement Dates (as
defined in the Non-Qualified Pension Plan) after December 30, 1996 shall
not be entitled to retirement benefits under the Non-Qualified Pension
Plan. Each person serving as an Independent Trustee as of December 30,
1996 who has a Retirement Date on or after December 31, 1996, shall have
his or her Deferred Fee Account increased, as of December 31, 1996, by an
amount equal to the present value of such Independent Trustees' retirement
benefits under the Non-Qualified Pension Plan as of December 31, 1996
(prior to giving effect to such amendment) as reflected on the books and
records of each of the Funds. The amount of any increase pursuant to this
Section 3(c) shall be treated as a Mandatory Contingent Deferred Fee, shall
vest in accordance with Section 3(b), and shall be referred to as
"Grandfathered Deferred Amounts."
(d) Optional Deferrals. In addition to the deferrals referred to in
Sections 3(a), 3(b) and 3(c), an Independent Trustee may (subject to
Section 3(f)) elect by notice given pursuant to Section 6 to defer receipt
of all or a specified portion of the Board Fees earned by such Independent
Trustee. Such deferred Board Fees are referred to as "Optional Deferred
Fees."
(e) Expenses, etc. Reimbursement of out of pocket expenses of
Independent Trustees may not be deferred.
(f) Maximum Deferral Amount; Allocation of Deferrals Among Funds.
Certain Funds ("Excluded Funds") may under applicable investment policies,
investment restrictions, principles of taxation, policies adopted by the
Nominating and Procedures Committee or otherwise be precluded from
purchasing shares of other Funds. The Excluded Funds will be identified by
the Administrator in the Administrator's good faith judgment and approval
by the Nominating and Procedures Committee. The Funds other than the
Excluded Funds are referred to as the "Eligible Funds". Notwithstanding
the adoption of this Plan by any Excluded Fund, except as provided in
Sections 3(c) and 5(a)(ii), no portion of any compensation payable by an
Excluded Fund shall be deferred under any provision of this Plan. It is
contemplated that: (i) compensation payable to Independent Trustees by
each of the Funds shall be administered through a single disbursement
account; (ii) amounts so payable and amounts to be deferred hereunder will
ordinarily be expressed as annualized aggregate dollar amounts for all
Funds as to which an Independent Trustee serves; (iii) as to any
Independent Trustee, the aggregate amount of compensation deferred
(excluding Grandfathered Deferred Amounts) will not exceed the aggregate
payable by the Eligible Funds, and (iv) as to any Independent Trustee, the
Administrator shall allocate the cash and deferred portion of such
Independent Trustee's compensation among the Funds in a manner consistent
with the previous sentence and otherwise consistent with the Funds'
accounting practices.
4. Deferred Fee Account.
A deferred compensation book entry account (the "Deferred Fee Account")
shall be established in the name of each Independent Trustee. Any
compensation earned by an Independent Trustee which is deferred pursuant to
this Plan will be credited to such Independent Trustee's Deferred Fee
Account on the date such compensation otherwise would have been payable to
such Independent Trustee.
5. Deferred Compensation Account Investment.
(a) Treatment of Credit Amounts. Amounts credited to an Independent
Trustee's Deferred Fee Account shall be treated as though such amounts had
been invested and reinvested in shares of any of the Funds selected as
follows:
(i) As to Mandatory Fixed Deferred Fees and Mandatory Contingent Deferred
Fees, the full amount of such fees shall be payable and deferred by the
Eligible Funds, and treated as invested in each such Eligible Fund.
(ii) As to Grandfathered Deferred Amounts, the full amount payable and
deferred by each Fund shall be treated as invested in each such Fund.
(iii) As to Optional Deferred Amounts, the amount payable and deferred
shall be treated as invested in one or more Eligible Funds designated by
such Independent Trustee on his or her notice given pursuant to Section 6.
Any Fund into which a deferred amount is treated as being invested in is
referred to herein as a "Target Fund".
(b) Calculations. Amounts deferred shall initially be treated as though
invested in shares of each Target Fund calculated as follows:
(i) the product of
(x) the amount of such deferrals and
(y) the percentage of such deferrals deemed invested in that Target
Fund, divided by
(ii) the Target Fund's Net Asset Value per share as of the date such amount
is so credited.
The Net Asset Value per share shall be determined as set forth in the
Target Fund's registration statement under the Investment Company Act of
1940, governing instruments and otherwise in accordance with law.
(c) Effect of Termination. As of the Termination Date for any Independent
Trustee and thereafter, all Mandatory Fixed Deferred Fees and Mandatory
Contingent Deferred Fees (adjusted as contemplated by the last sentence of
Section 3(b)) shall for all purposes of this Plan be treated as Optional
Deferred Fees.
(d) Dividends, etc. If a Target Fund shall pay a stock dividend on, or
split up, combine, reclassify or substitute other securities by merger,
consolidation or otherwise for its outstanding shares, the Independent
Trustee's Deferred Fee Account shall be adjusted as though shares of such
Target Fund were actually held by the Deferred Fee Account in order to
preserve rights substantially proportionate to the rights deemed held
immediately prior to such event. On each payable date of interest,
dividends or capital gains distributions declared by the Board of any
Target Fund in which an Independent Trustee's Deferred Fee Account is
deemed invested, the Deferred Fee Account will be credited with book
adjustments representing all interest, dividends or capital gains
distributions which would have been realized had such account been invested
in shares of such Target Fund. Each Deferred Fee Account will be charged
with any losses with respect to the shares of any Target Fund which would
have been realized had such Account actually been invested in such shares.
(e) Dissolution, etc. Notwithstanding any elections by an Independent
Trustee, deferrals under this Plan which are treated as though invested in
a Target Fund shall be distributed upon the dissolution, liquidation or
winding up of that Target Fund, whether voluntary or involuntary; or the
voluntary sale, conveyance or transfer of all or substantially all of the
Target Fund's assets unless the obligations of the Target Fund shall have
been assumed by another Fund); or the merger of the Target Fund into
another trust or corporation or its consolidation with one or more other
trusts or corporations (unless the obligations of the Target Fund are
assumed by such surviving entity and such surviving entity is another
Fund).
6. Manner of Making Elections; Administration.
(a) Notice. An Independent Trustee shall complete, sign and file with the
Administrator a Notice of Election to Defer Compensation (the "Notice") in
the form attached to this Plan. The Notice shall state:
(i) subject to Section 6(b), the time or times of payment of such
deferred compensation;
(ii) the manner of payment of deferred compensation (i.e., in a lump
sum or the number of quarterly or annual installments);
(iii) if the Independent Trustee elects to defer Board Fees under Section
3(d) the aggregate amount of compensation to be deferred as
Optional Deferred Fees;
(iv) as to any Optional Deferred Fees the Target Fund or Target Funds in
which such deferrals are to be deemed invested and in what
percentages; and
(v) any beneficiary designated pursuant to Section 9(b) of this Plan.
(b) Date of First Payout. Each Independent Trustee shall in the Notice
elect to defer the receipt of his or her deferred compensation until a date
specified by such Independent Trustee in the Notice, which date may not be
sooner than the later of:
(i) the first business day of January following the year in which such
Independent Trustee's Termination Date occurs; and
(ii) one year following the Notice (this clause (ii) shall not apply in
respect of payments of Grandfathered Deferred Amounts to any
Independent Trustee with a Termination Date before January 1,
1997 if such Notice is given before the Termination Date).
The period over which deferred compensation shall be paid out shall not
exceed 20 years.
(c) Failure to Designate Payment Schedule, etc. If an Independent Trustee
who elects to defer fees fails to designate in his or her Notice a time or
date as of which payment of his or her Deferred Fee Account shall commence,
payment of such amount shall commence as of the date set forth in (b)(i)
above (unless the Independent Trustees files an amended Notice in
compliance with Section 8 selecting a different distribution date). If an
Independent Trustee fails to designate in his or her Notice the manner of
distribution to apply to his Deferred Fee Account, such Deferred Fee
Account shall be distributed in a lump sum. If an Independent Trustee
fails to designate in his or her Notice one or more Target Funds in respect
of any Optional Deferred Fees, then the Nominating and Procedures Committee
may, subject to Section 5(b), by resolution designate one or more Target
Funds for such Independent Trustee.
(d) Changes in Target Funds. As of the last day of each calendar quarter,
by written election delivered to the Administrator identified pursuant to
Section 12 not less than 10 days prior to the end of such quarter, each
Independent Trustee may direct that the Target Funds in which the Optional
Deferred Fees portion of his or her Deferral Fee Account is deemed invested
be changed. Any election to change such investment direction shall
indicate the percentage of the balance of Optional Deferred Fees
(determined based on the then current Net Asset Value of each Target Fund
in which the Deferral Fee Account is deemed invested immediately prior to
giving effect to such investment change) to be invested in each such Target
Fund. The number of shares of each Target Fund to be deemed held in the
Independent Trustee's Deferral Fee Account following such investment change
shall be calculated as follows:
(i) the product of
(x) the balance of Optional Deferred Fees and
(y) the percentage of such balance to be deemed invested in that Target
Fund divided by
(ii) the Target Fund's Net Asset Value per share as of the last day of such
calendar quarter.
(e) Changes in Form and Timing of Payment of Deferred Compensation. An
Independent Trustee may elect to change the timing and manner of his or her
distribution election with respect to all amounts deferred by the
Independent Trustee under this Plan by filing an amended Notice with the
Administrator:
(a) prior to the last day of the calendar year in which the Termination
Date for the Independent Trustee occurs, or, if later,
(b) by a date such that at least one full calendar year elapses between
(i) the date as of which such amended Notice is filed and
(ii) each of
(A) the date as of which a distribution would otherwise have
commenced and
(B) the date as of which such distribution will commence under
such amended Notice.
(f) Hardship. Upon application by an Independent Trustee and a
determination by the Nominating and Procedures Committee of the Funds'
Boards that the Independent Trustee has suffered a severe and unanticipated
financial hardship, the Administrator shall distribute to the Independent
Trustee, in a single lump sum, an amount equal to the lesser of the amount
needed by the Independent Trustee to meet the hardship, or the balance of
the Independent Trustee's Deferred Fee Account.
(g) Order of Payout of Grandfathered Deferred Amounts. In a Notice or an
amended Notice given pursuant to Section 6(e) an Independent Trustee may
direct that payments of deferred compensation in respect of Grandfathered
Deferred Amounts be made preferentially from one or more specified Funds or
groups of Funds until the amounts by such Funds or group of Funds is
exhausted.
7. Effective Date and Duration of Deferral Elections.
(a) Election Irrevocable. Except as provided in Sections 7(b) and 6 of
this Plan, any election to defer compensation pursuant to this Plan shall
be irrevocable from and after the date on which Notice is filed with the
Administrator. Elections pursuant to Section 3(d) shall be effective to
defer an Independent Trustee's compensation as follows:
(i) As to any Independent Trustee in office on the effective date of
this Plan who files a Notice no later than 60 days after such effective
date, the Notice shall be effective to defer any compensation which
is earned by such Independent Trustee pursuant to Section 3(d) after
the date of the filing of the Notice.
(ii) As to any nominee for the Board who has not previously served as
an Independent Trustee and who files a Notice prior to his or her
election as an Independent Trustee, such election to defer pursuant
to Section 3(d) shall be effective to defer any compensation which is
earned by such nominee after his or her election as an Independent
Trustee; and
(iii) As to any other Independent Trustee, the election to defer pursuant
to Section 3(d) shall be effective to defer any compensation that is
earned from and after January 1 of the calendar year next succeed-
ing the year in which the Notice is filed.
(b) Continuance of Notices. Any election to defer compensation pursuant
to Section 3(d) made by an Independent Trustee shall continue in effect
unless and until the Administrator is notified in writing by such
Independent Trustee prior to the end of any calendar year that he or she
wishes to terminate such election or modify the amount of compensation
deferred pursuant to such election. Any such revocation or modification
shall be effective only with respect to compensation earned after the
calendar year in which such amended Notice is filed with the Fund. Upon
receipt by the Administrator from an Independent Trustee of such an amended
Notice, the applicable portion of compensation earned by such Independent
Trustee from and after January 1 of the calendar year succeeding the day on
which such Notice was received shall be paid currently and no longer
deferred as provided in this Plan. However, any amounts in such
Independent Trustee's Deferred Fee Account on such January 1 and any amount
which the Independent Trustee thereafter defers shall continue to be
payable in accordance with the Notice (or Notices) pursuant to which it was
deferred except as provided in Section 8(a). An Independent Trustee who
has filed a Notice to terminate deferment of compensation may thereafter
again file a Notice to participate pursuant to Section 6 hereof effective
for the calendar year subsequent to the calendar year in which he or she
files the new Notice.
8. Payment of Deferred Compensation.
(a) Manner of Payment. The aggregate value of an Independent Trustee's
Deferred Fee Account will be paid in a lump sum or in installments, as
specified in his or her Notice or amended Notice, and at the time or times
specified in the Notice or amended Notice. If installments are elected by
an Independent Trustee, such installments shall be paid in cash and the
amount of the first cash payment shall be a fraction of the then value of
such Independent Trustee's Deferred Fee Account, the numerator of which is
one, and the denominator of which is the total number of installments. The
amount of each subsequent cash payment shall be a fraction of the then
value of such Independent Trustee's Deferred Fee Account remaining after
the prior payment, the numerator of which is one and the denominator of
which is the total number of installments elected minus the number of
installments previously paid. Notwithstanding the foregoing provisions of
this Section 8(a), payments of installments from any Independent Trustee's
Deferred Fee Account shall be made first in respect of Grandfathered
Deferred Amounts included in such Account, until such amounts are
exhausted.
(b) Payment to Beneficiary. If an Independent Trustee dies before he or
she has received payment of all amounts in such Independent Trustee's
Deferred Fee Account, the value of such Deferred Fee Account shall be paid
in a lump sum as soon as reasonably possible to the beneficiary designated
in such Independent Trustee's Notice or, if no such beneficiary is
designated, to such Independent Trustee's estate, in accordance with the
provisions of this Plan. Any beneficiary so designated by an Independent
Trustee may be changed at any time by notice in writing from such
Independent Trustee to the Fund.
9. Statement of Deferred Fee Accounts.
The Administrator will furnish each Independent Trustee with a statement
setting forth the aggregate value of such Independent Trustee's Deferred
Fee Accounts as of the end of each calendar year and all credits to and
payments from such Deferred Fee Account during such year. Such statements
will be furnished no later than 60 days after the end of each calendar
year.
10. Rights in Deferred Fee Account.
Credits to Deferred Fee Accounts shall remain part of the general assets
of each Fund, shall at all times be the sole and absolute property of the
Fund and shall in no event be deemed to constitute a fund, trust or
collateral security for the payment of the deferred compensation to which
Independent Trustees are entitled from such Deferred Fee Accounts. The
right of any Independent Trustee or his designated beneficiary or estate to
receive future payment of deferred compensation under the provisions of
this Plan shall be an unsecured claim against general assets of the Fund,
if any, available at the time of payment. The Fund shall be under no
obligation to any Independent Trustee to purchase, hold or dispose of any
investments but, if the Fund chooses to purchase investments, including
shares of any Target Fund, to cover its obligations under this Plan, then
any and all such investments shall continue to be a part of the general
assets and property of the Fund.
11. Non-Assignability.
No Independent Trustee, his designated beneficiary or estate, nor any
other person shall have the right to encumber, pledge, sell, assign or
transfer the right to receive payments under this Plan, except by will or
by the laws of descent and distribution. All such payments and the right
thereto are expressly declared to be non-assignable.
12. Administration.
This Plan shall be administered by each Fund's Treasurer or one or more
other persons appointed by the Nominating and Procedures Committee of such
Fund (the "Administrator"). All Notices and amendments shall be filed with
the Administrator and the Administrator shall be responsible for
maintaining records of all Deferred Fee Accounts and for furnishing the
annual statements of Deferred Fee Account provided for in Section 9 of this
Plan. The Nominating and Procedures Committee shall have the general
authority to interpret, construe and implement provisions of the Plan. Any
determination by the Nominating and Procedures Committee shall be binding
on the Independent Trustee and shall be final and conclusive.
13. Amendment or Termination.
This Plan may at any time be amended, modified or terminated by the Board.
However, no amendment, modification or termination shall adversely affect
any Independent Trustee's rights in respect of amounts theretofore credited
to his Deferred Fee Account.
14. Governing Law.
This Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
15. Effective Date.
This Plan shall be effective as of September 15, 1995, and any amendments
hereto shall be effective on the date of adoption thereof by the Board.
EXHIBIT B
FUNDS ELIGIBLE TO DEFER PAYMENT OF TRUSTEE COMPENSATION
(AS OF 10/31/96)
FIDELITY FUNDS
Advisor Equity Portfolio: Growth FMMT-Retirement Money Market
Advisor Equity Income Growth & Income
Advisor Growth Opportunities Growth Company
Advisor High Yield Institutional Cash Money Market
Advisor Income & Growth Intermediate Bond
Asset Manager Low-Priced Stock
Asset Manager: Growth Magellan
Balanced OTC
Blue Chip Growth Overseas
Capital & Income Puritan
Capital Appreciation Retirement Growth
Cash Reserves Select: Health Care
Contrafund Short Term Bond
Destiny I Spartan Money Market
Destiny II Trend
Disciplined Equity U.S. Equity Index
Daily Money Fund: Money Market Portfolio Utilities
Emerging Growth Value
Equity-Income VIP II: Asset Manager
Equity-Income II VIP: Equity-Income
Fidelity VIP: Growth
Fidelity Daily Income Trust VIP: Overseas
Adopted October 1989
Amended November 16, 1995
Amended November 14, 1996
RETIREMENT PLAN FOR
NON-INTERESTED PERSON TRUSTEES,
DIRECTORS OR GENERAL PARTNERS
The mutual fund referred to on Schedule A (the "Adopting Fund") has
adopted this Retirement Plan for Non-Interested Person Trustees, Directors
and General Partners (the "Plan"). Fidelity Management & Research Company
("FMR") acts as manager or adviser, and Fidelity Distributors Corporation
("Fidelity Distributors") acts as distributor, for the Adopting Fund.
The Plan has been established for the benefit of (i) the Trustees of the
Adopting Fund if the Adopting Fund is organized as a Massachusetts business
trust, (ii) the Directors of the Adopting Fund if the Adopting Fund is
organized as a corporation, (iii) the individual General Partners of the
Adopting Fund if the Adopting Fund is organized as a partnership, and (iv)
the "directors" (as such term is defined in Section 2(a)(12) of the
Investment Company Act of 1940, an amended) of the Adopting Fund if the
Adopting Fund is any other type of organization, who in any such case are
not interested persons (as such term is defined in the Investment Company
Act of 1940, as amended) of FMR or Fidelity Distributors. Such Trustees,
Directors, General Partners or directors are referred to as "Independent
Board Members" regardless of the form of business organization of the
Adopting Fund.
1. ELIGIBILITY
Each Independent Board Member who at the time of Retirement (as defined
in paragraph 6(d)) has served as an Independent Board Member ("Eligible
Service") for at least five years will be an "Eligible Board Member", and
will be eligible to receive retirement benefits under the Plan. An
Independent Board Member's period of Eligible Service commences on the date
of election to the Board (as defined in paragraph 5(a)) of any registered
investment company as to which FMR acts as manager or advisor. Independent
Board Members with Retirement Dates after December 30, 1996 shall not be
entitled to receive retirement Benefits (as defined in Paragraph 2)
pursuant to paragraph 2(b) or 2(c).1
___________________________
1. Final sentence of section 1 added by amendment on November 14, 1996.
2. RETIREMENT DATE; AMOUNT OF BENEFIT
a. Retirement. Each Independent Board Member will retire not later than
the last day of the calendar year2 in which such Independent Board Member's
seventy-second birthday occurs (such day is referred to as such Independent
Board Member's Base Retirement Date"). Each retired Independent Board
Member is referred to as a "Retired Board Member".
b. Retirement Benefit. Upon Retirement, each Eligible Board Member will
receive, commencing as of such Eligible Board Member's Base Retirement
Date, for the remainder of the Eligible Board Member's life, a retirement
benefit (the "Benefit") paid at an annual rate equal to 40% of the annual
basic retainer payable by the Adopting Fund in effect for Independent Board
Members on the data of Retirement (but excluding any fees relating to
attending meetings or chairing committees), plus an additional .667% of
such annual basic retainer for each full month of Eligible Service in
excess of five years, up to a maximum of 80% of such annual basic retainer
for ten or more years of Eligible Service.
c. Early Payment of Benefit. At the discretion of the Committee (as
defined in paragraph 5(a)), an Eligible Board Member may receive,
commencing on a date earlier than such Eligible Board Member's Base
Retirement Date that is fixed by the Committee in its sole discretion upon
a showing of good cause by the Eligible Board Member, a Benefit which is
the actuarial equivalent of the Benefit provided under paragraph 2(b).
