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:
[X] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(e) or Sec. 240.14a-12
(Name of Registrant as Specified In Its Charter) Fidelity Charles Street
Trust
(Name of Person(s) Filing Proxy Statement) Arthur S. Loring, Secretary
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(ii), 14a-6(j) (1), or 14a-6(j) (2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(j) (3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j) (4) 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:
[ ] 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 ASSET MANAGER
FIDELITY ASSET MANAGER: GROWTH
FIDELITY ASSET MANAGER: INCOME
FUNDS OF
FIDELITY CHARLES STREET TRUST
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 Asset Manager, Fidelity Asset Manager: Growth, and
Fidelity Asset Manager: Income (the funds) will be held at the office of
Fidelity Charles Street Trust (the trust), 82 Devonshire Street, Boston,
Massachusetts 02109 on September 21, 1994, at 9:00 a.m. The purpose of the
Meeting is to consider and act upon the following proposals, and to
transact such other business as may properly come before the meeting or any
adjournments thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Price Waterhouse as independent accountants
of the trust.
3. To amend the Declaration of Trust to provide dollar-based voting rights
for shareholders of the trust.
4. To amend the Declaration of Trust regarding shareholder notification of
appointment of Trustees.
5. To amend the Declaration of Trust to provide each fund with the ability
to invest all of its assets in another open-end investment company with
substantially the same investment objective and policies.
6. To adopt a new fundamental investment policy for each fund permitting a
fund to invest all of its assets in another open-end investment company
with substantially the same investment objective and policies.
7. To approve an amended management contract for each fund.
8. To adopt a Sub-Advisory Agreement with FMR Far East for Fidelity Asset
Manager.
9. To adopt a Sub-Advisory Agreement with FMR U.K. for Fidelity Asset
Manager.
10. To approve a new Sub-Advisory Agreement with FMR Far East for Fidelity
Asset Manager: Growth and Fidelity Asset Manager: Income.
11. To approve a new Sub-Advisory Agreement with FMR U.K. for Fidelity
Asset Manager: Growth and Fidelity Asset Manager: Income.
12. To amend the fundamental investment limitation concerning the purchase
and sale of physical commodities for Fidelity Asset Manager: Growth.
13. To amend the fundamental investment limitation concerning real estate
for Fidelity Asset Manager and Fidelity Asset Manager: Growth.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
14. To amend the fundamental investment limitation concerning
diversification for Fidelity Asset Manager and Fidelity Asset Manager:
Growth.
15. To amend Fidelity Asset Manager's fundamental investment limitation
concerning the issuance of senior securities.
16. To eliminate Fidelity Asset Manager's fundamental investment
limitation concerning short sales of securities.
17. To eliminate Fidelity Asset Manager's fundamental investment
limitation concerning margin purchases.
18. To amend the fundamental investment limitation concerning the purchase
and sale of physical commodities for Fidelity Asset Manager and Fidelity
Asset Manager: Growth.
19. To amend Fidelity Asset Manager's fundamental investment limitation
concerning lending.
20. To amend the fundamental investment limitation concerning borrowing
for Fidelity Asset Manager and Fidelity Asset Manager: Growth.
21. To amend the fundamental investment limitation concerning the
concentration of its investments in a single industry for Fidelity Asset
Manager and Fidelity Asset Manager: Growth.
The Board of Trustees has fixed the close of business on July 25, 1994 as
the record date for the determination of the shareholders 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
July 25, 1994
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 TO THE FUNDS, 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 you avoid the time and expense to the funds 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 ASSET MANAGER
FIDELITY ASSET MANAGER: GROWTH
FIDELITY ASSET MANAGER: INCOME
TO BE HELD SEPTEMBER 21, 1994
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
Charles Street Trust (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Asset Manager, Fidelity Asset Manager: Growth, and
Fidelity Asset Manager: Income (the funds) and at any adjournments thereof
(the Meeting), to be held September 21, 1994 at 9:00 a.m. at 82 Devonshire
Street, Boston, Massachusetts 02109, the principal executive office of the
trust. Shareholders of the trust's other funds (Fidelity
Short-Intermediate Government Fund, Fidelity U.S. Government Reserves,
Spartan Investment Grade Bond Fund, and Spartan Short-Term Income Fund)
will also participate and have been mailed a separate notice and proxy
statement relating to proposals to be voted upon by the trust and/or by the
shareholders of those funds. 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 July
25, 1994. Supplementary solicitations may be made by mail, telephone,
telegraph, or by personal interview by representatives of the trust. The
expenses in connection with preparing this Proxy Statement and its
enclosures and of all solicitations will be paid by the funds. The funds
will reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares.
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. All proxies not
voted, including broker non-votes, will not be counted toward establishing
a quorum. 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.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote for the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted against the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate. A copy of each fund's
annual report for the fiscal year ended September 30, 1993 has been mailed
or delivered to shareholders of each respective fund entitled to vote at
the meeting.
Shares of each fund in the trust issued and outstanding as of May 31, 1994
are indicated in the following table:
FIDELITY ASSET MANAGER 765,881,432.809
FIDELITY ASSET MANAGER: GROWTH 208,926,683.651
FIDELITY ASSET MANAGER: INCOME 46,504,773.690
FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND 14,300,379.058
FIDELITY U.S. GOVERNMENT RESERVES 1,110,404,663.090
SPARTAN INVESTMENT GRADE BOND FUND 11,297,149.382
SPARTAN SHORT-TERM INCOME FUND 96,637,591.089
To the knowledge of the trust, no shareholder owned of record or
beneficially more than __% of the outstanding shares of any of the funds on
that date. Shareholders of record at the close of business on July 25, 1994
will be entitled to vote at the Meeting. Each such shareholder will be
entitled to one vote for each share held on that date.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A MAJORITY OF OUTSTANDING VOTING SECURITIES OF EACH
FUND OF THE TRUST AND, IN THE CASE OF PROPOSALS 4 AND 5, A MAJORITY OF
OUTSTANDING SHARES OF THE ENTIRE TRUST. APPROVAL OF PROPOSALS 6 THROUGH 21
REQUIRES THE AFFIRMATIVE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING
SECURITIES'' OF EACH RESPECTIVE FUND. UNDER THE INVESTMENT COMPANY ACT OF
1940 (THE 1940 ACT), A "MAJORITY VOTE OF THE OUTSTANDING VOTING
SECURITIES'' MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF
THE SHARES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF
MORE THAN 50% OF THE OUTSTANDING SHARES ARE PRESENT OR REPRESENTED BY PROXY
OR (B) MORE THAN 50% OF THE OUTSTANDING SHARES.
1. TO ELECT A BOARD OF TRUSTEES.
Pursuant to the provisions of the Declaration of Trust of Fidelity Charles
Street Trust, 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 Mrs. Davis and Mr. Mann, all nominees named below are currently
Trustees of Fidelity Charles Street Trust and have served in that capacity
continuously since originally elected or appointed. Mr. Cox, Mr. Jones,
Mr. Lynch, and Mr. McDonough were selected by the trust's Nominating and
Administration Committee (see page __) and were appointed to the Board in
November 1991, May 1990, April 1990, and August 1989, respectively. None of
the nominees is 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, Fidelity Management & Research Company (FMR, or the
Adviser), or the funds' distribution agent, Fidelity Distributors
Corporation (FDC). Each of the nominees is currently a Trustee or General
Partner, as the case may be, of other funds advised by FMR.
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation(s) Year of
(Age) Election or
Appointme
nt
*J. Gary Burkhead Senior Vice President, is 1987
82 Devonshire Street President of FMR; and President
Boston, MA and a Director of FMR Texas
(53) Inc. (1989), Fidelity
Management & Research
(U.K.) Inc., and Fidelity
Management & Research
(Far East) Inc.
Ralph F. Cox Consultant to Western Mining 1991
200 Rivercrest Drive Corporation (1994). Prior to
Fort Worth, TX February 1994, he was
(62) President of Greenhill Petroleum
Corporation (petroleum
exploration and production,
1990). Until March 1990, Mr.
Cox was President and Chief
Operating Officer of Union
Pacific Resources Company
(exploration and production). He
is a Director of Bonneville Pacific
Corporation (independent power,
1989), Sanifill Corporation
(non-hazardous waste, 1993),
and CH2M Hill Companies
(engineering). In addition, he
served on the Board of Directors
of the Norton Company
(manufacturer of industrial
devices, 1983-1990) and
continues to serve on the Board
of Directors of the Texas State
Chamber of Commerce, and 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 ----
P.O. Box 264 September 1991, Mrs. Davis
Bridgehampton, NY was the Senior Vice President of
(62) 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, 1990), and
previously served as a Director
of Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition, she
serves as a Director of the New
York City Chapter of the National
Multiple Sclerosis Society, and is
a member of the Advisory
Council of the International
Executive Service Corps. and
the President's Advisory Council
of The University of Vermont
School of Business
Administration.
Richard J. Flynn Financial consultant. Prior to 1982
77 Fiske Hill September 1986, Mr. Flynn was
Sturbridge, MA Vice Chairman and a Director of
(70) the Norton Company
(manufacturer of industrial
devices). He is currently a
Director of Mechanics Bank and
a Trustee of College of the Holy
Cross and Old Sturbridge
Village, Inc.
*Edward C. Johnson President, is Chairman, Chief 1981
3d Executive Officer and a Director
82 Devonshire Street of FMR Corp.; a Director and
Boston, MA Chairman of the Board and of
(64) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc. (1989),
Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
3881-2 Lander Road Mr. Jones was Chairman and
Chagrin Falls, OH Chief Executive Officer of LTV
(66) Steel Company. Prior to May
1990, he was a Director of
National City Corporation (a
bank holding company) and
National City Bank of Cleveland.
He is a Director of TRW Inc.
(original equipment and
replacement products),
Cleveland-Cliffs Inc. (mining),
NACCO Industries, Inc. (mining
and marketing), Consolidated
Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale
Materials Handling, Inc. (1989)
and RPM Inc. (manufacturer of
chemical products, 1990). In
addition, he serves as a Trustee
of First Union Real Estate
Investments, Chairman of the
Board of Trustees and a
member of the Executive
Committee of the Cleveland
Clinic Foundation, a Trustee and
a member of the Executive
Committee of University School
(Cleveland), and a Trustee of
Cleveland Clinic Florida.
Donald J. Kirk Professor at Columbia University 1987
680 Steamboat Road Graduate School of Business
Apartment #1-North and a financial consultant. Prior
Greenwich, CT to 1987, he was Chairman of the
(61) Financial Accounting Standards
Board. Mr. Kirk is a Director of
General Re Corporation
(reinsurance) and Valuation
Research Corp. (appraisals and
valuations, 1993). In addition, he
serves as Vice Chairman of the
Board of Directors of the
National Arts Stabilization Fund
and Vice Chairman of the Board
of Trustees of the Greenwich
Hospital Association.
*Peter S. Lynch Vice Chairman of FMR (1992). 1990
82 Devonshire Street Prior to his retirement on May
Boston, MA 31, 1990, he was a Director of
(51) FMR (1989) and Executive Vice
President of FMR (a position he
held until March 31, 1991); Vice
President of Fidelity Magellan
Fund and FMR Growth Group
Leader; and Managing Director
of FMR Corp. Mr. Lynch was
also Vice President of Fidelity
Investments Corporate Services
(1991-1992). He is a Director of
W.R. Grace & Co.
(chemicals, 1989) and Morrison
Knudsen Corporation
(engineering and construction).
In addition, he serves as a
Trustee of Boston College,
Massachusetts Eye & Ear
Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston (1990).
Gerald C. McDonough Chairman of G.M. Management 1989
135 Aspenwood Drive Group (strategic advisory
Cleveland, OH services). Prior to his retirement
(65) in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal
working, telecommunications
and electronic products),
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration, 1989), Commercial
Intertech Corp. (water treatment
equipment, 1992), and
Associated Estates Realty
Corporation (a real estate
investment trust, 1993).
Edward H. Malone Prior to his retirement in 1985, 1989
5601 Turtle Bay Drive Mr. Malone was Chairman,
#2104 General Electric Investment
Naples, FL Corporation and a Vice
(69) President of General Electric
Company. He is a Director of
Allegheny Power Systems, Inc.
(electric utility), General Re
Corporation (reinsurance), and
Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee
of Corporate Property Investors,
the EPS Foundation at Trinity
College, the Naples
Philharmonic Center for the Arts,
and Rensselaer Polytechnic
Institute, and he is a member of
the Advisory Boards of Butler
Capital Corporation Funds and
Warburg, Pincus Partnership
Funds.
Marvin L. Mann Chairman of the Board, ---
55 Railroad Avenue President, and Chief Executive
Greenwhich, CT Officer of Lexmark International,
(61) Inc. (office machines, 1991).
Prior to 1991, he held positions
of Vice President of International
Business Machines Corporation
("IBM") and President and
General Manager of various IBM
divisions and subsidiaries. Mr.
Mann is a Director of M.A.
Hanna Company (chemicals,
1993) and Infomart (marketing
services, 1991), a Trammell
Crow Co. In addition, he serves
as the Campaign Vice Chairman
of the Tri-State United Way
(1993) and is a member of the
University of Alabama
President's Cabinet (1990).
Thomas R. Williams President of The Wales Group, 1989
21st Floor Inc. (management and financial
191 Peachtree Street, advisory services). Prior to
N.E. retiring in 1987, Mr. Williams
Atlanta, GA served as Chairman of the
(66) Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates,
Inc. (computer software),
National Life Insurance
Company of Vermont, American
Software, Inc. (1989), 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 May 31, 1994, the nominees and officers of the trust owned, in the
aggregate __ % of any of the 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 three interested and
seven non-interested Trustees, met eleven times during the twelve months
ended September 30, 1993. It is expected that the Trustees will meet at
least ten times a year at regularly scheduled meetings.
As a group, the non-interested Trustees received fees and expenses of
$440,483 from the trust in their capacities as Trustees of the funds for
the fiscal year ended September 30, 1993. The non-interested Trustees also
served in similar capacities for other funds advised by FMR (see page __),
and received additional compensation for such services.
The Board of Trustees has adopted a policy whereby non-interested
Trustees, upon reaching their 72nd birthday will resign. Under a defined
benefit retirement program, non-interested Trustees, upon reaching age 72,
are entitled to payments during their lifetime based on their basic Trustee
fees and their length of service.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, of FMR or its affiliates and normally
meets four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Messrs. Kirk (Chairman), Cox, and Jones are members of
the Committee. This Committee oversees and monitors the financial reporting
process, including recommending to the Board the independent accountants to
be selected for the trust (see Proposal 2), reviewing internal controls and
the auditing function (both internal and external), reviewing the
qualifications of key personnel performing audit work, and overseeing
compliance procedures. During the twelve months ended September 30, 1993,
the Committee held five meetings.
The trust's Nominating and Administration Committee is currently composed
of Messrs. Flynn (Chairman), McDonough, and Williams. The Committee members
confer periodically and hold meetings as required. The Committee is charged
with the duties of reviewing the composition and compensation of the Board
of Trustees, proposing additional non-interested Trustees, monitoring the
performance of legal counsel employed by the funds and the non-interested
Trustees, and acting as administrative committee under the Retirement Plan
for non-interested Trustees. During the twelve months ended September 30,
1993, the Committee held five 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.
2. TO RATIFY THE SELECTION OF PRICE WATERHOUSE AS INDEPENDENT ACCOUNTANTS
OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Price Waterhouse has
been selected as independent accountants for the trust to sign or certify
any financial statements of the trust required by any law or regulation to
be certified by an independent accountant and filed with the Securities and
Exchange Commission (SEC) or any state. Pursuant to the 1940 Act, such
selection requires the ratification of shareholders. In addition, as
required by the 1940 Act, the vote of the Trustees is subject to the right
of the trust, by vote of a majority of its outstanding voting securities at
any meeting called for the purpose of voting on such action, to terminate
such employment without penalty. Price Waterhouse has advised the trust
that it has no direct or material indirect ownership interest in the trust.
The services provided to the trust include (1) audit of annual financial
statements and, if requested, an audit of semiannual financial statements;
(2) assistance and consultation in connection with SEC filings; and (3) if
requested, review of the federal income tax returns filed on behalf of the
trust. In recommending the selection of the trust's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such services
would affect the accountants' independence. Representatives of Price
Waterhouse are not expected to be present at the Meeting, but have been
given the opportunity to make a statement if they so desire and will be
available should any matter arise requiring their presence.
3. TO AMEND THE DECLARATION OF TRUST 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 VIII, Section 1 of the
Declaration of Trust. The amendment would provide voting rights based on a
shareholder's total dollar interest in a fund (dollar-based voting), rather
than on the number of shares owned, for all shareholder votes for a fund.
As a result, voting power would be allocated in proportion to the value of
each shareholder's investment.
BACKGROUND. Fidelity Asset Manager, Fidelity Asset Manager: Growth, and
Fidelity Asset Manager: Income are funds of Fidelity Charles Street Trust,
an open-end management investment company organized as a Massachusetts
business trust. Currently, there are four other funds in the trust:
Fidelity Short-Intermediate Government Fund, Fidelity U.S. Government
Reserves, Spartan Investment Grade Bond Fund, and Spartan Short-Term Income
Fund. 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 Declaration of Trust.
Currently, under the Declaration of Trust, 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 as required by the Investment Company Act of 1940
(1940 Act). In the case where a trust has several series or funds, such as
Fidelity Charles Street Trust, voting rights may have become
disproportionate since the net asset value per share (NAV) of the separate
funds 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 complies 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 than the one-share, one-vote system
currently in effect for certain votes. The voting power of shareholders
would be commensurate with the value of the shareholder's dollar investment
rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The following table shows each fund's
net asset value.
Fund Net Asset Value $1,000
as of May 31, investment in
1994 terms of shares
on May 31, 1994
Fidelity U.S. Government Reserves $ 1.00 1,000.00
Fidelity Short-Intermediate Gov't $ 9.42 106.16
Fund
Spartan Short-Term Income Fund $ 9.50 105.26
Spartan Investment Grade Bond $ 9.72 102.88
Fund
Fidelity Asset Manager: Income $10.75 93.02
Fidelity Asset Manager: Growth $13.72 72.89
Fidelity Asset Manager $14.64 68.31
For example, Fidelity U.S. Government Reserves shareholders would have
approximately 87% greater voting power than Fidelity Asset Manager
shareholders because at current NAVs, a $1,000 investment in Fidelity U.S.
