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:
[ ] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SEC. 240.14A-11(C) OR SEC. 240.14A-12
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FIDELITY COURT STREET TRUST II
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE
REGISTRANT) ARTHUR S. LORING
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:
[ ] 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.
(1) AMOUNT PREVIOUSLY PAID:
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
(3) FILING PARTY:
(4) DATE FILED:
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
SPARTAN(registered trademark) CONNECTICUT MUNICIPAL MONEY MARKET FUND
SPARTAN(registered trademark) FLORIDA MUNICIPAL MONEY MARKET FUND
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUNDS OF
FIDELITY COURT STREET 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 Connecticut Municipal Money Market Fund, Spartan
Connecticut Municipal Money Market Fund, Spartan Florida Municipal
Money Market Fund, and Fidelity New Jersey Municipal Money Market Fund
(the funds), will be held at the office of Fidelity Court Street Trust
II (the trust), 82 Devonshire Street, Boston, Massachusetts 02109 on
December 17, 1997, at 12:00 p.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 funds .
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 Fidelity Connecticut
Municipal Money Market Fund.
5. To approve an amended management contract for Fidelity New Jersey
Municipal Money Market Fund.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
6. To amend Fidelity Connecticut Municipal Money Market Fund's and
Fidelity New Jersey Municipal Money Market Fund's fundamental
investment limitation concerning the issuance of senior securities.
7. To amend Fidelity Connecticut Municipal Money Market Fund's,
Fidelity New Jersey Municipal Money Market Fund's and Spartan
Connecticut Municipal Money Market Fund's fundamental investment
limitation concerning the concentration of investments in a single
industry.
The Board of Trustees has fixed the close of business on October 20,
1997 as the record date for the determination of the shareholders of
each of the funds entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
October 20, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as
it appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration.
3. ALL OTHER ACCOUNTS should show the capacity of the
individual signing. This can be shown either in the form of the
account registration itself or by the individual executing the proxy
card. For example:
REGISTRATION VALID SIGNATURE
A. 1) ABC CORP. JOHN SMITH, TREASURER
2) ABC CORP. JOHN SMITH, TREASURER
C/O JOHN SMITH, TREASURER
B. 1) ABC CORP. PROFIT SHARING PLAN ANN B. COLLINS,
TRUSTEE
2) ABC TRUST ANN B. COLLINS,
TRUSTEE
3) ANN B. COLLINS, TRUSTEE ANN B. COLLINS,
TRUSTEE
U/T/D 12/28/78
C. 1) ANTHONY B. CRAFT, CUST. ANTHONY B. CRAFT
F/B/O ANTHONY B. CRAFT, JR.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY COURT STREET TRUST II:
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
TO BE HELD ON DECEMBER 17, 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 Court Street Trust II (the trust) to be used at the Special
Meeting of Shareholders of Fidelity Connecticut Municipal Money Market
Fund, Spartan Connecticut Municipal Money Market Fund, Spartan Florida
Municipal Money Market Fund and Fidelity New Jersey Municipal Money
Market Fund (the funds) and at any adjournments thereof (the Meeting),
to be held on December 17, 1997 at 12:00 p.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 October 20,
1997. Supplementary solicitations may be made by mail, telephone,
telegraph, facsimile, electronic m eans, or by personal
interview by representatives of the trust. In addition, Management
Information Services Corp. (MIS) and 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 $6,000 (Fidelity Connecticut
Municipal Money Market Fund), $3,000 (Spartan Connecticut Municipal
Money Market Fund), $4,000 (Spartan Florida Municipal Money Market
Fund), and $7,000 (Fidelity New Jersey Municipal Money Market Fund),
respectively. 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 Connecticut Municipal Money Market Fund
and Spartan Florida Municipal Money Market Fund, whose expenses will
be borne by FMR). The funds (FMR for Spartan Connecticut Municipal
Money Market Fund and Spartan Florida 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 $5,000, (Fidelity Connecticut Municipal Money Market
Fund), $2,000 (Spartan Connecticut Municipal Money Market Fund),
$3,000 (Spartan Florida Municipal Money Market Fund) and $6,000
(Fidelity New Jersey Municipal Money Market Fund). The expenses in
connection with telephone voting will be paid by the funds (except for
Spartan Connecticut Municipal Money Market Fund and Spartan Florida
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 not present at the Meeting, or 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 proxy agents 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
proxy agents 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 August
31, 1997 are indicated in the following table:
FIDELITY CONNECTICUT MUNICIPAL MONEY 384,322,522
MARKET FUND
SPARTAN CONNECTICUT MUNICIPAL MONEY 179,701,602
MARKET FUND
SPARTAN FLORIDA MUNICIPAL MONEY 392,811,907
MARKET FUND
FIDELITY NEW JERSEY MUNICIPAL MONEY 456,806,677
MARKET FUND
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of the funds on August 31, 1997 was as
follows : Spartan Connecticut Municipal Money Market: National
Financial Services Corporation, Boston, MA. (38.32%), Spartan Florida
Municipal Money Market: National Financial Services Corporation,
Boston, MA (31.84%). To the knowledge of the trust, no other
shareholder owned of record or beneficially more than 5% of the
outstanding shares of any of the funds on that date.
Shareholders of record at the close of business on October 20 ,1997
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each share held on that date.
The following table summarizes the proposals applicable to each fund.
PROPOSAL # PROPOSAL DESCRIPTION APPLICABLE FUNDS
1. TO ELECT AS TRUSTEES THE 12 FIDELITY CONNECTICUT MUNICIPAL
NOMINEES PRESENTED IN PROPOSAL MONEY MARKET FUND; SPARTAN
1. CONNECTICUT MUNICIPAL MONEY
MARKET FUND; SPARTAN FLORIDA
MUNICIPAL MONEY MARKET
FUND; AND FIDELITY NEW JERSEY
MUNICIPAL MONEY MARKET FUND
2. TO RATIFY THE SELECTION OF FIDELITY CONNECTICUT MUNICIPAL
COOPERS & LYBRAND L.L.P. AS MONEY MARKET FUND; SPARTAN
INDEPENDENT ACCOUNTANTS OF THE CONNECTICUT MUNICIPAL MONEY
FUNDS. MARKET FUND; SPARTAN FLORIDA
MUNICIPAL MONEY MARKET
FUND; AND FIDELITY NEW JERSEY
MUNICIPAL MONEY MARKET FUND
3. TO AMEND THE TRUST INSTRUMENT FIDELITY CONNECTICUT MUNICIPAL
TO PROVIDE VOTING RIGHTS BASED MONEY MARKET FUND; SPARTAN
ON A SHAREHOLDER'S TOTAL DOLLAR CONNECTICUT MUNICIPAL MONEY
INVESTMENT IN A FUND, RATHER MARKET FUND; SPARTAN FLORIDA
THAN ON THE NUMBER OF SHARES MUNICIPAL MONEY MARKET
OWNED. FUND; AND FIDELITY NEW JERSEY
MUNICIPAL MONEY MARKET FUND
PROPOSAL # PROPOSAL DESCRIPTION APPLICABLE FUNDS
4. TO APPROVE AN AMENDED FIDELITY CONNECTICUT MUNICIPAL
MANAGEMENT CONTRACT FOR THE MONEY MARKET FUND
FUND THAT WOULD REDUCE THE
MANAGEMENT FEE PAYABLE TO FMR
BY THE FUND AS FMR'S ASSETS
UNDER MANAGEMENT INCREASE.
5. TO APPROVE AN AMENDED FIDELITY NEW JERSEY MUNICIPAL
MANAGEMENT CONTRACT FOR THE MONEY MARKET FUND
FUND THAT WOULD REDUCE THE
MANAGEMENT FEE PAYABLE TO FMR
BY THE FUND AS FMR'S ASSETS
UNDER MANAGEMENT INCREASE.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
6. SENIOR SECURITIES: TO ADD THE FIDELITY CONNECTICUT MUNICIPAL
ABILITY TO ISSUE SENIOR SECURITIES MONEY MARKET FUND AND
TO THE EXTENT PERMITTED UNDER FIDELITY NEW JERSEY MUNICIPAL
THE INVESTMENT COMPANY ACT OF MONEY MARKET FUND
1940.
7. CONCENTRATION: TO FIDELITY CONNECTICUT MUNICIPAL
STANDARDIZE LANGUAGE AND MONEY MARKET FUND, FIDELITY
EXPLICITLY EXCLUDE "TAX-EXEMPT NEW JERSEY MUNICIPAL MONEY
OBLIGATIONS ISSUED OR GUARANTEED MARKET FUND AND SPARTAN
BY A U.S. TERRITORY OR CONNECTICUT MUNICIPAL MONEY
POSSESSION OR A STATE OR LOCAL MARKET FUND
GOVERNMENT, OR A POLITICAL
SUBDIVISION THEREOF" FROM THE
LIMITATION ON INDUSTRY
CONCENTRATION.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR
ENDED NOVEMBER 30, 1996 AND THE SEMIANNUAL REPORT FOR THE FISCAL
PERIOD ENDED MAY 31, 1997 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 PROPOSAL 1 AND A MAJORITY OF ALL VOTES OF THE
APPROPRIATE FUND CAST AT THE MEETING IS SUFFICIENT TO APPROVE PROPOSAL
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.