Actuarial equivalence for these purposes shall be computed by the
Committee, with the advice of an enrolled actuary (an "Enrolled Actuary")
within the meaning of the Employee Retirement Income Security Act of 1970,
selected by the Committee using the actuarial factors applicable for such
purposes at the time of commencement of payment of the Benefit under the
pension plan for FMR's employees. Good cause for these purposes may
include (but is not limited) the disability of the Eligible Board Member,
and any substantial medical or other similar expenses of the Eligible Board
Member or member of the family of the Eligible Board Member.
3. TIME OF PAYMENT
The Benefit for each year will be paid in installments that are as nearly
equal as possible, at the same times that payments of basic retainers are
made to Independent Board Members serving at the time of payment, but in no
event less frequently than quarterly.
___________________________
2. As amended on November 16, 1995. Previously read "month".
4. PAYMENT OF BENEFIT; ALLOCATION OF COSTS
The Adopting Fund is responsible for the payment of the Benefits, as well
as all expenses of administration of the Plan, including without limitation
all accounting and legal fees and expenses and fees and expenses of the
Enrolled Actuary. The obligations of the Adopting Fund to pay such
benefits and expenses will not be secured or funded in any manner, and such
obligations will not have any preference over the lawful claims of the
Adopting Fund's creditors and stockholders, shareholders or limited
partners, as the case may be. To the extent that the Adopting Fund
consists of one or more separate portfolios, such costs and expenses will
be allocated among such portfolios by the Board of the Adopting Fund in a
manner that is determined by such Board to be fair and equitable under the
circumstances.
5. ADMINISTRATION
a. The Committee. Any question involving entitlement to payments under
or the administration of the Plan will be referred to a committee (the
"Committee") of Independent Board Members designated by the individual
Boards of Trustees, Directors or individual General Partners (the "Board"),
as the case may be, of the Adopting Fund. Except as otherwise provided
herein, the Committee will make all interpretations and determinations
necessary or desirable for the Plan's administration, and such
interpretations and determinations will be final and conclusive.
b. Powers of the Committee. The Committee will represent and act on
behalf of the Adopting Fund in respect of the Plan and, subject to the
other provisions of the Plan, the Committee may adopt, amend or repeal
bylaws or other regulations, relating to the administration of the Plan,
the conduct of the Committee's affairs, its rights or powers or the rights
or powers of its members or of the Board. The Committee will report to the
Board from time to time on its activities in respect of the Plan. The
Committee or persons designated by it will cause such records to be kept as
may be necessary for the administration of the Plan.
6. MISCELLANEOUS AND TRANSITION PROVISIONS
a. Rights Not Assignable. The right to receive any payment under the
Plan is not transferable or assignable. Nothing in the Plan shall create
any benefit, cause of action, right of sale, transfer, assignment, pledge,
encumbrance, or other such right in any spouse or heirs or the estate of
any Eligible Board Member or Retired Board Member.
b. Amendment, etc. The Committee, with the concurrence of Board, may at
any time amend or terminate the Plan or waive any provision of the Plan,
provided that no amendment, termination or waiver will impair the rights of
an Eligible Board Member to receive upon Retirement the payments which
would have been made to such Board Member had there been no such amendment,
termination or waiver (based upon such Board Member's Eligible Service to
the date of such amendment, termination or waiver) or the rights of a
Retired Board Member to receive any Benefit due under the Plan, without the
consent of such Eligible Board Member or Retired Board Member, as the case
may be. An Eligible Board Member or Retired Board Member may elect to
waive receipt of his Benefit by so advising the Committee.
c. No Right to Reelection. Nothing in the Plan will create any
obligation on the part of the Board to nominate any Independent Board
Member for reelection.
d. "Retirement" Defined. The term "Retirement" includes any termination
of service (other than by death) of an Eligible Board Member except any
termination which the Committee determines to have resulted from the
Eligible Board Member's willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Independent Board Member.
e. Vacancies. Although the Board will retain the right to increase or
decrease its size, it shall be the general policy of the Board to replace
each Retired Board Member by selecting a now Independent Board Member from
candidates proposed by the Nominating Committee of the Board (such
Nominating Committee to consist solely of Independent Board Members).
f. Consulting. Each Retired Board Member may render such services for
the Adopting Fund, for such compensation, as may be agreed upon from time
to time by such Retired Board Member and the Board of the Adopting Fund.
g. Transition Provisions. The Plan will be effective for all Eligible
Board Members who have dates of Retirement occurring on or after November
1, 1987 ("Covered Members"). Periods of Eligible Service shall include
periods commencing prior to such date. The Plan will become effective on
the date (the "Effective Date") when the Committee determines that any
regulatory approval or advice that may be necessary or appropriate in
connection with the Plan have been obtained. On the Effective Date the
Retirement Policy for Independent Directors (the "Director Emeritus
Program") will be terminated for Covered Members (but will continue for
Retired Board Members who are not Covered Members), and Covered Members
will have no further rights in respect of the Director Emeritus Program.
Any Covered Member having a date of Retirement prior to the Effective Date
will, upon the occurrence of the Effective Date, be entitled to receive
payment of Benefits for the period of Retirement prior to the Effective
Date, reduced (but not below zero) by any amounts theretofore received by
such Covered Member under the Director Emeritus Program.
EXHIBIT 8(D)
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
By /s/John Costello
Name: John Costello
Title: Assistant Treasurer
Agreed and Accepted as of the Date Hereof:
THE BANK OF NEW YORK
By Stephen E. Grunston
Name: Stephen E. Grunston
Title: Vice President
EXHIBIT 8(E)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of _____________, among THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), J.P. MORGAN SECURITIES INC. ("Seller") and each of the
entities listed on Schedule A-1, A-2, A-3 and A-4 (collectively, the
"Funds" and each a "Fund") hereto, acting on behalf of itself or (i) in the
case of the Funds listed on Schedule A-1 or A-2 hereto which are portfolios
or series, acting through the series company listed on Schedule A-1 or A-2
hereto, (ii) in the case of the accounts listed on Schedule A-3 hereto,
acting through Fidelity Management & Research Company, and (iii) in the
case of the commingled or individual accounts listed on Schedule A-4
hereto, acting through Fidelity Management Trust Company (collectively, the
"Funds" and each, a "Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase agreement
dated as of ________________(the "Master Agreement") with Seller pursuant
to which from time to time one or more of the Funds, as buyers, and Seller,
as seller, may enter into repurchase transactions effected through one or
more joint trading accounts (collectively, the "Joint Trading Account")
established and administered by one or more custodians of the Funds
identified on Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from Eligible
Securities (as hereinafter defined) held by Repo Custodian, subject to an
agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities account
(the "Seller Account") for Seller for the purpose of, among other things,
effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the custodian
for the Funds in connection with the repurchase transactions effected
hereunder, and that the Repo Custodian hold cash, Cash Collateral (as
hereinafter defined) and Securities for the Funds for the purpose of
effecting repurchase transactions hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller Custodian,
Repo Custodian, and the Federal Reserve Banks where the Custodian and the
Repo Custodian are located, are each open for business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S. Dollars,
credited by Repo Custodian to a Transaction Account pursuant to Paragraphs
3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of this
Agreement.
(d) "Eligible Securities" shall mean those securities which are identified
as permissible securities for a particular Transaction Category.
(e) "FICASH I Transaction" and "FICASH III Transaction " shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day next
following the Sale Date and for which securities issued by the government
of the United States of America that are direct obligations of the
government of the United States of America shall constitute Eligible
Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is the Banking Day next following the Sale Date and for
which one or more of the following two categories of securities, as
specified by the Funds, shall constitute Eligible Securities: (x)
securities issued by the government of the United States of America that
are direct obligations of the government of the United States of America,
or (y) securities issued by or guaranteed as to principal and interest by
the government of the United States of America, or by its agencies and/or
instrumentalities, including, but not limited to, the Federal Home Loan
Bank, Federal Home Loan Mortgage Corp., Government National Mortgage
Association, Federal National Mortgage Association, Federal Farm Credit
Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date and for which securities issued by
the government of the United States of America that are direct obligations
of the government of the United States of America shall constitute Eligible
Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is a date fixed by agreement between Seller and the
Participating Funds which is not the Banking Day next following the Sale
Date and for which one or more of the following two categories of
securities, as specified by the Funds, shall constitute Eligible
Securities: (x) securities issued by the government of the United States
of America that are direct obligations of the government of the United
States of America, or (y) securities issued by or guaranteed as to
principal and interest by the government of the United States of America,
or by its agencies and/or instrumentalities, including, but not limited to,
the Federal Home Loan Bank, Federal Home Loan Mortgage Corp., Government
National Mortgage Association, Federal National Mortgage Association,
Federal Farm Credit Bank, Federal Intermediate Credit Bank, Banks for
Cooperatives, and Federal Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction shall
be 102% or such other percentage as is agreed to by Seller and the
Participating Funds (except that in no event shall the Margin Percentage be
less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of the
Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the preamble of
this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph 3(c) of
this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section 4(g) of
this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to a
particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to by
Seller and the Participating Funds for a repurchase transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph 7 of
this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to repurchase
Securities and Cash Collateral, if any, from the Participating Funds and
the Participating Funds are to resell the Securities and Cash Collateral,
if any, including any date determined by application of the provisions of
Paragraphs 7 and 15 of the Master Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the Sale
Price, plus an incremental amount determined by applying the Pricing Rate
to the Sale Price, calculated on the basis of a 360-day year and the number
of actual days elapsed from (and including) the Sale Date to (but
excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by Seller
pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the Participating
Funds and Seller at which the Securities and Cash Collateral, if any, are
to be sold to the Participating Funds by Seller.
(y) "Securities" shall mean all Eligible Securities delivered by Seller or
to be delivered by Seller to the Participating Funds pursuant to a
particular repurchase transaction and not yet repurchased hereunder,
together with all rights related thereto and all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph 3(c)
of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to this
Agreement.
(bb) "Seller Account" shall have the meaning set forth in the preamble of
this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of repurchase
transaction effected hereunder, as determined with reference to the term of
the transaction and the categories of Securities that constitute Eligible
Securities therefor, which term shall include FICASH I Transactions, FICASH
II Transactions, FICASH III Transactions, FITERM I Transactions, FITERM II
Transactions, FITERM III Transactions, and such other transaction
categories as may from time to time be designated by the Funds by notice to
Seller, Custodian and Repo Custodian.
2. Appointment of Repo Custodian. Upon the terms and conditions set forth
in this Agreement, Repo Custodian is hereby appointed by the Funds to act
as the custodian for the Participating Funds to hold cash, Cash Collateral
and Securities for the purpose of effecting repurchase transactions for the
Participating Funds through the Joint Trading Account pursuant to the
Master Agreement. Repo Custodian hereby acknowledges the terms of the
Master Agreement between the Funds and Seller (attached as an Exhibit
hereto), as amended from time to time, and agrees to abide by the
provisions thereof to the extent such provisions relate to the
responsibilities and operations of Repo Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more Transaction
Accounts for the purpose of effecting repurchase transactions hereunder for
the Funds, in each case pursuant to the Master Agreement. From time to
time the Funds may cause Custodian, on behalf of the Funds, to deposit
Securities and cash with Repo Custodian in the designated Transaction
Account, in each case in accordance with Paragraph 3 of the Master
Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash Collateral
received for the Participating Funds segregated at all times from those of
any other person, firm or corporation in its possession and shall identify
all such Securities, cash and Cash Collateral as subject to this Agreement
and the Master Agreement. Segregation may be accomplished by physical
segregation with respect to certificated securities held by the Repo
Custodian and, in addition, by appropriate identification on the books and
records of Repo Custodian in the case of all other Securities, cash and
Cash Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating Funds, and
shall be subject at all times to the proper instructions of the
Participating Funds, or the Custodian on behalf of the Participating Funds,
with respect to the holding, transfer or disposition of such Securities and
Cash Collateral. Repo Custodian shall include in its records for each
Transaction Account all instructions received by it which evidence an
interest of the Participating Funds in the Securities and Cash Collateral
and shall hold physically segregated any written agreement, receipt or
other writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash Collateral to
the Participating Funds or to "credit" a Transaction Account under this or
any other paragraph of this Agreement shall be made in immediately
available funds. If Repo Custodian is required to "deliver" or "transfer"
Securities to the Participating Funds under this or any other paragraph of
this Agreement, Repo Custodian shall take, or cause to be taken, the
following actions to perfect the Participating Funds' interest in such
Securities as an outright purchaser: (i) in the case of certificated
securities and instruments held by Seller, by physical delivery of the
share certificates or other instruments representing the Securities and by
physical segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities are
being held for the Participating Funds (such securities and instruments to
be delivered in form suitable for transfer or accompanied by duly executed
instruments of transfer or assignment in blank and accompanied by such
other documentation as the Participating Funds may request), (ii) in the
case of Securities held in a customer only account in a clearing agency or
federal book-entry system authorized for use by the Funds and meeting the
requirements of Rule 17f-4 under the Investment Company Act of 1940, as
amended (the "1940 Act") (such authorized agency or system being referred
to herein as a "Securities System"), by appropriate entry on the books and
records of Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a customer
only account in the Securities System and by appropriate entry on the books
and records of Repo Custodian identifying such Securities as belonging to
the Participating Funds; provided, further, that Repo Custodian shall
confirm to the Participating Funds the identity of the Securities
transferred or delivered. Acceptance of a "due bill", "trust receipt" or
similar receipt or notification of segregation issued by a third party with
respect to Securities held by such third party shall not constitute good
delivery of Securities to Repo Custodian for purposes of this Agreement or
the Master Agreement and shall expressly violate the terms of this
Agreement and the Master Agreement. The Funds shall identify by notice to
Repo Custodian and Seller those agencies or systems which have been
approved by the Funds for use under this Agreement and the Master
Agreement. The Funds hereby notify Repo Custodian and Seller that the
following agencies and systems have been approved by the Funds for use
under this Agreement and the Master Agreement, until such time as Repo
Custodian and Seller shall have been notified by the Funds to the contrary:
(i) Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular Public
Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry regulations of
federal agencies substantially in the form of 31 CFR 306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the Transaction
Account and effect the transfer of Securities to or from the Participating
Funds upon proper instructions received from the Participating Funds, or
the Custodian on behalf of the Participating Funds, and shall make all
credits and debits to the Seller Account and effect the transfer of
Securities to or from the Seller upon proper instructions received from
Seller. In the event that Repo Custodian receives conflicting proper
instructions from Seller and the Participating Funds, or the Custodian on
behalf of the Participating Funds, Repo Custodian shall follow the
Participating Funds' or the Custodian's proper instructions. The
Participating Funds shall give Repo Custodian only such instructions as
shall be permitted by the Master Agreement. Notwithstanding the preceding
sentence, the Participating Funds, or the Custodian on behalf of the
Participating Funds, may from time to time instruct Repo Custodian to
transfer cash from the Transaction Account to Custodian.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree to
enter into a repurchase transaction, Seller and the Participating Funds, or
the Custodian on behalf of the Participating Funds, will give Repo
Custodian proper instructions by telephone or otherwise on the Sale Date,
specifying the Transaction Category, Repurchase Date, Sale Price,
Repurchase Price or the applicable Pricing Rate and the Margin Percentage
for each such repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase Date
is the Banking Day next following the Sale Date (x) the Participating Funds
may increase or decrease the Sale Price for any such repurchase transaction
by no more than 10% of the initial Sale Price by causing to be delivered
further proper instructions by telephone or otherwise to Repo Custodian
prior to the close of business on the Sale Date and (y) Seller and the
Participating Funds may by mutual consent agree to increase or decrease the
Sale Price by more than 10% of the initial Sale Price by causing to be
provided further proper instructions to Repo Custodian by the close of
business on the Sale Date. In any event, Repo Custodian shall not be
responsible for determining whether any such increase or decrease of the
Sale Price exceeds the 10% limitation.
(c) Seller will take such actions as are necessary to ensure that on the
Sale Date the aggregate Market Value of all Securities held by Repo
Custodian for Seller and cash in the Seller Account equals or exceeds the
Margin Percentage of the Sale Price. Seller shall give Repo Custodian
proper instructions specifying with respect to each of the Securities which
is to be the subject of a repurchase transaction (a) the name of the issuer
and the title of the Securities, and (b) the Market Value of such
Securities. Such instructions shall constitute Seller's instructions to
Repo Custodian to transfer the Securities to the Participating Funds and/or
Cash Collateral from the Seller Account to the Transaction Account.
(d) Prior to the close of business on the Sale Date, the Participating
Funds shall transfer to, or maintain on deposit with, Repo Custodian in the
Transaction Account immediately available funds in an amount equal to the
Sale Price with respect to a particular repurchase transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian shall
transfer Securities from Seller to the Participating Funds and/or cash held
in the Seller Account to the Transaction Account and shall transfer to the
Seller Account immediately available funds from the Transaction Account in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
by Seller to the Participating Funds are Eligible Securities. Any
securities which are not Eligible Securities for a particular repurchase
transaction hereunder shall not be included in the calculations set forth
below and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the aggregate
Market Value of Securities and cash, if any, applicable to the repurchase
transaction is less than the Margin Percentage of the Sale Price and Seller
shall transfer, by the close of business on the Sale Date, to Repo
Custodian additional Securities and/or cash in the amount of such
deficiency. If Seller does not, by the close of business on the Sale Date,
transfer additional Securities and/or cash, the Market Value of which
equals or exceeds such deficiency, Repo Custodian may, at its option,
without notice to Seller, advance the amount of such deficiency to Seller
in order to effectuate the repurchase transaction. It is expressly agreed
that Repo Custodian is not obligated to make an advance to Seller to enable
it to complete any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo Custodian
shall cause the Securities applicable to the repurchase transaction
received from Seller to be transferred to the Participating Funds and shall
cause any cash received from Seller to be transferred to the Transaction
Account, against transfer of the Sale Price from the Transaction Account to
the Seller Account, such transfers of Securities and/or cash and funds to
occur simultaneously on a delivery versus payment basis.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the Transaction
Account is less than the agreed upon Sale Price in connection with the
repurchase transaction immediately prior to effectuating such repurchase
transaction, or if the aggregate Market Value of the Securities and cash,
if any, applicable to such repurchase transaction is less than the Sale
Price multiplied by the Margin Percentage immediately prior to effectuating
such repurchase transaction, Repo Custodian shall effect the repurchase
transaction to the best of its ability by transferring Securities from
Seller to the Participating Funds and/or cash from the Seller Account to
the Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction Account
multiplied by the Margin Percentage and (y) the aggregate Market Value of
the Securities available for transfer from Seller to the Participating
Funds and cash, if any, in the Seller Account, against the transfer of
immediately available funds from the Transaction Account to the Seller
Account in an amount equal to the aggregate Market Value of the Securities
and/or cash to be transferred divided by the Margin Percentage; provided,
however, that in either such event Repo Custodian shall have the right not
to transfer to the Participating Funds such Securities and not to transfer
such cash, if any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian determines, in
its sole discretion, will not be the subject of a repurchase transaction.
The actions of Repo Custodian pursuant to this subparagraph (e)(v) shall
not affect the obligations and liabilities of the parties to each other
pursuant to the Master Agreement with regard to such repurchase
transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the Master
Agreement), Repo Custodian shall perform such substitution in accordance
with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
to the Participating Funds are Eligible Securities. Any securities which
are not eligible for repurchase transactions hereunder shall not be
included in the calculations set forth below and shall not be transferred
to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Eligible Securities and/or Cash Collateral to be transferred. Repo
Custodian shall not make any substitution if, at the time of substitution,
the aggregate Market Value of all Securities and any Cash Collateral
applicable to such repurchase transaction immediately after such
substitution would be less than the Margin Percentage of the Repurchase
Price (calculated as if the Repurchase Date were the date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted against
the delivery by Repo Custodian of substitute Eligible Securities to the
Participating Funds and/or the crediting of the Transaction Account with
Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute Eligible
Securities, and has failed to deliver Eligible Securities against such Cash
Collateral not later than the close of business on such Banking Day in
accordance with the terms of the Master Agreement, Repo Custodian shall
promptly, but in no event later than 10:00 a.m. the following Banking Day,
notify the Participating Funds and Seller of such failure.
(g) With respect to each repurchase transaction, at 10:00 a.m. New York
time, or at such other time as specified in proper instructions of the
Participating Funds (or the Custodian on behalf of the Participating Funds)
on the Repurchase Date, Repo Custodian shall debit the Seller Account and
credit the Transaction Account in the amount of the Repurchase Price and
shall transfer Securities from the Participating Funds to the Seller and
Cash Collateral, if any, from the Transaction Account to the Seller Account
in accordance with the following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller Account
and credit the Transaction Account in the amount of the Repurchase Price
and shall transfer all Securities applicable to such repurchase transaction
from the Participating Funds to the Seller and debit the Transaction
Account and credit the Seller Account in the amount of any Cash Collateral
applicable to such repurchase transaction.