Government Reserves would equal 1,000 shares whereas a $1,000 investment in
Fidelity Asset Manager would equal 68.31 shares. 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 have been
proportionate to their economic interest which FMR believes is a more
equitable result, and is the result in 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 Declaration of Trust and an amended Declaration of Trust, 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 DECLARATION OF TRUST. Article VIII, Section 1 determines
the method of calculating voting rights for all shareholder votes for a
fund. If approved, Article VIII, Section 1 will be amended as follows
(material to be added is underlined and material to be deleted is
[bracketed]):
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote... On any matter
submitted to a vote of the Shareholders, all shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects only the interests of one
or more Series, then only the Shareholders of such Series shall be entitled
to vote thereon. [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) 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. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or any Bylaws of
the Trust to be taken by Shareholders.
CONCLUSION. If approved, the amendment will take effect immediately after
the shareholder meeting or after any adjournments thereof. The Trustees
believe the proposed amendment will benefit the trust by bringing greater
equality in voting rights among all shareholders of the trust. The Trustees
recommend that shareholders vote FOR the proposed amendment to the
Declaration of Trust. If the amendment is not approved, the Declaration of
Trust will remain unchanged.
4. TO AMEND THE DECLARATION OF TRUST REGARDING SHAREHOLDER NOTIFICATION OF
APPOINTMENT OF TRUSTEES.
The trust's Declaration of Trust provides that in the case of a vacancy on
the Board of Trustees, the remaining Trustees shall fill the vacancy by
appointing a person they, in their discretion see fit, consistent with the
limitations of the 1940 Act. Section 16 of the 1940 Act states that a
vacancy may be filled by the Trustees, if after filling the vacancy, at
least two-thirds of the Trustees then holding office were elected by the
outstanding shareholders of the trust. It also states that if at any time
less than 50% of the Trustees were elected by shareholders, a shareholder
meeting must be called within 60 days for the purposes of electing Trustees
to fill the existing vacancies.
The Declaration of Trust currently requires that within three months of a
Trustee appointment, notification of such be mailed to each shareholder of
the trust. Trustees also may appoint a Trustee in anticipation of a
current Trustee's retirement or resignation, or in the event of an increase
in the number of Trustees. An appointment in this case currently requires
shareholder notification within three months of the appointment under the
current Declaration of Trust.
Subject to shareholder approval, the Trustees intend to eliminate the
notification requirement from the trust's Declaration of Trust. The
language to be deleted from the Declaration of Trust is [bracketed].
ARTICLE IV
the trustees
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office or by
recording in the records of the Trust, whereupon the appointment shall take
effect. [Within three months of such appointment the Trustees shall cause
notice of such appointment to be mailed to each Shareholder at his address
as recorded on the books of the trust.] An appointment of a Trustee may be
made by the Trustees then in office [and notice thereof mailed to
Shareholders as aforesaid] in anticipation of a vacancy to occur by reason
of retirement, resignation or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only at
or after the effective date of said retirement, resignation or increase in
number of Trustees. As soon as any Trustee so appointed shall have accepted
this trust, the trust estate shall vest in the new Trustee or Trustees,
together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. The power of
appointment is subject to the provisions of Section 16 (a) of the 1940 Act.
Notifying a trust's shareholders in the event of an appointment of a
Trustee is not required by any federal or state law. Such notification to
all shareholders of a trust would be costly to the funds of the trust. If
the proposal is approved, shareholders will be notified of Trustee
appointments in the next financial report for the fund. Other than
eliminating the notification requirement, this proposal does not amend any
other aspect of Trustee resignation or appointment.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the Declaration of Trust's shareholder notification
requirement in the event of an appointment of a Trustee is in the best
interests of the trust's shareholders. The Trustees recommend voting FOR
the proposed amendment. If the proposal is not approved, the Declaration
of Trust's current section entitled "Resignation and Appointment of
Trustees" will remain unchanged.
5. TO AMEND THE DECLARATION OF TRUST TO PROVIDE EACH FUND WITH THE ABILITY
TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the funds approve, a proposal to amend Article V, Section 1 of the
Declaration of Trust to clarify that the Trustees may authorize the
investment of all of a fund's assets in another open-end investment company
with substantially the same investment objective and policies ("Pooled Fund
Structure"). The purpose of the Pooled Fund Structure is to achieve
operational efficiencies by consolidating portfolio management while
maintaining different distribution and servicing structures. In order to
implement a Pooled Fund Structure, both the Declaration of Trust and the
funds' policies must permit the structure. Currently, each fund's policies
do not allow for such investments. Proposal 6 on page __ seeks each fund's
shareholder approval to adopt a fundamental investment policy to permit
investment in another open-end investment company. This proposal, which
amends the Declaration of Trust, clarifies the Board's ability to implement
the Pooled Fund Structure if a fund's policies permit it.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled investment, or "master" fund. For
example, an institutional equity fund with a high initial minimum
investment amount for large investors might pool its investments with a
retail equity fund designed for investors with lower minimums. This
structure allows several feeder funds with substantially the same objective
but different distribution and servicing features to combine their
investments and manage them as one master pool instead of managing them
separately. The feeder funds combine their investments by investing all of
their assets in one master pooled fund which would be organized as an
open-end management investment company (mutual fund). (Each feeder fund
invested in a single master pooled investment retains its own
characteristics, but is able to achieve operational efficiencies through
investing together with the other feeder funds in the Pooled Fund
Structure.) The current Declaration of Trust does not specifically provide
the Trustees the ability to authorize the Pooled Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take maximum advantage of potential
efficiencies. While neither FMR nor the Trustees has determined that a
fund should invest in a Pooled Fund Structure, the Trustees believe it
could be in the best interest of each fund to adopt such a structure at a
future date. If this proposal is approved, the Declaration of Trust
amendment would provide the Trustees with the power to authorize a fund to
invest all of its assets in a single open-end investment company. The
Trustees will authorize such a transaction only if a Pooled Fund Structure
is permitted under the fund's investment policies (see Proposal 6), if they
determine that a Pooled Fund Structure is in the best interest of a fund,
and if, upon advice of counsel, they determine that the investment will not
have material adverse tax consequences to the fund or its shareholders.
The Trustees will specifically consider the impact, if any, on fees paid by
a fund as a result of adopting a Pooled Fund Structure. Although the
current Declaration of Trust does not contain any explicit prohibition
against implementing a Pooled Fund Structure, the specific authority is
being sought in the event the Trustees deem it appropriate to adopt a
Pooled Fund Structure in the future.
AMENDMENT TO THE DECLARATION OF TRUST. If the proposal is approved,
Article V, Section 1 of the Declaration of Trust will be amended as
follows: (material to be added is underlined):
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have power and authority:
(t) Notwithstanding any other provision hereof, to invest all of the
assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company;"
CONCLUSION. The Trustees believe the proposed amendment will benefit the
funds by providing the Trustees with the flexibility to adopt a Pooled Fund
Structure in the future if permitted by a fund's investment policies and if
the Trustees determine it to be in the best interest of the fund. The
Trustees recommend that shareholders vote FOR the proposed amendment to the
Declaration of Trust. If approved, the amendment to the Declaration of
Trust will take effect immediately after the shareholder meeting or any
adjournments thereof. If the proposal is not approved, Article V, Section 1
of the Declaration of Trust will remain unchanged.
6. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR EACH FUND PERMITTING A
FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY
WITH SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
each fund approve, the adoption of a new fundamental investment policy that
would permit each fund to invest all of its assets in another open-end
investment company with substantially the same investment objective and
policies ("Pooled Fund Structure"). The purpose of pooling would be to
achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled "master" fund. In order to
implement a Pooled Fund Structure, an amendment to the Declaration of Trust
is proposed, as is the adoption of a new fundamental investment policy.
Proposal 5, proposes to amend the Declaration of Trust, and if approved,
would allow the Trustees to authorize the conversion to a Pooled Fund
Structure when permitted by a fund's policies. This proposal would add a
fundamental policy for each fund that permits a Pooled Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that a fund
should invest in a master fund, the Trustees believe it could be in the
best interests of each fund to adopt such a structure at a future date.
At present, certain of each fund's fundamental investment policies and
limitations would prevent a fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit each fund's assets to be invested in a single Pooled Fund,
without a further vote of shareholders, if the Trustees determine that
action to be in the best interests of a fund and its shareholders.
Approval of Proposal 5 provides the Trustees with explicit authority to
approve a Pooled Fund Structure. If shareholders approve this proposal,
certain fundamental and non-fundamental policies and limitations of each
fund that currently prohibit investment in shares of one investment company
would be modified to permit the investment in a Pooled Fund. These
policies include each fund's concentration and underwriting limitation.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Pooled Fund
Structure would facilitate the introduction of new Fidelity mutual funds,
increasing the investment options available to shareholders.
Each fund's method of operation and shareholder services would not be
materially affected by its investment in a Pooled Fund, except that the
assets of a fund would be managed as part of a larger pool. Were a fund to
invest all of its assets in a Pooled Fund, it would hold only a single
investment security, and the Pooled Fund would directly invest in
individual securities pursuant to its investment objective. The Pooled
Fund would be managed by FMR or an affiliate, such as FMR Texas in the case
of a money market fund. The Trustees would retain the right to withdraw a
fund's investments from a Pooled Fund at any time and would do so if the
Pooled Fund's investment objective and policies were no longer appropriate
for the fund. The fund would then resume investing directly in individual
securities as it does currently. Whenever a fund is asked to vote at a
shareholder meeting of the Pooled Fund, the fund will hold a meeting of its
shareholders if required by applicable law or the fund's policies to vote
on the matters to be considered at the Pooled Fund shareholder meeting.
The fund will cast its votes at the Pooled Fund meeting in the same
proportion as the fund's shareholders voted at theirs. The fund would
otherwise continue its normal operations.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing each
fund's assets in a Pooled Fund only if they determine that pooling is in
the best interests of the fund and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. In determining whether to
invest in a Pooled Fund, the Trustees will consider, among other things,
the opportunity to reduce costs and to achieve operational efficiencies.
The Trustees will not authorize investment in a Pooled Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR intends to seek federal and state regulatory approval in order to
allow the Fidelity funds to invest in Pooled Funds. There is, of course,
no assurance that all necessary regulatory approvals will be obtained, or
that cost reductions or increased efficiencies will be achieved.
FMR may benefit from the use of a Pooled Fund if overall assets are
increased (since FMR's fees are based on assets). Also, FMR's expenses of
providing investment and other services to each fund may be reduced. If a
fund's investment in a Pooled Fund were to reduce FMR's expenses
materially, the Trustees would consider whether a reduction in FMR's
management fee would be appropriate if and when a Pooled Fund structure is
implemented.
PROPOSED FUNDAMENTAL POLICY. To allow each fund to invest in a Pooled
Fund at a future date, the Trustees recommend that each fund adopt the
following fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for each fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees recommends that each fund's
shareholders vote to adopt a new fundamental policy that would permit each
fund, subject to future review by the Board of Trustees as described above,
to invest all of its assets in an open-end investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund. If the proposal is not adopted, each fund's
current fundamental investment policies will remain unchanged with respect
to potential investment in Pooled Funds.
7. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR EACH FUND.
The Board of Trustees has approved, and recommends that shareholders of
each fund approve, a proposal to amend each fund's management contract with
FMR (the Amended Contract). The proposal would amend the management fee
that FMR receives from each fund to provide for lower fees when FMR's
assets under management exceed certain levels. THE AMENDED 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 AMENDMENT TO THE PRESENT MANAGEMENT CONTRACT. A copy of the
Amended Contract, marked to indicate the proposed amendment, is supplied as
Exhibit 1 on page __. Except for the amendment to the management fee, it
is substantially identical to the Present Contracts. (For a detailed
discussion of the funds' Present Contract, refer to the section entitled
"Present Management Contracts" beginning on page __.) If approved by
shareholders, the Amended Contract will take effect on October 1, 1994 (or,
if later, the first day of the first month following approval) and will
remain in effect through July 31, 1995 and thereafter subject to
continuation by the funds' Board of Trustees. If the Amended Contract is
not approved, the Present Contract will continue in effect through July 31,
1995, and thereafter subject to continuation by the funds' Board of
Trustees.
MODIFICATION TO GROUP FEE RATE. The group fee rate varies based on the
aggregate net assets of all registered investment companies having
management contracts with FMR. As group net assets increase, the group fee
rate declines. The Amended Contract would not change the group fee
calculation for group net assets of $138 billion or less for Fidelity Asset
Manager, and $228 billion or less for Fidelity Asset Manager: Growth and
Fidelity Asset Manager: Income. Above these levels of group net assets, the
group fee rate does not decline under the Present Contract, but under the
Amended Contract, it declines as indicated in the tables below. These lower
fee rates were voluntarily implemented by FMR on January 1, 1992 and
November 1, 1993.
The group fee rate is calculated according to a graduated fee schedule
providing for different rates for different levels of group net assets.
The fee rates for Fidelity Asset Manager and Fidelity Asset Manager: Growth
are based on the equity fee rate schedule, and the fee rates for Fidelity
Asset Manager: Income are based on the fixed income fee rate schedule. The
rate at which the fee declines is determined by fee "breakpoints" that
provide for lower fees when assets increase. For Fidelity Asset Manager,
the Amended Contract would add five new fee breakpoints for group asset
levels above $102 billion. For Fidelity Asset Manager: Growth and Fidelity
Asset Manager: Income, the Amended Contract would add four new fee
breakpoints for group asset level above $174 billion, as illustrated in
the following tables. (For an explanation of how these breakpoints are
factored into the fee calculation, see the section entitled "Present
Management Contracts" beginning on page ___.)
GROUP FEE RATE SCHEDULE
Average Group Asset Asset Manager:
Assets Manager Growth Proposed
($ billions) Present Present Contract
Contract* Contract*
102 - 138 .3100% .3100% .3100%
138 - 174 .3100% .3050% .3050%
174 - 228 .3100% .3000% .3000%
228 - 282 .3100% .3000% .2950%
282 - 336 .3100% .3000% .2900%
Over .3100% .3000% .2850%
336
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Average Group Asset Asset Manager:
Assets Manager Growth Proposed
($ billions) Present Present Contract
Contract* Contract*
215 .3292% .3264% .3264%
250 .3265% .3227% .3223%
300 .3238% .3190% .3175%
350 .3218% .3162% .3133%
400 .3203% .3142% .3098%
* Does not reflect voluntary adoption of extended group fee rate
schedules.
GROUP FEE RATES
Average Group Asset Manager: Amended
Assets Income Contract
($ billions) Present
Contract*
120 - 174 .1450% .1450%
174 - 228 .1400% .1400%
228 - 282 .1400% .1375%
282 - 336 .1400% .1350%
Over 336 .1400% .1325%
The result at various levels of group net assets is illustrated by the
table below.
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net Asset Manager: Amended
Assets Income Contract
($ billions) Present
Contract*
215 .1646% .1646%
250 .1606% .1604%
300 .1572% .1565%
350 .1547% .1533%
400 .1529% .1507%
* Does not reflect voluntary adoption of extended group fee rate
schedules.
Average group net assets for May 1994 were approximately $253 billion.
The annual individual fund fee rate is .40% for Fidelity Asset Manager and
Fidelity Asset Manager: Growth, and .35% for Fidelity Asset Manager:
Income. The sum of the group fee rate and the individual fund fee rate is
referred to as a fund's management fee rate. One-twelfth (1/12) of this
annual management fee rate is applied to each fund's average net assets for
the current month, resulting in a dollar amount which is the management fee
for that month.
COMPARISON OF MANAGEMENT FEES AND TOTAL EXPENSES. The following table
compares each fund's management fee rate under the terms of the Present
Contract and the Amended Contract for May 1994 average group net assets of
$253 billion.
Present Contract Amended Contract
Management Fee Management Fee
Rate* Rate
Fidelity Asset Manager % %
Fidelity Asset Manager: % %
Growth
Fidelity Asset Manager: % %
Income
* Does not reflect voluntary adoption of extended group fee rate schedule.
The following table compares each fund's management fee and total expense
ratio under the terms of the Present Contract and the Amended Contract for
the fiscal year ended September 30, 1993.
Present Contract Amended Contract
Manageme Total Manageme Total
nt Expense nt Fee Expense
Fee* Ratio* Ratio
Fidelity Asset $ % $ %
Manager
Fidelity Asset $ % $ %
Manager:
Growth
Fidelity Asset $ % $ %
Manager:
Income
* Does not reflect voluntary adoption of extended group fee rate schedules.
Average group net assets for May 1994 were approximately $253 billion.
MATTERS CONSIDERED BY THE BOARD OF TRUSTEES. The non-interested Trustees
recommended in 1991, and again in 1993, that the existing group fee be
reconsidered in light of the significant growth in the assets of funds
advised by FMR.
FMR provided substantial information to the Trustees to assist them in
their deliberations. In addition, the Committee requested and reviewed
additional data, including analyses prepared by independent counsel to the
funds and the non-interested Trustees. In unanimously approving the
proposed contract and recommending its approval by shareholders, the
Trustees of the funds, including the Independent Trustees, considering the
best interests of shareholders of the funds, took into account all factors
they deemed relevant. The factors considered by the Independent Trustees
included the nature, quality, and extent of the services furnished by FMR
to the funds; the necessity of FMR maintaining and enhancing its ability to
retain and attract high caliber personnel to serve the funds; the increased
complexity of the domestic and international securities markets; the
investment record of FMR in managing the funds; extensive financial,
personnel, and structural information as to the Fidelity organization,
including the revenues and expenses of FMR, and Fidelity Service Co. (FSC,
the funds' transfer, shareholder servicing, and pricing and bookkeeping
agent) relating to their mutual fund activities; whether economies of scale
were demonstrated in connection with FMR's provision of investment
management and shareholder services as assets increased; data on investment
performance, management fees and expense ratios of competitive funds and
other Fidelity funds; FMR's expenditures in developing enhanced shareholder
services for the funds; enhancements in the quality and scope of the
shareholder services provided to each fund's shareholders; the fees charged
and services offered by an affiliate of FMR for providing investment
management services to non-investment company accounts; and possible
"spin-off" benefits to FMR from serving as manager and from affiliates of
FMR serving as principal underwriter and transfer agent of the funds.
