SPARTAN MONEY MARKET FUND
OUTBOUND CALLING SCRIPT
BACKGROUND AND OVERVIEW
Beginning January 25, 1994, Fidelity will be mailing proxy packages to all
Spartan Money Market Fund shareholders of record as of January 25, 1994. A
key proposal in the proxy statement is to adopt a new fee structure for the
fund. At the same time, this will represent an increase in the management
fee.
Voting for the new management fee structure and, in turn, fee increase,
would mean additional revenues to Fidelity, helping us to continue to
devote considerable resources to portfolio management for the fund.
For the next few weeks, your role is to call fund shareholders who have not
yet voted to ask them if they have received and understand the proxy
statement and to encourage them to vote the proposals in the proxy. You
cannot, however, ask the shareholder how he or she intends to vote.
The attached information is designed to help you in your conversations with
shareholders regarding the proxy proposals. It describes your role in
helping us achieve the proxy votes and lays out some specific reasons why
we are asking for the management fee increase.
Also included in this package are copies of the proxy packages that were
sent to shareholders, including the letter, the proxy card, and the proxy
statement. Please be sure to read these materials so that you can assist
shareholders with questions.
What's Inside
Fidelity Contact List 2
The Call and Your Role 3
Spartan Money Market Fund Proposal Summaries 4
Spartan Money Market Fund Q & A 5
Spartan Money Market Fund Shareholder Letter 9
Spartan Money Market Fund Information 10
SPARTAN MONEY MARKET FUND
FIDELITY CONTACT LIST
If you have any questions about Spartan Money Market Fund, please contact:
Andria Smith Day: 6l7-728-6410
Senior Marketing Manager Evening: 617-527-5119
Mary Ruth Moran Day: 617-728-6415
Vice President Evening: 617-367-0605
SPARTAN MONEY MARKET FUND
THE CALL AND YOUR ROLE
APPROACH: TALK ABOUT THE ENTIRE PROXY -- NOT JUST THE MANAGEMENT CONTRACT
CHANGE. ENCOURAGE THE SHAREHOLDER TO VOTE FOR ALL THE PROPOSALS AND RETURN
THEIR PROXY CARD(S).
1. Confirm that the shareholder received the proxy package. Describe the
package to the shareholder if they do not recall it. (6" x 9" envelope
with yellow bar across top).
2. Explain to the shareholder that his/her vote is extremely important. If
a majority of shareholders do not vote prior to the meeting we must send
out additional mailings.
3. If shareholders have specific questions on the management contract
changes or any other proxy proposal, refer to the background material for
answers to specific questions.
4. Encourage the shareholder to vote as recommended by the Trustees - FOR
each proposal. Mention that all of the proposals have been carefully
reviewed by the entire Board of Trustees, including the independent
Trustees, whose role it is to protect the interests of the shareholders.
The Board believes the proposals are fair and reasonable and unanimously
recommends that shareholders vote for all proposals.
5. IF THE SHAREHOLDER INDICATES THAT HE/SHE PLANS TO VOTE YES, please
reconfirm that he/she has a proxy card. Offer to assist the shareholder in
completing the card. If the shareholder does not have a card, please order
another for him/her.
6. IF THE SHAREHOLDER INDICATES THAT HE/SHE DOES NOT PLAN TO VOTE YES,
please make sure the he/she understands the issues. If the shareholder
restates that he/she will vote no, please thank him/her for his/her time
and consideration. Offer to assist the shareholder in completing the card.
If the shareholder does not have a card, please order another for him/her.
SPARTAN MONEY MARKET FUND
SUMMARY OF MANAGEMENT FEE CHANGE PROPOSAL
The proposed fee is a fixed fee of 0.45%.
- It is FLAT, meaning that it does not vary.
- The fund's fee is also ALL-INCLUSIVE, meaning that the fund does not
pay additional monies for non-management fee services, such as shareholder
servicing, as do most mutual funds. Fees for these services are paid out
of the 0.45% management fee collected by FMR, the fund's manager. FMR
retains the balance as its management fee.
