SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant) Arthur S. Loring, Secretary
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
FUNDS OF
FIDELITY MUNICIPAL TRUST II
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Michigan Municipal Money Market Fund, Fidelity Ohio
Municipal Money Market Fund, and Spartan Pennsylvania Municipal Money
Market Fund (the funds), will be held at the office of Fidelity Municipal
Trust II (the trust), 82 Devonshire Street, Boston, Massachusetts 02109 on
July 16, 1997, at 10:45 a.m. The purpose of the Meeting is to consider and
act upon the following proposals, and to transact such other business as
may properly come before the Meeting or any adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based voting rights for
shareholders of the trust.
4. To approve an amended management contract for Michigan Municipal Money
Market Fund and Ohio Municipal Money Market Fund.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
5. To amend the fundamental investment limitation concerning the issuance
of senior securities of Michigan Municipal Money Market Fund and Ohio
Municipal Money Market Fund.
6. To amend the fundamental investment limitation concerning borrowing of
Michigan Municipal Money Market Fund and Ohio Municipal Money Market Fund.
7. To amend the fundamental limitation concerning the concentration of its
investments in a single industry of Michigan Municipal Money Market Fund
and Ohio Municipal Money Market Fund.
The Board of Trustees has fixed the close of business on May 19, 1997 as
the record date for the determination of the shareholders of each of the
funds entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
MAY 19, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY MUNICIPAL TRUST II:
MICHIGAN MUNICIPAL MONEY MARKET FUND
OHIO MUNICIPAL MONEY MARKET FUND
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
TO BE HELD ON JULY 16, 1997
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
Municipal Trust II (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Michigan Municipal Money Market Fund, Fidelity
Ohio Municipal Money Market Fund, and Spartan Pennsylvania Municipal Money
Market Fund (the funds) and at any adjournments thereof (the Meeting), to
be held on July 16, 1997, at 10:45 a.m. at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and
Fidelity Management & Research Company (FMR), the funds' investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about May 19, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. may be paid on a per-call basis to solicit shareholders on behalf of
the funds at an anticipated cost of approximately $7,000 (Michigan
Municipal Money Market Fund), $7,000 (Ohio Municipal Money Market Fund),
and $7,000 (Spartan Pennsylvania Municipal Money Market Fund). The expenses
in connection with preparing this Proxy Statement and its enclosures and of
all solicitations will be paid by the funds (except for Spartan
Pennsylvania Municipal Money Market Fund, whose expenses will be borne by
FMR). The funds (FMR for Spartan Pennsylvania Municipal Money Market Fund)
will reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares. The
principal business address of Fidelity Distributors Corporation (FDC) the
funds' principal underwriter and distribution agent is 82 Devonshire
Street, Boston, Massachusetts 02109. The principal business address of FMR
Texas, Inc. (FMR Texas), subadviser to the funds, is 400 East Las Colinas
Boulevard, Irving, Texas 75039.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. Only proxies that are voted will be counted
towards establishing a quorum. Broker non-votes are not considered voted
for this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
The funds may also arrange to have votes recorded by telephone. D.F. King
& Co. may be paid on a per call basis for vote-by-phone solicitations on
behalf of the funds at an anticipated cost of approximately $4,875
(Michigan Municipal Money Market Fund), $4,875 (Ohio Municipal Money Market
Fund), and $4,875 (Spartan Pennsylvania Municipal Money Market Fund). The
expenses in connection with telephone voting will be paid by the funds
(except for Spartan Pennsylvania Municipal Money Market Fund, whose
expenses will be borne by FMR). If the funds record votes by telephone,
they will use procedures designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance
with their instructions, and to confirm that their instructions have been
properly recorded. Proxies voted by telephone may be revoked at any time
before they are voted in the same manner that proxies voted by mail may be
revoked.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote FOR the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted AGAINST the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Shares of each fund of the trust issued and outstanding as of March 31,
1997 are indicated in the following table:
Michigan Municipal Money Market Fund
Ohio Municipal Money Market Fund
Spartan Pennsylvania Municipal Money Market Fund
To the knowledge of the trust, substantial (5% or more) record ownership
of the funds on ____________ was as follows:
Shareholders of record at the close of business on May 19, 1997 will be
entitled to vote at the Meeting. Each such shareholder will be entitled to
one vote for each share.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996, CALL 1-800-544-8888 OR WRITE TO FIDELITY DISTRIBUTORS
CORPORATION AT 82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
BOTH THE TRUST AND OF EACH FUND OF THE TRUST. APPROVAL OF PROPOSALS 4
THROUGH 7 REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" OF THE APPROPRIATE FUNDS. UNDER THE INVESTMENT COMPANY
ACT OF 1940 (THE 1940 ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR
MORE OF THE VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY
PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES
ARE PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING
VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS
PURPOSE.
The following tables summarize the proposals applicable to each fund.
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Proposal # Proposal Description Applicable Funds
1. To elect as Trustees the 12 Michigan Municipal Money
nominees presented in Market Fund; Ohio
proposal 1. Municipal Money Market
Fund; and Spartan
Pennsylvania Municipal
Money Market Fund
2 To ratify the selection of Michigan Municipal Money
Coopers & Lybrand L.L.P. as Market Fund; Ohio
independent accountants of Municipal Money Market
the trust. Fund; and Spartan
Pennsylvania Municipal
Money Market Fund
3 To amend the Trust Michigan Municipal Money
Instrument to provide voting Market Fund; Ohio
rights based on a Municipal Money Market
shareholder's total dollar Fund; and Spartan
investment in a fund, rather Pennsylvania Municipal
than on the number of shares Money Market Fund
owned.
4 To approve an amended Michigan Municipal Money
management contract for the Market Fund and Ohio
fund that would reduce the Municipal Money Market
management fee payable to Fund
FMR by the fund as FMR's
assets under management
increase.
Proposal # Proposal Description Applicable Funds
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
5 SENIOR SECURITIES: To add Michigan Municipal Money
the ability to issue senior Market Fund and Ohio
securities to the extent Municipal Money Market
permitted under the Fund
Investment Company Act of
1940 Act.
6 BORROWING: To amend the Michigan Municipal Money
borrowing limitation to require Market Fund and Ohio
a reduction in borrowing if Municipal Money Market
borrowings exceed the 33 Fund
1/3% limit for any reason
rather than solely because of
a decline in net assets.
7 CONCENTRATION: To Michigan Municipal Money
standardize language and Market Fund and Ohio
explicitly exclude "tax-exempt Municipal Money Market
obligations issued or Fund
guaranteed by a U.S.
territory or possession or a
state or local government, or
a political subdivision thereof"
from the limitation on industry
concentration.
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1. TO ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect a Board of Trustees of the Trust.
Pursuant to the provisions of the Trust Instrument of Fidelity Municipal
Trust II, the Trustees have determined that the number of Trustees shall be
fixed at twelve. It is intended that the enclosed proxy card will be voted
for the election as Trustees of the twelve nominees listed below, unless
such authority has been withheld in the proxy card.