CONCLUSION, ACTION OF THE BOARD OF TRUSTEES, AND RECOMMENDED SHAREHOLDER
ACTION. Based on its evaluation of the extensive materials presented and
assisted by the advice of independent counsel, the Board of Trustees
concluded (i) that the existing management fee rate structure was fair and
reasonable and (ii) that the proposed reduction in the group fee rate
structure was in the best interest of each fund's shareholders. The Board
of Trustees voted to approve the submission of the Amended Contract to
shareholders of the funds and recommends that shareholders of each fund
vote FOR the Amended Contract.
8. TO ADOPT A SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR FIDELITY ASSET
MANAGER.
In conjunction with its portfolio management responsibilities on behalf of
Fidelity Asset Manager, FMR proposes to enter into sub-advisory agreements
with affiliates whose offices are geographically dispersed around the
world. To strengthen and coordinate these relationships, the Board of
Trustees proposes that shareholders of the fund approve a sub-advisory
agreement (the Proposed Agreement) between Fidelity Management &
Research Far East Inc. (FMR Far East) and FMR on behalf of the fund. The
proposed agreement would allow FMR not only to receive investment advice
and research services from FMR Far East, but also would permit FMR to grant
FMR Far East investment management authority, as well as the authority to
buy and sell securities if FMR believes it would be beneficial to the fund
and its shareholders. Because FMR pays all of FMR Far East's fees, the
proposed agreement would not affect the fees paid by the fund to FMR.
On March 9, 1994, the Board of Trustees agreed to submit the proposed
agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. A copy of the proposed agreement is attached
to this proxy statement as Exhibit 2.
FMR Far East, with its principal office in Tokyo, is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR Far East may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FMR Far East's only client other
than FMR is Fidelity International Limited (FIL), an affiliate of FMR
organized under the laws of Bermuda. FIL provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities of issuers throughout the world. Edward C. Johnson
3d, President and a Trustee of the trust, is Chairman and a Director of FMR
Far East, Chairman and a Director of FIL, and a principal stockholder of
both FIL and FMR. For more information on FMR Far East, see the section
entitled "Activities and Management of FMR U.K. and FMR Far East" on
page__.
Under the proposed agreement, FMR Far East would act as an investment
consultant to FMR and would supply FMR with investment research information
and portfolio management advice as FMR reasonably requests on behalf of the
fund. FMR Far East would provide investment advice and research services
with respect to issuers located outside of the United States focusing
primarily on companies based in the Far East. Under the proposed agreement
with FMR Far East, FMR, NOT THE FUND, would pay FMR Far East's fee equal
to 105% of its costs incurred in connection with the agreement.
Under the proposed agreement, FMR could also grant investment management
authority with respect to all or a portion of the fund's assets to FMR Far
East. If FMR Far East were to exercise investment management authority on
behalf of the fund, FMR Far East would be required, subject to the
supervision of FMR, to direct the investments of the fund in accordance
with the fund's investment objective, policies, and limitations as provided
in the fund's prospectus or other governing instruments and such other
limitations as the fund may impose by notice in writing to FMR or FMR Far
East. If FMR grants investment management authority to FMR Far East with
respect to all or a portion of the fund's assets, FMR Far East would be
authorized to buy or sell stocks, bonds, and other securities for the fund
subject to the overall supervision of FMR and the Board of Trustees. In
addition, the proposed agreement would authorize FMR to delegate other
investment management services to FMR Far East, including, but not limited
to, currency management services (including buying and selling currency
options and entering into currency forward and futures contracts on behalf
of the fund), other transactions in futures contracts and options, and
borrowing or lending portfolio securities. If any of these investment
management services were delegated, FMR Far East would continue to be
subject to the control and direction of FMR and the Board of Trustees and
to be bound by the investment objective, policies, and limitations of the
fund. If granted investment management authority, FMR Far East would also
execute orders to purchase and sell securities as described in the
"Portfolio Transactions" section on page ___.
Allowing FMR to grant investment management authority to FMR Far East
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR Far East, the ability to execute
portfolio transactions from points in the Far East that are physically
closer to foreign issuers and the primary markets in which their securities
are traded. Increasing FMR's proximity to foreign markets should enable the
fund to participate more readily in full trading sessions on foreign
exchanges, and to react more quickly to changing market conditions.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. To the extent that FMR granted investment management authority to
FMR Far East, FMR would pay FMR Far East 50% of its monthly management fee
with respect to the average net assets managed on a discretionary basis by
FMR Far East for investment management and portfolio execution services.
If approved by shareholders, the proposed agreement would take effect on
October 1, 1994 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1995 and from year to
year thereafter, but only as long as its continuance was 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 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 proposed agreement could be transferred to a successor of FMR Far East
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The proposed agreement would be terminable on 60
days' written notice by either party to the agreement and the proposed
agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees unanimously recommends that shareholders
of the fund vote FOR the proposed agreement. If the proposed agreement is
not approved, the Board and FMR will consider alternative means of
obtaining the investment services provided under the Sub-Advisory
Agreement.
9. TO ADOPT A SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR FIDELITY ASSET
MANAGER.
In conjunction with its portfolio management responsibilities on behalf of
Fidelity Asset Manager, FMR proposes to enter into sub-advisory agreements
with affiliates whose offices are geographically dispersed around the
world. To strengthen and coordinate these relationships, the Board of
Trustees proposes that shareholders of the fund approve a sub-advisory
agreement (the Proposed Agreement) between Fidelity Management &
Research U.K. Inc. (FMR U.K.) and FMR on behalf of the fund. The proposed
agreement would allow FMR not only to receive investment advice and
research services from FMR U.K., but also would permit FMR to grant FMR
U.K. investment management authority, as well as the authority to buy and
sell securities if FMR believes it would be beneficial to the fund and its
shareholders. Because FMR pays all of FMR U.K.'s fees, the proposed
agreement would not affect the fees paid by the fund to FMR.
On March 9, 1994, the Board of Trustees agreed to submit the proposed
agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. A copy of the proposed agreement is attached
to this proxy statement as Exhibit 3.
FMR U.K., with its principal office in London, is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR U.K. may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment adviser,
and to other clients. Currently, FMR U.K.'s only client other than FMR is
Fidelity International Limited (FIL), an affiliate of FMR organized under
the laws of Bermuda. FIL provides investment advisory services to non-U.S.
investment companies and institutional investors investing in securities of
issuers throughout the world. Edward C. Johnson 3d, President and a Trustee
of the trust, is Chairman and a Director of FMR U.K., Chairman, and a
Director of FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page__.
Under the proposed agreement, FMR U.K. would act as an investment
consultant to FMR and would supply FMR with investment research information
and portfolio management advice as FMR reasonably requests on behalf of the
fund. FMR U.K. would provide investment advice and research services with
respect to issuers located outside of the United States focusing primarily
on companies based in Europe. Under the proposed agreement with FMR U.K.,
FMR, NOT THE FUND, would pay FMR U.K.'s fee equal to 110% of its costs
incurred in connection with the agreement.
Under the proposed agreement, FMR could also grant investment management
authority with respect to all or a portion of the fund's assets to FMR U.K.
If FMR U.K. were to exercise investment management authority on behalf of
the fund, FMR U.K. would be required, subject to the supervision of FMR, to
direct the investments of the fund in accordance with the fund's investment
objective, policies, and limitations as provided in the fund's prospectus
or other governing instruments and such other limitations as the fund may
impose by notice in writing to FMR or FMR Far East. If FMR grants
investment management authority to FMR U.K. with respect to all or a
portion of the fund's assets, FMR U.K. would be authorized to buy or sell
stocks, bonds, and other securities for the fund subject to the overall
supervision of FMR and the Board of Trustees. In addition, the proposed
agreement would authorize FMR to delegate other investment management
services to FMR U.K., including, but not limited to, currency management
services (including buying and selling currency options and entering into
currency forward and futures contracts on behalf of the fund), other
transactions in futures contracts and options, and borrowing or lending
portfolio securities. If any of these investment management services were
delegated, FMR U.K. would continue to be subject to the control and
direction of FMR and the Board of Trustees and to be bound by the
investment objective, policies, and limitations of the fund. If granted
investment management authority, FMR U.K. would also execute orders to
purchase and sell securities as described in the "Portfolio Transactions"
section on page ___.
Allowing FMR to grant investment management authority to FMR U.K. would
provide FMR increased flexibility in the assignment of portfolio managers
and give the fund access to managers located abroad who may have more
specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR U.K., the ability to execute portfolio
transactions from points in Europe that are physically closer to foreign
issuers and the primary markets in which their securities are traded.
Increasing FMR's proximity to foreign markets should enable the fund to
participate more readily in full trading sessions on foreign exchanges, and
to react more quickly to changing market conditions.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. To the extent that FMR granted investment management authority to
FMR U.K., FMR would pay FMR U.K. 50% of its monthly management fee with
respect to the average net assets managed on a discretionary basis by FMR
U.K. for investment management and portfolio execution services.
If approved by shareholders, the proposed agreement would take effect on
October 1, 1994 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1995 and from year to
year thereafter, but only as long as its continuance was 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 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 proposed agreement could be transferred to a successor of FMR U.K.
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The proposed agreement would be terminable on 60
days' written notice by either party to the agreement and the proposed
agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees unanimously recommends that shareholders
of the fund vote FOR the proposed agreement. If the proposed agreement is
not approved, the Board and FMR will consider alternative means of
obtaining the investment services provided under the Sub-Advisory
Agreement.
10. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR FAR EAST FOR FIDELITY
ASSET MANAGER: GROWTH AND FIDELITY ASSET MANAGER: INCOME.
In conjunction with its portfolio management responsibilities on behalf of
Fidelity Asset Manager: Growth and Fidelity Asset Manager: Income, FMR has
entered into sub-advisory agreements with affiliates whose offices are
geographically dispersed around the world. To strengthen and coordinate
these relationships, the Board of Trustees proposes that shareholders of
each fund approve a new sub-advisory agreement (the proposed agreement)
between Fidelity Management & Research Far East Inc. (FMR Far East) and
FMR on behalf of each fund to replace FMR's existing agreement with FMR Far
East. The proposed agreement would allow FMR not only to receive investment
advice and research services from FMR Far East, but also would permit FMR
to grant FMR Far East investment management authority, as well as the
authority to buy and sell securities if FMR believes it would be beneficial
to each fund and its shareholders. Because FMR pays all of FMR Far East's
fees, the proposed agreement would not affect the fees paid by each fund to
FMR.
On March 9, 1994, the Board of Trustees agreed to submit the proposed
agreement to shareholders of each fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. If approved by shareholders, the proposed
agreement will replace the sub-advisory agreement currently in effect with
respect to each fund (the current agreement). The current agreements for
Fidelity Asset Manager: Growth and Fidelity Asset Manager: Income, dated
September 21, 1990 and July 16, 1992, respectively, were approved by the
Board of Trustees prior to each fund's commencement of operations, and were
approved by FMR, then sole shareholder of each fund on September 22, 1990
and July 17, 1992, respectively. A copy of the proposed agreement is
attached to this proxy statement as Exhibit 4.
FMR Far East, with its principal office in Tokyo, is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR Far East may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FMR Far East's only client other
than FMR is Fidelity International Limited (FIL), an affiliate of FMR
organized under the laws of Bermuda. FIL provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities of issuers throughout the world. Edward C. Johnson
3d, President and a Trustee of the trust, is Chairman and a Director of FMR
Far East, Chairman, and a Director of FIL, and a principal stockholder of
both FIL and FMR. For more information on FMR Far East, see the section
entitled "Activities and Management of FMR U.K. and FMR Far East" on
page__.
Under the current agreement, FMR Far East acts as an investment
consultant to FMR and supplies FMR with investment research information and
portfolio management advice as FMR reasonably requests on behalf of each
fund. FMR Far East provides investment advice and research services with
respect to issuers located outside of the United States, focusing primarily
on companies based in the Far East. Under the current agreement with FMR
Far East, FMR, NOT EACH FUND, pays FMR Far East's fee equal to 105% of its
costs incurred in connection with the agreement.
For the fiscal years ended September 30, 1993 and1992 FMR paid FMR Far
East on behalf of each fund as follows:
1993 1992
Fidelity Asset Manager: Growth $125,372 $ 1,863*
Fidelity Asset Manage: Income 7,113** N/A
* From December 30, 1991 (commencement of operations).
** From October 1, 1992 (commencement of operations).
During the period November 1, 1992 to September 30, 1993 (Fidelity Asset
Manager: Growth) and October 1, 1992 (commencement of operations) to
September 30, 1993 (Fidelity Asset Manager: Income), FMR voluntarily agreed
to reimburse each fund for its expenses or to limit each fund's expenses to
various levels of average net assets. However, since Fidelity Asset
Manager: Growth's and Fidelity Asset Manager: Income's management fee for
that period, prior to reimbursement, was $573,000 and $375,284,
respectively, FMR paid $_____ and $_____, respectively, to FMR Far East
under the Agreement for that period.
Although FMR employees are expected to consult regularly with FMR Far
East, under the current agreement, FMR Far East has no authority to make
investment decisions on behalf of the funds. Under the proposed agreement,
FMR would continue to receive investment advice from FMR Far East, but it
could also grant investment management authority to FMR Far East with
respect to all or a portion of each fund's assets. If FMR Far East were to
exercise investment management authority on behalf of a fund, it would be
required, subject to the supervision of FMR, to direct the investments of
the fund in accordance with the fund's investment objective, policies, and
limitations as provided in each fund's Prospectus or other governing
instruments and such other limitations as each fund may impose by notice in
writing to FMR or FMR Far East. If FMR grants investment management
authority to FMR Far East with respect to all or a portion of a fund's
assets, FMR Far East would be authorized to buy or sell stocks, bonds, and
other securities for the fund subject to the overall supervision of FMR and
the Board of Trustees. In addition, the proposed agreement would authorize
FMR to delegate other investment management services to FMR Far East,
including, but not limited to, currency management services (including
buying and selling currency options and entering into currency forward and
futures contracts on behalf of each fund), other transactions in futures
contracts and options, and borrowing or lending portfolio securities. If
any of these investment management services were delegated, FMR Far East
would continue to be subject to the control and direction of FMR and the
Board of Trustees and to be bound by the investment objective, policies,
and limitations of each fund. If granted investment management authority,
FMR Far East would also execute orders to purchase and sell securities as
described in the "Portfolio Transactions" section on page ___.
Allowing FMR to grant investment management authority to FMR Far East
would provide FMR increased flexibility in the assignment of portfolio
managers and give each fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that each fund and its shareholders may
benefit from giving FMR, through FMR Far East, the ability to execute
portfolio transactions from points in the Far East that are physically
closer to foreign issuers and the primary markets in which their securities
are traded. Increasing FMR's proximity to foreign markets should enable
each fund to participate more readily in full trading sessions on foreign
exchanges, and to react more quickly to changing market conditions.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY EACH
FUND. The fees paid by FMR to FMR Far East for investment advice as
described above would remain unchanged. However, to the extent that FMR
granted investment management authority to FMR Far East, FMR would pay FMR
Far East 50% of its monthly management fee with respect to the average net
assets managed on a discretionary basis by FMR Far East for investment
management and portfolio execution services.
If approved by shareholders, the proposed agreement would take affect on
October 1, 1994 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1995 and from year to
year thereafter, but only as long as its continuance was 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 and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of each fund.
The proposed agreement could be transferred to a successor of FMR Far East
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The proposed agreement would be terminable on 60
days' written notice by either party to the agreement and the proposed
agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees unanimously recommends that shareholders
of each fund vote FOR the proposed agreement. If the proposed agreement is
not approved by shareholders of a fund, FMR's current agreement on behalf
of that fund will continue in effect.
11. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FMR U.K. FOR FIDELITY
ASSET MANAGER: GROWTH AND FIDELITY ASSET MANAGER: INCOME.
In conjunction with its portfolio management responsibilities on behalf of
Fidelity Asset Manager: Growth and Fidelity Asset Manager: Income, FMR has
entered into sub-advisory agreements with affiliates whose offices are
geographically dispersed around the world. To strengthen and coordinate
these relationships, the Board of Trustees proposes that shareholders of
each fund approve a new sub-advisory agreement (the proposed agreement)
between Fidelity Management & Research U.K. Inc. (FMR U.K.) and FMR on
behalf of each fund to replace FMR's existing agreement with FMR U.K. The
proposed agreement would allow FMR not only to receive investment advice
and research services from FMR U.K., but also would permit FMR to grant FMR
U.K. investment management authority, as well as the authority to buy and
sell securities if FMR believes it would be beneficial to each fund and its
shareholders. Because FMR pays all of FMR U.K.'s fees, the proposed
agreement would not affect the fees paid by each fund to FMR.
On March 9, 1994, the Board of Trustees agreed to submit the proposed
agreement to shareholders of each fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. If approved by shareholders, the proposed
agreement will replace the sub-advisory agreement currently in effect with
respect to each fund (the current agreement). The current agreements for
Fidelity Asset Manager : Growth and Fidelity Asset Manager: Income, dated
September 21, 1990 and July 16, 1992, respectively, were approved by the
Board of Trustees prior to each fund's commencement of operations, and were
approved by FMR, then sole shareholder of each fund on September 22, 1990
and July 17, 1992, respectively. A copy of the proposed agreement is
attached to this proxy statement as Exhibit 5.
FMR U.K., with its principal office in London, is a wholly-owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR U.K. may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment adviser,
and to other clients. Currently, FMR U.K.'s only client other than FMR is
Fidelity International Limited (FIL), an affiliate of FMR organized under
the laws of Bermuda. FIL provides investment advisory services to non-U.S.
investment companies and institutional investors investing in securities of
issuers throughout the world. Edward C. Johnson 3d, President and a Trustee
of the trust, is Chairman and a Director of FMR U.K., Chairman, and a
Director of FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page__.
Under the current agreement, FMR U.K. acts as an investment consultant to
FMR and supplies FMR with investment research information and portfolio
management advice as FMR reasonably requests on behalf of each fund. FMR
U.K. provides investment advice and research services with respect to
issuers located outside of the United States focusing primarily on
companies based in Europe. Under the current agreement with FMR U.K., FMR,
NOT EACH FUND, pays FMR U.K.'s fee equal to 110% of its costs incurred in
connection with the agreement.
For the fiscal years ended September 30, 1993 and 1992 FMR paid FMR U.K.
on behalf of each fund as follows:
1993 1992
Fidelity Asset Manager: Growth $72,462 $2,427*
Fidelity Asset Manage: Income 4,032** N/A
* From December 30, 1991 (commencement of operations).