The fund currently pays a management fee at the annual rate of 0.30% of
the fund's average net assets, plus 6% of any portion of gross income that
represents a gross yield in excess of 5% The maximum fee rate is 0.60%.
The fee rate for December 1993 was 0.30%. The proposed fixed flat fee of
0.45% is the midpoint of the current fee range.
By eliminating the component of the fee that varies based on the fund's
yield FMR gives up the right to receive a fee of over 45 basis points to 60
basis points at some time in the future.
Spartan Money Market Fund's total management fee would be higher than the
current contract when yields are less than 7.5%, and reduced when the
fund's yield is over 7.5%. A 7.5% yield level is approximately equal to
the average yield of money market instruments over the past twenty years
(7.44% based on 90-day US Treasury bills' yields measured monthly).
REASONS FOR THE PROPOSAL
Management believes that a fixed management fee that does not vary based
on the fund's yield is more consistent with the Spartan Approach of
guaranteed low expenses.
Because the management fee is a fixed rate regardless of fund yield
levels, it will not expose the fund to expense increases or decreases as
interest rates change.
The fund's management fee will remain below BOTH the median management fee
(.50%) and the median total expense level (0.75%) for similar funds in the
industry. Comparing the fund's proposed management fee to total fund
operating expenses of competitive funds is appropriate because the fund's
fee is all-inclusive.
SPARTAN MONEY MARKET FUND
QUESTIONS AND ANSWERS
1. PLEASE EXPLAIN SPARTAN MONEY MARKET FEE INCREASE TO ME.
FMR has proposed, and the Board has approved, a change to Spartan Money
Market Fund's management fee structure. The fund's current management fee
is based on a percentage of fund assets, and it varies with the fund's
gross yield. The proposed fee would be a fixed flat fee rather than a
variable fee. The new management fee would continue to be lower than the
fees paid by most competitive money market funds.
2. WHAT DOES SPARTAN MONEY MARKET FUND'S PROPOSED MANAGEMENT FEE CONSIST
OF?
The proposed management fee rate is 0.45%. It is a FLAT, ALL-INCLUSIVE
FEE.
That the fund's management fee is FLAT, means that, unlike the management
fees of most mutual funds, it does not vary from period to period.
That it is ALL-INCLUSIVE means that it covers all expenses associated with
the fund's operation, including so-called non-advisory fees, such as
shareholder servicing, bookkeeping, custodial, and registration fees. FMR,
the fund's advisor, pays all non-advisory fees out of the flat fee that it
collects and retains the balance as its management fee. This is different
from the fee structure of most mutual funds, which, in addition to a
management fee component, includes a non-advisory expense component that
varies with the actual costs of providing non-advisory services, including
those listed above.
All of Fidelity's other Spartan funds have flat, all-inclusive fee
structure, however the rate varies based on the fund's investment category.
3. HOW IS THE PROPOSED CONTRACT DIFFERENT FROM THE CURRENT CONTRACT?
The key difference between the current and the proposed contract is that
proposed fee will be a flat fixed fee. It will not vary based on the
fund's yield.
The current management fee is an annual percentage of the fund's average
net assets, calculated and paid monthly. The percentage is determined by a
fixed formula which depends in part on the fund's yield. The fee currently
ranges from 0.30% to 0.60% (30 to 60 basis points) of the fund's average
net assets, depending on gross yield levels.
Under the current contract, the fund pays FMR a monthly management fee at
the annual rate of .30% of its average net assets, plus 6% of that portion
of gross income (if any) that represents a gross yield in excess of 5%.
The annual maximum fee rate for any month is 0.60% of the fund's average
net assets. FMR has voluntarily agreed to limit the fund's total expense
to 0.45% through December 1995.