Except, Robert M. Gates and William O. McCoy, all nominees named below are
currently Trustees of Fidelity Municipal Trust II and have served in that
capacity continuously since originally elected or appointed. Ralph F. Cox,
Phyllis Burke Davis, and Marvin L. Mann were selected by the trust's
Nominating and Administration Committee (see page 15) and were appointed to
the Board on November 1, 1991, December 1, 1992, and October 1, 1993,
respectively. None of the nominees are related to one another. Those
nominees indicated by an asterisk (*) are "interested persons" of the trust
by virtue of, among other things, their affiliation with either the trust,
the funds' investment adviser (FMR, or the Adviser), or the funds'
distribution agent, FDC. The business address of each nominee who is an
"interested person" is 82 Devonshire Street, Boston, Massachusetts 02109,
and the business address of all other nominees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Except for Robert M.
Gates, Peter S. Lynch, and William O. McCoy, each of the nominees is
currently a Trustee or General Partner, as the case may be, of 238 other
funds advised by FMR. Mr. Gates, Mr. Lynch and Mr. McCoy are currently a
Trustee or General Partner, as the case may be, of ____other funds advised
by FMR.
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation ** Year of
(Age) Election or
Appointmen
t
*J. Gary Burkhead Senior Vice President, is 1986
President of FMR; and President
and a Director of FMR Texas
(56) Inc., Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
Ralph F. Cox Management consultant (1994). 1991
Prior to February 1994, he was
President of Greenhill Petroleum
(65) Corporation (petroleum
exploration and production).
Until March 1990, Mr. Cox was
President and Chief Operating
Officer of Union Pacific
Resources Company
(exploration and production). He
is a Director of Sanifill
Corporation (non-hazardous
waste, 1993), CH2M Hill
Companies (engineering), Rio
Grande, Inc. (oil and gas
production), and Daniel
Industries (petroleum
measurement equipment
manufacturer). In addition, he is
a member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
September 1991, Mrs. Davis
was the Senior Vice President of
(65) 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 Consultant, author, and lecturer -
(1993). Mr. Gates was Director
of the Central Intelligence
(53) 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).
*Edward C. Johnson President, is Chairman, Chief 1968
3d Executive Officer and a Director
of FMR Corp.; a Director and
Chairman of the Board and of
(67) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc., and Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
Mr. Jones was Chairman and
Chief Executive Officer of LTV
(69) Steel Company. He is a Director
of TRW Inc. (original equipment
and replacement products),
Cleveland-Cliffs Inc (mining),
Consolidated Rail Corporation,
Birmingham Steel Corporation,
and RPM, Inc. (manufacturer of
chemical products), and he
previously served as a Director
of NACCO Industries, Inc.
(mining and marketing,
1985-1995) and Hyster-Yale
Materials Handling, Inc.
(1985-1995). In addition, he
serves as a Trustee of First
Union Real Estate Investments,
a Trustee and member of the
Executive Committee of the
Cleveland Clinic Foundation, a
Trustee and member of the
Executive Committee of
University School (Cleveland),
and a Trustee of Cleveland
Clinic Florida.
Donald J. Kirk Executive-in-Residence (1995) 1987
at Columbia University Graduate
School of Business and a
financial consultant. From 1987
(64) 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 Vice Chairman and Director of 1990
FMR (1992). Prior to May 31,
1990, he was a Director of FMR
(54) and Executive Vice President of
FMR (a position he held until
March 31, 1991); Vice President
of Fidelity Magellan Fund and
FMR Growth Group Leader; and
Managing Director of FMR Corp.
Mr. Lynch was also Vice
President of Fidelity Investments
Corporate Services (1991-1992).
He is a Director of W.R. Grace &
Co. (chemicals) and Morrison
Knudsen Corporation
(engineering and construction).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston.
William O. McCoy Vice President of Finance for the -
University of North Carolina
(16-school system, 1995). Prior to
(63) 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 Chairman of G.M. Management 1989
Group (strategic advisory
services). Prior to his retirement
(66) in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration), Commercial
Intertech Corp. (hydraulic
systems, building systems, and
metal products, 1992), CUNO,
Inc. (liquid and gas filtration
products, 1996), and Associated
Estates Realty Corporation (a
real estate investment trust,
1993). Mr. McDonough served
as a Director of
ACME-Cleveland Corp. (metal
working, telecommunications,
and electronic products) from
1987-1996.
Marvin L. Mann Chairman of the Board, 1993
President, and Chief Executive
Officer of Lexmark International,
(64) Inc. (office machines, 1991).
Prior to 1991, he held the
positions of Vice President of
International Business Machines
Corporation ("IBM") and
President and General Manager
of various IBM divisions and
subsidiaries. Mr. Mann is a
Director of M.A. Hanna
Company (chemicals, 1993) and
Infomart (marketing services,
1991), a Trammell Crow Co. In
addition, he serves as the
Campaign Vice Chairman of the
Tri-State United Way (1993) and
is a member of the University of
Alabama President's Cabinet.
Thomas R. Williams President of The Wales Group, 1989
Inc. (management and financial
advisory services). Prior to
retiring in 1987, Mr. Williams
(68) served as Chairman of the
Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc., and AppleSouth, Inc.
(restaurants, 1992).
** Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
As of December 31, 1996 the Trustees and officers of each fund owned, in
the aggregate, less than 1% of each fund's total outstanding shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
seven non-interested Trustees, met eleven times during the twelve months
ended December 31, 1996. It is expected that the Trustees will meet at
least ten times a year at regularly scheduled meetings.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, FMR or its affiliates and normally meets
four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Donald Kirk, (Chairman) and Phyllis Burke Davis are
members of the committee. If elected, it is anticipated that Mr. McCoy will
also be a member of the committee. The committee oversees and monitors the
trust's internal control structure, its auditing function and its financial
reporting process, including the resolution of material reporting issues.
The committee recommends to the Board of Trustees the appointment of
auditors for the trust. It reviews audit plans, fees and other material
arrangements in respect of the engagement of auditors, including all
no-audit services to be performed. It reviews the qualifications of key
personnel involved in the foregoing activities. The committee plays an
oversight role in respect of the trust's investment compliance procedures
and the code of ethics. During the twelve months ended December 31, 1996,
the committee held four meetings.
The trust's Nominating and Administration Committee is currently composed
of Gerald McDonough (Chairman), E. Bradley Jones, and Thomas Williams. The
committee members confer periodically and hold meetings as required. The
committee makes nominations for independent trustees, and for membership on
committees. The committee periodically reviews procedures and policies of
the Board of Trustees and committees. It acts as the administrative
committee under the Retirement Plan for non-interested trustees who retired
prior to December 30, 1996. It monitors the performance of legal counsel
employed by the trust and the independent trustees. The committee in the
first instance monitors compliance with, and acts as the administrator of
the provisions of the code of ethics applicable to the independent
trustees. During the twelve months ended December 31, 1996 the Committee
held four meetings. The Nominating and Administration Committee will
consider nominees recommended by shareholders. Recommendations should be
submitted to the Committee in care of the Secretary of the Trust. The trust
does not have a compensation committee; such matters are considered by the
Nominating and Administration Committee.
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of each fund for his or her
services for the fiscal year ended December 31, 1996.