** From October 1, 1992 (commencement of operations).
During the period November 1, 1993 to September 30, 1993 (Fidelity Asset
Manager: Growth) and October 1, 1992 (commencement of operations) to
September 30, 1993 (Fidelity Asset Manager: Income), FMR voluntarily agreed
to reimburse each fund for its expenses or to limit each fund's expenses to
various levels of average net assets as described in Proposal 7. However,
since Fidelity Asset Manager: Growth's and Fidelity Asset Manager: Income's
management fee for that period, prior to reimbursement, was $573,000 and
$375,284, respectively, FMR paid $_____ and $_____, respectively, to FMR
U.K. under the Agreement for that period.
Although FMR employees are expected to consult regularly with FMR U.K.,
under the current agreement, FMR U.K. has no authority to make investment
decisions on behalf of the funds. Under the proposed agreement, FMR would
continue to receive investment advice from FMR U.K., but it could also
grant investment management authority with respect to all or a portion of
each fund's assets to FMR U.K. If FMR U.K. were to exercise investment
management authority on behalf of a fund, it would be required, subject to
the supervision of FMR, to direct the investments of the fund in accordance
with the fund's investment objective, policies, and limitations as provided
in each fund's Prospectus or other governing instruments and such other
limitations as each fund may impose by notice in writing to FMR or FMR U.K.
If FMR grants investment management authority to FMR U.K. with respect to
all or a portion of a fund's assets, FMR U.K. would be authorized to buy or
sell stocks, bonds, and other securities for the fund subject to the
overall supervision of FMR and the Board of Trustees. In addition, the
proposed agreement would authorize FMR to delegate other investment
management services to FMR U.K., including, but not limited to, currency
management services (including buying and selling currency options and
entering into currency forward and futures contracts on behalf of each
fund), other transactions in futures contracts and options, and borrowing
or lending portfolio securities. If any of these investment management
services were delegated, FMR U.K. would continue to be subject to the
control and direction of FMR and the Board of Trustees and to be bound by
the investment objective, policies, and limitations of each fund. If
granted investment management authority, FMR U.K. would also execute orders
to purchase and sell securities as described in the "Portfolio
Transactions" section on page ___.
Allowing FMR to grant investment management authority to FMR U.K. would
provide FMR increased flexibility in the assignment of portfolio managers
and give each fund access to managers located abroad who may have more
specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that each fund and its shareholders may
benefit from giving FMR, through FMR U.K., the ability to execute portfolio
transactions from points in Europe that are physically closer to foreign
issuers and the primary markets in which their securities are traded.
Increasing FMR's proximity to foreign markets should enable each fund to
participate more readily in full trading sessions on foreign exchanges, and
to react more quickly to changing market conditions.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY EACH
FUND. The fees paid by FMR to FMR U.K. for investment advice as described
above would remain unchanged. However, to the extent that FMR granted
investment management authority to FMR U.K., FMR would pay FMR U.K. 50% of
its monthly management fee with respect to the average net assets managed
on a discretionary basis by FMR U.K. for investment management and
portfolio execution services.
If approved by shareholders, the proposed agreement would take effect on
October 1, 1994 (or, if later, the first day of the first month following
approval) and would continue in force until July 31, 1995 and from year to
year thereafter, but only as long as its continuance was 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 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 proposed agreement could be transferred to a successor of FMR U.K.
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The proposed agreement would be terminable on 60
days' written notice by either party to the agreement and the proposed
agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees unanimously recommends that shareholders
of each fund vote FOR the proposed agreement. If the proposed agreement is
not approved by shareholders of a fund, FMR's current agreement on behalf
of that fund will continue in effect.
12. TO AMEND FIDELITY ASSET MANAGER: GROWTH'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING THE PURCHASE AND SALE OF PHYSICAL COMMODITIES.
The fund's current fundamental investment limitation concerning
commodities states:
"The fund may not purchase or sell physical commodities unless acquired as
a result of ownership of securities, provided that the fund may purchase
and sell precious metals, and further provided that the fund may purchase
and sell futures contracts and options relating to physical commodities."
Subject to shareholder approval, the Trustees intend to replace this
fundamental investment limitation with the following fundamental investment
limitation governing commodities.
"The fund may not purchase or sell physical commodities unless acquired as
a result of ownership of securities or other instruments (but this shall
not prevent the fund from purchasing and selling precious metals,or from
purchasing or selling options and futures contracts or from investing in
securities or other instruments backed by physical commodities)."
Adoption of the proposed limitation on commodities is not expected to
affect the way in which the fund is managed, the investment performance of
the fund, or the securities or instruments in which the fund invests.
However, the proposed limitation would clarify three points. First, the
proposed limitation would make it explicit that the fund may acquire
physical commodities as the result of ownership of securities or other
instruments. Second, the proposed limitation would clarify that the fund
may invest without limit in securities or other instruments backed by
physical commodities. Any investments of this type are, of course, subject
to the fund's investment objective, policies, and other limitations. Third,
the proposed limitation would eliminate the restriction that futures
contracts and options be related to physical commodities.
CONCLUSION. The Board of Trustees has concluded that the adoption of the
proposed amendment will benefit the fund and its shareholders. The
Trustees recommend that shareholders of the fund vote FOR the proposed
amendment. The amended limitation, upon shareholder approval, will become
effective immediately. If the proposal is not approved, the fund's current
limitation will remain unchanged.
13. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING REAL ESTATE
FOR FIDELITY ASSET MANAGER AND FIDELITY ASSET MANAGER: GROWTH.
Fidelity Asset Manager's fundamental investment limitation concerning real
estate currently states:
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities (but this shall not prevent the fund from
purchasing and selling marketable securities issued by companies or other
entities or investment vehicles that deal in real estate or interests
therein, nor shall this prevent the fund from purchasing interests in pools
of real estate mortgage loans)."
Fidelity Asset Manager: Growth's fundamental investment limitation
concerning real estate currently states:
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities (but this shall not prevent the fund from
investing in securities backed by real estate, nor shall this prevent the
fund from purchasing interests in pools of real estate mortgage loans."
Subject to shareholder approval, the Trustees intend to replace each
fundamental investment limitation with the following fundamental investment
limitation governing purchases and sales of real estate.
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the funds are authorized to invest and to conform each
fund's fundamental real estate limitation to a limitation that is expected
to become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page __.) If the proposal is
approved, the new fundamental real estate limitations may not be changed
without a future vote of shareholders.
To the extent that the funds invest in real estate related securities, the
fund's performance will be subject to the risks of the real estate market.
This industry is sensitive to factors such as changes in real estate values
and property taxes, overbuilding, variations in rental income, and interest
rates. Performance could also be affected by the structure, cash flow, and
management skill of real estate companies.
The funds do not expect to acquire real estate. However, the proposed
limitation would clarify two points. First, for Fidelity Asset Manager, the
proposed limitation would make it explicit that the fund may acquire a
security or other instrument that is secured by a mortgage or other right
to foreclose on real estate, in the event of a default. Second, for both
funds, the proposed limitation would clarify the fact that each fund may
invest without limitation in securities issued or guaranteed by companies
engaged in acquiring, constructing, financing, developing, or operating
real estate projects (e.g., securities of issuers that develop various
industrial, commercial, or residential real estate projects such as
factories, office buildings, or apartments). Any investments in these
securities or other instruments are, of course, subject to the fund's
investment objective and policies and to other limitations regarding
diversification and concentration. Also, while the current limitations
specifically permit the funds to purchase and sell real estate acquired as
a result of ownership of securities, the proposed limitation would
additionally specify those acquired as a result of ownership of other
instruments. However, in light of the types of securities in which the
funds regularly invest, FMR considers this to be a remote possibility. For
Fidelity Asset Manager, the proposed limitation eliminates the restriction
that securities issued by companies or other entities that deal in real
estate be marketable. The fund's investment in illiquid securities is
limited to 10% of their total assets under the existing non-fundamental
limitation.
CONCLUSION. The Board of Trustees has concluded that the adoption of the
proposed amendment will benefit the funds and their shareholders. The
Trustees recommend that shareholders of the funds vote FOR the proposed
amendment. The amended limitations, upon shareholder approval, will become
effective immediately. If the proposal is not approved, the funds' current
limitations will remain unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 14 through 21 is to revise several of the
funds' investment limitations to conform to limitations which are the
standards 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
vote. 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 if called for these purposes
are generally borne by the 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.
14. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION FOR FIDELITY ASSET MANAGER AND FIDELITY ASSET MANAGER:
GROWTH.
Fidelity Asset Manager's current fundamental investment limitation
concerning diversification states:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than obligations issued or guaranteed
by the United States government, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of such
issuer."
Fidelity Asset Manager: Growth's current fundamental investment limitation
concerning diversification states:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than obligations issued or guaranteed
by the government of the United States, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the fund's
total assets would be invested in the securities of such issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of such
issuer."
Subject to shareholder approval, the Trustees intend to replace these
limitations with the following fundamental investment limitation concerning
diversification:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer."
The primary purpose of the proposal is to revise each fund's fundamental
diversification limitation to conform to a limitation which is expected to
become the standard for all diversified funds managed by FMR. Although the
proposed diversification limitation is not significantly different, it will
contribute to the overall objectives of standardization. (See "Adoption of
Standardized Investment Limitations" on page __.) If the proposal is
approved, the new fundamental diversification limitation cannot be changed
without a future vote of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the funds. The Trustees recommend voting FOR the
proposed amendment. The new limitations, upon shareholder approval, will
become effective immediately. If the proposal is not approved, that fund's
current fundamental diversification limitation will remain unchanged.
15. TO AMEND FIDELITY ASSET MANAGER'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING THE ISSUANCE OF SENIOR SECURITIES.
The 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 Charles Street Trust may issue additional series of
shares in accordance with its Declaration of Trust."
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 the fund's fundamental
senior securities limitation to conform to a limitation that is expected to
become the 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 a future vote of the fund's shareholders.
Adoption of the proposed limitation on senior securities is not expected
to affect the way in which the fund is managed, the investment performance
of the fund, or the securities or instruments in which the fund invests.
However, the proposed limitation clarifies that the 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 to be settled 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 amount equal
to its obligation to pay cash for the securities at a future date. The
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 recommends voting FOR the proposed
amendment. The amended limitation, upon shareholder approval, will become
effective immediately. If the proposal is not approved, the fund's current
limitation will remain unchanged.
16. TO ELIMINATE FIDELITY ASSET MANAGER'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING SHORT SALES OF SECURITIES.
The fund's current fundamental investment limitation on selling
securities short is as follows:
"The fund may not sell securities short, unless it owns, or by virtue of
ownership of other securities has the right to obtain, securities
equivalent in kind and amount to the securities sold short, and provided
that transactions in futures contracts are not deemed to constitute short
sales."
The Trustees of the fund recommend that shareholders vote to eliminate the
above fundamental investment limitation. If the proposal is approved, the
Trustees intend to replace the current fundamental limitation with a
non-fundamental limitation that could be changed without a vote of
shareholders. The proposed non-fundamental limitation is set forth below,
with a brief analysis of the substantive difference between it and the
current limitation.
"The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short."
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security.
In an investment technique known as a short sale "against the box," an
investor sells securities short while owning the same securities in the
same amount, or having the right to obtain equivalent securities. The
investor could have the right to obtain equivalent securities, for example,
through its ownership of warrants, options, or convertible bonds.
The proposed non-fundamental limitation would clarify that transactions in
options are not deemed to constitute selling securities short.
Certain state regulations currently prohibit mutual funds from entering
into any short sales, other than short sales against the box. If the
proposal is approved, however, the Board of Trustees would be able to
change the proposed non-fundamental limitation in the future, without a
vote of shareholders, if state regulations were to change to permit other
types of short sales, or if waivers from existing requirements were
available, subject to appropriate disclosure to investors.
Elimination of the fund's fundamental limitation on short selling is
unlikely to affect the fund's investment techniques at this time. The Board
of Trustees believes that efforts to standardize the fund's investment
limitation will facilitate FMR's investment compliance efforts (see
"Adoption of Standardized Investment Limitations" on page __) and are in
the best interests of shareholders.
CONCLUSION. The Board of Trustees recommends voting FOR the proposal to
eliminate the fund's fundamental investment limitation regarding short
sales of securities. If approved, the proposal will take effect
immediately. If the proposal is not approved by the shareholders of the
fund, that fund's current limitation will remain unchanged.
17. TO ELIMINATE FIDELITY ASSET MANAGER'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING MARGIN PURCHASES.
The fund's current fundamental investment limitation concerning purchasing
securities on margin is as follows:
The fund may not purchase securities on margin, except that the fund may
obtain such short-term credits as are necessary for the clearance of
transactions, and provided that the fund may make initial and variation
margin payments in connection with transactions in futures contracts and
options on futures contracts."
The Trustees recommend that shareholders vote to eliminate the above
fundamental investment limitation. If the proposal is approved, the
Trustees intend to adopt a substantially identical non-fundamental
limitation that could be changed without a vote of shareholders.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the
borrower places with a broker as collateral against the loan. The fund's
current fundamental limitation prohibits the fund from purchasing
securities on margin, except to obtain such short-term credits as may be
necessary for the clearance of transactions and for initial and variation
margin payments made in connection with the purchase and sale of futures
contracts and options on futures contracts. With these exceptions, mutual
funds are prohibited from entering into most types of margin purchases by
applicable SEC policies. The proposed non-fundamental limitation includes
these exceptions.
If the proposal is approved by shareholders, the Trustees intend to adopt
the following non-fundamental investment limitation, which would prohibit
margin purchases except as permitted under the conditions referred to
above:
"The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin."
Although elimination of the fund's fundamental limitation on margin
purchases is unlikely to affect the fund's investment techniques at this
time, in the event of a change in federal regulatory requirements, the fund
may alter its investment practices in the future. The Board of Trustees
believes that efforts to standardize investment limitations will facilitate
FMR's investment compliance efforts (see "Adoption of Standardized
Investment Limitations" on page __) and are in the best interests of
shareholders.
CONCLUSION. The Trustees recommend voting FOR the proposal to eliminate
the fund's fundamental investment limitation regarding margin purchases. If
approved, the new non-fundamental limitation will become effective
immediately. If the proposal is not approved by the shareholders of the
fund, the fund's current limitation will remain unchanged.
18. TO AMEND FIDELITY ASSET MANAGER'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING THE PURCHASE AND SALE OF PHYSICAL COMMODITIES.
The fund's current fundamental investment limitation concerning
commodities states:
"The fund may not purchase or sell physical commodities unless acquired as
a result of ownership of securities (but this shall not prevent the fund
from purchasing and sell futures contracts)."
Subject to shareholder approval, the Trustees intend to replace this
fundamental investment limitation with the following fundamental investment
limitation governing commodities.
"The fund may not purchase or sell physical commodities unless acquired as
a result of ownership of securities or other instruments (but this shall
not prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed by
physical commodities)."
The primary purpose of this proposal is to implement a fundamental
investment limitation on commodities that conforms to a limitation that is
expected to become the standard for all funds managed by FMR. (See
"Adoption of Standardized Investment Limitations" on page _.) If the
proposal is approved, the new fundamental commodities limitation cannot be
changed without a future vote of shareholders.
Adoption of the proposed limitation on commodities is not expected to
affect the way in which the fund is managed, the investment performance of
the fund, or the securities or instruments in which the fund invests.
However, the proposed limitation would clarify two points. First, the
proposed limitation would make it explicit that the fund may acquire
physical commodities as the result of ownership of securities or other
instruments. Second, the proposed limitation would clarify that the fund
may invest without limit in securities or other instruments backed by
physical commodities. Any investments of this type are, of course, subject
to the fund's investment objective, policies, and other limitations.
CONCLUSION. The Board of Trustees has concluded that the adoption of the
proposed amendment will benefit the fund and its shareholders. The
Trustees recommend that shareholders of the fund vote FOR the proposed
amendment. The amended limitation, upon shareholder approval, will become
effective immediately. If the proposal is not approved, the fund's current
limitation will remain unchanged.
19. TO AMEND FIDELITY ASSET MANAGER'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING LENDING.
The fund's current fundamental investment limitation concerning lending is
as follows:
"The fund may not make loans, except (a) by lending portfolio securities,
or by lending money to registered investment companies or portfolios
thereof for which FMR or an affiliate serves as investment adviser, or to a
joint account of such companies or portfolios; provided that no loan will
be made if, as a result thereof, more than 33 1/3% of the fund's total
assets (taken at current value) would be lent to another party; (b) through
the purchase of a portion of an issue of debt securities in accordance with
its investment objective, policies, and limitations; and (c) by engaging in
repurchase agreements with respect to portfolio securities."
Subject to shareholder approval, the Trustees intend to replace the
limitation with the following fundamental investment limitation governing
lending:
"The fund may not lend any security or make any other loan if, as a
result, more than 33 1/3% of its total assets would be lent to other
parties, but this limitation does not apply to purchases of debt securities
or to repurchase agreements."
The primary purpose of this proposal is to revise the fund's fundamental
lending limitation to conform to a limitation expected to become the
standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page __.) If the proposal is approved, the new
fundamental lending limitation cannot be changed without a future vote of
shareholders.
Adoption of the proposed limitation on lending is not expected to affect
the way in which the fund is managed, the investment performance of the
fund, or the instruments in which the fund invests. However, the proposed
limitation would clarify two points. First, the proposed limitation
provides specific authority for the fund to acquire the entire portion of
an issue of debt securities. Ordinarily, if a fund purchases an entire
issue of debt securities, there may be greater risks of illiquidity and
unavailability of public information if the issuer has no other issue of
securities outstanding, and it may be more difficult to obtain pricing
information to be used in establishing the fund's daily share price.
Second, the proposed amendment eliminates the reference to "portfolio
securities" in the exception for repurchase agreements.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund and is in the best interest of
shareholders. The Trustees recommend voting FOR the proposed amendment. The
amended limitation, upon shareholder approval, will become effective
immediately. If the proposal is not approved by shareholders of the fund,
the fund's current limitation will remain unchanged.
20. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING BORROWING FOR
FIDELITY ASSET MANAGER AND FIDELITY ASSET MANAGER: GROWTH.
Fidelity Asset Manager's current fundamental investment limitation
concerning borrowing states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of its total assets (less
liabilities other than borrowings). Any borrowings that come to exceed 33
1/3% of the value of the fund's total assets by reason of a decline in net
assets will be reduced within three days to the extent necessary to comply
with the 33 1/3% limitation."