FMR proposes to replace this variable fee structure with a fixed flat fee
of 0.45%, the midpoint of the current fee range. The new management fee
would continue to be lower than the fees paid by most competitive money
market funds.
4. WHY ARE YOU PROPOSING TO CHANGE SPARTAN MONEY MARKET FUND'S FEE
STRUCTURE?
FMR believes that a fixed management fee that does not vary based on the
fund's yield is more consistent with the Spartan Approach of guaranteed low
expenses. Under the proposal, therefore, FMR would give up the right to
receive a fee of 45-60 basis points at some time in the future, in return
for the right to earn 45 basis points in lower-yield conditions such as the
current environment.
5. HOW DOES SPARTAN MONEY MARKET FUND'S PROPOSED MANAGEMENT FEE COMPARE
WITH THOSE OF SIMILAR MONEY MARKET FUNDS?
The proposed total management fee would continue to be lower than
management fees paid by most competitive money market funds.
In addition, the proposed management fee of 0.45%, which includes payment
by FMR of the total expenses for the fund, would remain below the
competitive median total expense level for taxable retail money market
funds (0.75%). Comparing the fund's proposed management fee to total fund
operating expenses of competitive funds is appropriate because the fund's
fee is all-inclusive. (Source: Lipper Analytical Services, Inc.)
6. HOW HAS SPARTAN MONEY MARKET PERFORMED?
Very well. For the fund's fiscal year ended April 30, 1993 the fund's
performance ranking, based on total return, was 8 out of 236 competitive
taxable money market funds. For the one-year ended December 31, 1993,
Spartan Money Market Fund ranked 8 out of 233 competitive taxable money
market funds. (Source: Lipper Analytical Services, Inc.)
7. HOW WOULD THE NEW FEE STRUCTURE AFFECT SPARTAN MONEY MARKET FUNDS'
TOTAL MANAGEMENT FEES?
The figures below reflect the impact of the proposed fee structure to
fund's management fee for the last three fiscal years ended April 30.
1993 1992 1991
Actual Management Fees: 0.30% 0.34% 0.47%
Proposed Contract: 0.45% 0.45% 0.45%
8. WHY WOULD THE BOARD OF TRUSTEES RECOMMEND A CHANGE IN THE FEE
STRUCTURE? I THOUGHT THEY WERE SUPPOSED TO PROTECT THE BEST INTERESTS OF
SHAREHOLDERS.
They do. The Board carefully considered a number of factors before
unanimously approving the new fee structure. Some of these factors
included:
that the fund's income-based fee structure was inconsistent with the flat,
all-inclusive fee structure of the other Spartan fixed-income funds managed
by FMR.
management fees of competitive funds.
the fund's performance record.
the quality and service being provided by the fund.
9. WHAT OTHER PROPOSALS ARE INCLUDED IN THE SPARTAN MONEY MARKET PROXY
STATEMENT?
There are a number of additional proposals included in this proxy
statement. Shareholders are being asked to:
ELECT A BOARD OF TRUSTEES. This is a routine matter. Twelve trustees are
up for election, including Fidelity's first woman trustee, Phyllis Burke
Davis.
RATIFY THE SELECTION OF COOPERS & LYBRAND. This, too, is a routine
proposal ratifying Coopers & Lybrand as the trust's accountants.
Amend the Declaration of Trust to provide DOLLAR-BASED, RATHER THAN
SHARE-BASED VOTING RIGHTS to the shareholders of the Trust. Spartan Money
Market Fund is a portfolio of Fidelity Summer Street Trust. Currently the
declaration of trust provides that the portfolios of the trust operate with
a one share, one vote provision; however, when the net asset values of the
various portfolios of the trust diverge, voting rights may become
disproportionate. This proposal is intended to eliminate this occurrence
by replacing the one share, one vote provision with one that provides for
voting rights based on a shareholder's total dollar investment in the
trust. As a result, money market shareholders would be giving up voting
power on trust-wide votes only.