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
Court Street 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 for Robert M. Gates, William O. McCoy and Robert C. Pozen all
nominees named below are currently Trustees of Fidelity Court Street
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
Adm inistration Committee (see page ) 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, William O. McCoy and Robert C. Pozen, each
of the nominees is currently a Trustee or General Partner, as the case
may be, of 62 registered investment companies (trusts or
partnerships) advised by FMR. Mr. Gates a nd Mr. McCoy are
currently a Trustee or General Partner, as the case may be, of
5 5 registered investment companies (trusts or partnerships)
advised by FMR. Mr. Pozen is currently a Trustee or General
Partner, as the case may be, of 52 registered investment c ompanies
(trusts or partnerships) 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
APPOINTMENT
RALPH F. COX PRESIDENT OF RABAR ENTERPRISES 1991
(65) (MANAGEMENT
CONSULTING-ENGINEERING INDUSTRY,
1994). PRIOR TO FEBRUARY 1994, HE
WAS PRESIDENT OF GREENHILL
PETROLEUM CORPORATION (PETROLEUM
EXPLORATION AND PRODUCTION). UNTIL
MARCH 1990, MR. COX WAS PRESIDENT
AND CHIEF OPERATING OFFICER OF
UNION PACIFIC RESOURCES COMPANY
(EXPLORATION AND PRODUCTION). HE IS
A DIRECTOR OF USA WASTE SERVICES,
INC. (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
(6 5) SEPTEMBER 1991, MRS. DAVIS WAS
THE SENIOR VICE PRESIDENT OF
CORPORATE AFFAIRS OF AVON PRODUCTS,
INC. SHE IS CURRENTLY A DIRECTOR OF
BELLSOUTH CORPORATION
(TELECOMMUNICATIONS), EATON
CORPORATION (MANUFACTURING, 1991),
AND THE TJX COMPANIES, INC. (RETAIL
STORES), AND PREVIOUSLY SERVED AS A
DIRECTOR OF HALLMARK CARDS, INC.
(1985-1991) AND NABISCO BRANDS,
INC. IN ADDITION, SHE IS A MEMBER OF
THE PRESIDENT'S ADVISORY COUNCIL OF
THE UNIVERSITY OF VERMONT SCHOOL
OF BUSINESS ADMINISTRATION.
ROBERT M. GATES CONSULTANT, AUTHOR, AND LECTURER ____
(54) (1993). MR. GATES WAS DIRECTOR OF
THE CENTRAL INTELLIGENCE AGENCY
(CIA) FROM 1991-1993. FROM 1989
TO 1991, MR. GATES SERVED AS
ASSISTANT TO THE PRESIDENT OF THE
UNITED STATES AND DEPUTY NATIONAL
SECURITY ADVISOR. MR. GATES IS
CURRENTLY A TRUSTEE FOR THE FORUM
FOR INTERNATIONAL POLICY, A BOARD
MEMBER FOR THE VIRGINIA
NEUROLOGICAL INSTITUTE, AND A SENIOR
ADVISOR OF THE HARVARD JOURNAL OF
WORLD AFFAIRS. IN ADDITION, MR. GATES
ALSO SERVES AS A MEMBER OF THE
CORPORATE BOARD FOR LUCAS VARITY
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 3D PRESIDENT, IS CHAIRMAN, CHIEF 1968
(67) EXECUTIVE OFFICER AND A DIRECTOR OF
FMR CORP.; A DIRECTOR AND
CHAIRMAN OF THE BOARD AND OF THE
EXECUTIVE COMMITTEE OF FMR;
CHAIRMAN AND A DIRECTOR OF FMR
TEXAS INC., FIDELITY MANAGEMENT &
RESEARCH (U.K.) INC., AND FIDELITY
MANAGEMENT & RESEARCH (FAR EAST)
INC.
E. BRADLEY JONES PRIOR TO HIS RETIREMENT IN 1984, 1990
( 7 0) MR. JONES WAS CHAIRMAN AND CHIEF
EXECUTIVE OFFICER OF LTV STEEL
COMPANY. HE IS A DIRECTOR OF TRW
INC. (ORIGINAL EQUIPMENT AND
REPLACEMENT PRODUCTS),
CONSOLIDATED RAIL CORPORATION,
BIRMINGHAM STEEL CORPORATION, AND
RPM, INC. (MANUFACTURER OF
CHEMICAL PRODUCTS), AND HE
PREVIOUSLY SERVED AS A DIRECTOR OF
NACCO INDUSTRIES, INC. (MINING AND
MANUFACTURING, 1985-1995),
HYSTER-YALE MATERIALS HANDLING, INC.
(1985-1995), AND CLEVELAND-CLIFFS
INC. (MINING), AND AS A TRUSTEE OF
FIRST UNION REAL ESTATE INVESTMENTS.
IN ADDITION, HE SERVES AS A TRUSTEE
OF THE CLEVELAND CLINIC FOUNDATION,
WHERE HE HAS ALSO BEEN A MEMBER
OF THE EXECUTIVE COMMITTEE AS WELL
AS CHAIRMAN OF THE BOARD AND
PRESIDENT, 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) AT 1987
(65) COLUMBIA UNIVERSITY GRADUATE
SCHOOL OF BUSINESS AND A FINANCIAL
CONSULTANT. FROM 1987 TO JANUARY
1995, MR. KIRK WAS A PROFESSOR AT
COLUMBIA UNIVERSITY GRADUATE
SCHOOL OF BUSINESS. PRIOR TO 1987,
HE WAS CHAIRMAN OF THE FINANCIAL
ACCOUNTING STANDARDS BOARD.
MR. KIRK IS A DIRECTOR OF GENERAL RE
CORPORATION (REINSURANCE), AND HE
PREVIOUSLY SERVED AS A DIRECTOR OF
VALUATION RESEARCH CORP.
(APPRAISALS AND VALUATIONS,
1993-1995). IN ADDITION, HE SERVES
AS CHAIRMAN OF THE BOARD OF
DIRECTORS OF THE NATIONAL ARTS
STABILIZATION FUND, CHAIRMAN OF THE
BOARD OF TRUSTEES OF THE GREENWICH
HOSPITAL ASSOCIATION, A MEMBER OF
THE PUBLIC OVERSIGHT BOARD OF THE
AMERICAN INSTITUTE OF CERTIFIED
PUBLIC ACCOUNTANTS' SEC PRACTICE
SECTION (1995), AND AS A PUBLIC
GOVERNOR OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS,
INC. (1996).
*PETER S. LYNCH VICE CHAIRMAN AND DIRECTOR OF FMR 1990
(54) (1992). PRIOR TO MAY 31, 1990, HE
WAS A DIRECTOR OF FMR AND
EXECUTIVE VICE PRESIDENT OF FMR (A
POSITION HE HELD UNTIL MARCH 31,
1991); VICE PRESIDENT OF FIDELITY
MAGELLAN FUND AND FMR GROWTH
GROUP LEADER; AND MANAGING
DIRECTOR OF FMR CORP. MR. LYNCH
WAS ALSO VICE PRESIDENT OF FIDELITY
INVESTMENTS CORPORATE SERVICES
(1991-1992). 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 ____
(64) UNIVERSITY OF NORTH CAROLINA
(16-SCHOOL SYSTEM, 1995). PRIOR TO
HIS RETIREMENT IN DECEMBER 1994,
MR. MCCOY WAS VICE CHAIRMAN OF THE
BOARD OF BELLSOUTH CORPORATION
(TELECOMMUNICATIONS, 1984) AND
PRESIDENT OF BELLSOUTH ENTERPRISES
(1986). HE IS CURRENTLY A DIRECTOR OF
LIBERTY CORPORATION (HOLDING
COMPANY, 1984), WEEKS CORPORATION
OF ATLANTA (REAL ESTATE, 1994),
CAROLINA POWER AND LIGHT COMPANY
(ELECTRIC UTILITY, 1996) AND THE KENAN
TRANSPORT CO. (1996). PREVIOUSLY, HE
WAS A DIRECTOR OF FIRST AMERICAN
CORPORATION (BANK HOLDING COMPANY,
1979-1996). IN ADDITION, MR. MCCOY
SERVES AS A MEMBER OF THE BOARD OF
VISITORS FOR THE UNIVERSITY OF NORTH
CAROLINA AT CHAPEL HILL (1994) AND FOR
THE KENAN-FLAGER BUSINESS SCHOOL
(UNIVERSITY OF NORTH CAROLINA AT
CHAPEL HILL, 1988).
GERALD C. MCDONOUGH CHAIRMAN OF G.M. MANAGEMENT 1989
(69) GROUP (STRATEGIC ADVISORY SERVICES).
MR. MCDONOUGH IS A DIRECTOR OF
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, PRESIDENT, 1993
(64) AND CHIEF EXECUTIVE OFFICER OF
LEXMARK INTERNATIONAL, INC. (OFFICE
MACHINES, 1991). PRIOR TO 1991, HE
HELD THE POSITIONS OF VICE PRESIDENT
OF INTERNATIONAL BUSINESS MACHINES
CORPORATION ("IBM") AND PRESIDENT
AND GENERAL MANAGER OF VARIOUS
IBM DIVISIONS AND SUBSIDIARIES. MR.
MANN IS A DIRECTOR OF M.A. HANNA
COMPANY (CHEMICALS, 1993),
IMATION CORP. (IMAGING AND
INFORMATION STORAGE, 1997), AND
I NFOMART (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.
*ROBERT C. POZEN SENIOR VICE PRESIDENT, IS PRESIDENT ____
(51) AND A DIRECTOR OF FMR (1997); AND
PRESIDENT AND A DIRECTOR OF FMR
TEXAS INC. (1997), FIDELITY
MANAGEMENT & RESEARCH (U.K.) INC.
(1997), AND FIDELITY MANAGEMENT &
RESEARCH (FAR EAST) INC. (1997).