Fidelity Asset Manager: Growth's current fundamental investment limitation
concerning borrowing states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of its total assets (less
liabilities other than borrowings). Any borrowings that come to exceed 33
1/3% of the value of the fund's total assets by reason of a decline in net
assets will be reduced within three days (exclusive of Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation."
Subject to shareholder approval, the Trustees intend to replace each
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise each fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
the standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page __.) If the proposal is approved, the
amended fundamental borrowing limitation cannot be changed without a future
vote of shareholders.
Adoption of the proposed limitation concerning borrowing is not expected
to affect the way in which the funds are managed, the investment
performance of the funds, or the securities or instruments in which the
funds invest. However, the proposal would clarify three points. First,
under the current limitations, each fund must reduce borrowings that come
to exceed 33 1/3% of total assets only when there is a decline in net
assets. Second, the proposed limitation differs from that of Fidelity Asset
Manager because it specifically defines "three days" to exclude Sundays and
holidays, while the fund's current limitation simply states three days.
Third, the proposed limitation specifies that the amount borrowed be
included in each fund's total assets when determining the amount each fund
has borrowed, in terms of a percentage of total assets.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit each fund. Accordingly, the Trustees recommend that
shareholders of the funds vote FOR the proposed amendment. The amended
limitation, upon shareholder approval, will become effective immediately.
With respect to each fund, if the proposal is not approved, the fund's
current limitation will remain unchanged.
21. TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE
CONCENTRATION OF ITS INVESTMENTS IN A SINGLE INDUSTRY FOR FIDELITY ASSET
MANAGER AND FIDELITY ASSET MANAGER: GROWTH.
Fidelity Asset Manager'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
obligations issued or guaranteed by the United States government or any of
its agencies or instrumentalities) if, as a result, more than 25% of the
fund's total assets (taken at current value) would be invested in the
securities of issuers having their principal business activities in the
same industry."
Fidelity Asset Manager: Growth'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
obligations issued or guaranteed by the government of the United States or
any of its agencies or instrumentalities) if, as a result, more than 25% of
the fund's total assets (taken at current value) would be invested in the
securities of issuers having their principal business activities in the
same industry."
Subject to shareholder approval, the Trustees of the funds intend to
replace these fundamental investment limitations 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) 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 the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page __.) If the proposal is
approved, the amended fundamental concentration limitation could not be
changed without a future vote of shareholders.
Adoption of the proposed limitation on concentration is not expected to
affect the way the funds are managed, the investment performance of the
funds, or the securities or instruments in which the funds invest.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the funds. The Trustees recommend voting FOR the
proposed amendment. The amended limitation, upon shareholder approval, will
become effective immediately. If the proposal is not approved, that fund's
current fundamental investment 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 whose net assets as of May 31, 1994, were in
excess of $___ billion. The Fidelity family of funds currently includes a
number of funds with a broad range of investment objectives and permissible
portfolio compositions. The Boards of these funds are substantially
identical to that of this trust. In addition, FMR serves as investment
adviser to certain other funds which are generally offered to limited
groups of investors. Information concerning the advisory fees, net assets,
and total expenses of the funds advised by FMR is contained in the Table of
Average Net Assets and Expense Ratios in Exhibit __.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far
East), both wholly owned subsidiaries of FMR formed in 1986, supply
investment research information, and may supply portfolio management
services to FMR in connection with certain funds advised by FMR. FMR Texas
Inc., a wholly owned subsidiary of FMR formed in 1989, supplies portfolio
management and research services in connection with certain money market
funds advised by FMR.
FMR, its officers and directors, its affiliated companies and personnel,
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 which 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 Consolidated Statement of Financial Condition of Fidelity Management
& Research Company and subsidiaries as of December 31, 1993 is shown
beginning on page __
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Robert Beckwitt, Gary L. French, and Arthur S. Loring,
are currently officers of the trust and officers or employees of FMR or FMR
Corp. With the exception of Mr. Costello all of these persons are
stockholders of FMR Corp. FMR's address is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of the Directors of FMR.
All of the stock of FMR is owned by a parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts, which was organized on October
31, 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions, Fidelity Service Co., which is
the transfer and shareholder servicing agent for certain of the retail
funds advised by FMR, Fidelity Investments Institutional Operations
Company, which performs shareholder servicing functions for certain
institutional customers, and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization. Messrs. Johnson 3d, Burkhead, William L. Byrnes, James C.
Curvey, and Caleb Loring, Jr. are the Directors of FMR Corp. On March 31,
1994, Messrs. Johnson 3d, Burkhead, Curvey, and Loring, Jr., and Ms.
Abigail Johnson owned approximately __%, _%, _%, __%, and __%,
respectively, of the voting common stock of FMR Corp. In addition, various
Johnson family members and various trusts for the benefit of Johnson family
members, for which Messrs. Burkhead, Curvey, or Loring, Jr. are Trustees,
owned in the aggregate approximately __% of the voting common stock of FMR
Corp. Messrs. Johnson 3d, Burkhead, and Curvey owned approximately _%, _%
and _%, respectively, of the non-voting common stock of FMR Corp. In
addition, various trusts for the benefit of members of the Johnson family,
for which Mr. Loring, Jr. is the sole Trustee, and other trusts for the
benefit of Johnson family members, through limited partnership interest in
a partnership the corporate general partner of which is controlled by Mr.
Johnson 3d, Mr. Loring, Jr., and other Johnson family members, together
owned approximately __% of the non-voting common stock of FMR Corp. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of the trust), Johnson family members, and various trusts for the
benefit of the Johnson family form a controlling group with respect to FMR
Corp.
[THE FOLLOWING INFORMATION IS TO BE UPDATED]
During the period October 1, 1992 through May 31, 1994, the following
transactions were entered into by officers and/or Trustees of the fund or
of FMR Corp. involving more than 1% of the voting common, non-voting common
or preferred stock of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed in
1986 to provide investment research information with respect to certain
funds for which FMR acts as investment adviser. Under sub-advisory
agreements with FMR U.K. and FMR Far East, FMR pays fees equal to 110% of
FMR U.K.'s costs and 105% of FMR Far East's costs, respectively, in
connection with research services provided for the benefit of certain
Fidelity funds. During the fiscal year ended September 30, 1993, the fees
paid by FMR on behalf of the funds are shown in the table below.
FMR U.K. FMR Far East
Fidelity Asset Manager: Growth $72,462 $125,372
Fidelity Asset Manager: Income 4,032 7,113
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and J. Gary Burkhead, President. Each of the Directors is also a
Trustee of the trust. Messrs. Johnson 3d and Burkhead are currently
officers of the trust and officers or employees of FMR U.K. and FMR Far
East. Messrs. Johnson 3d and Burkhead are stockholders of FMR Corp. The
affiliations of Messrs. Johnson 3d and Burkhead are described in Proposal
1. The principal business address of the Directors and FMR U.K. and FMR Far
East is 82 Devonshire Street, Boston, Massachusetts.
FMR U.K. and FMR Far East are wholly-owned subsidiaries of FMR formed in
1986 to provide investment research information with respect to certain
funds for which FMR acts as investment adviser. Under sub-advisory
agreements with FMR U.K. and FMR Far East, FMR pays fees equal to 110% of
FMR U.K.'s costs and 105% of FMR Far East's costs, respectively, in
connection with research services provided for the benefit of certain
Fidelity funds.
The Statements of Financial Condition for FMR U.K. and FMR Far East as of
December 30, 1992 (audited) and for the period January 1, 1993 through
September 30, 1993 (unaudited) are shown beginning on page __. Funds
managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East, and the net assets of each
of these funds, are indicated in the Table of Average Net Assets and
Expense Ratios (Exhibit __) on page __.
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and J. Gary Burkhead, President. Each of the Directors is also a
Trustee of the trust. Messrs. Johnson 3d and Burkhead are currently
officers of the trust and officers or employees of FMR U.K. and FMR Far
East. Messrs. Johnson 3d and Burkhead are stockholders of FMR Corp. The
affiliations of Messrs. Johnson 3d and Burkhead are described in Proposal
1. The principal business address of the Directors and FMR U.K. and FMR Far
East is 82 Devonshire Street, Boston, Massachusetts.
PRESENT MANAGEMENT CONTRACTS
The funds employ FMR to furnish investment advisory and other services.
Under its management contracts with the funds, 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 the funds with all necessary
office facilities and personnel for servicing the funds' investments, and
compensates all officers of the trust, all Trustees who are "interested
persons" of the trust or FMR, and all personnel of the trust 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 the funds. These services include providing
facilities for maintaining the funds' organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with the funds; preparing all general shareholder
communications and conducting shareholder relations; maintaining the funds'
records and the registration of the funds' shares under federal and state
law; developing management and shareholder services for the funds; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, the funds pay all of its expenses, without limitation, that are not
assumed by those parties. The funds pays for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although each fund's
management contract provides that the fund will pay for the typesetting,
printing, and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, the trust entered into a
revised transfer agent agreement with FSC, pursuant to which FSC bears the
cost of providing these services to existing shareholders. Other expenses
paid by the funds include interest, taxes, brokerage commissions, the
funds' proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal and state
securities laws. The funds are also liable for such nonrecurring expenses
as may arise, including costs of any litigation to which the funds may be a
party and any obligation it may have to indemnify the trust's officers and
Trustees with respect to litigation.
FMR is manager pursuant to a management contracts dated December 28, 1988,
(Fidelity Asset Manager) and October 1, 1992 (Fidelity Asset Manager:
Growth) which were approved by the fund's shareholders on October 26, 1989
and September 16, 1992, respectively. FMR is Fidelity Asset Manager:
Income's manager pursuant to a management contract dated July 1, 1993,
which was approved by FMR, then sole shareholder, on July 16, 1992. For
the services of FMR under the contracts, 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 schedules
shown below. On the right, the effective fee rate schedule shows the
results of cumulatively applying the annualized rates at varying asset
levels. For example, under Asset Manager's and Asset Manager: Growth's
current contracts, the effective annual group fee rate at $253 billion of
group net assets - their approximate level for May 1994 - was .3220%, which
is the weighted average of the respective fee rates for each level of group
net assets up to that level. Under Asset Manager: Income's current
contract, the effective annual group fee rate at $253 billion of group net
assets was .1601%.
Fidelity Asset Manager and Fidelity Asset Manager: Growth Group Fee Rate
Schedule
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Fee Rate Net Annual
Assets Assets Fee Rate
0 - $ 3 billion .520% $ 0.5 .5200%
billion
3 - 6 .490 25 .4238
6 - 9 .460 50 .3823
9 - 12 .430 75 .3626
12 - 15 .400 100 .3512
15 - 18 .385 125 .3430
18 - 21 .370 150 .3371
21 - 24 .360 175 .3325
24 - 30 .350 200 .3284
30 - 36 .345 225 .3253
36 - 42 .340 250 .3223
42 - 48 .335 275 .3198
48 - 66 .325 300 .3175
66 - 84 .320 325 .3153
84 - 102 .315 350 .3133
102 - 138 .310
138 - 174 .305
174 - 228 .300
228 - 282 .295
282 - 336 .290
Over 336 .285
* The rates shown for average group assets in excess of $174 billion were
adopted by FMR on a voluntary basis on November 1, 1993 pending shareholder
approval of a new management contract reflecting the extended schedule. The
extended schedule provides for lower management fees as total assets under
management increase.
Fidelity Asset Manager: Income Group Fee Rate Schedule
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Fee Rate Net Annual
Assets Assets Fee Rate
$0 - 3 billion .3700% $ 0.5 .3700%
billion
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
* The rates shown for average group assets in excess of $174 billion were
adopted by FMR on a voluntary basis on November 1, 1993 pending shareholder
approval of a new management contract reflecting the extended schedule. The
extended schedule provides for lower management fees as total assets under
management increase.
The schedule shown above (minus the breakpoints added November 1, 1993)
was voluntarily adopted by FMR on January 1, 1992 until shareholders could
meet to approve the amended management contract. Prior to January 1, 1992,
the fund's group fee rate was based on a schedule with breakpoints ending
at .310% for average group assets in excess of $102 billion.
The individual fund fee rate is .40% for Asset Manager and Asset Manager:
Growth, and .35% for Asset Manager: Income. Based on the average net
assets of funds advised by FMR for May 1994, the annual management fee rate
would be calculated as follows:
Group Individual Fund Basic
Fee Rate Fee Rate Fee Rate
Fidelity Asset Manager .3220% + .40% = .7220%
Fidelity Asset Manager: Growth .3220% + .40% = .7220%
Fidelity Asset Manager: Income .1601% + .35% = .5101%
One twelfth (1/12) of this annual management fee rate is then applied to
each fund's average net assets for the current month, giving a dollar
amount which is the fee for that month.
During the fiscal periods ended September 30, 1993, 1992, and 1991, FMR
received the following fees for its services as investment adviser of the
funds:
Management Fees Percentage of Average Net
Assets
1993 1992 1991 1993 1992 1991
Fidelity Asset $34,058,61 $ 3,504,035 $11,864,46 .72% .74% .75%
Manager 7 6
Fidelity Asset $ 4,107,172 $ 256,528 N/A .73% .73% N/A
Manager: Growth
Fidelity Asset $ N/A N/A .__% N/A N/A
Manager: Income 348,635
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
SUB-ADVISERS. On Behalf of Fidelity Asset Manager: Growth and Fidelity
Asset Manager: Income, FMR has entered into sub-advisory agreements with
FMR U.K. and FMR Far East. Pursuant to the sub-advisory agreements, FMR
may receive investment advice and research services outside the United
States from the sub-advisers.
Currently, FMR U.K, and FMR Far East each focus on issuers in countries
other than the United States such as those in Europe, Asia, and the Pacific
Basin.
FMR U.K, and FMR Far East are wholly owned subsidiaries of FMR. Under the
sub-advisory agreement FMR pays the fees of FMR U.K. and FMR Far East. For
providing non-discretionary investment advice and research services, FMR
pays FMR U.K, and FMR Far East fees equal to 110% and 105%, respectively,
of FMR U.K.'s and FMR Far East's costs incurred in connection with
providing investment advice and research services.
For providing investment advice and research services, on behalf of
Fidelity Asset Manager: Growth, the fees paid to the sub-advisers for
fiscal 1993 and 1992 were as follows:
Fiscal Year Ended Fees Paid to Fees Paid to
September 30 FMR U.K. FMR Far East
1993 $72,462 $125,372
1992 2,427 1,863
For providing investment advice and research services, on behalf of
Fidelity Asset Manager: Income, the fees paid to the sub-advisers for
fiscal 1993 were as follows:
Fiscal Year Ended Fees Paid to Fees Paid to
September 30 FMR U.K. FMR Far East
1993 $4,032 $7,113
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 its
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR will
consider various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commission; and arrangements for payment of fund
expenses. Commissions for foreign investments traded on foreign exchanges
will generally be higher than for U.S. investments and may not be subject
to negotiation.
The funds 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. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers
generally is 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.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
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
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of
FMR Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
funds and review the commissions paid by each fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
The table below details the funds' portfolio turnover rates for the fiscal
years ended September 30, 1993 and 1992.
Annual Portfolio Turnover
Rates
1992 1993
Fidelity Asset Manager 134% 98%
Fidelity Asset Manager: Growth 693%* 97%
Fidelity Asset Manager: Income N/A 47%**
* Annualized. From December 31,1991 (commencement of operations).
** Annualized. From October 1, 1992 (commencement of operations).
For fiscal 1993, 1992, and 1991, Fidelity Asset Manager paid brokerage
commissions of $8,953,533, $1,990,893, and $605,473, respectively. For
fiscal 1993 and 1992, Asset Manager: Growth paid brokerage commissions of
$2,023,460 and $83,320, respectively. During fiscal 1993, approximately
$6,822,920 or 76.2% of Asset Manager's commissions and approximately
$1,701,402 or 84.09% of Asset Manager: Growth's commissions were paid to
brokerage firms that provided research services, although the provision of
such services was not necessarily a factor in the placement of all of this
business with such firms. Each fund pays both commissions and spreads in
connection with the placement of portfolio transactions; FBSI is paid on a
commission basis. During fiscal 1993, 1992, and 1991, Asset Manager paid
brokerage commissions of $1,218,609, $417,791, and $147,818, respectively,
to FBSI. During fiscal 1993 this amounted to 13.6% of the aggregate
brokerage commissions paid by the fund for transactions involving
approximately 27.4% of the aggregate dollar amount of transactions in which
the fund paid brokerage commissions. During fiscal 1993 and 1992, Asset
Manager: Growth paid brokerage commissions of $138,000 and $17,323,
respectively, to FBSI. During fiscal 1993, this amounted to 6.8% of the
aggregate brokerage commissions paid by the fund for transactions involving
approximately 17.68% of the aggregate dollar amount of transactions in
which the fund paid brokerage commissions. The difference in the
percentage of brokerage commissions paid to and the percentage of the
dollar amount of transactions effected through FBSI is a result of the low
commission rates charged by FBSI.
During fiscal 1992 Fidelity Asset Manager paid brokerage commissions of
$941 to FBSL.
For fiscal 1993, Fidelity Asset Manager: Income paid no brokerage
commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to
continue to review whether recapture opportunities are available and are
legally permissible and, if so, to determine in the exercise of their
business judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders' servicing agent
for the funds. Under the trust's contract with FSC, each fund pays an
annual fee of $25.50 per basic retail account with a balance of $5,000 or
more, $15.00 per basic retail account with a balance of less than $5,000
and a supplemental activity charge of $2.25 for standing order transactions
and $6.11 for other monetary transactions. These fees and charges are
subject to annual cost escalation based on postal rate changes and changes
in wage and price levels as measured by the National Consumer Price Index
for Urban Areas. With respect to certain institutional client master
accounts, the funds pay FSC a per-account fee of $95 and monetary
transaction charges of $20 or $17.50, depending on the nature of services
provided. With respect to certain broker-dealer master accounts, Fidelity
Asset Manager and Fidelity Asset Manager: Growth each pay FSC a per-account
fee of $30, and a charge of $6 for monetary transactions. Fees for certain
institutional retirement plan accounts are based on the net assets of all
such accounts in a fund.
Under the contract, FSC pays out-of-pocket expenses associated with
providing transfer agent services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
shareholders, with the exception of proxy statements.