(ii) If the amount of available funds in the Seller Account is less than
the Repurchase Price, then Repo Custodian shall notify the Seller of the
amount of the deficiency and Seller shall promptly cause such amount to be
transferred to the Seller Account. If Seller fails to cause the transfer
of the entire amount of the deficiency to the Seller Account, then Repo
Custodian may, at its option and without notice to Seller, advance to
Seller the amount of such remaining deficiency. It is expressly agreed
that Repo Custodian is not obligated to make any advance to Seller. If,
following such transfer and/or advance, the amount of available funds in
the Seller Account equals or exceeds the Repurchase Price then Repo
Custodian shall debit the Seller Account and credit the Transaction Account
in the amount of the Repurchase Price and shall transfer from the
Participating Funds to the Seller all Securities applicable to such
repurchase transaction and debit the Transaction Account and credit the
Seller Account in the amount of any Cash Collateral applicable to such
repurchase transaction.
(iii) If the Seller fails to cause the transfer of the entire amount of
the deficiency, as required by (ii) above, and Repo Custodian fails to
advance to Seller an amount sufficient to eliminate the entire deficiency,
then Repo Custodian shall debit the Seller Account in the amount of all
immediately available funds designated by Seller as applicable to the
repurchase transaction and credit the Transaction Account in such amount
(such amount being referred to as the "Partial Payment") and shall transfer
Securities from the Participating Funds to the Seller such that the
aggregate Market Value of all remaining Securities and Cash Collateral in
the Transaction Account with respect to such repurchase transaction shall
at least equal the difference between Margin Percentage of the Repurchase
Price and the Partial Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums paid by
or on behalf of the issuer in respect of the Securities and collected by
Repo Custodian, except as otherwise provided in Paragraph 8 of the Master
Agreement.
6. Daily Statement. On each Banking Day on which any Participating Funds
have an outstanding repurchase transaction, Repo Custodian shall deliver by
facsimile to Custodian and to the Participating Funds a statement
identifying the Securities held by Repo Custodian with respect to such
repurchase transaction and the cash and Cash Collateral, if any, held by
Repo Custodian in the Transaction Account, including a statement of the
then current Market Value of such Securities and the amounts, if any,
credited to the Transaction Account as of the close of trading on the
previous Banking Day. Repo Custodian shall also deliver to Custodian and
the Participating Funds such additional statements as the Participating
Funds may reasonably request.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and the
amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the Seller
Account against the receipt from Seller of the Securities and Cash
Collateral, if any, and (ii) on each Banking Day on which such repurchase
transaction is outstanding. If on any Banking Day the aggregate Market
Value of the Securities and Cash Collateral with respect to any repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day) for such
transaction, Repo Custodian shall promptly, but in any case no later than
10:00 a.m. the following Banking Day, notify Seller. If on any Banking Day
the aggregate market value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) for such transaction, and Seller fails to deliver additional
Eligible Securities applicable to such repurchase transaction or an
additional amount of Cash Collateral by the close of business on such
Banking Day such that the aggregate market value of the Securities and Cash
Collateral at least equals the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day), Repo
Custodian shall promptly, but in any event no later than 10:00 a.m. the
following Banking Day, notify the Participating Funds of such failure. For
purposes of determining Seller's margin maintenance requirements on the
Sale Date for repurchase transactions in which the Repurchase Date is the
Banking Day immediately following the Sale Date, such aggregate market
value shall equal at least the Margin Percentage of the Sale Price.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing services
("Pricing Services") set forth on Schedule B. It is understood and agreed
that Repo Custodian shall use the prices made available by the Pricing
Services on the Banking Day of such determination unless Seller and the
Participating Funds mutually agree that some other prices shall be used and
so notify Repo Custodian by proper instructions of the sum of the prices of
all such Securities priced in such different manner. In the event that
Repo Custodian is unable to obtain a valuation of any Securities from the
Pricing Services, Repo Custodian shall request a bid quotation from a
broker's broker or a broker dealer, set forth in Schedule B, other than
Seller. In the event Repo Custodian is unable to obtain a bid quotation
for any Securities from such a broker's broker or a broker dealer, Repo
Custodian (i) shall not include any such Securities in the determination of
whether the aggregate Market Value of the Securities and any Cash
Collateral equals at least the Margin Percentage of the Repurchase Price
and (ii) shall redeliver such Securities to Seller if the Market Value of
all other Securities and any Cash Collateral with respect to such
repurchase transaction equals at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such Banking
Day). The Repo Custodian may rely on prices quoted by Pricing Services,
broker's brokers or broker dealers, except Seller, as set forth in Schedule
B.
(c) (i) If, on any Banking Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase transaction
is less than the Margin Percentage of the Repurchase Price (calculated as
if the Repurchase Date were such Banking Day) applicable to such repurchase
transaction, Repo Custodian shall deliver to the Participating Funds an
amount of additional Eligible Securities applicable to such repurchase
transaction and/or debit the Seller Account and credit the Transaction
Account with an additional amount of Cash Collateral, such that the
aggregate Market Value of all Securities and any Cash Collateral with
respect to such repurchase transaction shall equal at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase Date
were such Banking Day) applicable to such repurchase transaction; except
that, for purposes of determining Seller's margin maintenance requirements
on the Sale Date for repurchase transactions in which the Repurchase Date
is the Banking Day immediately following the Sale Date, such aggregate
market value shall equal at least the Margin Percentage of the Sale Price.
(ii) If, on any Banking Day, the aggregate Market Value of the Securities
and any Cash Collateral with respect to a repurchase transaction exceeds
the Margin Percentage of the Repurchase Price (calculated as if the
Repurchase Date were such Banking Day) applicable to such repurchase
transaction, Repo Custodian shall return to the Seller all or a portion of
such Securities or Cash Collateral, if any; provided that the Market Value
of the remaining Securities and any Cash Collateral with respect to the
repurchase transaction shall be at least equal to the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) applicable to such repurchase transaction. At any time and
from time to time with respect to any repurchase transaction, if authorized
by the Participating Funds, or the Custodian on behalf of the Participating
Funds, the Repo Custodian shall debit the Transaction Account by an amount
of Cash Collateral and credit the Seller Account by the same amount of Cash
Collateral against simultaneous delivery from Seller to the Participating
Funds of Eligible Securities applicable to such repurchase transaction with
a Market Value at least equal to the amount of Cash Collateral credited and
debited.
8. Authorized Persons. Schedule C hereto sets forth those persons who are
authorized to act for Repo Custodian, Custodian, Seller and the Funds,
respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested telex,
facsimile, a written request, direction, instruction or certification
signed or initialed by or on behalf of the party giving the instructions by
one or more authorized persons (as provided in Paragraph 8); provided,
however, that no instructions directing the delivery of Securities or the
payment of funds to any individual who is an authorized signatory of
Custodian or Repo Custodian shall be signed by that individual.
Telephonic, other oral or electro-mechanical or electronic instructions
(including the code which may be assigned by Repo Custodian to Custodian
from time to time) given by one of the above authorized persons shall also
be considered proper instructions if the party receiving such instructions
reasonably believes them to have been given by an authorized person with
respect to the transaction involved. Oral instructions will be confirmed
by tested telex, facsimile or in writing in the manner set forth above.
The Funds authorize Repo Custodian to tape record any and all telephonic or
other oral instructions given to Repo Custodian. Proper instructions may
relate to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to exercise reasonable care and
diligence in carrying out the provisions of this Agreement and the Master
Agreement and shall be liable to each of the Funds and Seller for any
expenses or damages to the Funds or Seller for breach of Repo Custodian's
standard of care in this Agreement, as further provided in this Paragraph.
Repo Custodian assumes responsibility for loss to any property held by it
pursuant to the provisions of this Agreement which is occasioned by the
negligence of, or conversion, misappropriation or theft by, Repo
Custodian's officers, employees and agents. Repo Custodian, at its option,
may insure itself against loss from any cause but shall be under no
obligation to obtain insurance directly for the benefit of the Funds. So
long as and to the extent that Repo Custodian exercises reasonable care and
diligence and acts without negligence, misfeasance or misconduct, Repo
Custodian shall not be liable to Seller or the Funds for (i) any action
taken or omitted in good faith in reliance upon proper instructions, (ii)
any action taken or omitted in good faith upon any notice, request,
certificate or other instrument reasonably believed by it to be genuine and
to be signed by the proper party or parties, (iii) any delay or failure to
act as may be required under this Agreement or under the Master Agreement
when such delay or failure is due to any act of God or war, (iv) the
actions or omissions of a Securities System, (v) the title, validity or
genuineness of any security received, delivered or held by it pursuant to
this Agreement or the Master Agreement, (vi) the legality of the purchase
or sale of any Securities by or to the Participating Funds or Seller or the
propriety of the amount for which the same are purchased or sold (except to
the extent of Repo Custodian's obligations hereunder to determine whether
securities are Eligible Securities and to calculate the Market Value of
Securities and any Cash Collateral), (vii) the due authority of any person
listed on Schedule C to act on behalf of Custodian, Seller or the Funds, as
the case may be, with respect to this Agreement or (viii) the errors of the
Pricing Services, broker's brokers or broker dealers set forth in Schedule
B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any money to
be used in a repurchase transaction, whether or not such money is
represented by any check, draft, or other instrument for the payment of
money, until the Eligible Securities have been delivered in accordance with
Paragraph 3 or until Repo Custodian actually receives and collects such
money on behalf of Seller or the Funds directly or by the final crediting
of the Seller Account or a Transaction Account through the Securities
System, except that this Paragraph 10(b) shall not be deemed to limit the
liability of Repo Custodian to Seller or the Funds if the non-delivery of
such Eligible Securities or the failure to receive and collect such money
results from the breach by Repo Custodian of its obligations under this
Agreement or the Master Agreement.
(c) Repo Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it are such as
properly may be held by the Participating Funds; provided that
notwithstanding anything to the contrary herein, Repo Custodian shall be
obligated to act in accordance with the guidelines and proper instructions
of the Participating Funds, or the Custodian on behalf of the Participating
Funds, with respect to the types of Eligible Securities and the issuers of
such Eligible Securities that may be used in specific repurchase
transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the Custodian
if Securities held by Repo Custodian are in default or if payment on any
Securities has been refused after due demand and presentation and Repo
Custodian shall take action to effect collection of any such amounts upon
the proper instructions of the Participating Funds, or the Custodian on
behalf of the Participating Funds, and assurances satisfactory to it that
it will be reimbursed for its costs and expenses in connection with any
such action.
(e) Repo Custodian shall have no duties, other than such duties as are
necessary to effectuate repurchase transactions in accordance with this
Agreement and the Master Agreement within the standard of care set forth in
Paragraph 10(a) above and in a commercially reasonable manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly authorized
to execute and deliver this Agreement and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) the execution, delivery and performance of
this Agreement do not and will not violate any ordinance, declaration of
trust, partnership agreement, articles of incorporation, charter, rule or
statute applicable to it or any agreement by which it is bound or by which
any of its assets are affected, (iii) the person executing this Agreement
on its behalf is duly and properly authorized to do so, (iv) it has (and
will maintain) a copy of this Agreement and evidence of its authorization
in its official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President or
higher.
(b) Repo Custodian further represents and warrants that (i) it has not
pledged, encumbered, hypothecated, transferred, disposed of, or otherwise
granted, any third party an interest in any Securities, (ii) it does not
have any security interest, lien or right of setoff in the Securities, and
(iii) it has not been notified by any third party, in its capacity as Repo
Custodian, custodian bank or clearing bank, of the existence of any lien,
claim, charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction. Repo Custodian agrees that (i) it
will not pledge, encumber, hypothecate, transfer, dispose of, or otherwise
grant, any third party an interest in any Securities, (ii) it will not
acquire any security interest, lien or right of setoff in the Securities,
and (iii) it will promptly notify the Fund Agent, if, during the term of
any outstanding repurchase transaction, it is notified by any third party,
in its capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim, charge
or encumbrance with respect to any Securities that are the subject of such
repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent that
Repo Custodian is in the exercise of reasonable care and diligence and acts
without negligence, misfeasance or misconduct, Seller will indemnify Repo
Custodian and hold it harmless against any and all losses, claims, damages,
liabilities or actions to which it may become subject, and reimburse it for
any expenses (including attorneys' fees and expenses) incurred by it in
connection therewith, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon or in any way related to this
Agreement, the Master Agreement or those arrangements. Without limiting
the generality of the foregoing indemnification, Repo Custodian shall be
indemnified by Seller for all costs and expenses, including attorneys'
fees, for its successful defense against claims that Repo Custodian
breached its standard of care and was negligent or engaged in misfeasance
or misconduct.
(b) So long as and to the extent that Repo Custodian is in the exercise of
reasonable care and diligence and acts without negligence, misconduct or
misfeasance, the Participating Funds will indemnify Repo Custodian and hold
it harmless against any and all losses, claims, damages, liabilities or
actions to which it may become subject, and reimburse it for any expenses
(including attorneys' fees and expenses) incurred by it in connection
therewith, insofar as such losses, claims, damages, liabilities or actions
result from the negligence, misconduct or misfeasance of the Participating
Funds under this Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional rights
and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement shall
be binding unless in writing and executed by the parties hereto. Schedule
A, listing the Funds, may be amended from time to time to add or delete
Funds by the Funds (i) delivering an executed copy of an addendum to
Schedule A to Seller and Repo Custodian, and (ii) amending Schedule A to
the Master Agreement in accordance with the provisions therein. The
amendment of Schedule A as provided above shall constitute appointment of
Repo Custodian as a custodian for such Fund. Schedule B may be amended
from time to time by an instrument in writing, or counterpart thereof,
executed by Repo Custodian, Seller and the Funds. Schedule C may be
amended from time to time to change an authorized person of: (i) the
Funds, by written notice to Repo Custodian and Seller by Ms. Sarah Zenoble
or the Treasurer of the Funds (or such persons who may be authorized from
time to time in writing by Ms. Zenoble or the President or Treasurer of
Fidelity Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any Vice
President of Repo Custodian; and (iv) Custodian, by written notice to Repo
Custodian by any Vice President of Custodian. Schedule D may be amended
from time to time by any party hereto by delivery of written notice to the
other parties hereto. Repo Custodian shall receive notice of any amendment
to the Master Agreement at the address set forth in Schedule D hereto; and,
if such amendment would have a material adverse effect on the rights of, or
would materially increase the obligations of Repo Custodian under this
Agreement, any such amendment shall also require the consent of Repo
Custodian. Any such amendment shall be deemed not to be material if Repo
Custodian fails to object in writing within 21 days after receipt of notice
thereof. No amendment to this Agreement shall affect the rights or
obligations of any Fund with respect to any outstanding repurchase
transaction entered into under this Agreement and the Master Agreement
prior to such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict between
this Agreement and the Master Agreement, the Master Agreement shall
control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Banking Days' written notice to the other parties; provided,
however, that any such termination shall not affect any repurchase
transaction then outstanding or any rights or obligations under this
Agreement or the Master Agreement with respect to any actions or omissions
of any party hereto prior to termination. In the event of termination,
Repo Custodian will deliver any Securities, Cash Collateral or cash held by
it or any agent to Custodian or to such successor custodian or custodian or
subcustodian as the Participating Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation for
the services to be rendered hereunder, based upon rates which shall be
agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian and
the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and except
as otherwise provided herein or as the parties to the Agreement shall from
time to time otherwise agree, all instructions, notices, reports and other
communications contemplated by this Agreement shall be given to the party
entitled to receive such notice at the telephone number and address listed
on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions hereof
shall not be affected thereby and shall remain in full force and effect.
19. Binding Nature. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their successors and assignees;
provided that, no party hereto may assign this Agreement or any of the
rights or obligations hereunder without the prior written consent of the
other parties.
20. Headings. Section headings are for reference purposes only and shall
not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Seller is hereby expressly put on notice
that the Declarations of Trust or the Certificates and Agreements of
Limited Partnership, as the case may be, of each Participating Fund contain
a limitation of liability provision pursuant to which the obligations
assumed by such Participating Fund hereunder shall be limited in all cases
to such Participating Fund and its assets or, in the case of a series Fund,
to the assets of that series only, and neither Seller nor its respective
agents or assigns shall seek satisfaction of any such obligation from the
officers, employees, agents, directors, trustees, shareholders or partners
of any such Participating Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations set
forth in this Agreement with respect to each repurchase transaction shall
accrue only to the Participating Funds in accordance with their respective
interests therein. No other Fund shall receive any rights or have any
liabilities arising from any action or inaction of any Participating Fund
under this Agreement with respect to such repurchase transaction.
25. General Provisions. This Agreement supersedes any other custodian
agreement by and among Seller, the Funds, and Repo Custodian concerning
repurchase transactions effected through the Joint Trading Account. It is
understood and agreed that time is of the essence with respect to the
performance of each party's respective obligations hereunder.
26. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) In the case of transactions in which one of the parties is a broker or
dealer registered with the SEC under Section 15 of the Exchange Act, the
Securities Investor Protection Corporation has taken the position that the
provisions of the Securities Investor Protection Act of 1970 (the "SIPA")
do not protect the other party with respect to any transaction hereunder;
and
(b) In the case of transactions in which one of the parties is a
government securities broker or a government securities dealer registered
with the SEC under Section 15C of the Exchange Act, SIPA will not provide
protection to the other party with respect to any transaction hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller and
the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data Services
(or any other pricing service mutually agreed upon by Seller and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day of the date of determination or
the last quote available. The pricing services, Brokers' Brokers and
Broker Dealers may be changed from time to time by agreement of all the
parties.
SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Ken Rindos
Kurt Woetzel
Custodian
Ken Rindos
Kurt Woetzel
Seller
Joseph P. Blauvelt
Michael B. Boyer
Robert E. Curry
Patrick Doyle
Frank Forgione
Edward J. Frederick
Christopher Juliano
Joseph Marrone
Thomas T. McGee
John S. Mehrtens
John A. Michielini
Allen Smith, II
The Funds
Barron, Leland C. Harlow, Katharyn M. Stehman, Burnell R.
Carbone, John M. Henning, Frederick L. Jr. Todd, Deborah
Curtis, Fritz Huyck, Timothy Todd, John J.
Duby, Robert K. Jamen, Jon Torres, Joseph E.
Egan, Dorothy T. Litterst, Robert Williams, Richard
Glocke, David Silver, Samuel Zenoble, Sarah
SCHEDULE D
NOTICES
If to Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (212) 635-7947
Attention: Sherman Yu, Esq.
With a copy to the Fund Agent
If to Repo Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, New York 10286
Telephone: (212) 635-4809
Attention: Ms. Kristin Smith
If to Seller: J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Telephone: (212) 483-2323
Attention: Middle Office Traders Support
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277282.c1
SCHEDULE 1
The following lists the additional counterparties to the Repo Custodian
Agreement for Joint Trading Account between The Bank of New York and the
Fidelity Funds:
BZW Government Securities, Inc.
CS First Boston Corp.
Daiwa Securities America, Inc.
Deutsche Bank Securities Corp.
Donaldson, Lufkin & Jenerette Securities Corp.
Fuji Securities, Inc.
Goldman Sachs & Co
Morgan Stanley & Co., Inc.
NationsBanc Capital Markets
Nikko Securities Co. International, Inc.
Nomura Securities International, Inc.
Prudential Securities, Inc.
Salomon Brothers, Inc.
Sanwa BJK Securities Co., LP
SBC Capital Markets, Inc.
Smith Barney, Inc.
EXHIBIT 8(F)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of _________________, among CHEMICAL BANK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), GREENWICH CAPITAL MARKETS, INC. ("Seller") and each of the
entities listed on Schedule A-1, A-2, A-3 and A-4 hereto acting on behalf
of itself or (i) in the case of a series company, on behalf of one or more
of its portfolios or series listed on Schedule A-1 or A-2 hereto, (ii) in
the case of the accounts listed on Schedule A-3 hereto, acting through
Fidelity Management & Research Company, and (iii) in the case of the
commingled or individual accounts listed on Schedule A-4 hereto, acting
through Fidelity Management Trust Company (collectively, the "Funds" and
each, a "Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase agreement
dated as of _________________, (the "Master Agreement") with Seller
pursuant to which from time to time one or more of the Funds, as buyers,
and Seller, as seller, may enter into repurchase transactions effected
through one or more joint trading accounts (collectively, the "Joint
Trading Account") established and administered by one or more custodians of
the Funds identified on Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from Eligible
Securities (as hereinafter defined) held by Repo Custodian , subject to an
agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities account
(the "Seller Account") for Seller for the purpose of, among other things,
effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the custodian
for each of the Funds in connection with the repurchase transactions
effected hereunder, and that the Repo Custodian hold cash, Cash Collateral
(as hereinafter defined) and Securities for each of the Funds for the
purpose of effecting repurchase transactions hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller Custodian,
Repo Custodian, and the Federal Reserve Banks where the Custodian and the
Repo Custodian are located, are each open for business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S. Dollars,
credited by Repo Custodian to a Transaction Account pursuant to Paragraphs
3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of this
Agreement.