PREVIOUSLY, MR. POZEN SERVED AS
GENERAL COUNSEL, MANAGING
DIRECTOR, AND SENIOR VICE PRESIDENT
OF FMR CORP.
THOMAS R. WILLIAMS PRESIDENT OF THE WALES GROUP, INC. 1989
(69) (MANAGEMENT AND FINANCIAL ADVISORY
SERVICES). PRIOR TO RETIRING IN 1987,
MR. WILLIAMS SERVED AS CHAIRMAN OF
THE BOARD OF FIRST WACHOVIA
CORPORATION (BANK HOLDING
COMPANY), AND CHAIRMAN AND CHIEF
EXECUTIVE OFFICER OF THE FIRST
NATIONAL BANK OF ATLANTA AND FIRST
ATLANTA CORPORATION (BANK HOLDING
COMPANY). HE IS CURRENTLY A DIRECTOR
OF CONAGRA, INC. (AGRICULTURAL
PRODUCTS), GEORGIA POWER COMPANY
(ELECTRIC UTILITY), 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 August 31, 1997, the no minees, Trustees, and officers of the
trust owned, in the aggregate, less than 1% of each fund's
outstanding shares.
If elected, the Trustees will hold office without limit in time
except that (a) any Trustee may resign; (b) any Trustee may be removed
by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal; (c) any Trustee who requests to be
retired or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees; and (d) a Trustee may be removed at any Special Meeting of
shareholders by a two-thirds vote of the outstanding voting securities
of the trust. In case a vacancy shall for any reason exist, the
remaining Trustees will fill such vacancy by appointing another
Trustee, so long as, immediately after such appointment, at least
two-thirds of the Trustees have been elected by shareholders. If, at
any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly
call a shareholders' meeting for the purpose of electing a Board of
Trustees. Otherwise, there will normally be no meeting of shareholders
for the purpose of electing Trustees.
The trust's Board, which is currently composed of two interested and
seven non-interested Trustees, met eleven times during the twelve
months ended November 30, 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, Mr. Kirk (Chairman) and Mrs. Davis
are members of the Committee. If elected, it is anticipated that Mr.
McCoy and Mr. Gates will be members 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 non-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 November 30, 1996, the
committee held four meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. McDonough (Chairman), Jones and 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 November 30, 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 estimated
compensation of each Trustee and Member of the Advisory Board of each
fund for his or her services for the fiscal year ended November 30,
1997 or calendar year ended December 31, 1996, as applicable.
COMPENSATION TABLE
AGGREGATE CONNECTICUT SPARTAN SPARTAN NEW JERSEY TOTAL
COMPENSATION MUNICIPAL CONNECTICUT FLORIDA MUNICIPAL COMPENSATION
FROM A FUND MONEY MUNICIPAL MUNICIPAL MONEY FROM THE FUND
MARKET FUND MONEY MONEY MARKET FUND COMPLEX*, A
B, C, + MARKET FUND MARKET FUND B, F, +
B, D, + B, E, +
J. GARY BURKHEAD**(DAGGER) $ 0 $ 0 $ 0 $ 0 $ 0
RALPH F. COX 156 80 200 198 137,000
PHYLLIS BURKE DAVIS 151 78 193 192 134,700
RICHARD J. FLYNN*** 9 5 10 11 168,000
EDWARD C. JOHNSON 0 0 0 0 0
3D**
E. BRADLEY JONES 153 78 195 194 134,700
DONALD J. KIRK 153 78 195 194 136,200
PETER S. LYNCH** 0 0 0 0 0
WILLIAM O. MCCOY**** 7 4 4 9 85,333
GERALD C. MCDONOUGH 188 96 240 237 136,200
EDWARD H. MALONE*** 12 7 14 17 136,200
MARVIN L. MANN 156 80 200 198 134,700
THOMAS R. WILLIAMS 156 80 200 198 136,200
* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead 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 December 31, 1996,
William O. McCoy served as a Member of the Advisory Board of the
trust.
(dagger) J. Gary Burkhead served on the Board of Trustees through
August 1, 1997. Effective August 1, 1997, Mr. Burkhead serves as a
Member of the Advisory Board of the trust.
+ Estimated
A Compensation figures include cash, a pro rata portion of benefits
accrued under the retirement program for the period ended December 30,
1996 and required to be deferred, and may include amounts deferred at
the election of Trustees.
B Compensation figures include cash, and may include amounts required
to be deferred, a pro rata portion of benefits accrued under the
retirement program for the period ended December 30, 1996 and required
to be deferred, and amounts deferred at the election of Trustees.
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, 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, $2, Phyllis Burke Davis, $2, Richard J. Flynn, $0, E. Bradley
Jones, $2, Donald J. Kirk, $2, Gerald C. McDonough, $2, Edward H.
Malone, $2, Marvin L. Mann, $2, and Thomas R. Williams, $2.
E The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $5, Phyllis Burke Davis, $5, Richard J. Flynn, $0, E. Bradley
Jones, $5, Donald J. Kirk, $5, Gerald C. McDonough, $5, Edward H.
Malone, $5, Marvin L. Mann, $5, and Thomas R. Williams, $5.
F The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $6, Phyllis Burke Davis, $6, Richard J. Flynn, $0, E. Bradley
Jones, $6, Donald J. Kirk, $6, Gerald C. McDonough, $6, Edward H.
Malone, $6, Marvin L. Mann, $6, and Thomas R. Williams, $6.
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 became eligible to
participate in the program at the end of the calendar year in which he
or she reached age 72, provided that, at the time of retirement, he or
she had served as a Fidelity fund Trustee for at least five years.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are treated as though equivalent dollar amounts had been invested
in shares of a cross-section of Fidelity funds including funds in each
major investment discipline and representing a majority of Fidelity's
assets under management (the Reference Funds). The amounts ultimately
received by the Trustees under the Plan will be directly linked to the
investment performance of the Reference Funds. Deferral of 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 a
fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In
connection with the termination of the retirement program, each
then-existing non-interested Trustee received a credit to his or her
Plan account equal to the present value of the estimated benefits that
would have been payable under the retirement program. The amounts
credited to the non-interested Trustees' Plan accounts are subject to
vesting and are treated as though equivalent dollar amounts had been
invested in shares of the Reference Funds. The amounts ultimately
received by the Trustees in connection with the credits to their Plan
accounts will be directly linked to the investment performance of the
Reference Funds. 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.
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
each fund to sign or certify any financial statements of
each fund 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 e ach fund , 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 e ach fun d that it has no direct or
material indirect ownership interest in e ach fund.
The independent accountants examine annual financial statements for
the funds and provide other audit and tax-related services. In
recommending the selection of the funds ' 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.
On September 18, 1997 Coopers & Lybrand L.L.P. and Price
Waterhouse LLP announced plans to merge their practices world wide.
Coopers & Lybrand L.L.P. and Price Waterhouse LLP expect the merger,
which is subject to approval by the partners of both organizations and
by the regulators, to become effective in early 1998.
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. Connecticut Municipal Money Market Fund, Spartan
Connecticut Municipal Money Market Fund, Spartan Florida Municipal
Money Market Fund, and New Jersey Municipal Money Market Fund are
funds of Fidelity Court Street Trust II, an open-end management
investment company organized as a Delaware business trust. Currently,
there are four 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 affect 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 Court Street Trust II, voting rights may have become
disproportionate since the net asset value per share (NAV) of the
separate funds generally diverge over time. The Staff of the
Securities and Exchange Commission (SEC) has issued a "no-action"
letter permitting a trust to seek shareholder approval of a
dollar-based voting system. The proposed amendment will comply with
the conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect. The voting power of
each shareholder would be commensurate with the value of the
shareholder's dollar investment rather than with the number of shares
held.
Under the current voting provisions, an investment in a fund with a
lower NAV may have significantly greater voting power than the same
dollar amount invested in a fund with a higher NAV. Currently, since
there are only money market funds in the trust, the proposal will not
affect the voting rights of fund shareholders on votes requiring
trust-wide participation since money market funds are managed to
maintain a $1.00 NAV. However, if additional funds with fluctuating
NAVs are added to the trust, relative voting rights would be changed
under the proposal. To illustrate the potentially disproportionate
calculation of voting power currently in place, the table below shows
a hypothetical example of a trust with funds with fluctuating NAVs.
FUND NET ASSET VALUE $1,000 INVESTMENT
IN TERMS OF
NUMBER OF SHARES
A $ 10.00 100.000
B $ 7.57 132.100
C $ 10.93 91.491
D $ 1.00 1,000.000
For example, Fund D shareholders would have ten times the voting
power of Fund A shareholders, because a $1,000 investment in Fund D
would buy ten times as many shares as a $1,000 investment in Fund A.
Accordingly, a one-share, one-vote system may provide certain
shareholders with a disproportionate ability to affect the vote
relative to shareholders of other funds in the trust. If dollar-based
voting had been in effect, each shareholder would have had 1,000
voting shares. Their voting power would be proportionate to their
economic interest, which FMR believes is a more equitable result, and
which is the result with respect to a typical corporation where each
voting share generally has an equal market price.
On matters requiring trust-wide votes where all funds are required to
vote, shareholders who own shares with a lower NAV than other funds in
the trust would be giving other shareholders in the trust more voting
"power" than they currently have. On matters affecting only one fund,
only shareholders of that fund vote on the issue. In this instance,
under both the current Trust Instrument and an amended Trust
Instrument, all shareholders of the fund would have the same voting
rights, since the NAV is the same for all shares in a single fund.