The table below shows the transfer agent fees paid to FSC during each
fund's last three fiscal periods ended September 30 (if applicable):
1993 1992 1991
Fidelity Asset Manager $12,348,09 $4,713,260 $1,389,504
1
Fidelity Asset Manager: Growth $ $ N/A
1,933,000 135,083*
Fidelity Asset Manager: Income $ N/A N/A
254,178**
* From December 30, 1991 (commencement of operations).
** From October 1, 1992 (commencement of operations).
The trust's contract with FSC also provides that FSC will perform the
calculations necessary to determine each fund's net asset value per share
and dividends, and maintain the fund's accounting records. With respect to
Fidelity Asset Manager, prior to July 1, 1991, the annual fee for these
pricing and bookkeeping services was based on two schedules, one pertaining
to the fund's average net assets, and one pertaining to the type and number
of transactions the fund made. The fee rates in effect as of July 1, 1991
are based on each fund's average net assets, specifically, for Fidelity
Asset Manager and Fidelity Asset Manager: Growth, .06% for the first $500
million of average net assets and .03% for average net assets in excess of
$500 million, for Fidelity Asset Manager: Income, .04% for the first $500
million of average net assets and .02% for average net assets in excess of
$500 million. The fee is limited to a minimum of $45,000 and a maximum of
$750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocked expenses during each fund's last
three fiscal periods (if applicable):
1993 1992 1991
Fidelity Asset Manager $803,179 $610,103 $198,462
Fidelity Asset Manager: Growth $288,000 $ 34,282 N/A
Fidelity Asset Manager: Income $ 50,625 N/A N/A
FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. The table below shows the securities lending
fees paid to FSC during each fund's last three fiscal years (if
applicable):
1993 1992 1991
Fidelity Asset Manager $25,830 $8,635 $6,045
Fidelity Asset Manager: Growth 0 0 N/A
Fidelity Asset Manager: Income 0 N/A N/A
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
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 Co., 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 each fund's respective Annual Report you
wish to receive in order to supply copies to the beneficial owners of the
respective shares.
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
________
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Fidelity Management & Research Company
(a Wholly-Owned Subsidiary of FMR Corp.):
We have audited the accompanying consolidated statement of financial
condition of Fidelity Management & Research Company as of December 31,
1993. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the consolidated financial position of Fidelity
Management & Research Company as of December 31, 1993, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
________
ASSETS
($000)
Cash and cash equivalents $ 109
Management fees receivable 103,826
Invested assets:
Managed funds (market value $59,845,000) 56,416
Other investments (fair value $25,816,000) 20,822
Property and equipment, net 141,584
Deferred income taxes 35,910
Note receivable from affiliate 11,250
Prepaid expenses and other assets 9,597
Total Assets $ 379,514
LIABILITIES AND STOCKHOLDER'S EQUITY
Payable to mutual funds $ 8,580
Accounts payable and accrued expenses 30,349
Payable to parent company 235,232
Other liabilities 3,871
Total Liabilities 278,032
Stockholder's equity:
Common stock, $.30 par value;
authorized 50,000 shares;
issued and outstanding
26,500 shares 8
Additional paid-in capital 50,074
Retained earnings 51,400
Total Stockholder's Equity 101,482
Total Liabilities and Stockholder's Equity $ 379,514
The accompanying notes are an integral part
of the consolidated statement of financial condition.
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO CONSOLIDATED STATEMENT
OF FINANCIAL CONDITION
________
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Fidelity Management & Research Company and Subsidiaries (the Company)
provide investment management and advisory services and other services
principally for the Fidelity Investments Family of Funds. The Company also
provides computer support and systems development services to affiliated
companies.
On March 1, 1993, ownership of the Company's wholly-owned subsidiary,
Fidelity Investments Institutional Services Company, Inc. was distributed
to the Company's parent. As of that date, this subsidiary had total assets
and stockholder's equity of approximately $73,000,000, and $60,000,000,
respectively.
PRINCIPLES OF CONSOLIDATION
The consolidated statement of financial condition includes the accounts of
Fidelity Management & Research Company and its wholly-owned
subsidiaries. All intercompany accounts have been eliminated.
INVESTED ASSETS
Managed funds investments (consisting primarily of Fidelity Mutual Funds)
are carried at the lower of aggregate cost or market. Other investments
consist primarily of investments in limited partnerships which are carried
at cost. Certain restrictions exist with respect to the sale or transfer of
these investments to third parties. For managed funds investments and other
investments, fair value is determined by the quoted market price except in
the case of restricted investments which are valued based on management's
assessment of fair value. When the Company has determined that an
impairment, which is deemed other than temporary, in the market or fair
value of an investment has occurred, the carrying value of the investment
is reduced to its net realizable value.
INCOME TAXES
The Company is included in the consolidated federal and certain state
income tax returns filed by FMR Corp.
Effective January 1, 1993, FMR Corp. and the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse.
Adoption of this statement did not have a material impact on the Company's
financial position.
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO CONSOLIDATED STATEMENT
OF FINANCIAL CONDITION
(CONTINUED)
________
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED:
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation of furniture and equipment is computed over the
estimated useful lives of the related assets, which are principally three
to five years, using the straight-line method. Leasehold improvements are
amortized over the lesser of their economic useful lives or the period of
the lease. Maintenance and repairs are charged to operations when incurred.
Renewals and betterments of a nature considered to materially extend the
useful life of the assets are capitalized.
PENSION AND PROFIT SHARING PLANS
The Company participates in FMR Corp.'s noncontributory defined benefit
pension plan covering all of its eligible employees. There are no
statistics available for the actuarial data of this separate company. There
are no unfunded vested benefits.
The Company also participates in FMR Corp.'s defined contribution profit
sharing and retirement plans covering substantially all eligible employees.
B. PROPERTY AND EQUIPMENT, NET
At December 31, 1993, property and equipment, at cost, consist of (in
thousands):
Furniture $ 1,853
Equipment (principally computer related) 320,141
Leasehold improvements 6,712 328,706
Less: Accumulated depreciation and amortization 187,122
$ 141,584
C. NOTE RECEIVABLE FROM AFFILIATE
On December 2, 1993, the Company issued a non-recourse mortgage to an
affiliate for property located in Irving, Texas. The $11,250,000 note
receivable is due on January 1, 2009, and accrues interest at 7.6325%.
Payments of principal and interest are due monthly.
D. TRANSACTIONS WITH AFFILIATED COMPANIES
In connection with its operations, the Company provides services to and
obtains services from affiliated companies. Transactions related to these
services are settled, in the normal course of business, through an
intercompany account with the Company's parent, FMR Corp. The terms of
these transactions may not be the same as those which would otherwise exist
or result from agreements and transactions among unrelated parties.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
________
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Fidelity Management & Research (U.K.) Inc.
(a Wholly-Owned Subsidiary of Fidelity Management & Research Company):
We have audited the accompanying statement of financial condition of
Fidelity Management & Research (U.K.) Inc. as of December 31, 1993.
This financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Fidelity Management
& Research (U.K.) Inc. as of December 31, 1993, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
________
ASSETS
Investments (market value $3,180,192) $ 2,537,448
Equipment, net of accumulated
depreciation of $859,335 914,770
Accounts receivable from parent 2,806,932
Deferred income taxes 23,520
Total Assets $ 6,282,670
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Subordinated loan $ 1,608,100
Accounts payable to affiliate 1,452,719
Income taxes payable 173,009
Other liabilities 131
Total Liabilities 3,233,959
Stockholder's equity:
Common stock, $1 par value;
authorized 300,000 shares;
issued and outstanding 100 shares 100
Additional paid-in capital 900
Retained earnings 3,047,711
Total Stockholder's Equity 3,048,711
Total Liabilities and Stockholder's Equity $ 6,282,670
The accompanying notes are an integral part
of the statement of financial condition.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
NOTES TO STATEMENT OF
FINANCIAL CONDITION
________
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF REPORTING
The statement of financial condition is presented in accordance with United
States generally accepted accounting principles. The functional and
reporting currency for Fidelity Management & Research (U.K.) Inc. (the
Company) is the U.S. dollar.
BUSINESS
The Company is a wholly-owned subsidiary of Fidelity Management &
Research Company (the parent). The Company is a registered investment
advisor and provides research and investment advisory services under
subadvisory agreements with its parent. The Company also provides research
advice to the parent and an affiliate pursuant to a research joint venture
agreement. Intercompany transactions are settled during the normal course
of business.
INVESTMENTS
Investments consist of shares held in Fidelity mutual funds and are carried
at the lower of aggregate cost or market. The fair value of investments is
equal to the quoted market price.
EQUIPMENT
Equipment is stated at cost less accumulated depreciation. Depreciation is
computed over the estimated useful lives of the related assets, which vary
from three to five years, using the straight-line method. Maintenance and
repairs are charged to operations when incurred.
SUBORDINATED LOAN
The Company has a subordinated loan payable to its parent and due on March
31, 1994. The loan is subordinated in all respects to the rights of senior
creditors. Interest is payable annually at a rate of 4.375%. Repayment or
modification of this loan is subject to regulatory approval.
INCOME TAXES
The Company is included in the consolidated federal income tax return filed
by FMR Corp., the parent Company of Fidelity Management & Research
Company. The Company is allocated a charge by FMR Corp. representing the
sum of the applicable foreign and U.S. statutory income tax rates.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
NOTES TO STATEMENT
OF FINANCIAL CONDITION
(CONTINUED)
________
A. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES, CONTINUED:
Effective January 1, 1993, FMR Corp. and the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse.
Adoption of this statement did not have a material impact on the Company's
financial position.
B. NET CAPITAL REQUIREMENT:
The Company is subject to certain financial regulatory resource rules which
require the Company to maintain a certain level of net capital (as
defined). At December 31, 1993, the minimum net capital requirement of
approximately $422,000 has been satisfied by the Company.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
________
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Fidelity Management & Research (Far East) Inc.
(a Wholly-Owned Subsidiary of Fidelity Management & Research Company):
We have audited the accompanying statement of financial condition of
Fidelity Management & Research (Far East) Inc. as of December 31, 1993.
This financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Fidelity Management
& Research (Far East) Inc. as of December 31, 1993, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
________
ASSETS
Cash $ 24,294
Investments (market value $618,049) 569,958
Furniture and equipment, net of
accumulated depreciation of $10,704 642
Prepaid expenses and other assets 143,427
Receivable from parent company 840,906
Total Assets $ 1,579,227
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to affiliate $ 795,567
Income taxes payable 168,646
Total Liabilities 964,213
Stockholder's equity:
Common stock, $1 par value;
authorized 300,000 shares;
issued and outstanding 100 shares 100
Additional paid-in capital 900
Retained earnings 614,014
Total Stockholder's Equity 615,014
Total Liabilities and Stockholder's Equity $ 1,579,227
The accompanying notes are an integral part
of the statement of financial condition.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
NOTES TO STATEMENT
OF FINANCIAL CONDITION
________
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BUSINESS
Fidelity Management & Research (Far East) Inc. (the Company) is a
wholly-owned subsidiary of Fidelity Management & Research Company (the
parent). The Company is a registered investment advisor and provides
research advice to the parent and an affiliate pursuant to a research joint
venture agreement. Intercompany transactions are settled during the normal
course of business.
INVESTMENTS
Investments consist of shares held in a Fidelity mutual fund and are
carried at the lower of cost or market. The fair value of investments is
equal to the quoted market price.
FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost less accumulated depreciation.
Depreciation is computed over the estimated useful lives of the related
assets, which vary from three to five years, using the straight-line
method. Maintenance and repairs are charged to operations when incurred.
INCOME TAXES
The Company is included in the consolidated federal income tax return filed
by FMR Corp., the parent company of Fidelity Management & Research
Company. The Company is allocated a charge by FMR Corp. representing the
sum of the applicable foreign and U.S. statutory income tax rates.
Effective January 1, 1993, FMR Corp. and the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse.
Adoption of this statement did not have a material impact on the Company's
financial position.
EXHIBIT 1
The language to be added to the current contract is ((underlined)); the
language to be deleted is set forth in [brackets].
The proper name of each fund - Fidelity Asset Manager, Fidelity Asset
Manager: Growth, and Fidelity Asset Manager: Income - will be inserted in
each respective fund's Contract where indicated by (Name of Portfolio).
The current contracts of the funds are substantially similar; the specific
areas that will differ are the Preamble and Section 3 of this Form of
Management Contract Exhibit.
FORM OF
MANAGEMENT CONTRACT
BETWEEN
FIDELITY CHARLES STREET TRUST:
(NAME OF PORTFOLIO)
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[AGREEMENT] (Fidelity Asset Manager) (Fidelity Asset Manager: Income)
[AMENDMENT] (Fidelity Asset Manager: Growth) ((MODIFICATION)) made this
[28th day of December, 1988] (Fidelity Asset Manager) [1st day of October,
1992] (Fidelity Asset Manager: Growth) [1st day of July, 1993] (Fidelity
Asset Manager: Income) ((1st day of October 1994)), by and between Fidelity
Charles Street Trust, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of (Name of Portfolio) (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
FOR FIDELITY ASSET MANAGER AND FIDELITY ASSET MANAGER: INCOME:
((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
December 28, 1988 (Fidelity Asset Manager), dated July 1, 1993 (Fidelity
Asset Manager: Income) to a modification of said Contract in the manner set
forth below. The Modified Management Contract shall when executed by duly
authorized officers of the Fund and the Adviser, take effect on the later
of October 1, 1994 or the first day of the month following approval.))
FOR FIDELITY ASSET MANAGER: GROWTH:
Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and [Fidelity
Management & Research Company] ((the Adviser)) hereby consent, pursuant
to Paragraph 6 of the existing Management Contract dated [September 21,
1990] ((October 1, 1992)) to a modification of said Contract in the manner
set forth below. The Modified Management Contract shall when executed by
duly authorized officers of the Fund and the Adviser, take effect on the
later of [October 1, 1992] ((October 1, 1994)) or the first day of the
month following approval.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to 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 Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser [,at its own expense,] shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Fund shall periodically review
the commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
FOR FIDELITY ASSET MANAGER AND FIDELITY ASSET MANAGER: INCOME:
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, [which shall be computed as follows: The fee shall
be composed of two elements:] ((composed of a Group Fee and an Individual
Fund Fee)).
FOR FIDELITY ASSET MANAGER: GROWTH:
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a Group Fee and an Individual Fund Fee.
[i](a) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in
the manner set forth in the [charter of such investment company] ((fund's
Declaration of Trust or other organizational document))) determined as of
the close of business on each business day throughout the month. The Group
Fee Rate shall be determined on a cumulative basis pursuant to the
following schedule:
FOR FIDELITY ASSET MANAGER AND FIDELITY ASSET MANAGER: GROWTH:
Average Net Assets Annualized Fee Rate (for each level)
0 - $ 3 billion .5200%
3 - 6 .4900%
6 - 9 .4600%
9 - 12 .4300%
12 - 15 .4000%
15 - 18 .3850%
18 - 21 .3700%
21 - 24 .3600%
24 - 30 .3500%
30 - 36 .3450%
36 - 42 .3400%
42 - 48 .3350%
48 - 66 .3250%
66 - 84 .3200%
84 - 102 .3150%
(For Asset [Over 102] [.3100%]
Manager)
((102 - 138 .3100%
138 - 174 .3050%))
(For Asset [Over 174] [.3000%]
Manager:
Growth)
(For Both) - 228 .3000%
((174
228 - 282 .2950%
282 - 336 .2900%
Over 336 .2850%))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .40%.
FOR FIDELITY ASSET MANAGER: INCOME:
Average Net Assets Annualized Fee Rate (for each level)
0 - $ 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84 - 102 .1500
120 - 174 .1450
[Over 174] [.1400]
((174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325))
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .35%.
The sum of the [cumulative] (Fidelity Asset Manager and Fidelity Asset
Manager: Income) Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the
Annual ((Management)) (Fidelity Asset Manager and Fidelity Asset Manager:
Income) Fee Rate. One-twelfth of the Annual ((Management)) (Fidelity Asset
Manager and Fidelity Asset Manager: Income) Fee Rate shall be applied to
the average of the net assets of the Portfolio (computed in the manner set
forth in [Paragraph 10 of] (Fidelity Asset Manager and Fidelity Asset
Manager: Income) the ((Fund's)) Declaration of Trust [of the Fund] ((or
other organizational document))) determined as of the close of business on
each business day throughout the month.
(c) In case of termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
business days during which it is in effect, and the fee computed upon the
average net assets for the business days it is so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until [July 31,
1989] (Fidelity Asset Manager) [July 31, 1993] (Fidelity Asset Manager:
Growth) [May 31, 1994] (Fidelity Asset Manager: Income) ((July 31, 1995))
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may
be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust ((or
other organizational document)) and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust ((or other
organizational document)) are separate and distinct from those of any and
all other Portfolios.
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 in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties 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,)) (Fidelity Asset Manager:
Growth and Fidelity Asset Manager: Income) all as of the date written
above.
[SIGNATURE LINES OMITTED]
EXHIBIT 2
FORM OF SUB-ADVISORY AGREEMENT
The proper name of the fund - Fidelity Asset Manager - will be inserted in
the fund's contract where indicated by (Name of Portfolio).
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY SECURITIES FUND ON BEHALF OF
(NAME OF PORTFOLIO)
AGREEMENT made this 1st day of October 1994, by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Management & Research (Far
East) Inc. (hereinafter called the "Sub-Advisor"); and Fidelity Charles
Street Trust, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Trust") on
behalf of (Name of Portfolio) (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management Contract
on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager to the Portfolio, and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated persons
have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor to
perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor, the
Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the Portfolio
and the Advisor such factual information, research reports and investment
recommendations, as the Adviser may reasonably require. Such information
may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the Advisor,
the Sub-Advisor shall, subject to the supervision of the Advisor, manage
all or a portion of the investments of the Portfolio in accordance with the
investment objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of 1940 (the "1940 Act") and rules thereunder,
as amended from time to time, and such other limitations as the Trust or
Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money, or lending securities on behalf of the Portfolio. All investment
management and any other activities of the Sub-Advisor shall at all times
be subject to the control and direction of the Advisor and the Trust's
Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor, shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor 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 l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor 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 Sub-Advisor 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 Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust 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.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, the Advisor agrees to pay the Sub-Advisor
a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be equal to 105% of
the Sub-Advisor's costs incurred in connection with rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement. The
Sub-Advisory Fee shall not be reduced to reflect expense reimbursements or
fee waivers by the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (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 Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor
or the Sub-Advisor as directors, officers or otherwise and that directors,
officers and stockholders of the Advisor or the Sub-Advisor are or may be
or become similarly interested in the Trust, and that the Advisor or the
Sub-Advisor may be or become interested in the Trust as a shareholder or
otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor 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 Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations hereunder.