Trustees Aggregate Aggregate Aggregate Total
Compensa Compensa Compensa Compensatio
tion from tion from tion from n from the
Fidelity Fidelity Spartan Fund
Michigan Ohio Pennsylva Complex*A
Municipal Municipal nia
Money Money Municipal
Market Market Money
Fund A,B Fund A,C Market
Fund A,D
J. Gary $ 0 $ 0 $ 0 $ 0
Burkhead**
Ralph F. Cox 80 106 81 137,700
Phyllis Burke 78 104 79 134,700
Davis
Richard J. 98 130 99 168,000
Flynn***
Edward C. 0 0 0 0
Johnson 3d**
E. Bradley 78 104 79 134,700
Jones
Donald J. Kirk 79 105 80 136,200
Peter S. 0 0 0 0
Lynch**
William O. 48 64 49 85,333
McCoy****
Gerald C. 79 105 80 136,200
McDonough
Edward H. 79 104 80 136,200
Malone***
Marvin L. Mann 78 103 79 134,700
Thomas R. 79 105 80 136,200
Williams
* Information is as of December 31, 1996 for 235 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** During the period from May 1, 1996 through the present, William McCoy
has served as a Member of the Advisory Board of Fidelity Municipal Trust
II.
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 The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $3, Phyllis
Burke Davis, $3, Richard J. Flynn, $0, E. Bradley Jones, $3, Donald J.
Kirk, $3, William O. McCoy, $0, Gerald C. McDonough, $3, Edward H. Malone,
$3, Marvin L. Mann, $3, and Thomas R. Williams, $3.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $4, Phyllis
Burke Davis, $4, Richard J. Flynn, $0, E. Bradley Jones, $4, Donald J.
Kirk, $4, William O. McCoy, $0, Gerald C. McDonough, $4, Edward H. Malone,
$4, Marvin L. Mann, $4, and Thomas R. Williams, $4.
D The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $3, Phyllis
Burke Davis, $3, Richard J. Flynn, $0, E. Bradley Jones, $3, Donald J.
Kirk, $3, William O. McCoy, $0, Gerald C. McDonough, $3, Edward H. Malone,
$3, Marvin L. Mann, $3, and Thomas R. Williams, $3.
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 becomes eligible to participate in the program at the end
of the calendar year in which he or she reaches age 72, provided that, at
the time of retirement, he or she has served as a Fidelity fund Trustee for
at least five years.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the funds to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
The funds 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 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 December 31, 1996 the Trustees, Members of the Advisory Board, and
officers of the funds owned, in the aggregate, less than 1% of each fund's
total outstanding shares.
2 . TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand
L.L.P. has been selected as independent accountants for the trust to sign
or certify any financial statements of the trust required by any law or
regulation to be certified by an independent accountant and filed with the
Securities and Exchange Commission (SEC) or any state. Pursuant to the 1940
Act, such selection requires the ratification of shareholders. In addition,
as required by the 1940 Act, the vote of the Trustees is subject to the
right of the trust, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Coopers & Lybrand L.L.P. has
advised the trust that it has no direct or material indirect ownership
interest in the trust.
The independent accountants examine annual financial statements for the
funds and provide other audit and tax-related services. In recommending the
selection of the trust's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including non-audit
services) and whether the performance of such services would affect the
accountants' independence. Representatives of Coopers & Lybrand L.L.P. are
not expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be available
should any matter arise requiring their presence.
3. TO AMEND THE TRUST INSTRUMENT TO PROVIDE DOLLAR-BASED VOTING RIGHTS FOR
SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve a proposal to amend Article VII, Section 7.01 of the
Trust Instrument. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Fidelity Michigan Municipal Money Market Fund, Fidelity Ohio
Municipal Money Market Fund, and Spartan Pennsylvania Municipal Money
Market Fund are funds of Fidelity Municipal Trust II, an open-end
management investment company organized as a Delaware business trust.
Currently, there are three funds in the trust. Shareholders of each fund
vote separately on matters concerning only that fund and vote on a
trust-wide basis on matters that effect the trust as a whole, such as
electing trustees or amending the Trust Instrument. Currently, under the
Trust Instrument, each share is entitled to one vote, regardless of the
relative value of the shares of each fund in the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights to all shareholders as required by the 1940 Act. In
the case where a trust has several series or funds, such as Fidelity
Municipal Trust II, voting rights may have become disproportionate since
the net asset value per share (NAV) of the separate funds generally diverge
over time. The Staff of the Securities and Exchange Commission (SEC) has
issued a "no-action" letter permitting a trust to seek shareholder approval
of a dollar-based voting system. The proposed amendment will comply with
the conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of each
shareholder would be commensurate with the value of the shareholder's
dollar investment rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The table below shows each fund's net
asset value. Currently, since there are only money market funds in the
trust, the proposal will not affect the voting rights of fund shareholders
on votes requiring trust-wide participation since money market funds are
managed to maintain a $1.00 NAV. However, if additional funds with
fluctuating NAVs are added to the trust, relative voting rights would be
changed under the proposal. To illustrate the potentially disproportionate
calculation of voting power currently in place, the table below shows a
hypothetical example of a trust with funds with fluctuating NAVs.
Fund Net Asset Value $1,000
investment in
terms of
number of
shares
A $ 10.00 100.000
B $ 7.57 132.100
C $ 10.93 91.491
D $ 1.00 1,000.000
For example, Fund D shareholders would have ten times the voting power of
Fund A shareholders, because a $1,000 investment in Fund D would buy ten
times as many shares as a $1,000 investment in Fund A. Accordingly, a
one-share, one-vote system may provide certain shareholders with a
disproportionate ability to affect the vote relative to shareholders of
other funds in the trust. If dollar-based voting had been in effect, each
shareholder would have had 1,000 voting shares. Their voting power would be
proportionate to their economic interest, which FMR believes is a more
equitable result, and which is the result with respect to a typical
corporation where each voting share generally has an equal market price.
AMENDMENT TO THE TRUST INSTRUMENT. Article VII, Section 7.01 sets forth
the method of calculating voting rights for all shareholder votes for the
trust. If approved, Article VII, Section 7.01 will be amended as follows
(material to be added is underlined and material to be deleted is
[bracketed]):
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 7.01. The Shareholders shall have power to vote only (i) for the
election of Trustees as provided in Article III, Sections 3.01 and 3.02
hereof, (ii) for the removal of Trustees as provided in Article III,
Section 3.03(d) hereof, (iii) with respect to any investment advisory or
management contract as provided in Article VI, Sections 6.01 and 6.05
hereof, and (iv) with respect to such additional matters relating to the
Trust as may be required by law, by this Trust Instrument, or the Bylaws or
any registration of the Trust with the Commission or any State or as the
Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted by individual Series, except (i) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series; and
(ii) when the Trustees have determined that the matter affects the
interests of one or more Series, then the Shareholders of all such Series
shall be entitled to vote thereon. The Trustees may also determine that a
matter affects only the interests of one or more classes of a Series, in
which case any such matters shall be voted on by such class or classes.
[Each whole Share shall be entitled to one vote as to any matter on which
it is entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote.] ((A Shareholder of each Series shall be
entitled to one vote for each dollar of net asset value (number of shares
owned times net asset value per share) of such Series, on any matter on
which such Shareholder is entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. ))There shall
be no cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy, or in any manner provided for in the Bylaws. A proxy
may be given in writing. The Bylaws may provide that proxies may also, or
may instead, be given by any electronic or telecommunications device or in
any other manner. Notwithstanding anything else herein or in the Bylaws, in
the event a proposal by anyone other than the officers or Trustees of the
Trust is submitted to a vote of the Shareholders of one or more Series or
of the Trust, or in the event of any proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees of the
Trust, Shares may be voted only in person or by written proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may
take any action required or permitted by law, this Trust Instrument or any
Bylaws of the Trust to be taken by Shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit the trust and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended Trust Instrument will
become effective immediately. If the proposal is not approved by the
shareholders of the trust, the Trust Instrument will remain unchanged.