AMENDMENT TO THE TRUST INSTRUMENT. Article VII, Section 7.01
sets forth the method of calculating voting rights for all shareholder
votes for the trust. If approved, Article VII, Section 7.01 will be
amended as follows (material to be added is
(( underlined )) and material to be deleted is [bracketed]):
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS VOTING POWERS
Section 7.01 The S hareholders shall have power to vote . . .
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, except (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and (ii) when the Trustees have determined
that the matter affects the interests of more than one Series, then
the Shareholders of all such Series shall be entitled to vote thereon.
The Trustees may also determine that a matter affects only the
interests of one or more classes of a Series, in which case any such
matters shall be voted on by such class or classes. [Each whole Share
shall be entitled to one vote as to any matter on which it is entitled
to vote, and each fractional Share shall be entitled to a
proportionate fractional vote.] (( A Shareholder of each Series
shall be entitled to one vote for each dollar of net asset value
(number of shares owned times net asset value per share) of such
Series, on any matter on which such Shareholder is entitled to vote
and each fractional dollar amount shall be entitled to a proportionate
fractional vote. )) There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy, or in
any manner provided for in the Bylaws. A proxy may be given in
writing. The Bylaws may provide that proxies may also, or may instead,
be given by any electronic or telecommunications device or in any
other manner. Notwithstanding anything else herein or in the Bylaws,
in the event a proposal by anyone other than the officers or Trustees
of the Trust is submitted to a vote of the Shareholders of one or more
Series or of the Trust, or in the event of any proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers
or Trustees of the Trust, Shares may be voted only in person or by
written proxy. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required or permitted
by law, this Trust Instrument or any 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. The amended Trust Instrument will become
effective upon shareholder approval. If the proposal is not approved
by shareholders of the trust, Article VII, Section 7.01 of the Trust
Instrument will remain unchanged.
4. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY CONNECTICUT
MUNICIPAL MONEY MARKET FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees) has
approved, and recommends that shareholders of the fund approve a
proposal to adopt an amended management contract with Fidelity
Management & Research Company (FMR) (the Amended Contract). The
Amended Contract modifies the management fee that FMR receives from
the fund to provide for lower fees when FMR's assets under management
exceed certain levels. THE AMENDED CONTRACT WILL RESULT IN A
MANAGEMENT FEE THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE
UNDER THE PRESENT MANAGEMENT CONTRACT (THE PRESENT CONTRACT).
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is
supplied as Exhibit 1 on page . Except for the modifications
discussed above, it is substantially identical to the Present
Contract. (For a detailed discussion of the fund's Present Contract,
refer to the section entitled "Present Management Contracts" beginning
on page .) If approved by shareholders, the Amended Contract
will take effect on January 1, 1998 (or, if later, the first day of
the first month following approval) and will remain in effect through
May 31, 1998 and thereafter, but only as long as its continuance is
approved at least annually by (i) the vote, cast in person at a
meeting called for the purpose, of a majority of those Trustees who
are not "interested persons" of the trust or FMR (the Independent
Trustees) and (ii) the vote of either a majority of the Trustees or by
the vote of a majority of the outstanding shares of the fund. If the
Amended Contract is not approved, the Present Contract will continue
in effect through May 31, 1998, and thereafter only as long as its
continuance is approved at least annually by (i) the vote, cast in
person at a meeting called for the purpose, of a majority of the
Independent Trustees and (ii) the vote of either a majority of the
Trustees or by the vote of a majority of the outstanding shares of the
fund.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $120 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $120 billion or less. Above $120 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contract, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January
1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds 12 new fee breakpoints for
assets under FMR's management above $120 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used
to calculate the management fee, see the section entitled "Present
Management Contracts" beginning on page .)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
GROUP GROUP PRESENT AVERAGE GROUP AMENDED
ASSETS CONTRACT* ASSETS CONTRACT
($ 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 August 31, 1997 were approximately
$531 billion.
COMPARISON OF MANAGEMENT FEES. For August 31, 1997, average assets
under management by FMR were $531 billion. The fund's management fee
rate under the Amended Contract would have been .3882%, compared to
.4069% under the Present Contract. The management fee rate will remain
the same under both the Present Contract and the Amended Contract
until assets under FMR's management exceed $120 billion, at which
point the management fee rate under the Amended Contract begins to
decline relative to the Present Contract. The following chart compares
the fund's management fee under the terms of the Present Contract for
the fiscal year ended November 30, 1996 to the management fee the fund
would have incurred if the Amended Contract had been in effect.
PRESENT CONTRACT AMENDED CONTRACT PERCENTAGE
MANAGEMENT FEE* MANAGEMENT FEE DIFFERENCE
$1,353,087 $1,308,203 (3.3%)
* 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.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended August
31, 1997 to the management fee the fund would have incurred if the
Amended Contract had been in effect.
PRESENT CONTRACT AMENDED CONTRACT PERCENTAGE
MANAGEMENT FEE* MANAGEMENT FEE DIFFERENCE
$1,448,040 $1,389,874 (4.0%)
* 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 the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including 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
Contract in advance of the meeting at which the Amended Contract was
considered, and had the opportunity to ask questions and request
further information in connection with such consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their monthly meetings Trustees receive materials specifically
relating to the Amended Contract. These materials include: (i)
information on the investment performance of the fund, a peer group of
funds and an appropriate index or combination of indices, (ii) sales
and redemption data in respect of the fund, (iii) the economic outlook
and the general investment outlook in the markets in which the fund
invests, and (iv) notable changes in the fund's investments. The Board
of Trustees and the Independent Trustees also consider periodically
other material facts such as (1) FMR's results and financial
condition, (2) arrangements in respect of the distribution of the
fund's shares, (3) the procedures employed to determine the value of
the fund's assets, (4) the allocation of the fund's brokerage, if any,
including allocations to brokers affiliated with FMR (5) FMR's
management of the relationships with the fund's custodian and
subcustodians, (6) the resources devoted to and the record of
compliance with the fund's investment policies and restrictions and
with policies on personal securities transactions, and (7) the nature,
cost and quality of non-investment management services provided by FMR
and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees annually review a report detailing the background
of the fund's portfolio manager, and the fund's investment objective
and discipline. The Independent Trustees have also had discussions
with senior management of FMR responsible for investment operations,
and the senior management of Fidelity's money market group. Among
other things they considered the size, education and experience of
FMR's investment staff, its use of technology, and FMR's approach to
recruiting, training and retaining portfolio managers and other
research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Amended Contract and under
separate agreements covering transfer agency functions and pricing,
bookkeeping and securities lending services, if any. The Board of
Trustees and the Independent Trustees have also considered the nature
and extent of FMR's supervision of third party service providers,
principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, credit card, insurance,
publishing, real estate, international research and investment funds,
and others. The Board of Trustees and the Independent Trustees
considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the
Independent Trustees considered the benefit to shareholders of
investing in a fund that is part of a large family of funds offering a
variety of investment disciplines and providing for a large variety of
fund and shareholder services.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule are in
the best interest of the fund's shareholders. The Board of Trustees,
including the Independent Trustees, voted to approve the submission of
the Amended Contract to shareholders of the fund and recommends that
shareholders of the fund vote FOR the Amended Contract.
5. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR FIDELITY NEW JERSEY
MUNICIPAL MONEY MARKET FUND.
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust or of FMR (the Independent Trustees), has
approved, and recommends that shareholders of the fund approve a
proposal to adopt an amended management contract with Fidelity
Management & Research Company (FMR) (the Amended Contract). The
Amended Contract modifies the management fee that FMR receives from
the fund to provide for lower fees when FMR's assets under management
exceed certain levels. The Amended Contract also includes a discussion
of FMR's ability to use brokers and dealers to execute portfolio
transactions. THE AMENDED CONTRACT WILL RESULT IN A MANAGEMENT FEE/
THAT IS THE SAME AS, OR LOWER THAN, THE FEE PAYABLE UNDER THE PRESENT
MANAGEMENT CONTRACT (THE PRESENT CONTRACT).
PROPOSED AMENDMENTS TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendments, is
supplied as Exhibit 2 on page . Except for the modifications discussed
above, it is substantially identical to the Present Contract. (For a
detailed discussion of the fund's Present Contract, refer to the
section entitled "Present Management Contracts" beginning on page .)
If approved by shareholders, the Amended Contract will take effect on
January 1, 1998 (or, if later, the first day of the first month
following approval) and will remain in effect through May 31, 1998 and
thereafter, but only as long as its continuance is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested
persons" of the trust or FMR (the Independent Trustees) and (ii) the
vote of either a majority of the Trustees or by the vote of a majority
of the outstanding shares of the fund. If the Amended Contract is not
approved, the Present Contract will continue in effect through May 31,
1998, and thereafter only as long as its continuance is approved at
least annually by (i) the vote, cast in person at a meeting called for
the purpose, of a majority of the Independent Trustees and (ii) the
vote of either a majority of the Trustees or by the vote of a majority
of the outstanding shares of the fund.
The management fee is an annual percentage of the fund's average net
assets (the management fee rate), calculated and paid monthly. The
management fee rate is the sum of two components: a Group Fee Rate,
which varies according to assets under management by FMR, and a fixed
Individual Fund Fee Rate. The Amended Contract modifies the Group Fee
Rate by providing for lower fee rates if FMR's assets under management
remain above $120 billion.