The Sub-Advisor shall for all purposes be an independent contractor and not
an agent or employee of the Advisor or the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, the Trust or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph 9, this Agreement shall continue in force until July 31, 1995 and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph 9, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or with respect to the Portfolio by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and
agrees that any obligations of the Trust or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Advisor shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Advisor seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
11. Governing Law: 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 "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 3
FORM OF SUB-ADVISORY AGREEMENT
The proper name of the fund - Fidelity Asset Manager - will be inserted in
the fund's contract where indicated by (Name of Portfolio).
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY SECURITIES FUND ON BEHALF OF
(NAME OF PORTFOLIO)
AGREEMENT made this 1st day of October 1994 by and between Fidelity
Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Management & Research
(U.K.) Inc. (hereinafter called the "Sub-Advisor"); and Fidelity Charles
Street Trust, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Trust") on
behalf of (Name of Portfolio) (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management Contract
on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated persons
have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor to
perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor, the
Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the Portfolio
and the Advisor such factual information, research reports and investment
recommendations as the Advisor may reasonably require. Such information may
include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the Advisor,
the Sub-Advisor shall, subject to the supervision of the Advisor, manage
all or a portion of the investments of the Portfolio in accordance with the
investment objective, policies and limitations provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of 1940 (the "1940 Act") and rules thereunder,
as amended from time to time, and such other limitations as the Trust or
Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money or lending securities on behalf of the Portfolio. All investment
management and any other activities of the Sub-Advisor shall at all times
be subject to the control and direction of the Advisor and the Trust's
Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor, shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor 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 l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor 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 Sub-Advisor 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 Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust 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.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, the Advisor agrees to pay the Sub-Advisor
a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be equal to 110% of
the Sub-Advisor's costs incurred in connection with rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement. The
Sub-Advisory Fee shall not be reduced to reflect expense reimbursements or
fee waivers by the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers or
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (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 Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
6. Interested Persons: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor
or the Sub-Advisor as directors, officers or otherwise and that directors,
officers and stockholders of the Advisor or the Sub-Advisor are or may be
or become similarly interested in the Trust, and that the Advisor or the
Sub-Advisor may be or become interested in the Trust as a shareholder or
otherwise.
7. Services to Other Companies or Accounts: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor 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 Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations hereunder.
The Sub-Advisor shall for all purposes be an independent contractor and not
an agent or employee of the Advisor or the Trust.
8. Standard of Care: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, the Trust or to any shareholder of the Portfolio
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph 9, this Agreement shall continue in force until July 31, 1995 and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph 9, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees of the
Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or with respect to the Portfolio by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
10. Limitation of Liability: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and
agrees that any obligations of the Trust or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Advisor shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Advisor seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
11. Governing Law: 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 "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed on their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
The language to be added to Fidelity Asset Manager: Growth's and Fidelity
Asset Manager: Income's current contract is underlined; the language to be
deleted is set forth in [brackets].
The proper name of each fund - Fidelity Asset Manager: Growth, and Fidelity
Asset Manager: Income - will be inserted in each respective fund's contract
where indicated by (Name of Portfolio).
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY CHARLES STREET TRUST ON BEHALF OF (NAME OF PORTFOLIO)
AGREEMENT made this [21st day of September, 1990] (Fidelity Asset Manager:
Growth)[16th day of July, 1992] (Fidelity Asset Manager: Income) 1st day of
October, 1994, by and between [Fidelity Management & Research (Far
East) Inc., a Massachusetts corporation with principal offices at 82
Devonshire Street, Boston, Massachusetts (hereinafter called the
Sub-Adviser) and] Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts (hereinafter called the "Advisor"); Fidelity
Management & Research (Far East) Inc. (hereinafter called the
"Sub-Advisor"); and Fidelity Charles Street Trust, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Trust") on behalf of (Name of Portfolio)
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor [has] have entered into a Management
Contract [with Fidelity Charles Street Trust, a Massachusetts business
trust which may issue one or more shares of beneficial interest
(hereinafter called the Fund)] on behalf of [(Name of Portfolio)
(hereinafter called the Portfolio)] the Portfolio, pursuant to which the
Advisor is to act as investment [adviser] manager of the Portfolio; and
WHEREAS the Sub-Advisor [has personnel in Asia and the Pacific Basin and
was] and its subsidiaries and other affiliated persons have personnel in
various locations throughout the world and have been formed in part for the
purpose of researching and compiling information and recommendations with
respect to the economies of various countries, and securities of issuers
located [outside of North America, principally in Asia and the Pacific
Basin] in such countries, and providing investment advisory services in
connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
((1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
[1](((a) Investment Advice:)) [The Sub-Advisor shall act as an investment
consultant to the Advisor and] ((If and to the extent requested by the
Advisor, the Sub-Advisor shall provide investment advice to the Portfolio
and the Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice))shall furnish ((the
Portfolio and)) the Advisor such factual information, research reports and
investment recommendations [relating to non-U.S. issuers of securities
located in, and the economies of, various countries outside of the U.S.
all] as the Advisor may reasonably require. Such information may include
written and oral reports and analyses.
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money or lending securities on behalf of the Portfolio. All investment
management and any other activities of the Sub-Advisor shall at all times
be subject to the control and direction of the Advisor and the Trust's
Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor 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 l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor 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 Sub-Advisor 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 Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust 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.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
[(2)](((a) INVESTMENT ADVISORY FEE)): [The Sub-Advisor will be compensated
by the Advisor on the following basis for the services to be furnished
hereunder:] ((For services provided under subparagraph (a) of paragraph 1
of this Agreement,)) the Advisor agrees to pay the Sub-Advisor a monthly
((Sub-Advisory)) Fee((. The Sub-Advisory Fee shall be)) equal to 105% of
the Sub-Advisor's costs incurred in connection with [the] ((rendering the
services referred to in subparagraph (a) of paragraph 1 of this)) Agreement
[, said costs to be determined in relation to the assets of the Portfolio
that benefit from the services of the Sub-Adviser]. ((The Sub-Advisory Fee
shall not be reduced to reflect expense reimbursements or fee waivers by
the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers or
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (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 Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
[3]6. Interested Persons: ))It is understood that Trustees, officers, and
shareholders of the [Fund] Trust are or may be or become interested in the
Advisor [and] or the Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor [and] or the
Sub-Advisor are or may be or become similarly interested in the [Fund]
Trust, and that the Advisor or the Sub-Advisor may be or become interested
in the [Fund] Trust as a shareholder or otherwise.
[4. The Sub-Adviser shall for all purposes be an independent contractor
and not an agent or employee of the Adviser or the Fund. The Sub-Adviser
shall have no authority to act for, represent, bind or obligate the Adviser
or the Fund, and shall in no event have discretion to invest or reinvest
assets held by the Portfolio.]
[5]((7. Services to Other Companies or Accounts:)) The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor 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 Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations [with respect
to the rendering of investment advice] hereunder. ((The Sub-Advisor shall
for all purposes be an independent contractor and not an agent or employee
of the Advisor or the Trust.
((8. Standard of Care:)) In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, the [Fund] Trust or to any shareholder of the
Portfolio for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
[6]((9. Duration and Termination of Agreement; Amendments: ))
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph [6]9, this Agreement shall continue in force until July 31,
(Fidelity Asset Manager: Growth) [1992]; (Fidelity Asset Manager: Income)
[1994] ((1995)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph [6]9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] ((Trust)) who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or ((with respect to the Portfolio)) by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7]((10. Limitation of Liability:)) The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust ((or other organizational document)) of the [Fund]
((Trust)) and agrees that any obligations of the [Fund] Trust or the
Portfolio arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek satisfaction
of any such obligation from the Trustees or any individual Trustee.
((11. Governing Law: 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 "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
[Investment Company Act of] 1940 ((Act)) as now in effect or as hereafter
amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, ((and their respective seals to be hereunto affixed,)) all as
of the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 5
The language to be added to Fidelity Asset Manager: Growth's and Fidelity
Asset Manager: Income's current contract is underlined; the language to be
deleted is set forth in [brackets].
The proper name of each fund - Fidelity Asset Manager: Growth, and Fidelity
Asset Manager: Income - will be inserted in each respective fund's contract
where indicated by (Name of Portfolio).
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY CHARLES TRUST ON BEHALF OF (NAME OF PORTFOLIO)
AGREEMENT made this [21st day of September, 1990] (Fidelity Asset Manager:
Growth)[16th day of July, 1992] (Fidelity Asset Manager: Income) 1st day of
October, 1994, by and between [Fidelity Management & Research (U.K.)
Inc., a Massachusetts corporation with principal offices at 82 Devonshire
Street, Boston, Massachusetts (hereinafter called the Sub-Adviser) and]
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Advisor"); Fidelity Management & Research
(U.K.) Inc. (hereinafter called the "Sub-Advisor"); and Fidelity Charles
Street Trust, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Trust")
on behalf of (Name of Portfolio) (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor [has] have entered into a Management
Contract [with Fidelity Charles Street Trust, a Massachusetts business
trust which may issue one or more shares of beneficial interest
(hereinafter called the Fund)] on behalf of [(Name of Portfolio)
(hereinafter called the Portfolio)] the Portfolio, pursuant to which the
Advisor is to act as investment [adviser] manager of the Portfolio; and
WHEREAS the Sub-Advisor ((and its subsidiaries and other affiliated
persons)) [has] ((have)) personnel in [Western Europe] ((various locations
throughout the world)) and [was] ((have been)) formed ((in part ))for the
purpose of researching and compiling information and recommendations with
respect to the economies of various countries, and [issuers located outside
of North America, principally in Western Europe.] ((securities of issuers
located in such countries, and providing investment advisory services in
connection therewith;))
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, ((the Trust,)) the Advisor and the Sub-Advisor agree
as follows:
((1. Duties: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion
of the investments of the Portfolio to be advised or managed by the
Sub-Advisor shall be as agreed upon from time to time by the Advisor and
the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.))
[1.](((a) Investment Advice)): [The Sub-Adviser shall act as an
investment consultant to the Adviser and] ((If and to the extent requested
by the Advisor, the Sub-Advisor shall provide investment advice to the
Portfolio and the Advisor with respect to all or a portion of the
investments of the Portfolio, and in connection with such advice)) shall
furnish ((the Portfolio and ))the Advisor such factual information,
research reports and investment recommendations [relating to non-U.S.
issuers of securities located in, and the economies of, various countries
outside of the U.S. all] as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(((b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money or lending securities on behalf of the Portfolio. All investment
management and any other activities of the Sub-Advisor shall at all times
be subject to the control and direction of the Advisor and the Trust's
Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor 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 l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor 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 Sub-Advisor 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 Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust 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.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.))
[(2)](((a) INVESTMENT ADVISORY FEE:)) [The Sub-Adviser will be compensated
by the Adviser on the following basis for the services to be furnished
hereunder:] ((For services provided under subparagraph (a) of paragraph 1
of this Agreement, ))the Advisor agrees to pay the Sub-Advisor a monthly
((Sub-Advisory)) Fee((. The Sub-Advisory Fee shall be)) equal to 110% of
the Sub-Advisor's costs incurred in connection with [the] ((rendering the
services referred to in subparagraph (a) of paragraph 1 of this)) Agreement
[, said costs to be determined in relation to the assets of the Portfolio
that benefit from the services of the Sub-Adviser]. ((The Sub-Advisory Fee
shall not be reduced to reflect expense reimbursements or fee waivers by
the Advisor, if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers or
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1) for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (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 Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.))
[3]((6. Interested Persons:)) It is understood that Trustees, officers,
and shareholders of the [Fund] ((Trust)) are or may be or become interested
in the Advisor [and] or the Sub-Advisor as directors, officers or otherwise
and that directors, officers and stockholders of the Advisor [and] ((or))
the Sub-Advisor are or may be or become similarly interested in the [Fund]
((Trust,)) and that the Advisor or the Sub-Advisor may be or become
interested in the [Fund] ((Trust)) as a shareholder or otherwise.
[4. The Sub-Adviser shall for all purposes be an independent contractor
and not an agent or employee of the Adviser or the Fund. The Sub-Adviser
shall have no authority to act for, represent, bind or obligate the Adviser
or the Fund, and shall in no event have discretion to invest or reinvest
assets held by the Portfolio.]
[5]((7. Services to Other Companies or Accounts:)) The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the
Sub-Advisor 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 Agreement, interfere, in a material manner,
with the Sub-Advisor's ability to meet all of its obligations [with respect
to rendering investment advice] hereunder. ((The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. Standard of Care:)) In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Sub-Advisor, the Sub-Advisor shall not be subject to
liability to the Advisor, the [Fund] ((Trust)) or to any shareholder of the
Portfolio for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
[6]((9. Duration and Termination of Agreement; Amendments: ))
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph [6]9, this Agreement shall continue in force until July 31,
(Fidelity Asset Manager: Growth) [1992]; (Fidelity Asset Manager: Income)
[1994] ((1995)) and indefinitely thereafter, but only so long as the
continuance after such period shall be specifically approved at least
annually by vote of the [Fund's] ((Trust's)) Board of Trustees or by vote
of a majority of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph [6]9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] ((Trust)) who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or ((with respect to the Portfolio)) by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7]((10. Limitation of Liability:)) The Sub-Advisor is hereby expressly
put on notice of the limitation of shareholder liability as set forth in
the Declaration of Trust ((or other organizational document)) of the [Fund]
((Trust)) and agrees that any obligations of the [Fund] Trust or the
Portfolio arising in connection with this Agreement shall be limited in all
cases to the Portfolio and its assets, and the Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek satisfaction
of any such obligation from the Trustees or any individual Trustee.
((11. Governing Law: 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 "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
[Investment Company Act of] 1940 ((Act)) as now in effect or as hereafter
amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, ((and their respective seals to be hereunto affixed,)) all as
of the date written above.