(d) "Eligible Securities" shall mean those securities which are identified
as permissible securities for a particular Transaction Category.
(e) "FICASH I Transaction" and "FICASH III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day next
following the Sale Date and for which securities issued by the government
of the United States of America that are direct obligations of the
government of the United States of America shall constitute Eligible
Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is the Banking Day next following the Sale Date and for
which one or more of the following two categories of securities, as
specified by the Funds, shall constitute Eligible Securities: (x)
securities issued by the government of the United States of America that
are direct obligations of the government of the United States of America,
or (y) securities issued by or guaranteed as to principal and interest by
the government of the United States of America, or by its agencies and/or
instrumentalities, including, but not limited to, the Federal Home Loan
Bank, Federal Home Loan Mortgage Corp., Government National Mortgage
Association, Federal National Mortgage Association, Federal Farm Credit
Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date, or if applicable, the date fixed
upon exercise of an Unconditional Resale Right (as hereinafter defined) by
the Participating Funds and for which securities issued by the government
of the United States of America that are direct obligations of the
government of the United States of America shall constitute Eligible
Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in which
the Repurchase Date is a date fixed by agreement between Seller and the
Participating Funds which is not the Banking Day next following the Sale
Date, or, if applicable, the date fixed upon exercise of an Unconditional
Resale Right (as hereinafter defined) by the Participating Funds and for
which one or more of the following two categories of securities, as
specified by the Funds, shall constitute Eligible Securities: (x)
securities issued by the government of the United States of America that
are direct obligations of the government of the United States of America,
or (y) securities issued by or guaranteed as to principal and interest by
the government of the United States of America, or by its agencies and/or
instrumentalities, including, but not limited to, the Federal Home Loan
Bank, Federal Home Loan Mortgage Corp., Government National Mortgage
Association, Federal National Mortgage Association, Federal Farm Credit
Bank, Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction shall
be 102% or such other percentage as is agreed to by Seller and the
Participating Funds (except that in no event shall the Margin Percentage be
less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of the
Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the preamble of
this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph 3(c) of
this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section 4(g) of
this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to a
particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to by
Seller and the Participating Funds for a particular repurchase transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph 7 of
this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to repurchase
Securities and Cash Collateral, if any, from the Participating Funds and
the Participating Funds are to resell the Securities and Cash Collateral,
if any, including any date determined by application of the provisions of
Paragraphs 7(a) and 15 of the Master Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the Sale
Price, plus an incremental amount determined by applying the Pricing Rate
to the Sale Price, calculated on the basis of a 360-day year and the number
of actual days elapsed from (and including) the Sale Date to (but
excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by Seller
pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the Participating
Funds and Seller at which the Securities and Cash Collateral, if any, are
to be sold to the Participating Funds by Seller.
(y) "Securities" shall mean all Eligible Securities delivered by Seller or
to be delivered by Seller to the Participating Funds pursuant to a
particular repurchase transaction and not yet repurchased hereunder,
together with all rights related thereto and all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph 3(c)
of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to this
Agreement.
(bb) "Seller Account" shall have the meaning set forth in the preamble of
this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of repurchase
transaction effected hereunder, as determined with reference to the term of
the transaction and the categories of Securities that constitute Eligible
Securities therefor, which term shall include FICASH I Transactions, FICASH
II Transactions, FICASH III Transactions, FITERM I Transactions, FITERM II
Transactions, FITERM III Transactions, and such other transaction
categories as may from time to time be designated by the Funds by notice to
Seller, Custodian and Repo Custodian.
(ee) "Unconditional Resale Right" shall have the meaning set forth in
Paragraph 7(b) of the Master Agreement.
(ff) "Valuation Day" shall mean any day on which Repo Custodian is open
for business.
2. Appointment of Repo Custodian. Upon the terms and conditions set forth
in this Agreement, Repo Custodian is hereby appointed by the Funds to act
as the custodian for the Participating Funds to hold cash, Cash Collateral
and Securities for the purpose of effecting repurchase transactions for the
Participating Funds through the Joint Trading Account pursuant to the
Master Agreement. Repo Custodian hereby acknowledges the terms of the
Master Agreement between the Funds and Seller (attached as an Exhibit
hereto), as amended from time to time, and agrees to abide by the
provisions thereof to the extent such provisions relate to the
responsibilities and operations of Repo Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more Transaction
Accounts for the purpose of effecting repurchase transactions hereunder for
the Funds, in each case pursuant to the Master Agreement. From time to
time the Funds may cause Custodian, on behalf of the Funds, to deposit
Securities and cash with Repo Custodian in the designated Transaction
Account, in each case in accordance with Paragraph 3 of the Master
Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash Collateral
received for the Participating Funds segregated at all times from those of
any other person, firm or corporation in its possession and shall identify
all such Securities, cash and Cash Collateral as subject to this Agreement
and the Master Agreement. Segregation may be accomplished by physical
segregation with respect to certificated securities held by the Repo
Custodian and, in addition, by appropriate identification on the books and
records of Repo Custodian in the case of all other Securities, cash and
Cash Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating Funds, and
shall be subject at all times to the proper instructions of the
Participating Funds, or the Custodian on behalf of the Participating Funds,
with respect to the holding, transfer or disposition of such Securities and
Cash Collateral. Repo Custodian shall include in its records for each
Transaction Account all instructions received by it which evidence an
interest of the Participating Funds in the Securities and Cash Collateral
and shall hold physically segregated any written agreement, receipt or
other writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash Collateral to
the Participating Funds or to "credit" a Transaction Account under this or
any other paragraph of this Agreement shall be made in immediately
available funds. If Repo Custodian is required to "deliver" or "transfer"
Securities to the Participating Funds under this or any other paragraph of
this Agreement, Repo Custodian shall take, or cause to be taken, the
following actions to perfect the Participating Funds' interest in such
Securities as an outright purchaser: (i) in the case of certificated
securities and instruments held by Seller, by physical delivery of the
share certificates or other instruments representing the Securities and by
physical segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities are
being held for the Participating Funds (such securities and instruments to
be delivered in form suitable for transfer or accompanied by duly executed
instruments of transfer or assignment in blank and accompanied by such
other documentation as the Participating Funds may request), (ii) in the
case of Securities held in a customer only account in a clearing agency or
federal book-entry system authorized for use by the Funds and meeting the
requirements of Rule 17f-4 under the Investment Company Act of 1940, as
amended (the "1940 Act") (such authorized agency or system being referred
to herein as a "Securities System"), by appropriate entry on the books and
records of Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a customer
only account in the Securities System and by appropriate entry on the books
and records of Repo Custodian identifying such Securities as belonging to
the Participating Funds; provided, further, that Repo Custodian shall
confirm to the Participating Funds the identity of the Securities
transferred or delivered. Acceptance of a "due bill", "trust receipt" or
similar receipt or notification of segregation issued by a third party with
respect to Securities held by such third party shall not constitute good
delivery of Securities to Repo Custodian for purposes of this Agreement or
the Master Agreement and shall expressly violate the terms of this
Agreement and the Master Agreement. The Funds shall identify by notice to
Repo Custodian and Seller those agencies or systems which have been
approved by the Funds for use under this Agreement and the Master
Agreement. The Funds hereby notify Repo Custodian and Seller that the
following agencies and systems have been approved by the Funds for use
under this Agreement and the Master Agreement, until such time as Repo
Custodian and Seller shall have been notified by the Funds to the contrary:
(i) Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular Public
Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry regulations of
federal agencies substantially in the form of 31 CFR 306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the Transaction
Account and effect the transfer of Securities to or from the Participating
Funds upon proper instructions received from the Participating Funds, or
the Custodian on behalf of the Participating Funds, and shall make all
credits and debits to the Seller Account and effect the transfer of
Securities to or from the Seller upon proper instructions received from
Seller. In the event that Repo Custodian receives conflicting proper
instructions from Seller and the Participating Funds, or the Custodian on
behalf of the Participating Funds, Repo Custodian shall follow the
Participating Funds' or the Custodian's proper instructions. The
Participating Funds shall give Repo Custodian only such instructions as
shall be permitted by the Master Agreement. Notwithstanding the preceding
sentence, the Participating Funds, or the Custodian on behalf of the
Participating Funds, may from time to time instruct Repo Custodian to
transfer cash from the Transaction Account to Custodian so long as such
transfer is not in contravention of the Master Agreement.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree to
enter into a repurchase transaction, Seller and the Participating Funds, or
the Custodian on behalf of the Participating Funds, will give Repo
Custodian proper instructions by telephone or otherwise by 5:00 p.m. New
York time on the Sale Date, specifying the Transaction Category, Repurchase
Date, Sale Price, Repurchase Price or the applicable Pricing Rate and the
Margin Percentage for each such repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase Date
is the Banking Day next following the Sale Date (x) the Participating Funds
may increase or decrease the Sale Price for any such repurchase transaction
by no more than 10% of the initial Sale Price by causing to be delivered
further proper instructions by telephone or otherwise to Repo Custodian by
5:15 p.m. New York time (or at such later time as may be agreed upon by the
parties) on the Sale Date and (y) Seller and the Participating Funds may by
mutual consent agree to increase or decrease the Sale Price by more than
10% of the initial Sale Price by causing to be provided further proper
instructions to Repo Custodian by the close of business on the Sale Date.
In any event, Repo Custodian shall not be responsible for determining
whether any such increase or decrease of the Sale Price exceeds the 10%
limitation.
(c) Seller will take such actions as are necessary to ensure that on the
Sale Date the aggregate Market Value of all Securities held by Repo
Custodian for Seller and cash in the Seller Account equals or exceeds the
Margin Percentage of the Sale Price. Seller shall give Repo Custodian
proper instructions specifying with respect to each of the Securities which
is to be the subject of a repurchase transaction (a) the name of the issuer
and the title of the Securities, and (b) the Market Value of such
Securities. Such instructions shall constitute Seller's instructions to
Repo Custodian to transfer the Securities to the Participating Funds and/or
Cash Collateral from the Seller Account to the Transaction Account.
(d) By 5:00 p.m. New York Time on the Sale Date, the Participating Funds
shall transfer to, or maintain on deposit with, Repo Custodian in the
Transaction Account immediately available funds in an amount equal to the
Sale Price with respect to a particular repurchase transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian shall
transfer Securities from Seller to the Participating Funds and/or cash held
in the Seller Account to the Transaction Account and shall transfer to the
Seller Account immediately available funds from the Transaction Account in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
by Seller to the Participating Funds are Eligible Securities. Any
securities which are not Eligible Securities for a particular repurchase
transaction hereunder shall not be included in the calculations set forth
below and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the aggregate
Market Value of Securities and cash, if any, applicable to the repurchase
transaction is less than the Margin Percentage of the Sale Price and Seller
shall transfer, by the close of business on the Sale Date, to Repo
Custodian additional Securities and/or cash in the amount of such
deficiency. If Seller does not, by the close of business on the Sale Date,
transfer additional Securities and/or cash, the Market Value of which
equals or exceeds such deficiency, Repo Custodian may, at its option,
without notice to Seller, advance the amount of such deficiency to Seller
in order to effectuate the repurchase transaction. It is expressly agreed
that Repo Custodian is not obligated to make an advance to Seller to enable
it to complete any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo Custodian
shall cause the Securities applicable to the repurchase transaction
received from Seller to be transferred to the Participating Funds and shall
cause any cash received from Seller to be transferred to the Transaction
Account, against transfer of the Sale Price from the Transaction Account to
the Seller Account, such transfers of Securities and/or cash and funds to
be deemed to occur simultaneously.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the Transaction
Account is less than the agreed upon Sale Price in connection with the
repurchase transaction immediately prior to effectuating such repurchase
transaction, or if the aggregate Market Value of the Securities and cash,
if any, applicable to such repurchase transaction is less than the Sale
Price multiplied by the Margin Percentage immediately prior to effectuating
such repurchase transaction, Repo Custodian shall effect the repurchase
transaction to the best of its ability by transferring Securities from
Seller to the Participating Funds and/or cash from the Seller Account to
the Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction Account
multiplied by the Margin Percentage and (y) the aggregate Market Value of
the Securities available for transfer from Seller to the Participating
Funds and cash, if any, in the Seller Account, against the transfer of
immediately available funds from the Transaction Account to the Seller
Account in an amount equal to the aggregate Market Value of the Securities
and/or cash to be transferred divided by the Margin Percentage; provided,
however, that in either such event Repo Custodian shall have the right not
to transfer to the Participating Funds such Securities and not to transfer
such cash, if any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian determines, in
its sole discretion, will not be the subject of a repurchase transaction.
The actions of Repo Custodian pursuant to this subparagraph (e)(v) shall
not affect the obligations and liabilities of the parties to each other
pursuant to the Master Agreement with regard to such repurchase
transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the Master
Agreement), Repo Custodian shall perform such substitution in accordance
with the following provisions:
(i) Repo Custodian shall determine that all securities to be transferred
to the Participating Funds are Eligible Securities. Any securities which
are not eligible for repurchase transactions hereunder shall not be
included in the calculations set forth below and shall not be transferred
to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value of the
Eligible Securities and/or Cash Collateral to be transferred. Repo
Custodian shall not make any substitution if, at the time of substitution,
the aggregate Market Value of all Securities and any Cash Collateral
applicable to such repurchase transaction immediately after such
substitution would be less than the Margin Percentage of the Repurchase
Price (calculated as if the Repurchase Date were the date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted against
the delivery by Repo Custodian of substitute Eligible Securities to the
Participating Funds and/or the crediting of the Transaction Account with
Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute Eligible
Securities, and has failed to deliver Eligible Securities against such Cash
Collateral not later than the close of business on such Banking Day in
accordance with the terms of the Master Agreement, Repo Custodian shall
promptly, but in no event later than 10:00 a.m. the following Banking Day,
notify the Participating Funds and Seller of such failure.
(g) With respect to each repurchase transaction, at 9:00 a.m. New York
time, or at such other time as specified in proper instructions of the
Participating Funds (or the Custodian on behalf of the Participating Funds)
on the Repurchase Date, Repo Custodian shall debit the Seller Account and
credit the Transaction Account in the amount of the Repurchase Price and
shall transfer Securities from the Participating Funds to the Seller and
Cash Collateral, if any, from the Transaction Account to the Seller Account
in accordance with the following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller Account
and credit the Transaction Account in the amount of the Repurchase Price
and shall transfer all Securities applicable to such repurchase transaction
from the Participating Funds to the Seller and debit the Transaction
Account and credit the Seller Account in the amount of any Cash Collateral
applicable to such repurchase transaction.
(ii) If the amount of available funds in the Seller Account is less than
the Repurchase Price, then Repo Custodian shall notify the Seller of the
amount of the deficiency and Seller shall promptly cause such amount to be
transferred to the Seller Account. If Seller fails to cause the transfer
of the entire amount of the deficiency to the Seller Account, then Repo
Custodian may, at its option and without notice to Seller, advance to
Seller the amount of such remaining deficiency. It is expressly agreed
that Repo Custodian is not obligated to make any advance to Seller. If,
following such transfer and/or advance, the amount of available funds in
the Seller Account equals or exceeds the Repurchase Price then Repo
Custodian shall debit the Seller Account and credit the Transaction Account
in the amount of the Repurchase Price and shall transfer from the
Participating Funds to the Seller all Securities applicable to such
repurchase transaction and debit the Transaction Account and credit the
Seller Account in the amount of any Cash Collateral applicable to such
repurchase transaction.
(iii) If the Seller fails to cause the transfer of the entire amount of
the deficiency, as required by (ii) above, and Repo Custodian fails to
advance to Seller an amount sufficient to eliminate the entire deficiency,
then Repo Custodian shall debit the Seller Account in the amount of all
immediately available funds designated by Seller as applicable to the
repurchase transaction and credit the Transaction Account in such amount
(such amount being referred to as the "Partial Payment") and shall transfer
Securities from the Participating Funds to the Seller such that the
aggregate Market Value of all remaining Securities and Cash Collateral in
the Transaction Account with respect to such repurchase transaction shall
at least equal the difference between Margin Percentage of the Repurchase
Price and the Partial Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums paid by
or on behalf of the issuer in respect of the Securities and collected by
Repo Custodian, except as otherwise provided in Paragraph 8 of the Master
Agreement.
6. Daily Statement. On each Banking Day on which any Participating Funds
have an outstanding repurchase transaction, Repo Custodian shall deliver by
facsimile, or other electronic means acceptable to the Participating Funds,
the Custodian and the Repo Custodian, to Custodian and to the Participating
Funds a statement identifying the Securities held by Repo Custodian with
respect to such repurchase transaction and the cash and Cash Collateral, if
any, held by Repo Custodian in the Transaction Account, including a
statement of the then current Market Value of such Securities and the
amounts, if any, credited to the Transaction Account as of the close of
trading on the previous Banking Day. Repo Custodian shall also deliver to
Custodian and the Participating Funds such additional statements as the
Repo Custodian and the Participating Funds may agree upon from time to
time.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and the
amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the Seller
Account against the receipt from Seller of the Securities and Cash
Collateral, if any, and (ii) on each Valuation Day on which such repurchase
transaction is outstanding. If on any Valuation Day the aggregate Market
Value of the Securities and Cash Collateral with respect to any repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day) for such
transaction, Repo Custodian shall promptly, but in any case no later than
10:00 a.m. the following Valuation Day, notify Seller. If on any Valuation
Day the aggregate market value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) for such transaction, and Seller fails to deliver additional
Eligible Securities applicable to such repurchase transaction or an
additional amount of Cash Collateral by the close of business on such
Valuation Day such that the aggregate market value of the Securities and
Cash Collateral at least equals the Margin Percentage of the Repurchase
Price (calculated as if the Repurchase Date were such Valuation Day), Repo
Custodian shall promptly, but in any event no later than 10:00 a.m. the
following Valuation Day, notify the Participating Funds of such failure.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing services
("Pricing Services") set forth on Schedule B. It is understood and agreed
that Repo Custodian shall use the prices made available by the Pricing
Services at the close of business of the preceding Valuation Day. In the
event that Repo Custodian is unable to obtain a valuation of any Securities
from the Pricing Services, Repo Custodian shall request a bid quotation
from a broker's broker or a broker dealer, set forth in Schedule B, other
than Seller. In the event Repo Custodian is unable to obtain a bid
quotation for any Securities from such a broker's broker or a broker
dealer, Repo Custodian (i) shall not include any such Securities in the
determination of whether the aggregate Market Value of the Securities and
any Cash Collateral equals at least the Margin Percentage of the Repurchase
Price and (ii) shall redeliver such Securities to Seller if the Market
Value of all other Securities and any Cash Collateral with respect to such
repurchase transaction equals at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such Valuation
Day). The Repo Custodian may rely on prices quoted by Pricing Services,
broker's brokers or broker dealers, except Seller, as set forth in Schedule
B.
(c) (i) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase transaction
is less than the Margin Percentage of the Repurchase Price (calculated as
if the Repurchase Date were such Valuation Day) applicable to such
repurchase transaction, Repo Custodian shall deliver to the Participating
Funds an amount of additional Eligible Securities applicable to such
repurchase transaction and/or debit the Seller Account and credit the
Transaction Account with an additional amount of Cash Collateral, such that
the aggregate Market Value of all Securities and any Cash Collateral with
respect to such repurchase transaction shall equal at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase Date
were such Valuation Day) applicable to such repurchase transaction.
(ii) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase transaction
exceeds the Margin Percentage of the Repurchase Price (calculated as if the
Repurchase Date were such Valuation Day) applicable to such repurchase
transaction, Repo Custodian shall return to the Seller all or a portion of
such Securities or Cash Collateral, if any; provided that the Market Value
of the remaining Securities and any Cash Collateral with respect to the
repurchase transaction shall be at least equal to the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) applicable to such repurchase transaction. At any time and
from time to time with respect to any repurchase transaction, if authorized
by the Participating Funds, or the Custodian on behalf of the Participating
Funds, the Repo Custodian shall debit the Transaction Account by an amount
of Cash Collateral and credit the Seller Account by the same amount of Cash
Collateral against simultaneous delivery from Seller to the Participating
Funds of Eligible Securities applicable to such repurchase transaction with
a Market Value at least equal to the amount of Cash Collateral credited and
debited.
8. Authorized Persons. Schedule C hereto sets forth those persons who are
authorized to act for Repo Custodian, Custodian, Seller and the Funds,
respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested telex,
facsimile, a written request, direction, instruction or certification
signed or initialed by or on behalf of the party giving the instructions by
one or more authorized persons (as provided in Paragraph 8); provided,
however, that no instructions directing the delivery of Securities or the
payment of funds to any individual who is an authorized signatory of
Custodian or Repo Custodian shall be signed by that individual.
Telephonic, other oral or electro-mechanical or electronic instructions
(including the code which may be assigned by Repo Custodian to Custodian
from time to time) given by one of the above authorized persons shall also
be considered proper instructions if the party receiving such instructions
reasonably believes them to have been given by an authorized person with
respect to the transaction involved. Oral instructions will be confirmed
by tested telex, facsimile or in writing in the manner set forth above.