MODIFICATION TO GROUP FEE RATE. The Group Fee Rate varies based upon
the monthly average of the aggregate net assets of all registered
investment companies having management contracts with FMR (assets
under management by FMR). For example, as assets under management by
FMR increase, the Group Fee Rate declines. The Amended Contract would
not change the group fee calculation for assets under management by
FMR of $120 billion or less. Above $120 billion in assets under FMR's
management, the Group Fee Rate declines under both the Present
Contract and the Amended Contract, but under the Amended Contract, it
declines faster. Group Fee Rates that are lower than those contained
in the fund's Present Contract have been voluntarily implemented by
FMR on January 1, 1992, November 1, 1993, August 1, 1994, and January
1, 1996.
The Group Fee Rate is calculated according to a graduated schedule
providing for different rates for different levels of assets under
management by FMR. The rate at which the Group Fee Rate declines is
determined by fee "breakpoints" that provide for lower fee rates when
assets increase. The Amended Contract adds 12 new fee breakpoints for
assets under FMR's management above $120 billion as illustrated in the
following table. (For an explanation of how the Group Fee Rate is used
to calculate the management fee, see the section entitled "Present
Management Contracts" beginning on page .)
GROUP FEE RATE BREAKPOINTS
PRESENT CONTRACT AMENDED CONTRACT
GROUP GROUP PRESENT AVERAGE GROUP AMENDED
ASSETS CONTRACT* ASSETS CONTRACT
($ 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 August 31, 1997 were approximately
$531 billion.
COMPARISON OF MANAGEMENT FEES. For August 31, 1997 average assets
under management by FMR were $531 billion. The fund's management fee
rate under the Amended Contract would have been .3882%, compared to
.4069% under the Present Contract. The management fee rate will remain
the same under both the Present Contract and the Amended Contract
until assets under FMR's management exceed $120 billion, at which
point the management fee rate under the Amended Contract begins to
decline relative to the Present Contract. The following chart compares
the fund's management fee under the terms of the Present Contract for
the fiscal year ended November 30, 1996 to the management fee the fund
would have incurred if the Amended Contract had been in effect.
Present Contract
Amended Contract
Percentage
Management Fee* Management Fee Difference
$1,785,595 $1,726,411 (3.3%)
* 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.
The following chart compares the fund's management fee under the
terms of the Present Contract for the twelve month period ended August
31, 1997 to the management fee the fund would have incurred if the
Amended Contract had been in effect.
Present Contract
Amended Contract
Percentage
Management Fee* Management Fee Difference
$1,831,468 $1,758,020 (4.0%)
* Does not reflect voluntary adoption of extended group fee rate
schedules by FMR on January 1, 1992, November 1, 1993, August 1, 1994,
and January 1, 1996.
TRANSACTIONS WITH BROKERS-DEALERS. The fund may execute portfolio
transactions with broker-dealers who provide research and execution
services to the fund or other accounts over which FMR or its
affiliates exercise investment discretion. The selection of such
broker-dealers is generally made by FMR (to the extent possible
consistent with execution considerations) in accordance with a ranking
of broker-dealers determined periodically by FMR's investment staff
based upon the quality of research and execution services provided. If
FMR grants investment management authority to a sub-adviser pursuant
to a Sub-advisory Agreement, the sub-adviser is authorized to place
orders for the purchase and sale of portfolio securities, and will do
so in accordance with the policies described below.
The receipt of research from broker-dealers that execute transactions
on behalf of the fund may be useful to FMR in rendering investment
management services to the fund and to its other clients, and
conversely, such research provided by broker-dealers who execute
transaction orders on behalf of other FMR clients may be useful to FMR
in carrying out its obligations to the fund. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid additional expenses that could be
incurred if FMR tried to develop comparable information through its
own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause the fund to pay such higher commissions,
FMR must determine in good faith that such commissions are reasonable
in relation to the value of the brokerage and research services
provided by such executing broker-dealers, viewed in terms of a
particular transaction or FMR's overall responsibilities to the fund
and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation
should be related to those services.
The fund has already been authorized by the Board of Trustees,
consistent with the federal securities laws and the rules and
regulations of the Securities and Exchange Commission, to place
portfolio transactions through broker-dealers who are affiliated with
FMR and through broker-dealers who provide research. The Amended
Contract expressly recognizes this authority.
MATTERS CONSIDERED BY THE BOARD
The mutual funds for which the members of the Board of Trustees serve
as Trustees are referred to herein as the "Fidelity funds." The Board
of Trustees meets eleven times a year. The Board of Trustees,
including the Independent Trustees, believe that matters bearing on
the appropriateness of the fund's management fees are considered at
most, if not all, of their meetings. While the full Board of Trustees
or the Independent Trustees, as appropriate, act on all major matters,
a significant portion of the activities of the Board of Trustees
(including certain of those described herein) are conducted through
committees. The Independent Trustees meet frequently in executive
session and are advised by independent legal counsel selected by the
Independent Trustees.
The proposal to present the Amended Contract to shareholders was
approved by the Board of Trustees of the fund, including 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 consider and approve twice every year
portfolio transactions with broker-dealers who provide research
services to the funds. The Board of Trustees received materials
relating to the Amended Contract in advance of the meeting at which
the Amended Contract was considered, and had the opportunity to ask
questions and request further information in connection with such
consideration.
INFORMATION RECEIVED BY THE INDEPENDENT TRUSTEES. In connection with
their monthly meetings Trustees receive materials specifically
relating to the Amended Contract. These materials include: (i)
information on the investment performance of the fund, a peer group of
funds and an appropriate index or combination of indices, (ii) sales
and redemption data in respect of the fund, (iii) the economic outlook
and the general investment outlook in the markets in which the fund
invests, and (iv) notable changes in the fund's investments. The Board
of Trustees and the Independent Trustees also consider periodically
other material facts such as (1) FMR's results and financial
condition, (2) arrangements in respect of the distribution of the
fund's shares, (3) the procedures employed to determine the value of
the fund's assets, (4) the allocation of the fund's brokerage, if any,
including allocations to brokers affiliated with FMR (5) FMR's
management of the relationships with the fund's custodian and
subcustodians, (6) the resources devoted to and the record of
compliance with the fund's investment policies and restrictions and
with policies on personal securities transactions, and (7) the nature,
cost and quality of non-investment management services provided by FMR
and its affiliates.
In response to questions raised by the Independent Trustees,
additional information was furnished by FMR including, among other
items, information on and analysis of (a) the overall organization of
FMR, (b) the choice of performance indices and benchmarks, (c) the
composition of peer groups of funds, (d) transfer agency and
bookkeeping fees paid to affiliates of FMR, (e) investment
performance, (f) investment management staffing, (g) the potential for
achieving further economies of scale, (h) operating expenses paid to
third parties, and (i) the information furnished to investors,
including the fund's shareholders.
In considering the Amended Contract, the Board of Trustees and the
Independent Trustees did not identify any single factor as
all-important or controlling, and the following summary does not
detail all the matters considered. Matters considered by the Board of
Trustees and the Independent Trustees in connection with their
approval of the Amended Contract include the following:
INVESTMENT COMPLIANCE AND PERFORMANCE. The Board of Trustees and the
Independent Trustees considered whether the fund has operated within
its investment objective and its record of compliance with its
investment restrictions. They also reviewed monthly the fund's
investment performance as well as the performance of a peer group of
mutual funds, and the performance of an appropriate index or
combination of indices.
FMR'S PERSONNEL AND METHODS. The Board of Trustees and the
Independent Trustees annually review a report detailing the background
of the fund's portfolio manager, and the fund's investment objective
and discipline. The Independent Trustees have also had discussions
with senior management of FMR responsible for investment operations,
and the senior management of Fidelity's money market group. Among
other things they considered the size, education and experience of
FMR's investment staff, its use of technology, and FMR's approach to
recruiting, training and retaining portfolio managers and other
research, advisory and management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent
of administrative and shareholder services performed by FMR and
affiliated companies, both under the Amended Contract and under
separate agreements covering transfer agency functions and pricing,
bookkeeping and securities lending services, if any. The Board of
Trustees and the Independent Trustees have also considered the nature
and extent of FMR's supervision of third party service providers,
principally custodians and subcustodians.
EXPENSES. The Board of Trustees and the Independent Trustees
considered the fund's expense ratio and expense ratios of a peer group
of funds. They also considered the amount and nature of fees paid by
shareholders.
PROFITABILITY. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits in respect of the management of
the Fidelity funds, including the fund. This consideration included an
extensive review of FMR's methodology in allocating its costs to the
management of the fund. The Board of Trustees and the Independent
Trustees have concluded that the cost allocation methodology employed
by FMR has a reasonable basis and is appropriate in light of all of
the circumstances. They considered the profits realized by FMR in
connection with the operation of the fund and whether the amount of
profit is a fair entrepreneurial profit for the management of the
fund. They also considered the profits realized from non-fund
businesses which may benefit from or be related to the fund's
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry
data, both accounting for and ignoring marketing expenses.
ECONOMIES OF SCALE. The Board of Trustees and the Independent
Trustees considered whether there have been economies of scale in
respect of the management of the Fidelity funds, whether the Fidelity
funds (including the fund) have appropriately benefitted from any
economies of scale, and whether there is potential for realization of
any further economies of scale. The Board of Trustees and the
Independent Trustees have concluded that FMR's mutual fund business
presents some limited opportunities to realize economies of scale and
that these economies are being shared between fund shareholders and
FMR in an appropriate manner. The Independent Trustees have also
concluded that the existing group fee structure should be continued
but determined that it would be appropriate to change the group fee
structure as proposed herein.
