Exhibit m(13)
FORM OF
DISTRIBUTION AND SERVICE PLAN
Variable Insurance Products Fund III: Dynamic Capital Appreciation
Portfolio
Initial Class Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"Act") for Initial Class of shares of Dynamic Capital Appreciation
Portfolio ("Initial Class"), a class of shares of Dynamic Capital
Appreciation Portfolio (the "Fund"), a series of Variable Insurance
Products Fund III (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the
"Distributor") under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for
the Fund's shares of beneficial interest ("Shares"). Under the
agreement, the Distributor pays the expenses of printing and
distributing any prospectuses, reports and other literature used by
the Distributor, advertising, and other promotional activities in
connection with the offering of Shares of the Fund for sale to the
public. It is recognized that Fidelity Management & Research Company
(the "Adviser") may use its management fee revenues as well as its
past profits or its resources from any other source, to make payments
to the Distributor with respect to any expenses incurred in connection
with the distribution of Initial Class Shares, including the
activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to
the approval of the Trustees, make payments to securities dealers and
other third parties who engage in the sale of Initial Class Shares or
who render shareholder support services, including but not limited to
providing office space, equipment and telephone facilities, answering
routine inquiries regarding the Fund, processing shareholder
transactions and providing such other shareholder services as the
Trust may reasonably request.
4. The Initial Class will not make separate payments as a result of
this Plan to the Adviser, Distributor or any other party, it being
recognized that the Fund presently pays, and will continue to pay, a
management fee to the Adviser. To the extent that any payments made by
the Fund to the Adviser, including payment of management fees, should
be deemed to be indirect financing of any activity primarily intended
to result in the sale of Initial Class Shares within the meaning of
Rule 12b-1, then such payments shall be deemed to be authorized by
this Plan.
5. This Plan shall become effective upon the first business day of
the month following approval by a vote of at least a "majority of the
outstanding voting securities" (as defined in the Act) of the Initial
Class, this plan having been approved by a vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who
have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to the Plan (the "Independent
Trustees"), cast in person at a meeting called for the purpose of
voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April __, 200_, and from year to year thereafter,
provided, however, that such continuance is subject to approval
annually by a vote of a majority of the Trustees of the Trust,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may
be amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Initial Class to finance
any activity primarily intended to result in the sale of Initial Class
Shares, to increase materially the amount spent by the Initial Class
for distribution, shall be effective only upon approval by a vote of a
majority of the outstanding voting securities of the Initial Class and
(b) any material amendments of this Plan shall be effective only upon
approval in the manner provided in the first sentence of this
paragraph 6.
7. This Plan may be terminated at any time, without the payment of
any penalty, by a vote of a majority of the Independent Trustees or by
a vote of a majority of the outstanding voting securities of the
Initial Class.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or Distributor to provide the Trust, for review by the
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any
activity primarily intended to result in the sale of Initial Class
Shares (making estimates of such costs where necessary or desirable)
and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any
specific level of expenses for activities primarily intended to result
in the sale of Initial Class Shares.
10. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by
Initial Class pursuant to this Plan and any agreement related to this
Plan shall be limited in all cases to Initial Class and its assets and
shall not constitute an obligation of any shareholder of the Trust or
any other class of the Fund, series of the Trust, or class of such
series.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