The Funds and Seller authorize Repo Custodian to tape record any and all
telephonic or other oral instructions given to Repo Custodian. Proper
instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to use reasonable care and diligence
in carrying out the provisions of this Agreement and the Master Agreement
and shall be liable to the Funds and/or Seller only for direct damages
resulting from the negligence or willful misconduct of the Repo Custodian
or its officers, employees or agents. The parties hereby agree that Repo
Custodian shall not be liable for consequential, special or indirect
damages, even if Repo Custodians has been advised as to the possibility
thereof. So long as and to the extent that Repo Custodian exercises
reasonable care and diligence and acts without negligence, misfeasance or
misconduct, Repo Custodian shall not be liable to Seller or the Funds for
(i) any action taken or omitted in good faith in reliance upon proper
instructions, (ii) any action taken or omitted in good faith upon any
notice, request, certificate or other instrument reasonably believed by it
to be genuine and to be signed by the proper party or parties, (iii) any
delay or failure to act as may be required under this Agreement or under
the Master Agreement when such delay or failure is due to any act of God or
war, (iv) the actions or omissions of a Securities System, (v) the title,
validity or genuineness of any security received, delivered or held by it
pursuant to this Agreement or the Master Agreement, (vi) the legality of
the purchase or sale of any Securities by or to the Participating Funds or
Seller or the propriety of the amount for which the same are purchased or
sold (except to the extent of Repo Custodian's obligations hereunder to
determine whether securities are Eligible Securities and to calculate the
Market Value of Securities and any Cash Collateral), (vii) the due
authority of any person listed on Schedule C to act on behalf of Custodian,
Seller or the Funds, as the case may be, with respect to this Agreement or
(viii) the errors of the Pricing Services, broker's brokers or broker
dealers set forth in Schedule B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any money to
be used in a repurchase transaction, whether or not such money is
represented by any check, draft, or other instrument for the payment of
money, until the Eligible Securities have been delivered in accordance with
Paragraph 3 or until Repo Custodian actually receives and collects such
money on behalf of Seller or the Funds directly or by the final crediting
of the Seller Account or a Transaction Account through the Securities
System, except that this Paragraph 10(b) shall not be deemed to limit the
liability of Repo Custodian to Seller or the Funds if the non-delivery of
such Eligible Securities or the failure to receive and collect such money
results from the breach by Repo Custodian of its obligations under this
Agreement or the Master Agreement.
(c) Repo Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it are such as
properly may be held by the Participating Funds; provided that
notwithstanding anything to the contrary herein, Repo Custodian shall be
obligated to act in accordance with the guidelines and proper instructions
of the Participating Funds, or the Custodian on behalf of the Participating
Funds, with respect to the types of Eligible Securities and the issuers of
such Eligible Securities that may be used in specific repurchase
transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the Custodian
if Securities held by Repo Custodian are in default or if payment on any
Securities has been refused after due demand and presentation and Repo
Custodian shall take action to effect collection of any such amounts upon
the proper instructions of the Participating Funds, or the Custodian on
behalf of the Participating Funds, and assurances satisfactory to it that
it will be reimbursed for its costs and expenses in connection with any
such action.
(e) Repo Custodian shall have no duties, other than such duties as are
necessary to effectuate repurchase transactions in accordance with this
Agreement and the Master Agreement within the standard of care set forth in
Paragraph 10(a) above and in a commercially reasonable manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly authorized
to execute and deliver this Agreement and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) the execution, delivery and performance of
this Agreement do not and will not violate any ordinance, declaration of
trust, partnership agreement, articles of incorporation, charter, rule or
statute applicable to it or any agreement by which it is bound or by which
any of its assets are affected, (iii) the person executing this Agreement
on its behalf is duly and properly authorized to do so, (iv) it has (and
will maintain) a copy of this Agreement and evidence of its authorization
in its official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President or
higher.
(b) Repo Custodian further represents and warrants that (i) it has not
pledged, encumbered, hypothecated, transferred, disposed of, or otherwise
granted, any third party an interest in any Securities, (ii) it does not
have any security interest, lien or right of setoff in the Securities, and
(iii) it has not received notification from any third party, in its
capacity as Repo Custodian, custodian bank or clearing bank, of any lien,
claim, charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction. Repo Custodian agrees that (i) it
will not pledge, encumber, hypothecate, transfer, dispose of, or otherwise
grant, any third party an interest in any Securities, (ii) it will not
acquire any security interest, lien or right of setoff in the Securities,
and (iii) it will promptly notify the Fund Agent, if, during the term of
any outstanding repurchase transaction, it is notified by any third party,
in its capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim, charge
or encumbrance with respect to any Securities that are the subject of such
repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent that
Repo Custodian is in the exercise of reasonable care and diligence and acts
without negligence, misfeasance or misconduct, Seller will indemnify Repo
Custodian and hold it harmless against any and all losses, claims, damages,
liabilities or actions to which it may become subject, and reimburse it for
any expenses (including attorneys' fees and expenses) incurred by it in
connection therewith, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon or in any way related to this
Agreement, the Master Agreement or any transactions contemplated hereby or
thereby or effected hereunder or thereunder. Without limiting the
generality of the foregoing indemnification, Repo Custodian shall be
indemnified by Seller for all costs and expenses, including attorneys'
fees, for its successful defense against claims that Repo Custodian
breached its standard of care and was negligent or engaged in misfeasance
or misconduct.
(b) So long as and to the extent that Repo Custodian is in the exercise of
reasonable care and diligence and acts without negligence, misconduct or
misfeasance, the Participating Funds will indemnify Repo Custodian and hold
it harmless against any and all losses, claims, damages, liabilities or
actions to which it may become subject, and reimburse it for any expenses
(including attorneys' fees and expenses) incurred by it in connection
therewith, insofar as such losses, claims, damages, liabilities or actions
result from the negligence, misconduct or misfeasance of the Participating
Funds under this Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional rights
and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement shall
be binding unless in writing and executed by the parties hereto. Schedule
A, listing the Funds, may be amended from time to time to add or delete
Funds by the Funds (i) delivering an executed copy of an addendum to
Schedule A to Seller and Repo Custodian, and (ii) amending Schedule A to
the Master Agreement in accordance with the provisions therein. The
amendment of Schedule A as provided above shall constitute appointment of
Repo Custodian as a custodian for such Fund. Schedule B may be amended
from time to time by an instrument in writing, or counterpart thereof,
executed by Repo Custodian, Seller and the Funds. Schedule C may be
amended from time to time to change an authorized person of: (i) the
Funds, by written notice to Repo Custodian and Seller by Ms. Sarah Zenoble
or the Treasurer of the Funds (or such persons who may be authorized from
time to time in writing by Ms. Zenoble or the President or Treasurer of
Fidelity Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any Vice
President of Repo Custodian; and (iv) Custodian, by written notice to Repo
Custodian by any Vice President of Custodian. Schedule D may be amended
from time to time by any party hereto by delivery of written notice to the
other parties hereto. Repo Custodian shall receive notice of any amendment
to the Master Agreement at the address set forth in Schedule D hereto; and,
if such amendment would have a material adverse effect on the rights of, or
would materially increase the obligations of Repo Custodian under this
Agreement, any such amendment shall also require the consent of Repo
Custodian. Any such amendment shall be deemed not to be material if Repo
Custodian fails to object in writing within 21 days after receipt of notice
thereof. No amendment to this Agreement shall affect the rights or
obligations of any Fund with respect to any outstanding repurchase
transaction entered into under this Agreement and the Master Agreement
prior to such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict between
this Agreement and the Master Agreement, the Master Agreement shall
control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Valuation Days' written notice to the other parties;
provided, however, that any such termination shall not affect any
repurchase transaction then outstanding or any rights or obligations under
this Agreement or the Master Agreement with respect to any actions or
omissions of any party hereto prior to termination. In the event of
termination, Repo Custodian will deliver any Securities, Cash Collateral or
cash held by it or any agent to Custodian or to such successor custodian or
custodian or subcustodian as the Participating Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation for
the services to be rendered hereunder, based upon rates which shall be
agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian and
the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and except
as otherwise provided herein or as the parties to the Agreement shall from
time to time otherwise agree, all instructions, notices, reports and other
communications contemplated by this Agreement shall be given to the party
entitled to receive such notice at the telephone number and address listed
on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions hereof
shall not be affected thereby and shall remain in full force and effect.
19. Binding Nature. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their successors and assignees;
provided that, no party hereto may assign this Agreement or any of the
rights or obligations hereunder without the prior written consent of the
other parties.
20. Headings. Section headings are for reference purposes only and shall
not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Repo Custodian and Seller are hereby
expressly put on notice of the limitation of liability set forth in the
Declarations of Trust and in the Certificates and Agreements of Limited
Partnership of the Funds and agree that the obligations assumed by any Fund
hereunder shall be limited in all cases to a Fund and its assets or, in the
case of a series Fund, to the assets of that series only, and neither
Seller, Repo Custodian nor their respective agents or assigns shall seek
satisfaction of any such obligation from the officers, agents, employees,
directors, trustees, shareholders or partners of any such Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations set
forth in this Agreement with respect to each repurchase transaction shall
accrue only to the Participating Funds in accordance with their respective
interests therein. No other Fund shall receive any rights or have any
liabilities arising from any action or inaction of any Participating Fund
under this Agreement with respect to such repurchase transaction.
25. General Provisions. This Agreement supersedes any other custodian
agreement by and among Seller, the Funds, and Repo Custodian concerning
repurchase transactions effected through the Joint Trading Account. It is
understood and agreed that time is of the essence with respect to the
performance of each party's respective obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller and
the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data Services
(or any other pricing service mutually agreed upon by Seller and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day immediately preceding the date of
determination or the last quote available. The pricing services, Brokers'
Brokers and Broker Dealers may be changed from time to time by agreement of
all the parties.
SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Anthony Isola
Raymond Stancil
William Mosca
Leonardo Nichols
Alan Mann
Allen B. Clark
Custodian
Ken Rindos
Kurt Woetzel
Seller
Gary F. Holloway
Konrad R. Kruger
Stephen M. Peet
Raymond E. Humiston
P. Michael Florio
Ben Carpenter
Blake S. Drexler
Derick B. Burgher
Lyn Kratovil
The Funds
Leland Barron
Wickliffe Curtis
Dorothy Egan
David Glocke
Katharyn Harlow
Timothy Huyck
Jon Jamen
Robert Litterst
Sam Silver
Burnell Stehman
Jeffrey St. Peters
Deborah Todd
John Todd
Joseph Torres
Richard Williams
SCHEDULE D
NOTICES
If to Custodian: Morgan Guaranty Trust Co. of New York
15 Broad Street, 16th Floor
New York, New York 10015
Telephone: (212) 483-4150
Attention: Ms. Kimberly Smith
or
The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (312) 635-4808
Attention: Claire Meskovic
With a copy to the Fund Agent
If to Repo Custodian: Chemical Bank
4 New York Plaza
21st Floor
New York, NY 10004-2477
Telephone: (212) 623-6446
Attention: Anthony Isola
If to Seller: Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-7909
Attention: Peter Sanchez
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277262.c1
SCHEDULE 1
The following lists the additional counterparties to the Repo Custodian
Agreement for Joint Trading Account between Chemical Bank and the Fidelity
Funds:
Chase Securities, Inc.
CS First Boston Corp.
Dresdner Securities (U.S.A.), Inc.
HSBC Securities, Inc.
Lehman Government Securities, Inc.
Merrill Lynch Government Securities, Inc.
Paine Webber, Inc.
Salomon Brothers, Inc.
UBS Securities, Inc.
EXHIBIT 8(G)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
Between
THE BANK OF NEW YORK
and
FIDELITY FUNDS
Dated as of: ______________________
TABLE OF CONTENTS
Page
ARTICLE I - APPOINTMENT OF CUSTODIAN 2
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN 2
Section 2.01. Establishment of Accounts 2
Section 2.02. Receipt of Funds 2
Section 2.03. Repurchase Transactions 2
Section 2.04. Other Transfers 4
Section 2.05. Custodian's Books and Records 5
Section 2.06. Reports by Independent Certified Public Accountants 5
Section 2.07. Securities System 6
Section 2.08. Collections 6
Section 2.09. Notices, Consents, Etc. 6
Section 2.10. Notice of Custodian's Inability to Perform 7
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS 7
Section 3.01. Proper Instructions; Special Instruction 7
Section 3.02. Authorized Persons 8
Section 3.03. Investment Limitations 8
Section 3.04. Persons Having Access to Assets of the Funds 8
Section 3.05. Actions of Custodian Based on Proper Instructions and Special
Instructions 9
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION 9
Section 4.02. Liability of Custodian for Actions of Securities Systems 9
Section 4.03. Indemnification 9
Section 4.04. Funds, Right to Proceed 10
ARTICLE V - COMPENSATION 11
Section 5.01. Compensation 11
Section 5.02. Waiver of Right of Set-Off 11
ARTICLE VI - TERMINATION 11
Section 6.01. Events of Termination 11
Section 6.02. Successor Custodian; Payment of Compensation 11
ARTICLE VII - MISCELLANEOUS 12
Section 7.01. Representative Capacity and Binding Obligation 12
Section 7.02. Entire Agreement 12
Section 7.03. Amendments 12
Section 7.04. Interpretation 12
Section 7.05. Captions 13
Section 7.06. Governing Law 13
Section 7.07. Notice and Confirmations 13
Section 7.08. Assignment 14
Section 7.09. Counterparts 14
Section 7.10. Confidentiality; Survival of Obligations 14
EXHIBIT 8(G)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
AGREEMENT dated as of __________________by and between The Bank of New
York (hereinafter referred to as the "Custodian") and each of the entities
listed on Schedules A-1, A-2, A-3 and A-4 hereto, acting on behalf of
itself or, (i) in the case of a series company, on behalf of one or more of
its portfolios or series listed on Schedule A-1 or A-2 hereto, (ii) in the
case of the accounts listed on Schedule A-3 hereto, acting through Fidelity
Management & Research Company, and (iii) in the case of the commingled or
individual accounts listed on Schedule A-4 hereto, acting through Fidelity
Management Trust Company (collectively, the "Funds" and each, a "Fund").
W I T N E S S E T H
WHEREAS, each of the Funds desire to appoint the Custodian as its
custodian for the purpose of establishing and administering one or more
joint trading accounts or subaccounts thereof (individually, an "Account"
and collectively, the "Accounts") and holding cash and securities for the
Funds in connection with repurchase transactions effected through the
Accounts; and
WHEREAS, one or more of the Funds may, from time to time, enter into one
or more written repurchase agreements pursuant to which one or more of the
Funds agrees to purchase and resell, and the sellers named in such
agreements agree to sell and repurchase through the Accounts, certain
securities (collectively, the "Securities") (such repurchase agreements
being hereinafter referred to, collectively, as the "Repurchase
Agreements"); and
WHEREAS, each of the custodians identified in ScheduleB hereto (each, a
"Fund Custodian") serves as the primary custodian for one or more of the
Funds; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from one or more Fund Custodians to the
Custodian or transfer cash or Securities from the Custodian to one or more
Fund Custodians, or in the case of Funds in which Custodian is also Fund
Custodian, such Fund may arrange for transfer of cash or Securities between
an Account and an account maintained by Custodian in its capacity as Fund
Custodian for such Fund, in each event in connection with Repurchase
Agreement transactions; and
WHEREAS, from time to time, such Funds may arrange to transfer cash or
securities from the Custodian to the seller in such Repurchase Agreement
transactions, or in the case in which Custodian is also the clearing bank
for such seller, such Funds may arrange for transfer of cash or securities
between an Account and an account maintained by Custodian for such seller
in its capacity as clearing bank, in each event in connection with
two-party Repurchase Agreement transactions; and
WHEREAS, each of the custodians identified in Schedule C hereto (each, a
"Repo Custodian") serves as a third-party custodian of the Funds for
purposes of effecting third-party Repurchase Agreement transactions; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from the Custodian to one or more Repo
Custodians or transfer cash or Securities from one or more Repo Custodians
to the Custodian, or in the case in which Custodian is also Repo Custodian,
such Funds may arrange for transfer of cash or securities between an
Account and an account maintained for such Funds in its capacity as Repo
Custodian, in each event in connection with third-party Repurchase
Agreement transactions;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I - APPOINTMENT OF CUSTODIAN
Each of the Funds hereby employs and appoints the Custodian as its
custodian, subject to the terms and provisions of this Agreement.
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties,
and only such powers and duties, as are set forth in this Agreement.
Section 2.01. Establishment of Accounts. The Custodian shall establish
one or more Accounts as segregated joint trading accounts for the Funds
through which the Funds shall, from time to time, effect Repurchase
Agreement transactions.
Section 2.02. Receipt of Funds. The Custodian shall, from time to time,
receive funds for or on behalf of the Funds and shall hold such funds in
safekeeping. Upon receipt of Proper Instructions, the Custodian shall
credit funds so received to one or more Accounts designated in such Proper
Instructions. Promptly after receipt of such funds from the Fund Custodian
or a Repo Custodian or promptly following the transfer to an Account from
any account maintained by Custodian in its capacity as Fund Custodian, or
as Repo Custodian, the Custodian shall provide written confirmation of such
receipt to the Fund Custodian or Repo Custodian, when and as applicable,
and of such receipt or transfer to the Fund Agent designated in Section
7.07(b) hereof (the "Fund Agent"). The Custodian shall designate on its
books and records the funds allocable to each Account and the identity of
each Fund participating in such Account.
Section 2.03. Repurchase Transactions. The Funds may, from time to time,
enter into Repurchase Agreement transactions. In connection with each such
Repurchase Agreement transaction, unless otherwise specifically directed by
Special Instructions, the Custodian shall take the following actions:
(a) Purchase of Securities. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive Securities and any cash denominated in
U.S. Dollars which is serving as collateral ("Cash Collateral"), provided
that payment therefor shall be made by the Custodian only against prior or
simultaneous receipt of the Securities and any Cash Collateral in the
manner prescribed in subsection 2.03(b) below. Except as provided in
Section2.04 hereof, in no event shall the Custodian deliver funds from an
Account for the purchase of Securities and any Cash Collateral prior to
receipt of the Securities and any Cash Collateral by the Custodian or a
Securities System (as hereinafter defined). The Custodian is not under any
obligation to make credit available to the Funds to complete transactions
hereunder. Promptly after the transfer of funds and receipt of Securities
and any Cash Collateral, the Custodian shall provide a confirmation to the
Fund Agent, setting forth (i) the Securities and any Cash Collateral which
the Custodian has received pursuant to the Repurchase Agreement
transaction, (ii) the amount of funds transferred from the applicable
Account, and (iii) any security or transaction identification numbers
reasonably requested by the Fund Agent.
(b) Receipt and Holding of Securities. In connection with each Repurchase
Agreement transaction, the Custodian shall receive and hold the Securities
as follows: (i) in the case of certificated securities, by physical receipt
of the certificates or other instruments representing such Securities and
by physical segregation of such certificates or instruments from other
assets of the Custodian in a manner indicating that such Securities belong
to specified Funds; and (ii) in the case of Securities held in book-entry
form by a Securities System (as hereinafter defined), by appropriate
transfer and registration of such Securities to a customer only account of
the Custodian on the book-entry records of the Securities System, and by
appropriate entry on the books and records of the Custodian identifying
such Securities as belonging to specified Funds.
(c) Sale of Securities. Upon receipt of Proper Instructions, the
Custodian shall make delivery of Securities and any Cash Collateral held in
or credited to an Account against prior or simultaneous payment for such
Securities in immediately available funds in the form of: (i) cash, bank
credit, or bank wire transfer received by the Custodian; or (ii) credit to
the customer only account of the Custodian with a Securities System.
Notwithstanding the foregoing, the Custodian shall make delivery of
Securities held in physical form in accordance with "street delivery
custom" to a broker or its clearing agent, against delivery to the
Custodian of a receipt for such Securities; provided that the Custodian
shall have taken all actions possible to ensure prompt collection of the
payment for, or the return of such Securities by the broker or its clearing
agent. Promptly after the transfer of Securities and any Cash Collateral
and the receipt of funds, the Custodian shall provide a confirmation to the
Fund Agent, setting forth the amount of funds received by the Custodian or
a Securities System for credit to the applicable Account.
(d) Additional Functions. Upon receipt of Proper Instructions, the
Custodian shall take all such other actions as specified in such Proper
Instructions and as shall be reasonable or necessary with respect to
Repurchase Agreement transactions and the Securities and funds transferred
and received pursuant to such transactions, including, without limitation,
all such actions as shall be prescribed in the event of a default under a
Repurchase Agreement.
(e) Nondiscretionary Functions. The Custodian shall attend to all
non-discretionary details in connection with the purchase, sale, transfer
or other dealings with Securities or other assets of the Funds held by the
Custodian.