OTHER BENEFITS TO FMR. The Board of Trustees and the Independent
Trustees also considered the character and amount of fees paid by the
fund and the fund's shareholders for services provided by FMR and its
affiliates, including fees for services like transfer agency, fund
accounting and direct shareholder services. They also considered the
allocation of fund brokerage to brokers affiliated with FMR and the
receipt of sales loads and payments under Rule 12b-1 plans in respect
of certain of the Fidelity funds. The Board of Trustees and the
Independent Trustees also considered the revenues and profitability of
FMR businesses other than its mutual fund business, including FMR's
retail brokerage, correspondent brokerage, capital markets, trust,
investment advisory, pension record keeping, credit card, insurance,
publishing, real estate, international research and investment funds,
and others. The Board of Trustees and the Independent Trustees
considered the intangible benefits that accrue to FMR and its
affiliates by virtue of their relationship with the fund.
OTHER BENEFITS TO SHAREHOLDERS. The Board of Trustees and the
Independent Trustees considered the benefit to shareholders of
investing in a fund that is part of a large family of funds offering a
variety of investment disciplines and providing for a large variety of
fund and shareholder services.
With regard to the section of the proposed contract describing the
changes to portfolio transactions, the Trustees considered the value
of research provided by the broker-dealers, the quality of the
execution services provided, and the level of commissions paid. While
the fund does not generally purchase securities through a
broker-dealer by paying commissions, the Board of Trustees determined
that amending the management contract to expressly recognize the
authority of FMR to use affiliated broker-dealers and broker-dealers
who provide research services furthers the goal of standardizing
management contracts for Fidelity funds, and that explicitly
permitting all Fidelity funds to utilize certain broker-dealers is
beneficial to the fund.
CONCLUSION. Based on their evaluation of all material factors and
assisted by the advice of independent counsel, the Trustees concluded
(i) that the existing management fee structure is fair and reasonable
and (ii) that the proposed modifications to the management fee
structure, that is the reduction of the Group Fee Rate schedule, and
the addition of the discussion of FMR's ability to use brokers and
dealers to execute portfolio transactions, are in the best interest of
the fund's shareholders. The Board of Trustees, including the
Independent Trustees, voted to approve the submission of the Amended
Contract to shareholders of the fund and recommends that shareholders
of the fund vote FOR the Amended Contract.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 6 and 7 is to revise certain of the
funds' investment limitations to conform to limitations which are
standard for similar types of funds managed by FMR. The Board of
Trustees asked FMR to analyze the various fundamental and
non-fundamental investment limitations of the Fidelity funds, and,
where practical and appropriate to a fund's investment objective and
policies, propose to shareholders adoption of standard fundamental
limitations and elimination of certain other fundamental limitations.
Generally, when fundamental limitations are eliminated, Fidelity's
standard non-fundamental limitations replace them. By making these
limitations non-fundamental, the Board of Trustees may amend a
limitation as they deem appropriate, without seeking shareholder
approval. The Board of Trustees would amend the limitations to
respond, for instance, to developments in the marketplace, or changes
in federal or state law. The costs of shareholder meetings called for
these purposes are generally borne by a fund and its shareholders.
It is not anticipated that these proposals will substantially affect
the way a fund is currently managed. However, FMR is presenting them
to you for your approval because FMR believes that increased
standardization will help to promote operational efficiencies and
facilitate monitoring of compliance with fundamental and
non-fundamental investment limitations. Although adoption of a new or
revised limitation is not likely to have any impact on the current
investment techniques employed by a fund, it will contribute to the
overall objectives of standardization.
6. TO AMEND FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND'S AND
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING THE ISSUANCE OF SENIOR SECURITIES.
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 Court Street 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 when the disclosure is
revised to reflect the changes. If the proposal is not approved by the
shareholders of a fund, that fund's current limitation will remain
unchanged.
7. TO AMEND FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND'S,
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND'S AND SPARTAN
CONNECTICUT MUNICIPAL MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE CONCENTRATION OF ITS INVESTMENTS IN A SINGLE
INDUSTRY.
Fidelity Connecticut Municipal Money Market Fund's and Fidelity New
Jersey Municipal Money Market 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."
Spartan Connecticut Municipal Money Market 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 or instrumentalities, or municipal securities 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 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 municipal funds managed by FMR.
(See "Adoption of Standardized Investment Limitations" on page
.) For Spartan Connecticut Municipal Money Market Fund, the
impact of the change in the investment limitation is that certain
private purpose municipal securities that are municipal securities but
not tax-exempt obligations under the Tax-Reform Act of 1986, are no
longer excluded from the concentration limits. 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 each 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 when the disclosure is
revised to reflect the changes. If the proposal is not approved by the
shareholders of a fund, that fund's current limitation will remain
unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Meeting. However, if any other matters properly come before the
Meeting, it is the intention that proxies that do not contain specific
instructions to the contrary will be voted on such matters in
accordance with the judgment of the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to
a number of investment companies. Information concerning the advisory
fees, net assets, and total expenses of funds with investment
objectives similar to Fidelity Connecticut Municipal Money Market Fund
and Fidelity New Jersey Municipal Money Market Fund and advised by FMR
is contained in the Table of Average Net Assets and Expense Ratios in
Exhibit 3 beginning on page .
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks,
including the custodian banks for certain of the funds advised by FMR.
Those transactions that have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by
existing or potential custodial or other fund relationships.
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board
and of the Executive Committee; Robert C. Pozen, President; and Peter
S. Lynch, Vice Chairman. With the exception of Robert C. Pozen, who is
proposed for election as a Trustee,each of the Directors is also a
Trustee of the trust. Messrs. Johnson 3d, Pozen, J. Gary Burkhead,
John H. Costello, Arthur S. Loring, Thomas D. Maher, Thomas J.
Simpson, Richard A. Silver, Leonard M. Rush, Fred L. Henning, Jr.,
Boyce I. Greer, and Scott A. Orr are currently officers of the
trust and officers or employees of FMR or FMR Corp. With the exception
of Mr. Costello, Mr. Simpson, and Mr. Silver, all of these persons
hold or have options to acquire stock 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 December 1, 1995 through August 31, 1997 no
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 Connecticut
Municipal Money Market Fund and Fidelity New Jersey 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 beginning on page .
The Directors of FMR Texas are Edward C. Johnson 3d, Chairman, and
Robert C. Pozen, 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. (FMR U.K), and Fidelity Management & Research
(Far East) Inc. (FMR Far East) In addition, Mr. Pozen is Senior Vice
President of the trust and a Senior Vice President and Trustee of
other funds advised by FMR; a Director of FMR Corp.; 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 FOR FIDELITY CONNECTICUT MUNICIPAL MONEY
MARKET FUND AND FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
Each fund employs 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 each 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 contract described in proposals 4 and 5.
In addition to the management fee payable to FMR, each fund
reimburses UMB Bank, n.a. (UMB) for its services as the 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. The
fund is also liable for such non-recurring expenses as may arise,
including costs of any litigation to which the fund may be a party,
and any obligation it may have to indemnify the trust's officers and
Trustees with respect to litigation.
UMB has entered into a sub-contract with Fidelity Service 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 Connecticut Municipal Money
Market Fund and Fidelity New Jersey Municipal Money Market Fund for
the fiscal year ended November 30, 1996 were $578,870 and $910,968,
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 Connecticut Municipal Money Market Fund's and
Fidelity New Jersey Municipal Money Market Fund's manager pursuant to
management contracts dated February 28, 1992, which were approved by
Court Street Trust, then sole shareholder of the fund on March 1,
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 and is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown below on the left. The schedule
on page 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 $447 billion of group net assets - the approximate level
for November 1996 - was 0.1429%, which is the weighted average of the
respective fee rates for each level of group net assets up to $447
billion.
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 billion .3700%
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 Annual
Assets Rate Assets Fee Rate
120 - $156 billion .1450% $ 150 billion .1736%
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The individual fund fee rate is 0.25%. Based on the average group net
assets of the funds advised by FMR for November 30, 1996, the annual
management fee rate would be calculated as follows:
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
Group Fee Rate Individual Fund Management Fee Rate
Fee Rate
0.1429% + 0.25% = 0.3929%
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
Group Fee Rate Individual Fund Management Fee Rate
Fee Rate
0.1429% + 0.25% = 0.3929%
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 fiscal year ended November 30, 1996, FMR received $1,308,203
and $1,726,411 for its services as investment adviser to Fidelity
Connecticut Municipal Money Market Fund and Fidelity New Jersey
Municipal Money Market Fund, respectively. This fee was equivalent to
0.3956% and 0.3956%, respectively, of the average net assets of
Fidelity Connecticut Municipal Money Market Fund and Fidelity New
Jersey Municipal Money Market Fund.
FMR may, from time to time, voluntarily reimburse all or a portion of
each fund's operating expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses). FMR retains the
ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal
year. Expense reimbursements by FMR will increase each fund's total
returns and yield and repayment of the reimbursement by each fund will
lower its total returns and yield.
SUB-ADVISORY AGREEMENTS FOR FIDELITY CONNECTICUT MUNICIPAL MONEY
MARKET FUND AND FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
On behalf of Fidelity Connecticut Municipal Money Market Fund and
Fidelity New jersey Municipal Money Market Fund, FMR has entered into
a sub-advisory agreement with FMR Texas Inc. (FMR Texas) pursuant to
which FMR Texas has primary responsibility for providing portfolio
investment management services to each fund. Fidelity Connecticut
Municipal Money Market Fund's sub-advisory agreement, dated February
28, 1992, was approved by Court Street Trust as sole shareholder of
the fund on March 1, 1992 pursuant to an Agreement and Plan of
Conversion approved by shareholders of the fund on December 11, 1991.