Amend the Declaration of Trust to eliminate the requirement of NOTIFYING
TRUST SHAREHOLDERS within three months in the event of an appointment of a
Trustee. Notifying shareholders of Trustee appointments is costly and not
required by the Investment Company Act of 1940. Shareholders will be
notified of Trustee appointments in the next financial report for a fund.
Amend the Declaraion of Trust and adopt a fundamental policy to provide the
fund with the ability to INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END
INVESTMENT COMPANY with the same investment objective and policies (Pooled
Fund Structure). The purpose of this structure is to allow several funds
with the same investment objectives and policies, but different servicing
features (e.g., checkwriting), to combine their investments rather than
managing them separately. Doing so allows each fund to achieve operational
efficiencies, thereby reducing expenses. While neither the Board nor FMR
has determined that the fund should currently invest in a Pooled Fund, the
Trustees believe it could be in the best interest of the fund to adopt such
a structure at a future date.
Approve an Agreement and Plan providing for the conversion of the fund into
a separate fund of a DELAWARE BUSINESS TRUST. Delaware law affords
advantages to the operations of a mutual fund in addition to those
available under Massachusetts law. The investment objective, policies and
limitations of the fund will not change.
Approve REVISION OF SEVERAL OF THE FUND'S INVESTMENT LIMITATIONS in order
to conform to limitations which are expected to become standard for all
funds managed by FMR. The proposals do not affect the fundamental
objective of the fund, and are not expected to result in any significant
changes in the fund's investment strategy.
Insert Shareholder proxy letter here
SPARTAN MONEY MARKET FUND
FUND INFORMATION
FUND HISTORY
Spartan Money Market Fund was introduced in 1989. It was the first mutual
fund to apply the Spartan Approach to investing.
The Spartan Approach was created as a way for cost-conscious investors to
earn higher yields through lower costs. The Spartan Approach lowers costs
in two ways: it takes advantages of economies of scale and uses an a la
carte fee structure. Here's how it works:
First, large accounts are more efficient to manage, so Spartan's higher
investment minimums mean overall fund operating costs are reduced.
Spartan investors have control over their transaction costs. Unlike most
other mutual funds, Spartan shareholders pay only for the transactions
they make. (Exception: transaction fees are waived on account balances
of $50,000 or more.)
Over the years the fund has consistently produced higher yields than most
other money market funds. (Source: Lipper Analytical Services, Inc.)
FUND MANAGEMENT
The fund seeks to offer high current income while maintaining a stable one
dollar share price. No one has ever lost a penny in this or any other
Fidelity money market fund. There is no guarantee that the fund will
maintain a $1 share price.
The fund's yield will fluctuate with interest rates.
SHAREHOLDER PROFILE
Spartan Money Market has approximately 65,000 retail accounts.
The average Spartan Money Market Fund retail account size of approximately
$60,000 is more than double the average retail taxable money market fund
($18,500) account, reflecting the fund's appeal to investors who seek to
minimize costs and maximize yields.
Spartan Money Market Fund shareholders may own either only Spartan Money
Market or it may be one of many Fidelity funds they own. The level of
investment expertise among many of these shareholders is high.
DATE: TIME: SCRIPT ID:
CONTACT:
FIDELITY INVESTMENTS
Name ________________________
Address ________________________
________________________
City _____________________ State __________
Zip Code ________ ______
Evening Phone ________________
Day time Phone _______________
Fund Name _____________________
Share Value _______________
Attempts: X E: D: State:
"Good evening Mr./Ms." ".
This is " (first and last name) " calling from Fidelity
Investments to follow up on a recent proxy mailing we sent
you regarding the "(fund name)". Do you recall receiving the
proxy? (It was in a yellow and white envelope)
(page 2) PF(1) DIDN'T RECEIVE/FULFILLMENT
(page 3) PF(3) RECEIVED
(page 4) PF(5) DEPARTMENT REFERRAL
(page 5) PF(12) TERMINATION
(page 6) PF(7) PRIORITY HANDLING
DATE: TIME: SCRIPT ID:
CONTACT:
FIDELITY INVESTMENTS
The proxy mailing that was sent to you was for the "(fund
name)" May we send you another proxy for this important
vote?