(f) In the event that the Custodian is directed by Proper Instructions to
make any payment or transfer of funds on behalf of a Fund for which there
would be, at the close of business on the date of such payment or transfer,
insufficient funds held by the Custodian on behalf of such Fund, the
Custodian may, in its discretion, provide an overdraft ("Overdraft") to the
Fund, in an amount sufficient to allow the completion of such payment or
transfer. Any Overdraft provided hereunder: (a) shall be payable on the
next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest form the date of the Overdraft to the date of
payment in full by the Fund at a rate agreed upon in writing, from time to
time, by the Custodian and the Fund. The Custodian and the Funds
acknowledge that the purpose of such Overdrafts is to temporarily finance
the purchase or sale of securities for prompt delivery in accordance with
the terms hereof, or to meet emergency expenses not reasonably foreseeable
by a particular Fund. The Funds hereby agree that the Custodian shall have
a continuing lien and security interest in and to all Securities whose
purchase is financed by Custodian and which are in Custodian's possession
or in the possession or control of any third party acting on Custodian's
behalf and the proceeds thereof. In this regard, Custodian shall be
entitled to all the rights and remedies of a pledgee under common law and a
secured party under the New York Uniform Commercial Code and any other
applicable laws or regulations as then in effect.
Section 2.04. Other Transfers.
(a) In addition to transfers of funds and Securities referred to in
Section 2.03, the Custodian shall transfer funds and Securities held in an
Account: (a) upon receipt of Proper Instructions, to (i)any Fund
Custodian, or (ii)any other account maintained for any Fund by the
Custodian in its capacity as a Fund Custodian, (iii)any Repo Custodian or
(iv) any other account maintained for any Fund by the Custodian in its
capacity as a Repo Custodian; or (b) upon receipt of Special Instructions,
and subject to Section 3.04 hereof, to any other person or entity
designated in such Special Instructions.
(b) Determination of Fund Custodian Daily Net Amount. On each banking
day, based upon daily transaction information provided to the Custodian by
the Funds, Custodian shall determine: (i) the amount of cash due to be
transferred on such day by each Fund Custodian to the Custodian in
connection with all Repurchase Agreement transactions in which the date
fixed for the repurchase and resale of Securities is the banking day next
following the date on which the sale and purchase of such Securities takes
place (each, an "Overnight Repo Transaction") to be effected through the
Accounts in such day; and (ii) the amount of cash due to be transferred on
such day by Custodian to such Fund Custodian in connection with all
outstanding Overnight Repo Transactions previously effected through the
Accounts (the difference between (i) and (ii) with respect to each Fund
Custodian being referred to as the "Fund Custodian Daily Net Amount"). On
each banking day, Custodian shall notify each Fund Custodian of the
foregoing determination and, unless otherwise directed in accordance with
Proper Instructions, Custodian shall (i) instruct such Fund Custodian to
transfer cash to the Custodian equal to the Fund Custodian Daily Net Amount
(if the Fund Custodian Daily Net Amount is positive) or (ii) transfer to
such Fund Custodian cash equal to the Fund Custodian Daily Net Amount (if
the Fund Custodian Daily Net Amount is negative).
(c) Determination of Repo Custodian Daily Net Amount. On each banking
day, based upon daily transaction information provided to the Custodian by
the Funds and each Repo Custodian, Custodian shall determine: (i) the
amount of cash due to be transferred on such day by each Repo Custodian on
behalf of the Funds to all counterparties in connection with all
third-party Overnight Repo Transactions to be effected through the Accounts
on such day; and (ii) the amount of cash due to be transferred on such day
by each Repo Custodian on behalf of all counterparties to the Funds in
connection with all outstanding third-party Overnight Repo Transactions
previously effected through the Accounts (the difference between (i) and
(ii) with respect to each Repo Custodian being referred to as the "Repo
Custodian Daily Net Amount"). On each banking day, Custodian shall notify
the Funds of the foregoing determinations and, unless otherwise directed in
accordance with Proper Instructions, Custodian shall (i) transfer to each
Repo Custodian cash equal to the Repo Custodian Daily Net Amount (if the
Repo Custodian Daily Net Amount is positive) or (ii) instruct each Repo
Custodian to transfer to the Custodian cash equal to the Repo Custodian
Daily Net Amount (if the Repo Custodian Daily Net Amount is negative).
Section 2.05. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by the Funds in the preparation of
reports to shareholders of the Funds and others, audits of accounts, and
other ministerial matters of like nature. The Custodian shall maintain
complete and accurate records with respect to cash and Securities held for
the benefit of the Funds as required by the rules and regulations of the
Securities and Exchange Commission applicable to investment companies
registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), including: (a) journals or other records of
original entry containing a detailed and itemized daily record of all
receipts and deliveries of securities (including certificate and
transaction identification numbers, if any), and all receipts and
disbursements of cash; (b) ledgers or other records reflecting Securities
in transfer, and Securities in physical possession; and (c) cancelled
checks and bank records related thereto. The Custodian shall keep such
other books and records of the Funds relating to repurchase transactions
effected through the Accounts as the Funds shall reasonably request. Such
books and records maintained by the Custodian shall reflect at all times
the identity of each Fund participating in each Account and the aggregate
amount of the Securities and any Cash Collateral held by the Custodian on
behalf of the Funds in such Account pursuant to this Agreement. All such
books and records maintained by the Custodian shall be maintained in a form
acceptable to the Funds and in compliance with the rules and regulations of
the Securities and Exchange Commission, including, but not limited to,
books and records required to be maintained by Section 31(a) of the
Investment Company Act and the rules from time to time adopted thereunder.
All books and records maintained by the Custodian relating to the Accounts
shall at all times be the property of the Funds and shall be available
during normal business hours for inspection and use by the Funds and their
agents, including, without limitation, their independent certified public
accountants. Notwithstanding the preceding sentence, the Funds shall not
take any actions or cause Custodian to take any actions which would cause,
either directly or indirectly, the Custodian to violate any applicable
laws, regulations, rules or orders.
Section 2.06. Reports by Independent Certified Public Accountants. At the
request of the Funds, the Custodian shall deliver to the Funds such annual
reports and other interim reports prepared by the independent certified
public accountants of the Custodian with respect to the services provided
by the Custodian under this Agreement, including, without limitation, the
Custodian's accounting system, internal accounting control and procedures
for safeguarding Securities, including Securities deposited and/or
maintained in a Securities System. Such reports, which shall be of
sufficient scope and in sufficient detail as may reasonably be required by
the Funds and as may reasonably by obtained by the Custodian, shall provide
reasonable assurance to the Funds that the procedures employed by the
independent certified public accountants are reasonably designed to detect
any material inadequacies with respect to the matters discussed in the
report, shall state in detail the material inadequacies disclosed by such
examination, and, if no such inadequacies exist, shall so state.
Section 2.07. Securities System. As used herein the term "Securities
System" shall mean each of the following: (a) the Depository Trust
Company; (b) the Participants Trust Company; (c) any book-entry system as
provided in (i) Subpart0 of Treasury Circular No. 300, 31CFR 306.115, (ii)
SubpartB of Treasury Circular Public Debt Series No. 27-76, 31CFR 350.2, or
(iii) the book-entry regulations of federal agencies substantially in the
form of 31CFR 306.115; or (d) any domestic clearing agency registered with
the Securities and Exchange Commission under Section17A of the Securities
Exchange Act of 1934, as amended (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which has
been approved in Special Instructions. Use of a Securities System by the
Custodian shall be in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
(A) The Custodian may deposit and/or maintain Securities held hereunder in
a Securities System, provided that such Securities are represented in an
account of the Custodian in the Securities System which account shall not
contain any assets of the Custodian other than assets held as a fiduciary,
custodian, or otherwise for customers.
(B) The Custodian shall, if requested by the Funds, provide the Funds with
all reports obtained by the Custodian with respect to the Securities
System's accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System.
(C) Upon receipt of Special Instructions, the Custodian shall terminate
the use hereunder of any Securities System (except for the federal
book-entry system) as promptly as practicable and shall take all actions
reasonably practicable to safeguard the Securities and other assets of the
Funds maintained with such Securities System.
Section 2.08. Collections. The Custodian shall (a) collect, receive and
deposit in the applicable Account all income and other payments with
respect to Securities held by the Custodian hereunder; (b) endorse and
deliver any instruments required to effect such collection; and (c) execute
ownership and other certificates and affidavits for all federal, state and
foreign tax purposes in connection with receipt of income or other payments
with respect to Securities, or in connection with the transfer of
Securities.
Section 2.09. Notices, Consents, Etc. The Custodian shall deliver to the
Funds, in the most expeditious manner practicable, all notices, consents or
announcements affecting or relating to Securities held by the Custodian on
behalf of the Funds that are received by the Custodian, and, upon receipt
of Proper Instructions, the Custodian shall execute and deliver such
consents or other authorizations as may be required.
Section 2.10. Notice of Custodian's Inability to Perform. The Custodian
shall promptly notify the Funds in writing by facsimile transmission or
such other manner as the Funds may designate, if, for any reason: (a) the
Custodian determines that it is unable to perform any of its duties or
obligations hereunder or its duties or obligations with respect to any
repurchase transaction; or (b) the Custodian reasonably foresees that it
will be unable to perform any such duties or obligations.
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS
Section 3.01. Proper Instructions; Special Instruction.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by one or more Authorized Persons (as hereinafter
defined); (ii) a telephonic or other oral communication by one or more
Authorized Persons; or (iii) a communication effected directly between
electromechanical or electronic devices or systems (including, without
limitation, computers) by one or more Authorized Persons; provided,
however, that communications of the types described in clauses (ii) and
(iii) above purporting to be given by an Authorized Person shall be
considered Proper Instructions only if the Custodian reasonably believes
such communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the Funds by tested telex or in
writing in the manner set forth in clause(i) above, but the lack of such
confirmation shall in no way affect any action taken by the Custodian in
reliance upon such oral instructions prior to the Custodian's receipt of
such confirmation. Each of the Funds and the Custodian is hereby
authorized to record any and all telephonic or other oral instructions
communicated to the Custodian. Proper Instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form
of standing instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by, in
the case of the entities listed in Schedules A-1 or A-2 hereto, the
Treasurer or any Assistant Treasurer of the Funds or any other person
designated in writing by the Treasurer of the Funds, and in the case of
each of the entities listed on Schedules A-3 or A-4, by the officer who is
a signatory to this Agreement on behalf of such entity or any other person
designated in writing by such officer or an officer of such entity of
higher authority, which countersignature or written confirmation shall be
(i) included on the same instrument containing the Proper Instructions or
on a separate instrument relating thereto, and (ii) delivered by hand, by
facsimile transmission, or in such other manner as the parties hereto may
agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the Funds.
Section 3.02. Authorized Persons. Concurrently with the execution of this
Agreement and from time to time thereafter, as appropriate, the Funds shall
deliver to the Custodian, duly certified as appropriate by the Treasurer or
any Assistant Treasurer of the Funds or by a Secretary or Assistant
Secretary of the Funds, and in the case of each of the entities listed on
Schedules A-3 or A-4, by the officer who is a signatory to this Agreement
on behalf of such entity or any other person designated in writing by such
officer or an officer of higher authority, a certificate setting forth (a)
the names, signatures and scope of authority of all persons authorized to
give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Funds
(collectively, the "Authorized Persons," and individually, an "Authorized
Person"), and (b) the names and signatures of those persons authorized to
issue Special Instructions. Such certificate may be accepted and relied
upon by the Custodian as conclusive evidence of the facts set forth therein
and shall be considered to be in full force and effect until delivery to
the Custodian of a similar certificate to the contrary. Upon delivery of a
certificate which deletes the name of a person previously authorized to
give Proper Instructions or to issue Special Instructions, such person
shall no longer be considered an Authorized Person or authorized to issue
Special Instructions, as applicable.
Section 3.03. Investment Limitations. In performing its duties hereunder
the Custodian may assume, unless and until it receives special Instructions
to the contrary (a "Contrary Notice"), that Proper Instructions received by
it are not in conflict with or in any way contrary to any investment or
other limitation applicable to any of the Funds. The Custodian shall in no
event be liable to the Funds and shall be indemnified by the Funds for any
loss, damage or expense to the Custodian arising out of any violation of
any investment or other limitation to which any Fund is subject, except to
the extent that such loss, damage or expense: (i) relates to a violation
of any investment or other limitation of a Fund occurring after receipt by
the Custodian of a Contrary Notice; or (ii) arises from a breach of this
Agreement by the Custodian.
Section 3.04. Persons Having Access to Assets of the Funds. No Authorized
Person, Trustee, officer, employee or agent of the Funds (other than the
Custodian) shall have physical access to the assets of the Funds held by
the Custodian, or shall be authorized or permitted to withdraw any such
assets for delivery to an account of such person, nor shall the Custodian
deliver any such assets to any such person; provided, however, that nothing
in this Section 3.04 shall prohibit: (a) any Authorized Person from giving
Proper Instructions, or the persons described in Section 3.01(b) from
issuing Special Instructions, so long as such action does not result in
delivery of or access to assets of the Funds prohibited by this Section
3.04; or (b) the Funds' independent certified public accountants from
examining or reviewing the assets of the Funds held by the Custodian.
Section 3.05. Actions of Custodian Based on Proper Instructions and
Special Instructions. Subject to the provisions of Section 4.01 hereof,
the Custodian shall not be responsible for the title, validity or
genuineness of any property, or evidence of title thereof, received by it
or delivered by it pursuant to this Agreement.
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION
Section 4.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Funds for all loss, damage and
expense incurred or suffered by the Funds, resulting from the failure of
the Custodian to exercise such reasonable care and diligence or from any
other breach by the Custodian of the terms of this Agreement.
(b) Acts of God, Etc. In no event shall the Custodian incur liability
hereunder if the Custodian is prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this Agreement
provides shall be performed or omitted to be performed by reason of: (i)
any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or of any foreign country,
or political subdivision thereof or of any court of competent jurisdiction;
or (ii) any act of God or war; unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the Custodian, or (B) a malfunction or failure of equipment maintained
or operated by the Custodian other than a malfunction or failure caused by
events beyond the Custodian's control and which could not reasonably be
anticipated and/or prevented by the Custodian.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Funds, the Custodian
shall use all commercially reasonable efforts and shall take all reasonable
steps under the circumstances to mitigate the effects of such event and to
avoid continuing harm to the Funds.
Section 4.02. Liability of Custodian for Actions of Securities Systems.
Notwithstanding the provisions of Section4.01 to the contrary, the
Custodian shall not be liable to the Funds for any loss, damage or expense
resulting from the use by the Custodian of a Securities System, unless such
loss, damage or expense is caused by, or results from, negligence,
misfeasance or misconduct of the Custodian. In the case of loss, damage or
expense resulting from use of a Securities System by the Custodian, the
Custodian shall take all reasonable steps to enforce such rights as it may
have against the Securities System to protect the interest of the Funds.
Section 4.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Funds severally agree to indemnify and hold harmless
the Custodian from all claims and liabilities (including reasonable
attorneys' fees) incurred or assessed against the Custodian for actions
taken in reliance upon Proper Instructions or Special Instructions;
provided, however, that such indemnity shall not apply to claims and
liabilities occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian, or any other breach of this Agreement by the
Custodian. In addition, the Funds severally agree to indemnify the
Custodian against any liability incurred by the Custodian by reason of
taxes assessed to the Custodian, or other costs, liability or expenses
incurred by the Custodian, resulting directly or indirectly solely from the
fact that securities and other property of the Funds is registered in the
name of the Custodian; provided, however, in no event shall such
indemnification be applicable to income, franchise or similar taxes which
may be imposed or applied against the Custodian or charges imposed by a
Federal Reserve Bank with respect to intra-day overdrafts unless separately
agreed to by the Funds.
(b) Extent of Liability. Notwithstanding anything to the contrary
contained herein, with respect to the indemnification obligations of the
Funds provided in this Section4.03, each Fund shall be: (i) severally, and
not jointly and severally, liable with each of the other Funds; and (ii)
liable only for its pro rata share of such liabilities, determined with
reference to such Fund's proportionate interest in the aggregate of assets
held by the Custodian in the Account with respect to which such liability
relates at the time such liability was incurred, as reflected on the books
and records of the Funds.
(c) Notice of Litigation, Right to Prosecute, Etc. The Custodian shall
promptly notify the Funds in writing of the commencement of any litigation
or proceeding brought against the Custodian in respect of which indemnity
may be sought against the Funds pursuant to this Section4.03. The Funds
shall be entitled to participate in any such litigation or proceeding and,
after written notice from the Funds to the Custodian, the Funds may assume
the defense of such litigation or proceeding with counsel of their choice
at their own expense. The Custodian shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or proceeding
without providing the Funds with adequate notice of any such settlement or
judgment, and without the Funds' prior written consent. The Custodian
shall submit written evidence to the Funds with respect to any cost or
expense for which it seeks indemnification in such form and detail as the
Funds may reasonably request.
Section 4.04. Funds, Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Funds shall have, at their election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Securities System or other person for loss, damage or
expense caused the Custodian or the Funds by such Securities System or
other person, and shall be entitled to enforce the rights of the Custodian
with respect to.any claim against such Securities System or other person
which the Custodian may have as a consequence of any such loss, damage or
expense if and to the extent that the Custodian or any Fund has not been
made whole for any such loss, damage or expense.
ARTICLE V - COMPENSATION
Section 5.01. Compensation. The Custodian shall be compensated for its
services hereunder in an amount, and at such times, as may be agreed upon,
from time to time, by the Custodian and the Funds. Each Fund shall be
severally, and not jointly, liable with the other Funds only for its pro
rata share of such compensation, determined with reference to such Fund's
proportionate interest in each Repurchase Agreement transaction to which
such compensation relates.
Section 5.02. Waiver of Right of Set-Off. The Custodian hereby waives and
relinquishes all contractual and common law rights of set-off to which it
may now or hereafter be or become entitled with respect to any obligations
of the Funds to the Custodian arising under this Agreement.
ARTICLE VI - TERMINATION
Section 6.01. Events of Termination. This Agreement shall continue in
full force and effect until the first to occur of: (a) termination by the
Custodian or the Funds by an instrument in writing delivered to the other
party, such termination to take effect not sooner than ninety (90) days
after the date of such delivery; or (b) termination by the Funds by written
notice delivered to the Custodian, based upon the Funds' determination that
there is a reasonable basis to conclude that the Custodian is insolvent or
that the financial condition of the Custodian is deteriorating in any
material respect, in which case termination shall take effect upon the
Custodians receipt of such notice or at such later time as the Funds shall
designate; provided, however, that this Agreement may be terminated as to
one or more Funds (but less than all Funds) by delivery of an amended
Schedule A-1, A-2, A-3 or A-4 pursuant to Section7.03 hereof. The
execution and delivery of an amended Schedule A-1, A-2, A-3 or A-4 which
deletes one or more Funds shall constitute a termination of this Agreement
only with respect to such deleted Fund(s).
Section 6.02. Successor Custodian; Payment of Compensation. Each of the
Funds may identify a successor custodian to which the cash, Securities and
other assets of such Fund shall, upon termination of this Agreement, be
delivered; provided that in the case of the termination of this Agreement
with respect to any of the Funds, such Fund or Funds shall direct the
Custodian to transfer the assets of such Fund or Funds held by the
Custodian pursuant to Proper Instructions. The Custodian agrees to
cooperate with the Funds in the execution of documents and performance or
all other actions necessary or desirable in order to substitute the
successor custodian for the Custodian under this Agreement. In the event
of termination, each Fund shall make payment of such Fund's applicable
share of unpaid compensation within a reasonable time following termination
and delivery of a statement to the Funds setting forth such fees. The
termination of this Agreement with respect to any of the Funds shall be
governed by the provisions of this ArticleVI as to notice, payments and
delivery of securities and other assets, and shall not affect the
obligations of the parties hereunder with respect to the other Funds set
forth in Schedule A-1, A-2, A-3 or A-4 as amended from time to time.
ARTICLE VII - MISCELLANEOUS
Section 7.01. Representative Capacity and Binding Obligation. A COPY OF
THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENTS OF EACH FUND IS
ON FILE WITH THE SECRETARY OF THE STATE OF EACH FUND'S FORMATION, AND
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE
TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT
ARE NOT BINDING UPON ANY OF THE SHAREHOLDERS, TRUSTEES, DIRECTORS,
PARTNERS, OFFICERS, EMPLOYEES OR AGENTS OF ANY FUND INDIVIDUALLY, BUT ARE
BINDING ONLY UPON THE ASSETS AND PROPERTY OF THE FUNDS, AND IN THE CASE OF
SERIES COMPANIES, SUCH FUNDS' RESPECTIVE PORTFOLIOS OR SERIES.
THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, DIRECTOR, PARTNER,
OFFICER, EMPLOYEE OR AGENT OF ANY FUND MAY BE HELD PERSONALLY LIABLE OR
RESPONSIBLE FOR ANY OBLIGATIONS OF THE FUNDS ARISING OUT OF THIS AGREEMENT.