4. TO APPROVE AMENDED MANAGEMENT CONTRACTS FOR FIDELITY MICHIGAN MUNICIPAL
MONEY MARKET FUND AND FIDELITY OHIO MUNICIPAL MONEY MARKET FUND.
The Trustees recommend that the shareholders of each fund approve an
amendment to each fund's management contract with Fidelity Management &
Research Company (FMR) (the Amended Contracts). The Amended Contracts
modify the management fee that FMR receives from each fund to provide for
lower fees when FMR's assets under management exceed certain levels. THE
AMENDED CONTRACTS WILL RESULT IN A MANAGEMENT FEE THAT IS THE SAME AS, OR
LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT MANAGEMENT CONTRACTS (THE
PRESENT CONTRACTS). (FOR MORE INFORMATION ON FMR, SEE THE SECTION ENTITLED
"ACTIVITIES AND MANAGEMENT OF FMR" ON PAGE 30.)
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACTS. Copies of each
fund's Amended Contract, marked to indicate the proposed amendments are
attached to this Proxy Statement as Exhibits 1 and 2. Except for the
modifications discussed above, they are substantially identical to the
Present Contracts. (For a detailed discussion of each fund's Present
Contract, refer to the section entitled "Present Management Contracts"
beginning on page 31). If approved by shareholders, the Amended Contracts
will take effect on AUGUST 1, 1997 (or, if later, the first day of the
month following approval) and will remain in effect through May 31, 1998,
and thereafter, but only as long as their continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR (the Independent Trustees) and (ii) the vote of either
a majority of the Trustees or by the vote of a majority of the outstanding
shares of the fund. If the Amended Contracts are not approved, the Present
Contracts will continue in effect through May 31, 1998, and thereafter only
as long as their continuance is approved at least annually by (i) the vote,
cast in person at a meeting called for the purpose, of a majority of the
Independent Trustees and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of the fund.
The management fee is an annual percentage of each fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate, which
varies according to assets under management by FMR, and a fixed Individual
Fund Fee Rate. The Amended Contracts modify the Group Fee Rate by providing
for lower fee rates if FMR's assets under management remain above $84
billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon the
monthly average of the aggregate net assets of all registered investment
companies having management contracts with FMR (assets under management by
FMR). For example, as assets under management by FMR increase, the Group
Fee Rate declines. The Amended Contracts would not change the group fee
calculation for assets under management by FMR of $84 billion or less.
Above $84 billion in assets under FMR's management, the Group Fee Rate
((declines under the Amended Contracts,)) but not under the Present
Contracts, however, Group Fee Rates that are lower than those contained in
each fund's Present Contract have been voluntarily implemented by FMR on
January 1, 1992, November 1, 1993, August 1, 1994, and January 1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contracts add 12 new breakpoints for assets
under FMR's management above $84 billion as illustrated in the following
table. (For an explanation of how the Group Fee Rate is used to calculate
the management fee, see the section entitled "Present Management Contracts"
beginning on page 31.)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
Group Group Present Average Group Amended
Assets Contract* Assets Contract
($ billions) ($ billions)
Over 84 .1500% 84 - 120 .1500%
120 - 156 .1450%
156 - 192 .1400%
192 - 228 .1350%
228 - 264 .1300%
264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
372 - 408 .1200%
408 - 444 .1175%
444 - 480 .1150%
480 - 516 .1125%
Over 516 .1100%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Present Amended
Assets Contract* Contract
($ billions)
150 .1746% .1736%
200 .1685% .1652%
250 .1648% .1587%
300 .1623% .1536%
350 .1605% .1494%
400 .1592% .1459%
450 .1582% .1427%
500 .1574% .1399%
550 .1567% .1372%
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
Assets under FMR's management for March 31, 1997 were approximately $___
billion.
COMPARISON OF MANAGEMENT FEES. For December 31,1996, average assets under
management by FMR were $___ billion. The funds' Basic Fee Rate under the
Amended Contracts would have been __%, compared to __% under the Present
Contracts. The Basic Fee Rate will remain the same for each fund under both
the Present Contract and the Amended Contract until assets under FMR's
management exceed $___ billion, at which point the Basic Fee Rate under the
Amended Contracts begins to decline relative to the Present Contracts. The
following chart compares each fund's management fee under the terms of the
Present Contract for the fiscal year ended December 31, 1996 to the
management fee the funds would have incurred if the Amended Contracts had
been in effect.
Present Contract Amended Percentage
Contract Difference
Fee* Fee
Michigan $963,070 $930,291 3.40%
Municipal
Money Market
Ohio $1,274,925 $1,231,605 3.40%
Municipal
Money Market
* Does not reflect voluntary adoption of extended group fee rate schedules
by FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January 1,
1996.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve as
Trustees are referred to herein as the "Fidelity funds." The Board of
Trustees meets eleven times a year. The Board of Trustees, including the
Independent Trustees, believe that matters bearing on the appropriateness
of each fund's management fees are considered at most, if not all, of their
meetings. While the full Board of Trustees or the Independent Trustees, as
appropriate, act on all major matters, a significant portion of the
activities of the Board of Trustees (including certain of those described
herein) are conducted through committees. The Independent Trustees meet
frequently in executive session and are advised by independent legal
counsel selected by the Independent Trustees.
The Amended Contracts were approved by the Board of Trustees for each
fund, including all of the Independent Trustees on October 17, 1996.The
Board of Trustees considered and approved the modifications to the Group
Fee Rate schedule during the two month periods from November to December
1995, June to July 1994, September to October 1993, and November to
December 1991. The Board of Trustees received materials relating to the
Amended Contracts in advance of the meeting at which the Amended Contracts
were considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with their
monthly meetings Trustees receive materials specifically relating to the
Amended Contracts. These materials include: (i) information on the
investment performance of each fund, a peer group of funds and an
appropriate index or combination of indices, (ii) sales and redemption data
in respect of each fund, (iii) the economic outlook and the general
investment outlook in the markets in which each fund invests, and (iv)
notable changes in each fund's investments. The Board of Trustees and the
Independent Trustees also consider periodically other material facts such
as (1) FMR's financial condition, (2) arrangements in respect of the
distribution of each fund's shares, (3) the procedures employed to
determine the value of each fund's assets, (4) the allocation of each
fund's brokerage, if any, including allocations to brokers affiliated with
FMR, (5) FMR's management of the relationships with each fund's custodian
and subcustodians, and (6) the resources devoted to and the record of
compliance with each fund's investment policies and restrictions and with
policies on personal securities transactions.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the Amended Contracts include the
following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether each fund has operated within its
investment objective and its record of compliance with its investment
restrictions. They also reviewed monthly each fund's investment performance
as well as the performance of a peer group of mutual funds, and the
performance of an appropriate index or combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the Independent
Trustees annually review a report detailing the background of each fund's
portfolio manager, and each fund's investment objective and discipline. The
Independent Trustees have also had discussions with senior management of
FMR responsible for investment operations, and the senior management of
Fidelity's money market group. Among other things they considered the size,
education and experience of FMR's investment staff, its use of technology,
and FMR's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR and affiliated
companies, both under the Amended Contracts and under separate agreements
covering transfer agency functions and pricing, bookkeeping and securities
lending services, if any. The Board of Trustees and the Independent
Trustees have also considered the nature and extent of FMR's supervision of
third party service providers, principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees considered
each fund's expense ratio and expense ratios of a peer group of funds. They
also considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of the
Fidelity funds, including each fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of each fund. The Board of Trustees and the Independent Trustees
have concluded that the cost allocation methodology employed by FMR has a
reasonable basis and is appropriate in light of all of the circumstances.