NO -- Thank you for your time this evening and for chosing
Fidelity for your investments.
YES -- Let me verify the address that the first proxy was
mailed to:
Name ________________________
Address ________________________
________________________
City _____________________ State __________
Zip Code ________ ______
____ Spartan Money Market Fund
We will be mailing the new proxy within 1-2 business days
and you will receive it in approximately 5 days. It will
arrive in a yellow and white envelope. Please fill it
out and mail it back as soon as possible. Thank you
for your time this evening and for chosing Fidelity for
your investments.
PF(1) YES - SEND PROXY PF(3) NO-EXIT CALL PF(12) TERMINATION
DATE: TIME: SCRIPT ID:
CONTACT:
The purpose of my call this evening is to remind you of the
importance of your vote to the fund. Have you had a chance to send it in?
ALREADY VOTED -- Great! Thank you for your time this
evening and for chosing Fidelity for your
investments.
WILL BE
VOTING -- Great! We are calling to encourage
everyone to vote so we can reach a quorum.
Thank you for your time this evening and
for chosing Fidelity for your investments.
WILL NOT
BE VOTING -- We are calling to encourage everyone to
vote so we can reach a quorum.
STILL NOT VOTING -- Thank you for your
time this evening and for chosing Fidelity
Investments.
WILL VOTE --Thank you for your time this
evening and for chosing Fidelity for your
investments.
PF(1) Complete PF(12) Termination
FROM PAGE 1 - PF(3)
DATE: TIME: SCRIPT ID:
CONTACT:
FIDELITY INVESTMENTS
Unfortunately, I'm not able to help you in my department this
evening, however I'd be happy to provide you with a toll free
number.
Department Phone Number Hours
Customer Service 1-800-544-6666 24 hours, 7 days
Mutual Fund Sales 1-800-544-8888 24 hours, 7 days
Brokerage Issues 1-800-544-7272 24 hours, 7 days
Proxy Issues beyond
Scope 440 Financial 1-800-544-8888 24 hours, 7 days
DATE: TIME: SCRIPT ID:
CONTACT:
FIDELITY INVESTMENTS
PRIORITY HANDLING:
Defined as any shareholder contacted who is either upset or
irate about the terms of the proxy or for being disturbed by
the phone call.
Name ________________________
Address ________________________
________________________
City _____________________ State __________
Zip Code ________ ______
Evening Phone ________________
Day time Phone _______________
Account Number _________________________
Comments
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
DATE: TIME: SCRIPT ID:
CONTACT:
FIDELITY INVESTMENTS
TERMINATION CODES
PF 01 = BUSY
PF 03 = NO ANSWER
PF 05 = ANSWER MACHINE
PF 07 = CALL BACK LATER Date (YYMMDD)
Time (HHMM)
PF 09 = INCORRECT NUMBER
PF 12 = RESEND
PF 13 = ALREADY VOTED
PF 14 = RECEIVED/NOT VOTING
PF 15 = RECEIVED/VOTING
PF 16 = DEPT. REFERRAL
PF 17 = PRIORITY HANDLING
DATE: TIME: SCRIPT ID:
CONTACT:
FIDELITY INVESTMENTS
ANSWERING MACHINE RESPONSE
This is _________________ from Fidelity Investments calling regarding the
proxy we mailed you on your (Spartan Money Market) account you may recall
it was in a yellow and white envelope.
If you have already mailed in the proxy, we would like to thank you.
If you have not had the opportunity to vote yet, we would like to encourage
you to take a moment and mail it back to us.
Thank you very much for investing with Fidelity and taking the time to cast
your vote.
PF (01) COMPLETE
PF (16) PREVIOUS SCREEN