WITH RESPECT TO OBLIGATIONS OF EACH FUND ARISING OUT OF THIS AGREEMENT, THE
CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY CLAIM SOLELY TO THE
ASSETS AND PROPERTY OF THE FUND TO WHICH SUCH OBLIGATION RELATES AS THOUGH
EACH FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT."
Section 7.02. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
subject matter hereof.
Section 7.03. Amendments. No provision of this Agreement may be amended
except by a statement in writing signed by the party against which
enforcement of the amendment is sought; provided, however, Schedule A-1,
A-2, A-3 or A-4 listing the Funds which are parties hereto, Schedule B
listing the Fund Custodians and Schedule C listing the Repo Custodians may
be amended from time to time to add or delete one or more Funds, Fund
Custodians or Repo Custodians, as the case may be, by the Funds' delivery
of an amended Schedule A-1, A-2, A-3 or A-4, Schedule B or Schedule C to
the Custodian. The deletion of one or more Funds from Schedule A-1, A-2,
A-3 or A-4 shall have the effect of terminating this Agreement as to such
Fund(s), but shall not affect this Agreement with respect to any other
Fund.
Section 7.04. Interpretation. In connection with the operation of this
Agreement, the Custodian, and the Funds may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
Section 7.05. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 7.06. Governing Law. THE PROVISIONS OF THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 7.07. Notice and Confirmations.
(a) Except as provided in Section 7.07(b) below and except in the case of
Proper Instructions or Special Instructions, notices and other writings
contemplated by this Agreement shall be delivered by hand or by facsimile
transmission (provided that in the case of delivery by facsimile
transmission, notice shall also be mailed postage prepaid) to the parties
at the following addresses:
(i) If to the Funds:
FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah Todd or
Mr. Samuel Silver
(ii) If to the Custodian:
The Bank of New York
One Wall Street
Fourth Floor
New York, NY 10286
Attn: Claire Meskovic
Telephone: (212) 635-4808
Telefax: (212) 635-4828
(b) The Custodian may provide the confirmations required by Sections 2.02
and 2.03 of this Agreement by making the information available in the form
of a communication directly between electromechanical or electrical devices
or systems (including, without limitation, computers) (or in such other
manner as the parties hereto may agree in writing) to the following Fund
Agent:
Fidelity Accounting and Custody
Domestic Securities Operations
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 506-4071
Attention: Mr. Mark Mufler
The address and telephone number of the Funds, the Fund Agent and the
Custodian and the identity of the Fund Agent specified in this Section 7.07
may be changed by written notice of the Funds to Custodian or Custodian to
the Funds, as the case may be. All written notices which are required or
provided to be given hereunder shall be effective upon actual receipt by
the entity to which such notice is given.
Section 7.08. Assignment. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective successors
and assigns, provided that, no party hereto may assign this Agreement or
any of its rights or obligations hereunder without the prior written
consent of each of the other parties.
Section 7.09. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
Section 7.10. Confidentiality; Survival of Obligations. The parties
hereto agree that they shall each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each party to
the others regarding its business and operations. All confidential
information provided by a party hereto shall be used by any other party
hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information
that is publicly available when provided or thereafter becomes publicly
available other than through a breach of this Agreement, or that is
required to be disclosed by any bank examiner of the Custodian, any auditor
of the parties hereto or by judicial or administrative process or otherwise
by applicable law or regulation. The provisions of this Section 7.10 and
Sections3.03, 4.01, 4.02, 4.03, 4.04, 4.05, 7.01 and 7.06 shall survive any
termination of this Agreement, provided that in the event of termination
the Custodian agrees that it shall transfer and return Securities and other
assets held by the Custodian for the benefit of the Funds as the Funds
direct pursuant to Proper Instructions.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of the Fund Custodians of the Funds:
The Bank of New York
Morgan Guaranty Trust Company
Brown Brothers Harriman & Co.
First Union National Bank Charlotte
Chase Manhattan Bank, N.A.
State Street Bank and Trust Company
SCHEDULE C
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of Repo Custodians of the Funds:
The Bank of New York
Chemical Bank
Morgan Guaranty Trust Company
EXHIBIT 8(G)
Form of
FIRST AMENDMENT TO
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN
THE BANK OF NEW YORK
AND
FIDELITY FUNDS
FIRST AMENDMENT TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT BETWEEN THE
BANK OF NEW YORK AND FIDELITY FUNDS, dated as of________________, by and
between THE BANK OF NEW YORK ("Custodian") and each of the entities listed
on Schedules A-1, A-2, A-3 and A-4 hereto on behalf of itself or, (i) in
the case of a series company, on behalf of one or more of its portfolios or
series listed on SchedulesA-1 or A-2 hereto, (ii) in the case of the
accounts listed on Schedule A-3 hereto, acting through Fidelity Management
& Research Company, and (iii)in the case of the commingled or individual
accounts listed on Schedule A-4 hereto, acting through Fidelity Management
Trust Company (collectively, the "Funds" and each, a "Fund").
WITNESSETH
WHEREAS, Custodian and certain of the Funds have entered into that certain
Joint Trading Account Custody Agreement between The Bank of New York and
Fidelity Funds, dated as of ______________ (the "Agreement"), pursuant to
which the Funds have appointed the Custodian as its custodian for the
purpose of establishing and administering one or more joint trading
accounts or subaccounts thereof (individually, an "Account" and
collectively, the "Accounts") and holding cash and securities for the Funds
in connection with repurchase transactions effected through the Accounts;
and
WHEREAS, Seller and the Funds desire to amend the Agreement as set forth
below.
NOW, THEREFORE, in consideration of the premises and mutual promises and
covenants contained herein, the parties hereto agree as follows. Unless
otherwise defined herein or the context otherwise requires, terms used in
this Amendment, including the preamble and recitals, have the meanings
provided in the Agreement.
The Agreement is hereby amended by deleting Paragraph2.03(f) in its
entirety and substituting the following in lieu thereof:
"(f) Overdraft. In the event that the Custodian is directed by Proper
Instructions to make any payment or transfer of funds on behalf of a Fund
for which there would be, at the close of business on the date of such
payment or transfer, insufficient funds held by the Custodian on behalf of
such Fund, the Custodian may, in its discretion, provide an overdraft
("Overdraft") to the Fund (such Fund being referred to herein as an
"Overdraft Fund"), in an amount sufficient to allow the completion of such
payment or transfer. Any Overdraft provided hereunder: (a) shall be
payable on the next Business Day, unless otherwise agreed by the Overdraft
Fund and the Custodian; and (b) shall accrue interest from the date of the
Overdraft to the date of payment in full by the Overdraft Fund at a rate
agreed upon in writing, from time to time, by the Custodian and the
Overdraft Fund. The Custodian and the Funds acknowledge that the purpose
of such Overdrafts is to temporarily finance the purchase or sale of
securities for prompt delivery in accordance with the terms hereof. The
Custodian hereby agrees to notify each Overdraft Fund by 3:00 p.m., New
York time, of the amount of any Overdraft. Provided that Custodian has
given the notice required by this subparagraph (f), the Funds hereby agree
that, as security for the Overdraft of an Overdraft Fund, the Custodian
shall have a continuing lien and security interest in and to all interest
of such Overdraft Fund in Securities whose purchase is financed by
Custodian and which are in Custodian's possession or in the possession or
control of any third party acting on Custodian's behalf and the proceeds
thereof. In this regard, Custodian shall be entitled to all the rights and
remedies of a pledgee under common law and a secured party under the New
York Uniform Commercial Code and any other applicable laws or regulations
as then in effect."
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed and delivered under seal by their duly authorized officers.
[Signature Lines Omitted]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 19
to the Registration Statement on Form N-1A of Fidelity Aberdeen Street
Trust, of our reports dated May 9, 1997 on the financial statements and
financial highlights included in the March 31, 1997 Annual Report to
Shareholders of Fidelity Freedom Income Fund, Fidelity Freedom 2000 Fund,
Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund, and Fidelity
Freedom 2030 Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 14, 1997
PLAN DOCUMENTS
The Fidelity SIMPLE-IRAPlan
Forms
Adoption Agreement
Company Profile Form
Plan Document
THE FIDELITY SIMPLE-IRAPLAN
Adoption Agreement
Use this Adoption Agreement to adopt or amend the Fidelity SIMPLE-IRA Plan.
The enclosed Fidelity SIMPLE-IRA Plan Agreement, along with the information
below, including any elections you make in this Adoption Agreement, shall
constitute your Fidelity SIMPLE-IRA Plan. You and each of your employees
must also complete a SIMPLE-IRA Application to accept SIMPLE contributions.
For help completing this Adoption Agreement, call us at 1-800-544-5373.
Please complete this Adoption Agreement and return it with the Company
Profile Form in the enclosed envelope, or mail them to: Fidelity
Investments, P.O. Box 650281, Dallas, TX 75266-0281.
Please complete all sections.
1. Employer Information
Name of Employer (i.e., Company Name): Tax Identification Number:
Address:
Name of Contact Person: Daytime Telephone:
Plan Effective Date: ___/___/___. (If this is the first year for which you
are adopting a SIMPLE-IRA Plan, you may insert any date of the applicable
year. If left blank, the Effective Date will be the first day of January
of the applicable year.)
month day year
2. Eligibility Requirements
The Employer shall permit all Employees who meet the following eligibility
requirements to participate under the Fidelity
SIMPLE-IRA Plan:
A. Full Eligibility. All Employees are eligible to participate in the
Plan upon the later of the Plan's Effective Date, or the
Employee's date of hire.
OR
B. Limited Eligibility. Eligibility is limited to Employees who are
described in both (i) and (ii) below:
(i) Current Compensation. Employees who are reasonably expected to
receive at least $________ in Compensation (not
to exceed $5,000) for the calendar year;
AND
(ii) Prior Compensation. Employees who have received at least $______ in
Compensation (not to exceed $5,000) during
any _______
(insert "0," "1," or "2") prior calendar years.
Please continue on reverse side.
Questions?
Call a Fidelity Representative
1-800-544-5373
8 a.m. - 9 p.m. ET
Seven days a week
3. Contributions
A. Employee Elective Deferrals. By executing a Salary Reduction Agreement
with the Employer, an Eligible Employee may elect to defer a percentage of
his or her Compensation which will result in the deferral of no more than
$6,000 (as indexed) per calendar year. An Employee may terminate a Salary
Reduction Agreement at any time during the year, and an Employer can elect
when such a Salary Reduction Agreement can resume.
Employees who modify or terminate a Salary Reduction Agreement during the
year (check one):
Can resume Elective Deferrals the first day of the next month:
Can resume Elective Deferrals the first day of the next quarter;
Cannot resume Elective Deferrals until the next Plan Year
B. Employer Contributions. For each Plan Year, and subject to the terms
of Section 4.3 of the Plan, the Employer shall make:
(i) Matching Contributions.
(a) The Employer will match the Employee's Elective Deferral on a
dollar-for-dollar basis (not to exceed the lesser of
3% of the Employee's Compensation or $6,000, as indexed)
OR
(b) The Employer will match the Employee's Elective Deferral on a
dollar-for-dollar basis up to ___% (insert an amount
less than 3% and greater than or equal to 1%) of the Employee's
Compensation, not to exceed $6,000 (as
indexed).
Note: The Employer may elect to reduce the 3% Matching Contribution limit
in 3B(i)(a) above to a lesser
percentage in 3B(i)(b) above, but not less than 1%. The Employer cannot
reduce the 3% limit for more than two
years out of the five-year period ending with the Plan Year the reduction
is effective.
OR
(ii) Nonelective Contributions. The Employer will make a contribution of
2% of Compensation (Compensation not to
exceed $160,000, as indexed) for each Eligible Employee, regardless of
whether the Eligible Employee elects to
make Elective Deferrals to the Plan.
4. Signature
By signing below, the Employer named below hereby (check one)
adopts
OR
amends
the Fidelity SIMPLE-IRA Plan under Section 408(p) of the Internal Revenue
Code, the terms of which shall be governed by the Fidelity SIMPLE-IRA Plan
Agreement and the instructions contained in this Adoption Agreement. The
Employer appoints Fidelity Management Trust Company of Texas ("Fidelity")
(or its successor) as Custodian of this Plan, and recognizes that while
such Custodian is a bank, neither Fidelity Distributors Corporation, nor
any mutual fund in which this SIMPLE-IRA Plan may invest is a bank, and
mutual fund shares are not backed or guaranteed by any bank or insured by
the FDIC. The Employer hereby authorizes Fidelity to accept direction with
respect to this Plan from the Contact Person authorized in Section 1 above.
(Please keep a copy of this form and the Company Profile Form for your
records.)
The Fidelity SIMPLE-IRA Plan Agreement and Adoption Agreement is
intended to be submitted to the Internal Revenue Service in accordance with
applicable revenue procedures for review and approval as a prototype plan.
Revisions may be required in order to obtain Internal Revenue Service
approval. The revised document shall be distributed to adopting Employers
upon approval from the Internal Revenue Service.
Name of Employer (i.e., Company Name)
Name of Person Authorized to Sign on Behalf of Company
(Please Print)
X Signature of Authorized Person Date
(Please keep a copy of this form and the Company Profile Form for your
records.)
The Fidelity SIMPLE-IRA Plan Agreement and Adoption Agreement is intended
to be submitted to the Internal Revenue Service in accordance with
applicable revenue procedures for review and approval as a prototype plan.
Revisions may be required in order to obtain Internal Revenue Service
approval. The revised document shall be distributed to adopting Employers
upon approval from the Internal Revenue Service.
Fidelity Brokerage Services, Inc.
Member NYSE, SIPC
7199601
THE FIDELITY SIMPLE IRAPLAN
Company Profile Form
In order to assist you with the implementation of the Fidelity SIMPLE-IRA
Plan and processing of contributions, we are requesting that you provide us
with some information about your company. Please complete this form and
return it with the SIMPLE-IRA Plan Adoption Agreement in the enclosed
envelope, or mail them to: Fidelity Investments, P.O. Box 650281, Dallas,
TX, 75266-0281.
Please complete all sections.
1. Employer Information
Name of Employer (i.e., Company Name): Tax Identification Number:
Name of Contact Person: Type of Business:
(medium solid bullet) Do you currently contribute to another
employer-sponsored retirement plan (e.g., a Keogh, 401(k) or SEP)? yes no
(medium solid bullet) Contributions cannot be made to the SIMPLE Plan for
any year for which contributions are made or benefits accrued to another
employer-sponsored retirement plan.
(medium solid bullet) What is the best time of day for Fidelity to call you
regarding questions concerning your SIMPLEPlan? _____________________
2. Employee Information
Please tell us the number of your employees, and an estimate of how many
Eligible Employees will participate in the Plan, so that we may send you
the appropriate number of enrollment kits.
(medium solid bullet) Total number of employees in your company (including
yourself): ________
(medium solid bullet) Number of employees eligible to participate in the
Plan (including yourself), based on the eligibility requirements you
elected on your Adoption Agreement: ________
(medium solid bullet) Please estimate to the best of your ability the
number of Eligible Employees who will participate in the Plan (including
yourself): ___________
3. Contribution Processing
Employees' Elective Deferrals and Employer Matching Contributions and
Nonelective Contributions must be sent electronically via the Automated
Clearing House ("ACH"). We will assist you and your payroll processor in
setting up this service.
(medium solid bullet) How is your payroll processed? internally externally
Name of internal person who processes your payroll:
_______________________________________
Phone number: ( )
Name of external payroll service (if applicable):
_______________________________________
Phone number: ( )
(medium solid bullet) Payroll frequency: weekly bi-weekly monthly
Employees' Elective Deferrals must be deposited no later than the 30th day
following the last day of the month in which the deferrals are withheld
from the Employees' Compensation. Employer Matching Contributions and
Nonelective Contributions must be made by your company's tax filing
deadline, including extensions, for the taxable year for which the
Contributions are made. Your bank or ACH service provider may charge you a
transaction fee (on a per-employee/per contribution basis) for sending
contributions.
(medium solid bullet) How often do you expect to send employee Elective
Deferrals?
regularly after each pay period monthly
(medium solid bullet) How often do you expect to send Employer Matching
Contributions and Nonelective Contributions?
regularly after each pay period monthly annually
Please continue on reverse side.
4. Your SIMPLE-IRA Plan
Which investment option will be made available to Eligible Employees?
(Choose one option that applies to all participants, including yourself.)
Mutual Fund Package (a pre-selected list of no-load Fidelity mutual funds)
Brokerage Option (ability to purchase stocks, bonds, and mutual funds from
Fidelity and other companies)
5. Signature
I certify that the information above is correct.
(Please keep a copy of this form and the Adoption Agreement for your
records.)
Name of Employer (i.e., Company Name)
Name of Person Authorized to Sign on Behalf of Company
(Please Print)
X Signature of Authorized Person Date
Questions?
Call a Fidelity Representative
1-800-544-5373
8 a.m. - 9 p.m. ET
Seven days a week
Fidelity Brokerage Services, Inc.
Member NYSE, SIPC
THE FIDELITY SIMPLE-IRA PLAN
Plan Agreement
Savings Incentive Match Plan for Employees
in IRA Form under Section 408(p) of the Internal Revenue Code
ARTICLE I
Adoption and Purpose of Plan
1.1 Adoption of Plan: By completing and executing the Adoption Agreement
the Employer has adopted and established the Sponsoring Organization's
Prototype Plan. This Plan document may only be used in conjunction with an
Internal Revenue Service ("IRS") Model IRA or an IRS approved Master or
Prototype IRA.
1.2 Purpose:
(a) The purpose of this Plan is to help provide retirement benefits for
the individuals who are eligible to participate hereunder. It is intended
that this Plan be for the exclusive benefit of the Participants, and that
the Plan qualify under Section 408(p) of the Code.
(b) The Employer agrees to permit Elective Deferrals to be made in each
Plan Year to the individual retirement account ("IRA") as described in
Section 408(a) of the Code, established by or on behalf of each of the
Employer's Employees who are eligible to participate in the Plan.
1.3 Limitations:
(a) This Plan may only be adopted by an Eligible Employer.
(b) This Plan may not be adopted by an Employer (or a predecessor
employer) who currently maintains another plan, contract, pension, or trust
described in subparagraph (A) or (B) of Section 219(g)(5) of the Code.
(c) If the Employer amends this Plan other than by making a change of the
Employer's prior election of an optional provision permitted in the
Adoption Agreement, (i) the Employer shall no longer participate in the
Prototype Plan, (ii) the Employer shall be considered to have substituted
an individually designed SIMPLE plan for the Prototype Plan, and (iii) the
Employer may no longer rely on the opinion letter received from the IRS in
connection with the Prototype Plan.
(d) Contributions under the Plan must be contributed to the separate IRA
established under the Plan by or on behalf of the Participant.
ARTICLE II
Definitions
As used in this Plan the following terms shall have the meanings set forth
below, unless a different meaning is clearly required by the context:
2.1 "Adoption Agreement" or "Agreement" shall mean the original
application executed by the Employer, and any amendment thereto, through
which the Employer adopts and establishes, or amends, the Plan, designates
the optional provisions selected by the Employer and agrees to be bound by
all terms and conditions of the Plan. The provisions of the Adoption
Agreement shall be considered an integral part of the Plan as if set forth
fully herein. This Agreement may be proved either by an original copy or
by a reproduced copy thereof, including, without limitation, a copy
reproduced by photocopying, facsimile transmission, or electronic imaging.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor provisions of law.
2.3 "Compensation" shall mean all of a Participant's wages, salaries, and
fees for professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer maintaining the Plan
as defined under Section 6051(a)(3) and (8) of the Code. For any
Self-Employed individual covered under the Plan, Compensation will mean
Earned Income. Compensation shall include only that compensation which is
actually paid or made available to the Participant during the Plan Year.
Compensation shall include any amount which is contributed to the Plan by
the Employer pursuant to a Salary Reduction Agreement and which is not
includable in the gross income of the Employee under Section 408(p) of the
Code.
The annual Compensation of each Participant taken into account under the
Plan for purposes only of the Nonelective Contributions for any Plan Year
shall not exceed $150,000, as adjusted from time to time in accordance with
Section 401(a)(17) of the Code for increases in the cost of living. If the
Plan determines Compensation for a period of time that contains fewer than
12 calendar months, then the otherwise applicable annual Compensation limit
shall be an amount equal to the annual Compensation limit for the calendar
year in which the Compensation period begins multiplied by the ratio
obtained by dividing the number of full months in the period by 12.
2.4 "Custodian" shall mean the financial institution or other organization
specified in the Adoption Agreement (or its successor) which qualifies
under Section 408(a) of the Code and is serving as custodian of the IRA to
which an Employer contribution is made under the Plan.
2.5 "Elective Deferrals" shall mean any Employer contribution made to a
Participant's IRA under the Plan at the election of such Participant, in
lieu of cash compensation, and shall include contributions made pursuant to
a Salary Reduction Agreement.