They considered the profits realized by FMR in connection with the
operation of each fund and whether the amount of profit is a fair
entrepreneurial profit for the management of each fund. They also
considered the profits realized from non-fund businesses which may benefit
from or be related to each fund's business. The Board of Trustees and the
Independent Trustees also considered FMR's profit margins in comparison
with available industry data, both accounting for and ignoring market
expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale in respect of the
management of the Fidelity funds, whether the Fidelity funds (including
each fund) have appropriately benefitted from any economies of scale, and
whether there is potential for realization of any further economies of
scale. The Board of Trustees and the Independent Trustees have concluded
that FMR's mutual fund business presents some limited opportunities to
realize economies of scale and that these economies are being shared
between fund shareholders and FMR in an appropriate manner. The Independent
Trustees have also concluded that the existing group fee structures should
be continued but determined that it would be appropriate to change the
group fee structures as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by each fund and each
fund's shareholders for services provided by FMR and its affiliates,
including fees for services like transfer agency, fund accounting and
direct shareholder services. They also considered the allocation of fund
brokerage to brokers affiliated with FMR and the receipt of sales loads and
payments under Rule 12b-1 plans in respect of certain of the Fidelity
funds. The Board of Trustees and the Independent Trustees also considered
the revenues and profitability of FMR businesses other than its mutual fund
business, including FMR's retail brokerage, correspondent brokerage,
capital markets, trust, investment advisory, pension record keeping, credit
card, insurance, publishing, real estate, international research and
investment funds, and others. The Board of Trustees and the Independent
Trustees considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with each fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the Independent
Trustees considered the benefit to shareholders of investing in a fund that
is part of a large family of funds offering a variety of investment
disciplines and providing for a large variety of fund and shareholder
services.
CONCLUSION. In considering the Amended Contracts, the Board of Trustees
and the Independent Trustees did not identify any single factor as
all-important or controlling, and the foregoing summary does not detail all
of the matters considered. Based on their evaluation of all material
factors and assisted by the advice of independent counsel, the Trustees
concluded (i) that the existing management fee structures are fair and
reasonable and (ii) that the proposed modifications to the management fee
structures, that is the reduction of the Group Fee Rate schedules, are in
the best interest of each funds' shareholders. The Board of Trustees,
including the Independent Trustees, voted to approve the submission of the
Amended Contracts to shareholders of each fund and recommends that
shareholders of the funds vote FOR approval of the Amended Contracts.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 5 through 7 is to revise several of the
funds' investment limitations to conform to limitations which are standard
for similar types of funds managed by FMR. The Board of Trustees asked FMR
to analyze the various fundamental and non-fundamental investment
limitations of the Fidelity funds, and, where practical and appropriate to
a fund's investment objective and policies, propose to shareholders
adoption of standard fundamental limitations and elimination of certain
other fundamental limitations. Generally, when fundamental limitations are
eliminated, Fidelity's standard non-fundamental limitations replace them.
By making these limitations non-fundamental, the Board of Trustees may
amend a limitation as they deem appropriate, without seeking shareholder
approval. The Board of Trustees would amend the limitations to respond, for
instance, to developments in the marketplace, or changes in federal or
state law. The costs of shareholder meetings called for these purposes are
generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect the
way a fund is currently managed. However, FMR is presenting them to you for
your approval because FMR believes that increased standardization will help
to promote operational efficiencies and facilitate monitoring of compliance
with fundamental and non-fundamental investment limitations. Although
adoption of a new or revised limitation is not likely to have any impact on
the current investment techniques employed by a fund, it will contribute to
the overall objectives of standardization.
5. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE ISSUANCE
OF SENIOR SECURITIES FOR FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND AND
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
Each fund's current fundamental investment limitation regarding the
issuance of senior securities states:
The fund may not issue bonds or any other class of securities preferred
over shares of the fund in respect of the fund's assets or earnings,
provided that Fidelity Municipal Trust II may issue additional series of
shares in accordance with the Trust Instrument.
The Trustees recommend that shareholders vote to replace this limitation
with the following fundamental investment limitation governing the issuance
of senior securities:
The fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940.
The primary purpose of the proposal is to revise each fund's fundamental
senior securities limitation to conform to a limitation that is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page _.) If the proposal is
approved, the new fundamental senior securities limitation cannot be
changed without the approval of shareholders.
Adoption of the proposed limitation on senior securities is not expected
to affect the way in which each fund is managed, the investment performance
of each fund, or the securities or instruments in which each fund invests.
However, the proposed limitation clarifies that each fund may issue senior
securities to the extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings
that takes precedence over the claims of the fund's shareholders. The 1940
Act generally prohibits mutual funds from issuing senior securities;
however, mutual funds are permitted to engage in certain types of
transactions that might be considered "senior securities" as long as
certain conditions are satisfied. For example, a transaction which
obligates a fund to pay money at a future date (e.g., the purchase of
securities for settlement on a date that is further away than the normal
settlement period) may be considered a "senior security." A mutual fund,
however, is permitted to enter into this type of transaction if it
maintains a segregated account containing liquid securities in an amount
equal to its obligation to pay cash for the securities at a future date.
Each fund utilizes transactions that may be considered "senior securities"
only in accordance with applicable regulatory requirements under the 1940
Act.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit each fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of a fund, that fund's current limitation will remain
unchanged.
6. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING BORROWING FOR
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND AND FIDELITY OHIO MUNICIPAL
MONEY MARKET FUND.
Each fund's current fundamental investment limitation concerning borrowing
states:
The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of its total assets (less
liabilities other than borrowings). Any borrowings that come to exceed 33
1/3% of the value of the fund's total assets by reason of a decline in
total assets will be reduced within three days (exclusive of Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation.
The Trustees recommend that shareholders of each fund vote to replace each
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation.
The primary purpose of the proposal is to revise each fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page __.) If the proposal is approved, the
amended fundamental borrowing limitation cannot be changed without the
approval of shareholders.
Adoption of the proposed fundamental limitation concerning borrowing is
not expected to affect the way in which each fund is managed, the
investment performance of each fund, or the securities or instruments in
which each fund invests. However, the proposed fundamental limitation would
clarify one point. Under the proposed limitation, each fund must reduce
borrowings that come to exceed 33 1/3% of its total assets for any reason.
While under the current limitations, each fund must reduce borrowings that
come to exceed 33 1/3% of total assets only when there is a decline in net
assets.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit each fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of a fund, that fund's current limitation will remain
unchanged.
7. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE
CONCENTRATION OF ITS INVESTMENTS IN A SINGLE INDUSTRY FOR FIDELITY MICHIGAN
MUNICIPAL MONEY MARKET FUND AND FIDELITY OHIO MUNICIPAL MONEY MARKET FUND.