Fidelity New Jersey Municipal Money Market Fund's sub-advisory
agreement, dated February 28, 1992, was approved by Court Street Trust
as sole shareholder of the fund on March 1, 1992 pursuant to an
Agreement and Plan of Conversion approved by shareholders of the fund
on December 11, 1991. The terms of Fidelity Connecticut Municipal
Money Market Fund's and Fidelity New Jersey Municipal Money Market
Fund's current sub-advisory agreements with FMR Texas duplicate those
of their previous sub-advisory agreements which were dated November 1,
1990 and December 1, 1989, respectively and approved by FMR as sole
shareholder.
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 November 30, 1996, FMR
paid FMR Texas fees of $654,102 and $863,206, on behalf of Fidelity
Connecticut Municipal Money Market Fund and Fidelity New Jersey
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 the fund's management contract.
FMR may place agency transactions with National Financial Services
Corporation (NFSC) an indirect subsidiary of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services.
During fiscal 1996 the funds paid no brokerage commissions to
affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written proposals to
the Secretary of the Trust, 82 Devonshire Street, Boston,
Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the trust, in care of Fidelity Service Company, Inc.
P.O. Box 789, Boston, Massachusetts 02102, whether other persons are
beneficial owners of shares for which proxies are being solicited and,
if so, the number of copies of the Proxy Statement and Annual Reports
you wish to receive in order to supply copies to the beneficial owners
of the respective shares.
EXHIBIT 1
((UNDERLINED)) DISCLOSURE WILL BE ADDED
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF MANAGEMENT CONTRACT
BETWEEN
FIDELITY COURT STREET TRUST II
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET
((FUND)) [PORTFOLIO] AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) [AGREEMENT] made this________, [28th day of February,
1992], by and between Fidelity Court Street Trust II, a Delaware
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Fund"), on behalf of
Fidelity Connecticut Municipal Money Market ((Fund)) [Portfolio]
(hereinafter called the "Portfolio"), and Fidelity Management &
Research Company, a Massachusetts corporation (hereinafter called the
"Adviser") ((as set forth in its entirety below.))
((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 January 1, 1998 or the first day of the month
following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Fund and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Fund in
accordance with the investment objective, policies and limitations as
provided in the Fund'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 Fund may impose by notice in writing to
the Adviser. The Adviser shall also furnish for the use of the Fund
office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund; 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
Fund, to buy, sell, lend and otherwise trade in any stocks, bonds and
other securities and investment instruments on behalf of the Fund. The
investment policies and all other actions of the Fund are and shall at
all times be subject to the control and direction of the Fund's Board
of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Fund, including but not limited to:
(i) providing the Fund with office space, equipment and facilities
(which may be its own) for maintaining its organization; (ii) on
behalf of the Fund, 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 Fund'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 Fund 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 Advisor will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Advisor shall
receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, composed of a Group Fee
[Rate] and an Individual Fund Fee [Rate].
(a) Group Fee Rate. The Group Fee Rate shall be based upon the
monthly average of the net assets of the registered investments
companies having Advisory and Service Management Contracts with the
Advisor (computed in the manner set forth in the ((Fund's Declaration
of Trust or other organization document)) [charter of each investment
company]) determined as the close of business on each business day
throughout the month. The group fee rate shall be determined on a
cumulative basis pursuant to the following schedule.
Average Net Assets Annualized Fee Rate (for each level)
Over $0.0 - 3 billion 0.37((00))%
3 - 6 0.34((00))
6 - 9 0.31((00))
9 - 12 0.28((00))
12 - 15 0.25((00))
15 - 18 0.22((00))
18 - 21 0.20((00))
21 - 24 0.19((00))
24 - 30 0.18((00))
30 - 36 0.17((50))
36 - 42 0.17((00))
42 - 48 0.16((50))
48 - 66 0.16((00))
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%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund fee rate shall constitute
the annual management fee rate. One-twelfth of the annual management
fee shall be applied to the average of the net assets of the Portfolio
(computed in the manner set forth in the ((Fund's Declaration of Trust
or other organizational document)) [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 Fund will pay all its expenses other
than those expressly stated to be payable by the Advisor hereunder,
which expenses payable by the Fund 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 Fund'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 Fund's shareholders, including
proxy solicitations therefor; (ix) a pro rata share, based on relative
net assets of the Fund 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 Fund is a party
and the legal obligation which the Fund may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Fund 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 Fund
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 Fund or to any shareholder of the Fund 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 ((May
31, 1998)) [June 30, 1992] 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 Fund.
(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 Fund.
(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 Fund by vote of a majority of
the outstanding voting securities of the Fund. 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 Fund and its assets, and
the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Fund or any other Funds 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 Fund under
the ((Declaration of Trust or other organizational document)) [Trust
Instrument] are separate and distinct from those of any and all other
Funds.
8. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified by the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY COURT STREET TRUST II
on behalf of Fidelity Connecticut Municipal Money Market ((Fund))
[Portfolio]
[signature lines omitted]
EXHIBIT 1
((UNDERLINED)) DISCLOSURE WILL BE ADDED
[BRACKETED] DISCLOSURE WILL BE DELETED
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY COURT STREET TRUST II
FIDELITY NEW JERSEY ((MUNICIPAL)) [TAX-FREE] MONEY MARKET ((FUND))
[PORTFOLIO]
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
((AMENDMENT)) [AGREEMENT] made this_______________[28th day of
February, 1992], by and between Fidelity Court Street Trust II, a
Delaware business trust which may issue one or more series of shares
of beneficial interest (hereinafter called the "Fund"), on behalf of
Fidelity New Jersey ((Municipal)) [Tax-Free] Money Market ((Fund))
[Portfolio] (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser") ((as set forth in its entirety
below.))
((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 January 1, 1998 or the first day of the month
following approval.))
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Fund and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Fund in
accordance with the investment objective, policies and limitations as
provided in the Fund'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 Fund may impose by notice in writing to
the Adviser. The Adviser shall also furnish for the use of the Fund
office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund; 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
Fund, to buy, sell, lend and otherwise trade in any stocks, bonds and
other securities and investment instruments on behalf of the Fund. The
investment policies and all other actions of the Fund are and shall at
all times be subject to the control and direction of the Fund's Board
of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and
administrative services necessary for the operation of the Fund. The
Adviser shall, subject to the supervision of the Board of Trustees,
perform various services for the Fund, including but not limited to:
(i) providing the Fund with office space, equipment and facilities
(which may be its own) for maintaining its organization; (ii) on
behalf of the Fund, 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 Fund'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 Fund as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information
or analyses to the Fund as the Fund's Board of Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Fund's Board of Trustees
with respect to Fund policies, and shall carry out such policies as
are adopted by the Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the Adviser
shall from time to time determine to be necessary or useful to perform
its obligations under this Contract.
(((c) The Adviser shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or
dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser. The Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers
or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other
accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either
that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Trustees of the Fund shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.))
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser are or may be or become similarly
interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
3. The Advisor will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Advisor 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
investments companies having Advisory and Service Management Contracts
with the Advisor (computed in the manner set forth in the ((Fund's
Declaration of Trust or other organizational document)) [charter of
each investment company]) determined as the close of business on each
business day throughout the month. The group fee rate shall be
determined on a cumulative basis pursuant to the following schedule.
Average Net Assets Annualized Fee Rate (for each level)
Over $0.0 - 3 billion 0.37((00))%
3 - 6 0.34((00))
6 - 9 0.31((00))
9 - 12 0.28((00))
12 - 15 0.25((00))
15 - 18 0.22((00))
18 - 21 0.20((00))
21 - 24 0.19((00))
24 - 30 0.18((00))
30 - 36 0.17((50))
36 - 42 0.17((00))
42 - 48 0.16((50))
48 - 66 0.16((00))
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%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund fee rate shall constitute
the annual management fee rate. One-twelfth of the annual management
fee shall be applied to the average of the net assets of the Portfolio
(computed in the manner set forth in the ((Fund's Declaration of Trust
or other organizational document)) [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 Fund will pay all its expenses other
than those expressly stated to be payable by the Advisor hereunder,
which expenses payable by the Fund 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 Fund'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 Fund's shareholders, including
proxy solicitations therefor; (ix) a pro rata share, based on relative
net assets of the Fund 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 Fund is a party
and the legal obligation which the Fund may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Fund 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 Fund
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 Fund or to any shareholder of the Fund 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 ((May
31, 1998)) [June 30, 1992] 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 Fund.
(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 Fund.
(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 Fund by vote of a majority of
the outstanding voting securities of the Fund. 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 Fund and its assets, and
the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Fund or any other Funds 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 Fund under
the ((Declaration of Trust or other organizational document)) [Trust
Instrument] are separate and distinct from those of any and all other
Funds.
8. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have
the respective meanings specified by the 1940 Act, as now in effect or
as hereafter amended, and subject to such orders as may be granted by
the Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as
of the date written above.
FIDELITY COURT STREET TRUST II
on behalf of Fidelity New Jersey ((Municipal)) [Tax-Free]
Money Market ((Fund)) [Portfolio]
[signature lines omitted]
EXHIBIT 1
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS
(A)
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)
MUNICIPAL MONEY MARKET ((yen))
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 0.4 8 *
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 11/30/96 330.7 0.40
Market
New Jersey Municipal Money 11/30/96 436.4 0.40
Market
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
Massachusetts Municipal Money 1/31/97 877.1 0.39
Market
New York Municipal Money Market 1/31/97 826.6 0.40
Spartan Massachusetts Municipal 1/31/97 574.4 0.50
Money Market
Spartan New York Municipal
Money Market 1/31/97 703.2 0.50
California Municipal Money Market 2/28/97 742.8 0.39
Spartan California Municipal Money 2/28/97 1,343.5 0.35*
Market
Institutional Tax-Exempt Cash
Portfolios:
Tax-Exempt:
Class I 3/31/97 $ 1,998.4 0.20%*
Class II 3/31/97 122.4 0.20*
Class III 3/31/97 13.9 0.20*
Daily Money Fund: Capital Reserves:
Municipal Money Market 7/31/97 145.3 0.32*
(a) All fund data is 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 (*).