2.6. "Earned Income" shall mean the net earnings from self-employment
determined under Section 1402(a) of the Code without regarding to any
contribution under the Plan derived by a Self-Employed.
2.7 "Effective Date" shall mean the date specified in the Adoption
Agreement.
2.8 "Election Period" shall mean the 60-day period before the beginning of
any Plan Year. For the first Plan Year the Election Period shall mean the
60-day period before the Effective Date of the Plan. For the first Plan
Year in which an Employee is eligible to participate in the Plan, such
Election Period shall mean the 60-day period before an Employee is eligible
to participate in the Plan and shall include either the date the Employee
becomes eligible or the day before.
2.9 "Eligible Employee" shall mean an Employee who meets the eligibility
requirements as outlined in Section 3.1 and elected by the Employer in the
Adoption Agreement.
2.10 "Eligible Employer" shall mean an Employer which had no more than 100
Employees who received at least $5,000 of Compensation from the Employer
for the preceding calendar year, and who does not currently maintain
another plan, contract, pension or trust described in subparagraph (A) or
(B) of Section 219(g)(5) of the Code. An Eligible Employer who adopts a
SIMPLE plan for one or more years, and who subsequently fails to be an
Eligible Employer, shall be treated as an Eligible Employer for the
two-year period following the last Plan Year the Employer was an Eligible
Employer.
2.11 "Employee" shall mean an individual, including a Self-Employed,
employed by the Employer, who performs services with respect to the trade
or business of the Employer. For purposes of eligibility in accordance
with Section 3.1 such term shall exclude (i) any individual who is a
nonresident alien receiving no earned income from the Employer which
constitutes income from sources within the United States, and (ii) any
individual who is covered by a collective bargaining agreement as to which
retirement benefits were the subject of good faith bargaining. "Employee"
shall also mean any employee of any other employer required to be
aggregated under Section 414(b), (c) or (m) of the Code; any leased
employee within the meaning of Section 414(n) of the Code; and all
employees required to be aggregated under section 414(o) of the Code.
2.12 "Employer" shall mean the sole proprietorship, partnership,
corporation or other entity identified as such in the Adoption Agreement,
and any successor thereto.
2.13 "Fidelity SIMPLE-IRA Plan" or "Fidelity SIMPLE Plan" or "Plan" shall
mean the Sponsoring Organization's Prototype Plan consisting of this Plan
document and the Adoption Agreement, as completed and executed by the
Employer, together with any and all amendments and supplements hereto.
2.14 "Matching Contributions" shall mean the Employer contribution
described in Section 4.3(b).
2.15 "Nonelective Contributions" shall mean the Employer contribution of
two percent (2%) of Compensation of each Eligible Employee as described in
Section 4.3(c).
2.16 "Participant" shall mean each Eligible Employee who participates in
the Plan pursuant to its provisions.
2.17 "Plan year" shall mean the calendar year.
2.18 "Prototype Plan" shall mean the form of the Fidelity SIMPLE-IRA Plan,
as approved from time to time by the IRS.
2.19 "Salary Reduction Agreement" shall mean a written agreement or
arrangement between the Participant and the Employer pursuant to which the
Participant's salary is reduced and the amount of such reduction is
contributed by the Employer to the Participant's IRA under the Plan.
2.20 "SIMPLE" shall mean a Savings Incentive Match Plan for Employees, as
defined in Section 408(p) of the Code under which Elective Deferrals,
Matching Contributions or Nonelective Contributions may be made.
2.21 "Self-Employed" shall mean an individual who has Earned Income for a
Plan Year from the trade or business (or would have had Earned Income but
for the fact that the trade or business had no net profits for the Plan
Year) with respect to which the Plan is established.
2.22 "Sponsoring Organization" shall mean Fidelity Management & Research
Company, a Massachusetts corporation, or its successor.
ARTICLE III
Eligibility and Participation
3.1 Eligible Employees: All Employees of the Employer shall be eligible to
participate in the Plan except for Excludable Employees as defined under
Section 3.2.
3.2 Excludable Employees: If the Employer so elects in Item 2B of the
Adoption Agreement, Employees who are not reasonably expected to earn at
least the amount of Compensation stated in Item 2B(i) of the Adoption
Agreement (not to exceed $5,000) from the Employer during the Plan Year for
which the contribution is being made and Employees who have not earned at
least the amount of Compensation stated in Item 2B(ii) of the Adoption
Agreement (not to exceed $5,000) from the Employer during any of the number
of prior calendar years stated in Item 2B(ii) of the Adoption Agreement
(not to exceed two calendar years) shall be excluded from eligibility.
3.3 Participation:
(a) Each Eligible Employee shall be eligible to become a Participant after
satisfying the requirements specified in Item 2 in the Adoption Agreement.
(b) Each Participant shall establish a separate IRA under the Plan in
order to receive contributions provided for under the Plan and any
contributions shall be made directly to such IRA. Unless the Employer
otherwise so elects and notification of such election is provided to each
Eligible Employee by the Employer, such IRA shall be established with the
custodian or trustee of the Participant's choice.
(c) If a Participant fails to establish in a timely manner or maintain a
separate IRA under the Plan into which contributions provided for under the
Plan may be made on such Participant's behalf, the Employer may execute any
necessary documents to establish an IRA under the Plan with the Custodian
into which such contributions shall be made on behalf of the Participant.
ARTICLE IV
Contributions and Written Allocation Formula
4.1 Amount of Contribution: The Employer agrees to contribute on behalf of
each Participant for the Plan Year an amount determined under one of the
written allocation formulas specified in Item 3B of the Adoption Agreement.
4.2 Uniform Relationship to Compensation: All Matching Contributions and
Nonelective Contributions to the Plan shall bear a uniform relationship to
the total Compensation of each Participant.
4.3 Limitation on Employer Contributions: The maximum Employer
contributions which may be made for any one Plan Year with respect to any
Participant and allocated to each Participant's IRA under the Plan is:
(a) Elective Deferrals: Each Eligible Employee may elect to have
contributions pursuant to a Salary Reduction Agreement made under this Plan
expressed as a percentage of Compensation. Such contributions may not
exceed $6,000, as adjusted from time to time by the Secretary of the
Treasury in accordance with Section 415(d) of the Code for increases in the
cost of living.
(b) Matching Contributions:
(i) Unless the Employer elects to make the Nonelective Contributions
described in Section 4.3(c), the Employer is required to make a
dollar-for-dollar Matching Contribution equal to the Elective Deferral by
each Participant. Such Matching Contribution shall not exceed three
percent (3%) of such Participant's Compensation for the Plan Year or
$6,000, as adjusted from time to time by the Secretary of the Treasury in
accordance with Section 415(d) of the Code for increases in the cost of
living, whichever is less.
(ii) The Employer may elect a lesser percentage (not less than one
percent (1%)) for any Plan year if:
(A) the Employer notifies all Eligible Employees of such lesser
percentage within a reasonable time before the Election Period; and
(B) Matching Contributions are not less than three percent (3%) for
more than two (2) of the years during the five-year (5-year) period ending
with the current Plan Year.
(iii) Employers who have never maintained a SIMPLE plan shall be
treated as if the level of Matching Contributions was at three percent (3%)
of Compensation for the previous calendar year.
(c) Nonelective Contributions: In lieu of making Matching Contributions
described in Section 4.3(b), the Employer may elect to make a two percent
(2%) Nonelective Contribution for each Eligible Employee. In order to
elect such Nonelective Contribution, the Employer must notify all Eligible
Employees of such election within a reasonable time before the Election
Period.
4.4 Timing of Matching Contributions and Nonelective Contributions: An
Employer shall make the Matching Contributions or Nonelective Contributions
described in Section 4.3 to each Participant's IRA under the Plan no later
than the due date for filing of the Employer's income tax return, including
extensions, for the taxable year that includes the last day of the Plan
Year for which the contributions are made.
4.5 Deductibility of Employer Contributions: Contributions under the Plan
are deductible by the Employer for the taxable year with or within which
the Plan Year ends. Employer contributions made for a particular taxable
year and contributed by the due date for filing of the Employer's income
tax return, including extensions, are deemed made in that taxable year.
4.6 Vesting Requirements: A Participant's right to any contribution made to
an IRA under the Plan on behalf of such Participant shall be 100%
immediately vested and non-forfeitable at all times.
4.7 Investment of Contributions and Assets:
(a) Direction by Participant: All contributions to the Participant's IRA
under the Plan and assets in such IRA shall be invested in accordance with
specific instructions given by the Participant (or the person designated by
such Participant on a signed form acceptable to and filed with the
Custodian to make investment decisions on behalf of the Participant (the
"Authorized Agent")) (or, following the death of the Participant, his or
her beneficiary, executor or administrator) to the Custodian in a form and
manner acceptable to the Custodian. An investment medium must be approved
by the Sponsoring Organization in order to be available under the Plan. In
the event that at any time there shall be credited to a Participant's IRA
cash for which no such instructions have been furnished, or for which the
instructions furnished are, in the opinion of the Custodian, not clear, or
for which the instructions furnished would require investment in a medium
not approved by the Sponsoring Organization for use under the Plan, such
cash shall be invested in Fidelity Cash Reserves, a money market mutual
fund.
(b) Effect of Direction: The Custodian and its agents may conclusively
rely upon and shall be protected in acting upon any direction from the
Participant (or the Participant's Authorized Agent) (or, following the
death of the Participant, his or her beneficiary, executor or
administrator) believed by it to be genuine, and, so long as it acts in
good faith, in taking or omitting to take any other action. The Custodian
shall have no duty to question the directions of the Participant (or the
Participant's Authorized Agent) (or, following the death of the
Participant, his or her beneficiary, executor or administrator), regarding
the investment of the assets in the Participant's IRA or to advise such
persons regarding the purchase, retention or sale of such investments, nor
shall the Custodian or the Sponsoring Organization, or any of their
affiliates, be liable for nay loss that results from the exercise of
control (whether by his or her action or inaction) over the Participant's
IRA by the Participant (or the Participant's Authorized Agent) (or,
following the death of the Participant, his or her beneficiary, executor or
administrator).
ARTICLE V
Elective Deferral Rules
5.1 Salary Reduction Agreement: An Eligible Employee may elect to have
Elective Deferrals made under the Plan through either single-sum or
continuing contributions, or both, pursuant to a Salary Reduction
Agreement. For a Plan Year, an Eligible Employee may enter into a Salary
Reduction Agreement during the Election Period. By entering into a Salary
Reduction Agreement, the Employee agrees to a reduction in his or her
Compensation in the amount designated and the Employer agrees to contribute
and allocate an equivalent amount to the Participant's IRA under the Plan.
An Employee may terminate a Salary Reduction Agreement at any time during
the Plan Year. An Employee who modifies or terminates a Salary Reduction
Agreement during the Plan Year may not resume Elective Deferrals until such
time as is stated in Item 3A of the Adoption Agreement following such
modification or termination.
5.2 Amount of Elective Deferrals: An Eligible Employee may elect to have
his or her Compensation reduced by a percentage per pay period, or for a
specified pay period or periods, as designated in a Salary Reduction
Agreement. Under no circumstances may an Eligible Employee's Elective
Deferrals in any Plan Year exceed $6,000, or, in the aggregate, the limits
imposed under Section 402(g) of the Code, as adjusted from time to time by
the Secretary of the Treasury in accordance with Section 415(d) of the Code
for increases in the cost of living.
5.3 Allocation of Elective Deferrals: The Employer shall contribute and
allocate to each Participant's IRA under the Plan an amount equal to the
amount of the Participant's Elective Deferrals.
5.4 Timing of Elective Deferrals: No Elective Deferrals may be based on
Compensation an Employee received or had a right to receive, immediately
before execution of a Salary Reduction Agreement. Notwithstanding the
preceding sentence, an Employee may use Compensation received during a Plan
Year prior to executing a Salary Reduction Agreement as a basis for
determining his or her Elective Deferrals, but not as a source of their
Elective Deferrals.
5.5 Transmission of Elective Deferrals: An Employer shall deposit such
Elective Deferrals into the Participant's IRA under the Plan in a form and
manner acceptable to the Custodian and as soon as such contributions can be
reasonably segregated from the Employer's general assets, but no later than
the close of the 30-day period following the last day of the month in which
the amounts were withheld from the Employee's Compensation.
ARTICLE VI
Distributions and Rollovers
6.1 Distributions: The Participant may elect, in such form and in such
manner as is acceptable to the Custodian, to receive a distribution of any
part or all of the assets in his or her IRA under the Plan at any time.
Distributions of the assets in a Participant's IRA under the Plan are
generally subject to the provisions applicable to IRAs under Sections 408
and 72(t) of the Code, and they are generally includable in gross income of
the Participant when withdrawn. If a Participant withdraws an amount from
his or her IRA under the Plan and the amount is subject to the 10% penalty
on early distributions under Section 72(t) of the Code, such penalty is
increased from 10% to 25% if the withdrawal is made within two (2) years
from the date the Participant first participated in a SIMPLE plan.
6.2 Minimum Required Distributions: Notwithstanding any provision
hereunder to the contrary, the Participant's entire interest in his or her
IRA under the Plan must be, or begin to be, distributed by the
Participant's required beginning date (within the meaning of Section
401(a)(9) of the Code). The Custodian is not obligated to make any
distribution, including a minimum required distribution as specified
herein, absent written direction from the Participant.
6.3 Rollovers: A Participant may roll over or transfer part or all the
assets in his or her IRA under the Plan to an IRA under another SIMPLE plan
on a tax-free basis. In addition, a Participant may roll over or transfer
part or all of the assets in his or her IRA under the Plan to any other IRA
on a tax-free basis after a two-year period has expired since the
Participant first participated in a SIMPLE plan. Any rollover or transfer
must comply with the requirements under Section 408 of the Code.
ARTICLE VII
Substitution, Resignation or Removal of Custodian
7.1 Substitution of Custodian: The Sponsoring Organization may at any time
appoint as substitute for the Custodian named in the Adoption Agreement
another institution that satisfies the requirements of Section 408(a) of
the Code, provided that the Sponsoring Organization shall notify the
Employer in writing at least 30 days in advance of the effective date of
any such appointment.
7.2 Resignation or Removal of Custodian: The Custodian may resign at any
time, upon at least 30 days' written notice to the Employer. The Custodian
may be removed by the Employer at any time, upon 30 days' written notice to
the Custodian. Upon resignation of the Custodian, the Sponsoring
Organization may, but shall not be required to, appoint a successor
custodian. Upon removal of the Custodian, the Employer shall appoint a
successor custodian, but in that event the Plan shall be considered an
individually designed plan for purposes of Section 8.2. Upon receipt by
the Custodian of written acceptance of appointment by a successor
custodian, and notice by the Custodian to the Participants, the Custodian
shall transfer and pay over to such successor the assets held in the
Participants' IRAs under the Plan, together with copies of relevant books
and records, to such successor custodian. The Custodian is authorized to
reserve from each Participant's IRA such sum of money or property as it may
deem advisable for payment of all its fees, compensation, costs and
expenses, or for payment of any other liabilities constituting a charge on
or against the assets of the Plan, or on or against the Custodian or the
Sponsoring Organization, with any balance of such reserve remaining after
the payment of all such items to be paid over to the successor custodian.
The Custodian shall not be liable for the acts or omissions of any
successor to it. If after the Custodian's resignation or removal no
successor custodian is appointed, the Plan shall be terminated.
ARTICLE VIII
Amendment and Termination
8.1 Sponsoring Organization's Right to Amend: The Sponsoring Organization
may amend any part of the prototype form of this Plan or the Adoption
Agreement in any respect at any time (including retroactive amendments), so
that they may conform with applicable provisions of the Code, or with any
other applicable law as in effect from time to time, or to make such other
changes to the Plan or the Adoption Agreement as the Sponsoring
Organization deems advisable. Any such amendment shall be effected by
mailing a written notice of such amendment to the Employer at the
Employer's last known address as shown in the records of the Custodian.
8.2 Employer's Right to Amend: The Employer may at any time and from time
to time modify or amend this Plan in whole or in part (including
retroactive amendments), by delivering to the Custodian a written copy of
such amendment executed by the Employer; provided, however that any such
amendment other than a change of the Employer's prior election of an
optional provision permitted in the Adoption Agreement will constitute
substitution by the Employer of an individually designed plan for the
approved Prototype Plan, upon which event the Custodian named in the
Adoption Agreement will resign pursuant to Section 7.2. An Employer may
effect a change of any optional provision previously elected by the
Employer in the Adoption Agreement by filing with the Custodian an amended
Adoption Agreement executed by the Employer only. Such changes to be
effective on the Effective Date of such amended Adoption Agreement.
8.3 Termination of Plan: The Employer may terminate the Plan at any time by
delivering to the Custodian a written notice, in a manner and form
acceptable to the Custodian, signed by or on behalf of the Employer and
specifying the date as of which the Plan shall terminate.
ARTICLE IX
Miscellaneous
9.1 Administration and Enforcement: The Plan shall be administered by the
Employer, who shall be responsible for the operation of the Plan in
accordance with its terms. From time to time the Employer shall furnish to
the Custodian a written instrument in a form acceptable to the Custodian,
specifying the person or persons authorized to give instructions and
directions on behalf of the Employer under the Plan, and the Custodian
shall be conclusively entitled to rely on the identity of such person or
persons as disclosed in the most recent such instrument. The Employer
shall have discretionary authority to determine all questions arising out
of the administration, interpretation and application of the Plan, which
determinations shall be conclusive and binding on all persons. In the
event that any contract or arrangement which is entered into pursuant to
the Plan conflicts in any manner with the provisions of the Plan, the
provisions of the Plan will govern. Should any provision or provisions of
this Plan be deemed to be invalid, such invalidity shall not affect the
remaining provisions of the Plan.
9.2 Fees and Expenses of Administration: As consideration for its
administrative services to the Plan and for performing its duties
hereunder, the Custodian shall be entitled to reasonable fees, and to
reimbursement of all reasonable expenses, including legal expenses,
incurred in the rendering of such services and the performance of such
duties, in accordance with any schedule of fees in effect at that time, as
the Custodian may determine from time to time. The Custodian shall bill
the Employer directly for such fees and expenses.
9.3 Reporting and Employee Notification:
(a) Reports of the Custodian: Each Plan Year the Custodian shall prepare,
and provide to the Employer, a summary description containing the following
information: (i) the name and address of the Employer and the Custodian;
(ii) the eligibility and participation requirements under the Plan; (iii)
the benefits provided under the Plan; (iv) the time and method of making
Elective Deferrals under the Plan; and (v) the procedures for, and effects
of, withdrawals (including rollovers) from the Participant's IRA under the
Plan. Not later than 30 days after the close of each Plan Year the
Custodian shall also furnish to each Participant an account statement with
respect to his or her IRA under the Plan for such Plan Year. In addition,
the Custodian is required to file an annual report with the IRS.
(b) Employee Notification: Immediately before the Election Period, the
Employer shall notify each Eligible Employee of his or her opportunity to
make or modify an Elective Deferral under the Plan. Such notice shall
include a copy of the summary description prepared by the Custodian
described in (a) above and shall specify the contribution allocation
formula elected by the Employer as specified in Item 3B of the Adoption
Agreement.
9.4 Inalienability of Benefits: The benefits provided hereunder shall not
be subject to alienation, pledge, use as security for a loan, assignment,
garnishment, attachment, execution or levy of any kind, and any attempt to
cause such benefits to be so subjected shall not be recognized; provided,
however, that the rule just stated shall not apply in the case of a
qualified domestic relations order within the meaning of Section 414(p) of
the Code and Section 206 of the Employment Retirement Income Security Act
of 1974, as amended ("ERISA").
9.5 Limitation of Duties and Liabilities: The Custodian shall not be
responsible in any way for the collection of contributions provided for
under the Plan, the purpose or propriety of any distribution made pursuant
to Article VI or any other action or nonaction taken pursuant to the
request of the Employer or a Participant; the validity or effect of the
Plan and Adoption Agreement; or the examination of the Plan. The Employer
or successor of the Employer shall at all times fully indemnify and save
harmless the Custodian, and its successors and assigns from any liability
arising from distributions so made or actions so taken, and from any and
all liability whatsoever which may arise in connection with the Plan and
the Adoption Agreement, except liability arising from the gross negligence
or willful misconduct of the Custodian.
9.6 Delegation of Agents: The Custodian may delegate to one or more
corporations affiliated with the Custodian the performance of recordkeeping
and other ministerial services in connection with the Plan.
9.7 Governing Law: This Plan and the accompanying Adoption Agreement shall
be construed, administered and enforced in accordance with the laws of the
Commonwealth of Massachusetts, except to the extent those laws are
pre-empted by ERISA.
Questions?
Call a Fidelity Representative
1-800-544-5373
8 a.m. - 9 p.m. ET
Seven days a week
SMP-PLANDOCS-1296 Fidelity Brokerage Services, Inc., Member NYSE, SIPC
24081.001
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