Each fund's current fundamental investment limitation concerning the
concentration of its investments within a single industry states:
The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies, instrumentalities, territories, or possessions, or issued or
guaranteed by a state government, or political subdivision thereof) if, as
a result, more than 25% of the value of its total assets would be invested
in securities of companies having their principal business activities in
the same industry.
The Trustees recommend that shareholders of each fund vote to replace this
fundamental investment limitation with the following amended fundamental
investment limitation governing concentration:
The fund may not 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 tax-exempt obligations issued or
guaranteed by a U.S. territory or possession or a state or local
government, or a political subdivision of any of the foregoing) 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.
The primary purpose of the proposal is to revise each fund's fundamental
concentration limitation to conform to a limitation which is expected to
become standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page __.) If the proposal is
approved, the new fundamental concentration limitation could not be changed
without the approval of shareholders.
Adoption of the proposed amended limitation on concentration is not
expected to affect the way each fund is managed, the investment performance
of each fund, or the securities or instruments in which each fund invests.
The proposed amended limitation is not substantially different from the
current policy and is not likely to have any impact on the investment
techniques employed by Michigan Municipal Money Market Fund and Ohio
Municipal Money Market Fund.
CONCLUSION. The Board of Trustees has concluded that the proposal will
benefit each fund and its shareholders. The Trustees recommend voting FOR
the proposal. Upon shareholder approval, the amended fundamental limitation
will become effective immediately. If the proposal is not approved by the
shareholders of a fund, a fund's current limitation will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees
and net assets, of funds with investment objectives similar to Fidelity
Michigan Municipal Money Market Fund and Fidelity Ohio Municipal Money
Market Fund and advised by FMR is contained in the Table of Average Net
Assets and Expense Ratios in Exhibit 3.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks for certain of the funds advised by FMR. Those
transactions that have occurred to date have included mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Arthur S. Loring, Thomas D. Maher, Scott Orr, Kenneth A.
Rathgeber, Leonard M. Rush, Thomas J. Simpson, Mss. Deborah F. Watson and
Sarah H. Zenoble are currently officers of the trust and officers or
employees of FMR Texas or FMR Corp. With the exception of Mr. Costello, Mr.
Maher, Mr. Orr, Mr. Rush, and Ms. Zenoble all of these persons are
stockholders of FMR Corp. The principal business address of each of the
Directors of FMR is 82 Devonshire Street, Boston, Massachusetts 02109.
All of the stock of FMR is owned by its parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Members of Mr. Edward C. Johnson 3d's family are the
predominant owners of a class of shares of common stock, representing
approximately 49% of the voting power of FMR Corp., and, therefore, under
the 1940 Act may be deemed to form a controlling group with respect to FMR
Corp.
During the period January 1, 1996 through December 31, 1996, the following
transactions were entered into by Trustees and nominees as Trustee of the
trust involving more than 1% of the voting common, non-voting common and
equivalent stock, or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR TEXAS
FMR Texas is a wholly owned subsidiary of FMR formed in 1989 to provide
portfolio management services to Fidelity's money market funds and
investment advice with respect to money market instruments.
Funds with investment objectives similar to Fidelity Michigan Municipal
Money Market Fund and Fidelity Ohio Municipal Money Market Fund for which
FMR has entered into a sub-advisory agreement with FMR Texas, and the net
assets of each of these funds, are indicated in the Table of Average Net
Assets and Expense Ratios in Exhibit 3.
The Directors of FMR Texas are Edward C. Johnson 3d, Chairman, and J. Gary
Burkhead, President. Mr. Johnson 3d also is President and a Trustee of the
trust and of other funds advised by FMR; Chairman, Chief Executive Officer,
President, and a Director of FMR Corp.; Chairman of the Board and of the
Executive Committee of FMR; a Director of FMR; and Chairman and Director of
Fidelity Management & Research (U.K.) Inc. and Fidelity Management &
Research (Far East) Inc. In addition, Mr. Burkhead is Senior Vice President
and a Trustee of the trust and of other funds advised by FMR; a Director of
FMR Corp.; President and Director of FMR; and President and Director of FMR
U.K. and FMR Far East. Each of the Directors is a stockholder of FMR Corp.
The principal business address of the Directors is 82 Devonshire Street,
Boston, Massachusetts 02109.
PRESENT MANAGEMENT CONTRACTS
Fidelity Michigan Municipal Money Market Fund and Fidelity Ohio Municipal
Money Market Fund employ FMR to furnish investment advisory and other
services. Under its management contract with each fund, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of each fund in accordance with its
investment objective, policies, and limitations. FMR also provides each
fund with all necessary office facilities and personnel for servicing each
fund's investments, compensates all officers of each fund and all Trustees
who are "interested persons" of the trust or of FMR, and all personnel of
each fund or FMR performing services relating to research, statistical, and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of Michigan Municipal Money Market Fund and
Ohio Municipal Money Market Fund fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees. Services provided by affiliates of FMR will continue under
the proposed management contracts described in proposal 4.
In addition to the management fee payable to FMR, the fund reimburses UMB
Bank, n.a. (UMB) for its services as each fund's custodian and transfer
agent. Although each fund's current management contract provides that each
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to shareholders,
the trust, on behalf of each fund has entered into a revised transfer agent
agreement with UMB, pursuant to which UMB bears the costs of providing
these services to existing shareholders. Other expenses paid by each fund
include interest, taxes, brokerage commissions, and each fund's
proportionate share of insurance premiums and Investment Company Institute
dues. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a party,
and any obligation it may have to indemnify the trust's officers and
Trustees with respect to litigation.
UMB has entered into a sub-contract with Fidelity Service Company, Inc.
(FSC), an affiliate of FMR, under the terms of which FSC performs the
processing activities associated with providing transfer agent and
shareholder servicing functions for the fund. Under the sub-contract, FSC
bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, except proxy statements. FSC also pays all
out-of-pocket expenses associated with transfer agent services. Transfer
agent fees and pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid to FSC by UMB on behalf of Fidelity Michigan
Municipal Money Market Funds and Fidelity Ohio Municipal Money Market Fund
for the fiscal year ended December 31, 1996 were $462,201 and $547,792,
respectively.
Each fund also has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. Each distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the fund, which are continuously offered
at net asset value per share. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
FMR is Fidelity Michigan Municipal Money Market Fund's and Fidelity Ohio
Municipal Money Market Fund's manager pursuant to management contracts
dated February 28,1992, which were approved by Fidelity Municipal Trust II
as then sole shareholder of each fund on February 28, 1992.