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to each fund.
CNCF-PXS-1097 CUSIP#316089408/FUND#418
CUSIP#316089309/FUND#417
CUSIP#316089606/FUND#425
CUSIP#316090109/FUND#428
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 COURT STREET TRUST II: FIDELITY CONNECTICUT 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 Gerald C. McDonough, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of Fidelity Court Street Trust II: Fidelity Connecticut
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
December 17, 1997 at 12:00 p.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
[cusip# 316089408/fund# 418]
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:
- ---------------------------------------------------------------------
- -------------------------
1. To elect the 12 nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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.)
_____________________________________________________________________
________________________
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the fund .
3. To amend the Trust Instrument to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the
trust.
4. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
fund.
6. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
concerning the issuance of senior securities.
7. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
concerning the concentration of investments in a
single industry.
[CTM-PXC-1097] [cusip#316089408/fund# 418]
Vote this proxy card TODAY! Your prompt response will
save 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 COURT STREET TRUST II: SPARTAN (registered trademark)
CONNECTICUT 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 Gerald C. McDonough, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of Fidelity Court Street Trust II: Spartan Connecticut
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
December 17, 1997 at 12:00 p.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
[cusip# 316089606/fund# 425]
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:
- ---------------------------------------------------------------------
- -------------------------
1. To elect the 12 nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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.)
_____________________________________________________________________
________________________
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the fund.
3. To amend the Trust Instrument to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the
trust.
7. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
concerning the concentration of investments in a
single industry.
[SCT-PXC-1097] [cusip#316089606/fund# 425]
Vote this proxy card TODAY! Your prompt response will
save 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 COURT STREET TRUST II: SPARTAN (registered trademark)
FLORIDA 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 Gerald C. McDonough, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of Fidelity Court Street Trust II: Spartan Florida
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
December 17, 1997 at 12:00 p.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
[cusip# 316090109/fund# 428]
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:
- ---------------------------------------------------------------------
- -------------------------
1. To elect the 12 nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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.)
_____________________________________________________________________
________________________
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the fund .
3. To amend the Trust Instrument to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the
trust.
[SFM-PXC-1097] [cusip#316090109/fund# 428]
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 COURT STREET TRUST II: FIDELITY NEW JERSEY 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 Gerald C. McDonough, or any one
or more of them, attorneys, with full power of substitution, to vote
all shares of Fidelity Court Street Trust II: Fidelity New Jersey
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
December 17, 1997 at 12:00 p.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
[cusip# 316089309/fund# 417]
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:
- ---------------------------------------------------------------------
- -------------------------
1. To elect the 12 nominees specified below as [ ] FOR all [ ] 1.
Trustees: Ralph F. Cox, Phyllis Burke Davis, nominees listed WITHHOLD
Robert M. Gates, Edward C. Johnson 3d, E. (except as marked to authority to
Bradley Jones, Donald J. Kirk, Peter S. Lynch, the contrary below). vote for all
William O. McCoy, Gerald C. McDonough, Marvin nominees.
L. Mann, Robert C. Pozen, 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.)
_____________________________________________________________________
________________________
2. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the fund .
3. To amend the Trust Instrument to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the
trust.
5. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
fund.
6. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
concerning the issuance of senior securities.
7. To amend the fundamental investment limitation FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
concerning the concentration of investments in a
single industry.
[NJS-PXC-1097] [cusip#316089309/fund# 417]
IMPORTANT
PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
SPARTAN(Registered trademark) CONNECTICUT MUNICIPAL MONEY MARKET FUND
SPARTAN(Registered trademark) FLORIDA MUNICIPAL MONEY MARKET FUND
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
Dear Shareholder:
I am writing to let you know that a special meeting of Fidelity
Connecticut Municipal Money Market Fund (FIDELITY CT), Spartan
Connecticut Municipal Money Market Fund (SPARTAN CT), Spartan Florida
Municipal Money Market Fund (SPARTAN FL), and Fidelity New Jersey
Municipal Money Market Fund (FIDELITY NJ) shareholders will be held in
December. The purpose of the meeting is to vote on several important
proposals that affect the funds and your investment in them. As a
shareholder, you have the opportunity to voice your opinion on the
matters that affect your fund(s). This package contains information
about the proposals and the materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card(s). PLEASE VOTE AND RETURN YOUR CARD(S) PROMPTLY. YOUR VOTE IS
EXTREMELY IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
All of the proposals have been carefully reviewed by the Board of
Trustees. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees believe these proposals are in the best
interest of shareholders. They recommend that you vote for each
proposal.
The following Q&A is provided to assist you in understanding the
proposals. Each of these proposals is described in greater detail in
the enclosed proxy statement.
VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED.
To cast your vote, simply complete the proxy card(s) enclosed in this
package. Be sure to sign the card(s) before mailing it in the
postage-paid envelope.
If you have any questions before you vote, please call us at
1-800-544-8888. We'll be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative.
Sincerely,
Edward C. Johnson 3d
President
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSALS
Please read the full text of the enclosed proxy statement. Below is a
brief overview of all of the proposals found in the proxy statement
that are to be voted on at the special shareholder meeting. Some of
the proposals described in this overview may not apply to your fund.
If you have any questions regarding the proposals, please call us at
1-800-544-8888. We appreciate you placing your trust in Fidelity and
look forward to helping you achieve your financial goals.
THE PROXY SAYS THAT THE BOARD OF TRUSTEES HAS APPROVED THESE CHANGES.
WHAT ROLE DOES THE BOARD PLAY? (PROPOSAL 1)
The Trustees oversee the investment policies of each fund. Members of
the Board are fiduciaries and have an obligation to serve the best
interests of each fund's shareholders, including approving policy
changes such as those proposed for each fund. In addition, the
Trustees review fund performance, oversee fund activities, and review
contractual arrangements with companies that provide services to a
fund.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS? (PROPOSAL 2)
The independent accountants examine annual financial statements for
each fund and provide other audit and tax-related services. They also
sign or certify any financial statements of the funds that are
required by law to be independently certified and filed with the
Securities and Exchange Commission.
WHAT IS THE CHANGE IN VOTING RIGHTS BEING PROPOSED? (PROPOSAL 3)
The proposed change would provide a more equitable distribution of
voting rights than the one-share, one-vote system currently in effect.
The voting power of each shareholder would be measured by the value of
the shareholder's total dollar investment rather than by the number of
shares owned.
These funds are part of a trust and some votes are conducted on a
trust-wide basis. While this proposal does not currently affect money
market funds, it would affect your fund if a fund with a fluctuating
net asset value per share (NAV) were added to the trust in the future.
Under the current system, if there were fluctuating NAV funds in the
trust, there would be disproportionate voting rights since the NAV of
each fund will generally diverge over time.
Here is an example of why this change is being recommended. Investor
A has a $1,000 investment in a fund with a $1.00 share price and owns
1,000 shares. Investor B in the same trust has a $1,000 investment in
another fund with a $10.00 share price and owns only 100 shares.
Under the current system, Investor A would have a much greater vote
than Investor B on trust-wide proposals. The proposed change would
give both investors the same voting rights since they both have
investments currently valued at $1,000.
WHAT IS BEING AMENDED IN FIDELITY CT'S AND FIDELITY NJ'S MANAGEMENT
CONTRACT? (PROPOSALS 4 AND 5)
The proposed amendments modify Fidelity CT's and Fidelity NJ's
management contracts with Fidelity Management & Research Company
(FMR). The modifications would reduce the Group Fee portion of the
management fee paid by the fund when FMR's assets under management
exceed certain levels. The result of the modifications would be a
Group Fee Rate that is the same as, or lower than, the fee payable
under the present management contract.
In addition, the Amended Contract for Fidelity NJ includes a
discussion of FMR's ability to use broker-dealers to execute portfolio
transactions.
WHAT IS MEANT BY "ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS"?
(PROPOSALS 6 AND 7)
For more than four years, we have been asking shareholders to vote by
proxy on proposals to standardize investment limitations. This is
being done in order to standardize these limitations for all of the
funds managed by FMR. The Board of Trustees of the funds has asked
FMR to analyze the investment limitations, and where appropriate, to
adopt standard fundamental limitations and eliminate certain other
fundamental limitations.
Fidelity believes that increased standardization will help promote
operational efficiencies and facilitate monitoring of investment
compliance. AS A PRACTICAL MATTER, IT IS NOT ANTICIPATED THAT THESE
PROPOSALS WILL SUBSTANTIALLY AFFECT THE WAY THE FUND IS CURRENTLY
MANAGED.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each share you own
of a fund on the record date. The record date is October 20, 1997.
WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH A QUORUM BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
If enough people do not vote, we will need to take further action. We
or outside solicitors may contact you by mail, telephone, facsimile,
or by personal interview to encourage you to vote. All of this is
costly to the funds. Therefore, we encourage shareholders to vote as
soon as they review the enclosed proxy materials to avoid additional
mailings, telephone calls or other solicitations.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card, and mailing it in the enclosed postage paid envelope. If you
need assistance, or have any questions regarding the proposals, please
call us at 1-800-544-8888.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."