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management
contracts.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Rate Net Annual
Assets Assets Fee Rate
$0 - 3 billion .3700% $ 0.5 .3700%
billion
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Under each fund's current management contract with FMR, the group fee rate
is based on a schedule with breakpoints ending at .1500% for average group
assets in excess of $84 billion. The group fee rate breakpoints shown above
for average group assets in excess of $120 billion and under $228 billion
were voluntarily adopted by FMR on January 1, 1992. The additional
breakpoints shown above for average group assets in excess of $228 billion
were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group assets
in excess of $156 billion and under $372 billion as shown in the schedule
below, pending shareholder approval of a new management contract reflecting
the revised schedule. The revised group fee rate schedule provides for
lower management fee rates as FMR's assets under management increase. The
revised group fee rate schedule was identical to the above schedule for
average group assets under $156 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the revised
schedule for average group assets in excess of $372 billion, pending
shareholder approval of a new management contract reflecting the revised
schedule and additional breakpoints. The revised group fee rate schedule
and its extensions provide for lower management fee rates as FMR's assets
under management increase. For average group assets in excess of $156
billion, the revised group fee rate schedule with additional breakpoints
voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE
RATES
Average Group Annualized Group Net Effective
Assets Rate Assets Annual
Fee Rate
120 - $156 .1450% $ 150 billion .1736%
billion
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The Group Fee Rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule above on
the right shows the effective annual group fee rate at various asset
levels, which is the result of cumulatively applying the annualized rates
on the left. For example, the effective annual fee rate at $453 billion of
group net assets - the approximate level for December 31, 1996 - was
.1425%, which is the weighted average of the respective fee rates for each
level of group net assets up to $453 billion.
The individual fund fee rate for each fund is .25%. Based on the average
group net assets of the funds advised by FMR for February 1996, the annual
management fee rates would be calculated as follows:
Fund Group Fee Individual Fund Management
Rate Fee Rate Fee Rate
Fidelity Ohio .1425% + .25% = .3925%
Municipal
Money Market
Fund
Fidelity .1425% + .25% = .3925%
Michigan
Municipal
Money Market
Fund
One-twelfth of this annual management fee rate is applied to each fund's
net assets averaged for the month, giving a dollar amount, which is the fee
for that month.
During the fiscal year ended December 31, 1996, FMR received $1,231,605
and $930,291 for its services as investment adviser to Fidelity Ohio
Municipal Money Market Fund and Fidelity Michigan Municipal Money Market
Fund, respectively. These fees were equivalent to .3950% of the average net
assets for Fidelity Ohio Municipal Money Market Fund and .3949% of the
average net assets for Fidelity Michigan Municipal Money Market Fund.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and yield and repayment of
the reimbursement by the fund will lower its total returns and yield.
SUB-ADVISORY AGREEMENTS
On behalf of Fidelity Michigan Municipal Money Market Fund and Fidelity
Ohio Municipal Money Market Fund, FMR has entered into sub-advisory
agreements with FMR Texas Inc. (FMR Texas) pursuant to which FMR Texas has
primary responsibility for providing portfolio investment management
services to each fund. Fidelity Michigan Municipal Money Market Fund and
Fidelity Ohio Municipal Money Market Fund's sub-advisory agreement, dated
February 28, 1992, were approved by FMR as sole shareholder of the funds on
February 28, 1992 pursuant to an Agreement and Plan of conversion approved
by shareholders of each fund on December 11, 1991. The terms of the funds'
current sub-advisory agreements with FMR Texas duplicate those of their
previous sub-advisory agreements which are dated February 28, 1992 for both
Fidelity Michigan Municipal Money Market Fund and Fidelity Ohio Municipal
Money Market Fund.
Under the sub-advisory agreements, FMR pays FMR Texas fees equal to 50% of
the management fee payable to FMR under its management contract with each
fund after payments by FMR pursuant to each fund's 12b-1 plan, if any. The
fees paid to FMR Texas are not reduced by any voluntary or mandatory
expense reimbursements that may be in effect from time to time. For the
fiscal year ended December 31, 1996, FMR paid FMR Texas fees of $465,146
and $615,803, on behalf of Michigan Municipal Money Market Fund and Ohio
Municipal Money Market Fund, respectively.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in each fund's
management contract.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services.
During the fiscal year ended December 31, 1996, the funds paid no
brokerage commissions.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
((UNDERLINED)) DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
Exhibit 1
Form of
MANAGEMENT CONTRACT
between
FIDELITY MUNICIPAL TRUST II:
Fidelity Michigan Municipal Money Market [Portfolio] ((Fund))
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) made this , by and
between Fidelity Municipal Trust II, a Delaware business trust that may
issue one or more series of shares of beneficial interest (hereinafter
called the "Fund"), on behalf of Fidelity Michigan Municipal Money Market
Portfolio [Portfolio] ((Fund)) (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser").
((Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
February 28, 1992, to a modification of said Contract in the manner set
below. The Amended Management Contract shall, when executed by duly
authorized officers of the Fund and Adviser, take effect on August 1, 1997
or the first day of the month following approval. ))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under Federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser, [at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Fund shall periodically review
the commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a Group Fee [Rate] and an Individual
Fund Fee [Rate].
(a) Group Fee Rate. The [g] ((G))roup [f]((F)))ee [r]((R))ate shall be
based upon the monthly average of the net assets of the registered
investment companies having Advisory and Service or Management Contracts
with the Adviser (computed in the manner set forth in the [charter]
((fund's Trust Instrument)) [of each investment company)] determined as of
the close of business on each business day throughout the month. The group
fee rate shall be determined on a cumulative basis pursuant to the
following schedule.
Annualized Fee Rate
Average Net Assets (for each level)
Over $0.0 - 3 billion 0.37((00%
3 - 6 0.3400
6 - 9 0.3100
9 - 12 0.2800
12 - 15 0.2500
15 - 18 0.2200
18 - 21 0.2000
21 - 24 0.1900
24 - 30 0.1800
30 - 36 0.1750
36 - 42 0.1700
42 - 48 0.1650
48 - 66 0.1600
66 - 84 0.1550))
[Over 84] [0.1500]
(( 84 -120 0.1500
120 -156 0.1450
156 -192 0.1400
192 -228 0.1350
228 -264 0.1300
264 -300 0.1275
300 -336 0.1250
336 -372 0.1225
372 -408 0.1200
408 -444 0.1175
444 -480 0.1150
480 -516 0.1125
Over - 516 0.1100))
(b) Individual Fund Fee Rate. The individual fund fee rate shall be
.25%. [of average daily net assets of the Portfolio.]
The sum of the Group Fee [r]((R))ate, calculated as described above to the
nearest millionth, and the Individual Fund fee rate shall constitute the
[a]((A))nnual [m]((M))anagement [f]((F))ee [r]((R))ate. One-twelfth of the
annual management fee shall be applied to the average of the net assets of
the Portfolio (computed in the manner set forth in the ((Fund's)) Trust
Instrument [of the Fund)] determined as of the close of business on each
business day throughout the month.
4. It is understood that the Portfolio will pay all its expenses [other
than those expressly stated to be payable by the Adviser hereunder,] which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's officers and Trustees with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security(( or other
investment instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until [June 30,
1992] ((May 31, 1998)) and indefinitely thereafter, but only so long as the
continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority of
the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
8. This [contract] ((agreement)) shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIDELITY MUNICIPAL TRUST II
on behalf of Fidelity Michigan Municipal Money Market Portfolio
[Portfolio] ((Fund))
[signature lines omitted]
</TABLE>
((UNDERLINED)) DISCLOSURE WILL BE ADDED;
[BRACKETED] DISCLOSURE WILL BE DELETED.
Exhibit 2
Form of
MANAGEMENT CONTRACT
between
FIDELITY MUNICIPAL TRUST II:
Fidelity Ohio Municipal Money Market [Portfolio] ((Fund))
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) made this , by and
between Fidelity Municipal Trust II, a Delaware business trust that may
issue one or more series of shares of beneficial interest (hereinafter
called the "Fund"), on behalf of Fidelity Ohio Municipal Money Market
Portfolio [Portfolio] ((Fund)) (hereinafter called the "Portfolio"), and
Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser").
((Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
February 28, 1992, to a modification of said Contract in the manner set
below. The Amended Management Contract shall, when executed by duly
authorized officers of the Fund and Adviser, take effect on August 1, 1997
or the first day of the month following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under Federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser, [at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Fund shall periodically review
the commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a Group Fee [Rate] and an Individual
Fund Fee [Rate].
(a) Group Fee Rate. The [g] ((G))roup [f]((F))ee [r]((R))ate shall be
based upon the monthly average of the net assets of the registered
investment companies having Advisory and Service or Management Contracts
with the Adviser (computed in the manner set forth in the [charter]
((fund's Trust Instrument)) [of each investment company)] determined as of
the close of business on each business day throughout the month. The group
fee rate shall be determined on a cumulative basis pursuant to the
following schedule.
Annualized Fee Rate
Average Net Assets (for each level)
Over $0.0 - 3 billion 0.37((00%
3 - 6 0.3400
6 - 9 0.3100
9 - 12 0.2800
12 - 15 0.2500
15 - 18 0.2200
18 - 21 0.2000
21 - 24 0.1900
24 - 30 0.1800
30 - 36 0.1750
36 - 42 0.1700
42 - 48 0.1650
48 - 66 0.1600
66 - 84 0.1550))
[Over 84] [0.1500]
(( 84 -120 0.1500
120 -156 0.1450
156 -192 0.1400
192 -228 0.1350
228 -264 0.1300
264 -300 0.1275
300 -336 0.1250
336 -372 0.1225
372 -408 0.1200
408 -444 0.1175
444 -480 0.1150
480 -516 0.1125
Over - 516 0.1100))
(b) Individual Fund Fee Rate. The individual fund fee rate shall be
.25%. [of average daily net assets of the Portfolio.]
The sum of the Group Fee [r]((R))ate, calculated as described above to the
nearest millionth, and the Individual Fund fee rate shall constitute the
[a]((A))nnual [m]((M))anagement [f]((F))ee [r]((R))ate. One-twelfth of the
annual management fee shall be applied to the average of the net assets of
the Portfolio (computed in the manner set forth in the ((Fund's)) Trust
Instrument [of the Fund)] determined as of the close of business on each
business day throughout the month.
4. It is understood that the Portfolio will pay all its expenses [other
than those expressly stated to be payable by the Adviser hereunder,] which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's officers and Trustees with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security ((or other
investment instrument.))
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until [June 30,
1992] ((May 31, 1998)) and indefinitely thereafter, but only so long as the
continuance after such date shall be specifically approved at least
annually by vote of the Trustees of the Fund or by vote of a majority of
the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
8. This [contract] ((agreement)) shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FIDELITY MUNICIPAL TRUST II
on behalf of Fidelity Ohio Municipal Money Market [Portfolio]
((Fund))
[signature lines omitted]
</TABLE>
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY MUNICIPAL TRUST II: FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Phyllis Burke Davis, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Municipal Trust II: Fidelity Michigan Municipal Money Market Fund
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on July 16, 1997 at 10:45 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[fund# 420]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S, below). vote for all
Lynch, William O. McCoy, Gerald C. McDonough, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
voting rights for shareholders of the trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
4. To approve an amended management contract. FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
5. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
concerning the issuance of senior securities.
6. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
concerning borrowing.
7. To amend the fundamental limitation concerning the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
concentration of its investments in a single industry.
</TABLE>
[OMM-PXC-0597] [fund# 420]
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY MUNICIPAL TRUST II: FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Phyllis Burke Davis, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
Fidelity Municipal Trust II: Fidelity Michigan Municipal Money Market Fund
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on July 16, 1997 at 10:45 a.m. and at any
adjournments thereof. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[fund# 419]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S, below). vote for all
Lynch, William O. McCoy, Gerald C. McDonough, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
voting rights for shareholders of the trust.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
4. To approve an amended management contract. FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
5. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
concerning the issuance of senior securities.
6. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
concerning borrowing.
7. To amend the fundamental limitation concerning the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
concentration of its investments in a single industry.
</TABLE>
[OMMO-PXC-0597] [fund# 419]
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY MUNICIPAL TRUST II: SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET
FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring and Phyllis Burke Davis, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Municipal Trust II: Spartan Pennsylvania Municipal Money Market
Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on July 16, 1997 at 10:45 a.m. and at
any adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[fund# 401]
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Robert M. Gates, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S, below). vote for all
Lynch, William O. McCoy, Gerald C. McDonough, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
</TABLE>
__________________________________________________________________________
___________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Trust Instrument to provide dollar-based FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
voting rights for shareholders of the trust.
</TABLE>
[OMM3-PXC-0597] [fund# 401]
EXHIBIT 3
[TABLE TO BE UPDATED IN SUBSEQUENT FILING.]
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
<TABLE>
<CAPTION>
INVESTMENT FISCAL AVERAGE RATIO OF NET
OBJECTIVE AND FUND YEAR END (A) NET ASSETS ADVISORY FEES
(MILLIONS)(B) TO AVERAGE
NET ASSETS
PAID
TO FMR (C)
<S> <C> <C> <C> <C>
MUNICIPAL MONEY MARKET ((yen))
Massachusetts Municipal Money 1/31/96 $ 779.7 0.40%
Market
New York Municipal Money Market 1/31/96 760.8 0.40
Spartan Massachusetts Municipal 1/31/96 461.4 0.50
Money Market
Spartan New York Municipal
Money Market 1/31/96 605.1 0.50
California Municipal Money Market 2/29/96 730.8 0.40
Spartan California Municipal Money 2/29/96 1,256.0 0.31*
Market
Institutional Tax-Exempt Cash
Portfolios:
Tax-Exempt:
Class I 3/31/96 1,940.2 0.19*
Class II 3/31/96** 0.6 0.20(dagger)*
Class III 3/31/96** 2.6 0.20(dagger)*
Daily Money Fund: Capital Reserves:
Municipal Money Market 7/31/96 131.6 0.29*
Spartan Arizona Municipal Money 8/31/96 66.9 0.22*
Market
Spartan Municipal Money Market 8/31/96 2,280.1 0.39*
Daily Tax-Exempt Money 10/31/96 521.4 0.39*
Municipal Money Market 10/31/96 3,673.6 0.30
Spartan New Jersey Municipal 10/31/96 491.1 0.35*
Money Market
Connecticut Municipal Money Market 11/30/96 330.7 0.40
New Jersey Municipal Money Market 11/30/96 436.4 0.40
Spartan Connecticut Municipal
Money Market 11/30/96 180.9 0.50
Spartan Florida Municipal Money 11/30/96 391.7 0.50
Market
Michigan Municipal Money Market 12/31/96 235.5 0.40
Ohio Municipal Money Market 12/31/96 311.8 0.40
Spartan Pennsylvania Municipal
Money Market 12/31/96 237.1 0.50
</TABLE>
(a) All data are as of the fiscal year end noted.
(b) Average net assets are computed on the basis of average net assets of
each fund or class at the close of business on each business day throughout
its fiscal period.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(dagger) Annualized
** Less than a complete fiscal year
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to each fund.