[SIGNATURE LINES OMITTED]
TO BE UPDATED
EXHIBIT 2
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
RATIO OF RATIO OF NET
ADVISORY FEES ADVISORY FEES
TO AVERAGE TO AVERAGE RATIO OF
AVERAGE NET ASSETS NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PURSUANT TO PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) ADVISORY CONTRACT TO FMR
(B) ASSETS (B)
GROWTH AND INCOME
Market Index 4/30/93 $ 265.2 0.45% 0.44% 0.44%
Fidelity Fund (3) 6/30/93# 1,398.0 0.42(dagger) 0.42(dagger) 0.66(dagger)
Balanced (3) 7/31/93 2,154.5 0.53 0.53 0.93
Dividend Growth (3) 7/31/93** 9.2 0.62(dagger) -- 2.50(dagger)
Global Balanced (1) 7/31/93** 35.7 0.77(dagger) 0.77(dagger) 2.12(dagger)
Growth & Income 7/31/93 5,195.4 0.53 0.53 0.83
Puritan (3) 7/31/93 6,319.2 0.47 0.47 0.74
Advisor Income &
Growth 10/31/93 870.1 0.53 0.53 1.51
International Growth
& Income (2) 10/31/93 301.5 0.77 0.77 1.52
Advisor Equity
Portfolio Income (3) 11/30/93 19.1 0.50 0.50 1.77
Advisor Institutional
Equity Portfolio
Income (3) 11/30/93 167.8 0.50 0.50 0.79
Convertible Securities (3) 11/30/93 782.6 0.53 0.53 0.92
Equity Income II (3) 11/30/93 3,544.3 0.53 0.53 0.88
Variable Insurance
Products:
Equity-Income 12/31/93 952.1 0.53 0.53 0.62
Equity Income (3) 1/31/94 6,040.5 0.38 0.38 0.66
Real Estate (3) 1/31/94 417.9 0.63 0.63 1.13
Utilities Income (3) 1/31/94 1,394.4 0.53 0.53 0.86
U.S. Equity Index 2/28/94 1,647.0 0.28 -- 0.28
ASSET ALLOCATION
Asset Manager 9/30/93 4,704.2 0.72 0.72 1.09
Asset Manager:
Growth (3)(4) 9/30/93 566.0 0.73 0.63 1.19
Asset Manager:
Income (3)(4) 9/30/93 79.1 0.44 -- 0.65
Variable Insurance
Products II:
Asset Manager (3) 12/31/93 1,432.9 0.72 0.72 0.88
Index 500 12/31/93 20.8 0.28 -- 0.28
GROWTH
RATIO OF RATIO OF NET
ADVISORY FEES ADVISORY FEES
TO AVERAGE TO AVERAGE RATIO OF
AVERAGE NET ASSETS NET ASSETS EXPENSES
TO
INVESTMENT FISCAL NET ASSETS PURSUANT TO PAID AVERAGE
NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) ADVISORY CONTRACT TO FMR
(B)
ASSETS (B)
Small Cap Stock 4/30/94** 564.9 0.67(dagger) 0.67(dagger) 1.16(dagger)
Fidelity Fifty (3) 6/30/94** 41.8 0.62(dagger) 0.62(dagger) 1.73(dagger)
Blue Chip Growth 7/31/93 $ 589.5 0.72% 0.72% 1.25%
Low-Priced Stock (3) 7/31/93 2,048.8 0.76 0.76 1.12
OTC Portfolio 7/31/93 1,202.7 0.74 0.74 1.08
Advisor Strategic
Opportunities (3) 9/30/93 219.2 0.54 0.54 1.57
Destiny I 9/30/93# 2,920.5 0.60(dagger) 0.60(dagger) 0.65(dagger)
Destiny II 9/30/93# 1,100.8 0.71(dagger) 0.71(dagger) 0.84(dagger)
Strategic
Opportunities (3) 9/30/93 19.2 0.54 0.54 0.89
Advisor Emerging Asia
Fund, Inc. (5) 10/31/94** 108.5 1.00(dagger) 1.00(dagger) 2.05(dagger)
Advisor Global
Resources (3) 10/31/93 14.4 0.77 0.77 2.62
Advisor Growth
Opportunities 10/31/93 1,204.5 0.68 0.68 1.64
Advisor Overseas (2) 10/31/93 65.5 0.77 0.77 2.38
Canada (2) 10/31/93 61.1 0.86 0.86 2.00
Capital Appreciation (3) 10/31/93 1,139.1 0.48 0.48 0.86
Disciplined Equity (3) 10/31/93 622.1 0.70 0.70 1.09
Diversified
International (2) 10/31/93 119.1 0.73 0.73 1.47
Emerging Markets (2) 10/31/93 144.4 0.77 0.77 1.91
Europe (2) 10/31/93 488.3 0.64 0.64 1.25
Europe Capital
Appreciation (2) 10/31/94** 137.5 0.76(dagger) 0.76(dagger) 1.88(dagger)
Japan (1) 10/31/93 98.4 0.77 0.77 1.71
Latin America (2) 10/31/93** 114.6 0.77(dagger) 0.77(dagger) 1.94(dagger)
Overseas (2) 10/31/93 1,025.1 0.77 0.77 1.27
Pacific Basin (1) 10/31/93 251.2 0.80 0.80 1.59
Southeast Asia (1) 10/31/93** 139.3 0.77(dagger) 0.71(dagger) 2.00(dagger)
Stock Selector (3) 10/31/93 459.7 0.71 0.71 1.10
Value (3) 10/31/93 1,100.8 0.72 0.72 1.11
Worldwide (2) 10/31/93 148.9 0.78 0.78 1.40
Advisor Equity
Portfolio Growth (3) 11/30/93 176.0 0.66 0.66 1.84
Advisor Institutional
Equity Portfolio
Growth (3) 11/30/93 226.7 0.66 0.66 0.94
Emerging Growth (3) 11/30/93 620.6 0.80 0.80 1.19
Growth Company (3) 11/30/93 2,119.8 0.75 0.75 1.07
New Millennium 11/30/93** 187.5 0.68(dagger) 0.68(dagger) 1.32(dagger)
Retirement Growth (3) 11/30/93 2,404.1 0.76 0.76 1.05
Congress Street 12/31/93 $ 63.4 0.46% 0.46% 0.61%
Contrafund (3) 12/31/93 4,138.1 0.69 0.69 1.06
Exchange 12/31/93 187.7 0.54 0.54 0.57
Trend (3) 12/31/93 1,296.7 0.65 0.65 0.92
Mid-Cap Stock (3) 1/31/95** 2.5 0.57(dagger) -- 2.50(dagger)
Magellan (3) 3/31/94 29,816.4 0.76 0.76 0.99
Variable Insurance
Products:
Growth 12/31/93 1,016.0 0.63 0.63 0.71
Overseas (2) 12/31/93 398.7 0.77 0.77 1.03
Select Portfolios:
Air Transportation (3) 2/28/94 17.8 0.63 0.63 2.31
American Gold 2/28/94 313.4 0.63 0.63 1.49
Automotive (3) 2/28/94 133.8 0.63 0.63 1.68
Biotechnology (3) 2/28/94 549.9 0.63 0.63 1.61
Brokerage and Investment
Management (3) 2/28/94 69.3 0.63 0.63 1.77
Chemicals (3) 2/28/94 27.4 0.63 0.63 1.93
Computers (3) 2/28/94 41.2 0.63 0.63 1.89
Construction and
Housing (3) 2/28/94 42.1 0.63 0.63 1.66
Consumer Products (3) 2/28/94 9.0 0.63 0.49 2.48
Defense and
Aerospace (3) 2/28/94 4.6 0.63 -- 2.53
Developing
Communications (3) 2/28/94 177.0 0.63 0.63 1.56
Electronics (3) 2/28/94 54.3 0.63 0.63 1.67
Energy (3) 2/28/94 126.1 0.63 0.63 1.66
Energy Service (3) 2/28/94 94.0 0.63 0.63 1.65
Environmental
Services (3) 2/28/94 56.6 0.63 0.63 2.03
Financial Services (3) 2/28/94 168.8 0.62 0.62 1.63
Food and Agriculture (3) 2/28/94 110.1 0.62 0.62 1.64
Health Care (3) 2/28/94 552.3 0.63 0.63 1.55
Home Finance (3) 2/28/94 224.4 0.63 0.63 1.58
Industrial Equipment (3) 2/28/94 58.2 0.63 0.63 1.68
Industrial Materials (3) 2/28/94 33.8 0.64 0.64 2.08
Insurance (3) 2/28/94 22.4 0.63 0.63 1.93
Leisure (3) 2/28/94 88.1 0.63 0.63 1.53
Medical Delivery (3) 2/28/94 105.8 0.63 0.63 1.79
Multimedia (3) (6) 2/28/94 62.8 0.63 0.63 1.63
Natural Gas (3) 2/28/94** 45.1 0.63(dagger) 0.63(dagger) 1.93(dagger)
Paper and Forest
Products (3) 2/28/94 $ 27.0 0.64% 0.64% 2.07%
Precious Metals and
Minerals (3) 2/28/94 378.4 0.63 0.63 1.55
Regional Banks (3) 2/28/94 201.0 0.62 0.62 1.60
Retailing (3) 2/28/94 57.7 0.62 0.62 1.83
Software and Computer
Services (3) 2/28/94 172.2 0.63 0.63 1.57
Technology (3) 2/28/94 163.4 0.63 0.63 1.54
Telecommunications (3) 2/28/94 353.3 0.63 0.63 1.53
Transportation (3) 2/28/94 10.5 0.63 0.63 2.39
Utilities (3) 2/28/94 310.9 0.63 0.63 1.35
CURRENCY PORTFOLIOS
Deutsche Mark
Peformance, L.P. 12/31/93 8.4 0.50 -- 1.50
Sterling
Performance, L.P. 12/31/93 3.0 0.50 -- 1.50
Yen Performance, L.P. 12/31/93 4.0 0.50 -- 1.50
INCOME
Capital & Income (3) 4/30/93 1,771.1 0.54 0.54 0.91
Intermediate Bond (3) 4/30/93 1,434.0 0.32 0.27 0.61
Investment Grade Bond (3) 4/30/93 1,049.6 0.37 0.37 0.68
Short-Term Bond (3) 4/30/93 1,634.8 0.47 0.47 0.77
Spartan Government
Income 4/30/93 491.8 0.65 0.65 0.65
Spartan High Income 4/30/93 470.8 0.70 0.70 0.70
Spartan Short-Intermediate
Government 4/30/93 23.5 0.65 0.02 0.02
The North Carolina Capital
Management Trust:
Term Portfolio 6/30/93 83.4 0.41 0.41 0.41
Ginnie Mae 7/31/93 953.2 0.47 0.47 0.80
Mortgage Securities 7/31/93 428.9 0.47 0.47 0.76
Spartan Limited Maturity
Government 7/31/93 1,653.7 0.65 0.65 0.65
Spartan Ginnie Mae 8/31/93 766.9 0.65 0.41 0.41
Government Securities 9/30/93** 616.6 0.47(dagger) 0.47(dagger)
0.69(dagger)
Short-Intermediate
Government 9/30/93 167.6 0.47 0.18 0.61
Spartan Investment
Grade Bond (3) 9/30/93 59.1 0.65 0.65 0.65
Spartan Short-Term
Income (3) 9/30/93 $ 547.0 0.65% 0.20% 0.20%
Advisor Government
Investment 10/31/93 40.8 0.46 -- 0.68
Advisor High Yield 10/31/93 299.1 0.51 0.51 1.11
Advisor Short Fixed
Income 10/31/93 359.6 0.47 0.47 0.95
Advisor Institutional
Limited Term Bond 11/30/93 174.3 0.42 0.42 0.64
Advisor Limited
Term Bond 11/30/93 22.5 0.42 0.42 1.23
Advisor Short-Inter-
Mediate Government 11/30/94** 98.9 0.46(dagger) 0.46(dagger) 0.46(dagger)
Institutional Short-
Intermediate
Government 11/30/93 255.2 0.45 0.45 0.45
Advisor Emerging
Markets 12/31/94** 5.0 0.71(dagger) - 1.50(dagger)
Global Bond (2) 12/31/93 434.1 0.71 0.71 1.17
New Markets Income (2) 12/31/93** 114.6 0.71(dagger) 0.28(dagger)
1.24(dagger)
Short-Term World
Income (2) 12/31/93 400.1 0.62 0.62 1.00
Spartan Bond
Strategist (3) 12/31/93** 15.4 0.70(dagger) 0.70(dagger) 0.70(dagger)
Variable Insurance
Products:
High Income 12/31/93 343.1 0.51 0.50 0.64
Variable Insurance
Products II:
Investment Grade
Bond 12/31/93 98.9 0.47 0.47 0.68
Spartan Long-Term
Government Bond 1/31/94 85.8 0.65 0.65 0.65
U.S. Bond Index 2/28/94 190.2 0.32 -- 0.32
MONEY MARKET
Spartan Money Market (4) 4/30/93 4,841.1 0.30 0.30 0.30
Spartan U.S. Government
Money Market (4) 4/30/93 1,204.8 0.55 0.45 0.45
The North Carolina
Capital Management Trust:
Cash Portfolio (4) 6/30/93 1,538.3 0.38 0.38 0.39
Daily Money Fund:
Capital Reserves:
Money Market (4) 7/31/93 $ 443.3 0.50% 0.31% 0.95%
U.S. Government
Money Market (4) 7/31/93 269.5 0.50 0.38 0.95
Money Market (4) 7/31/93 1,554.7 0.50 0.50 0.61
U.S. Treasury (4) 7/31/93 2,841.7 0.50 0.50 0.57
U.S. Treasury
Income (4) 7/31/93 1,166.9 0.42 0.20 0.20
Spartan U.S. Treasury
Money Market (4) 7/31/93 2,138.9 0.55 0.42 0.42
Daily Income Trust (4) 8/31/93 2,302.8 0.30 0.30 0.57
Money Market Trust:
Domestic Money
Market (4) 8/31/93 690.3 0.42 0.42 0.42
Retirement Government
Money Market (4) 8/31/93 1,338.8 0.42 0.42 0.42
Retirement Money
Market (4) 8/31/93 1,661.1 0.42 0.42 0.42
U.S. Government (4) 8/31/93 297.5 0.42 0.42 0.42
U.S. Treasury (4) 8/31/93 181.5 0.42 0.42 0.42
U.S. Government
Reserves (4) 9/30/93 1,139.5 0.43 0.43 0.73
Cash Reserves (4) 11/30/93 9,761.4 0.14 0.13 0.48
State and Local Asset
Management Series:
Government Money
Market (4) 11/30/93 844.5 0.43 0.43 0.43
Variable Insurance
Products:
Money Market (4) 12/31/93 307.3 0.14 0.13 0.22
Select Money Market (4) 2/28/94 462.6 0.13 0.13 0.72
Institutional Cash:
Domestic Money
Market (4) 3/31/94 762.8 0.20 0.12 0.18
Money Market :
Class A (4) 3/31/94 5,263.1 0.20 0.15 0.18
Class B (4) 3/31/94** 34.4 0.20(dagger) 0.15(dagger) 0.50(dagger)
U.S. Government (4) 3/31/94 4,830.3 0.20 0.14 0.18
U.S. Treasury (4) 3/31/94 1,898.0 0.20 0.15 0.18
U.S. Treasury II:
Class A (4) 3/31/94 4,916.5 0.20 0.14 0.18
Class B (4) 3/31/94** 1.5 0.20(dagger) 0.14(dagger) 0.50(dagger)
TAX-EXEMPT INCOME
Institutional Tax-
Exempt Cash (4) 5/31/93 $ 2,517.7 0.20% 0.14% 0.18%
Daily Money Fund:
Capital Reserves:
Municipal Money
Market (4) 7/31/93 91.7 0.50 0.22 0.95
Spartan Aggressive
Municipal 8/31/93** 6.4 0.60(dagger) 0.60(dagger) 0.60(dagger)
Spartan Intermediate
Municipal 8/31/93** 82.6 0.55(dagger) - -
Spartan Maryland Municipal
Income 8/31/93** 13.4 0.55(dagger) -- --
Spartan Municipal
Income 8/31/93 869.8 0.55 0.47 0.47
Spartan Municipal
Money Market (4) 8/31/93 1,561.2 0.50 0.27 0.27
Spartan Short-
Intermediate
Municipal 8/31/93# 819.9 0.55(dagger) 0.55(dagger) 0.55(dagger)
Advisor High Income
Municipal 10/31/93 316.4 0.42 0.42 0.92
Daily Tax-Exempt
Money (4) 10/31/93 504.9 0.50 0.50 0.61
Spartan New Jersey
Municipal Money
Market (4) 10/31/93 329.1 0.50 0.44 0.44
Tax-Exempt Money
Market Trust (4) 10/31/93 2,789.6 0.27 0.27 0.49
Advisor Institutional
Limited Term
Tax-Exempt 11/30/93 22.1 0.42 0.24 0.65
Advisor Limited
Term Tax-Exempt 11/30/93 15.4 0.42 -- 0.90
Advisor Short-Inter-
Mediate Tax Exempt 11/30/94** 2.9 0.40(dagger) - 0.75(dagger)
Connecticut Municipal
Money Market (4) 11/30/93 300.3 0.42 0.42 0.61
High Yield Tax-Free 11/30/93 2,161.9 0.42 0.42 0.56
New Jersey Tax-Free
Money Market (4) 11/30/93 357.5 0.42 0.42 0.63
Spartan Connecticut
Municipal:
High Yield 11/30/93 $ 450.4 0.55% 0.55% 0.55%
Money Market (4) 11/30/93 128.5 0.50 0.24 0.24
Spartan Florida Municipal:
Income 11/30/93 377.5 0.55 0.25 0.25
Money Market (4) 11/30/93 204.4 0.50 0.18 0.18
Spartan New Jersey
Municipal High Yield 11/30/93 399.2 0.55 0.55 0.55
Aggressive Tax-Free 12/31/93 891.9 0.47 0.47 0.64
Insured Tax-Free 12/31/93 426.3 0.42 0.42 0.61
Limited Term
Municipals 12/31/93 1,174.6 0.41 0.41 0.57
Michigan Tax-Free:
High Yield 12/31/93 528.9 0.42 0.42 0.59
Money Market (4) 12/31/93 161.3 0.42 0.41 0.62
Minnesota Tax-Free 12/31/93 320.0 0.42 0.42 0.61
Municipal Bond 12/31/93 1,279.8 0.37 0.37 0.49
Ohio Tax-Free:
High Yield 12/31/93 442.1 0.41 0.41 0.57
Money Market (4) 12/31/93 244.4 0.42 0.42 0.59
Spartan Pennsylvania
Municipal:
High Yield 12/31/93 283.2 0.55 0.55 0.55
Money Market (4) 12/31/93 218.8 0.50 0.50 0.50
Massachusetts Tax-Free:
High Yield 1/31/94 1,365.4 0.41 0.41 0.54
Money Market (4) 1/31/94 577.0 0.41 0.41 0.66
New York Tax-Free:
High Yield 1/31/94 477.9 0.41 0.41 0.58
Insured 1/31/94 395.2 0.41 0.41 0.58
Money Market (4) 1/31/94 564.0 0.41 0.41 0.62
Spartan Massachusetts
Municipal Money
Market (4) 1/31/94 339.5 0.50 0.40 0.40
Spartan New York
Municipal:
High Yield 1/31/94 427.7 0.55 0.55 0.55 Intermediate 1/31/94** 4.3
0.55(dagger) -- --
Money Market (4) 1/31/94 446.6 0.50 0.50 0.50
California Tax-Free:
High Yield 2/28/94 $ 588.0 0.41% 0.41% 0.57%
Insured 2/28/94 299.5 0.41 0.29 0.48
Money Market (4) 2/28/94 540.0 0.41 0.41 0.64
Spartan California
Municipal:
High Yield 2/28/94 598.5 0.55 0.52 0.52
Intermediate 2/28/94** 7.7 0.55(dagger) -- --
Money Market (4) 2/28/94 944.0 0.50 0.21 0.21
(a) All fund data are as of the fiscal year end noted in the chart or as of
March 31, 1994, if fiscal year end figures are not yet available. Average
net assets are computed on the basis of average net assets of each fund at
the close of business on each business day throughout its fiscal period.
(b) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations, or paid by or due
from brokers to which certain portfolio trades have been directed.
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
(1) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: Fidelity Management
& Research (U.K.) Inc. (FMR U.K.), Fidelity Management & Research
(Far East) Inc. (FMR Far East), Fidelity Investments Japan Ltd. (FIJ),
Fidelity International Investment Advisors (FIIA), and Fidelity
International Investment Advisors (U.K.) Limited (FIIAL U.K.), with respect
to the fund.
(2) Fidelity Management & Research Company has entered into
sub-advisory agreements with the following affiliates: FMR U.K., FMR Far
East, FIJ (New Markets Income and Advisor Emerging Markets only), FIIA, and
FIIAL U.K., with respect to the fund.
(3) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect to the
fund.
(4) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to the fund.
(5) Fidelity Management & Research Company has entered into
sub-advisory agreements with FIIA and FIJ, with respect to the fund.
(6) Effective April 25, 1994, Select Broadcast and Media Portfolio has been
renamed to Multimedia Portfolio.
CHA1-PXS-794 CUSIP #316069103/FUND #314
CUSIP #316069301/FUND #321
CUSIP #316069103/FUND #314
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 CHARLES STREET TRUST: FIDELITY ASSET MANAGER
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Richard J. Flynn, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
FIDELITY CHARLES STREET TRUST as indicated above 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
September 21, 1994 at 9:00 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
314, 321, 328 HH
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 twelve nominees specified below as [ ]FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Price Waterhouse as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of Trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting it to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
8. To adopt a Sub-Advisory Agreement with FMR Far FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
East for the fund.
9. To adopt a Sub-Advisory Agreement with FMR U.K. FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
for the fund.
13. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
limitation concerning real estate.
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning diversification.
15. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
limitation concerning the issuance of senior securities.
16. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
limitation concerning short sales of securities.
17. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning margin purchases.
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning the purchase and sale of physical
commodities.
19. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning lending.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning borrowing.
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning the concentration of its
investments in a single industry.
CHA1-PXC-794 CUSIP# 316069103/FUND# 314
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 CHARLES STREET TRUST: FIDELITY ASSET MANAGER: GROWTH
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Richard J. Flynn, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
FIDELITY CHARLES STREET TRUST as indicated above 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
September 21, 1994 at 9:00 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
314, 321, 328 HH
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 twelve nominees specified below as [ ]FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Price Waterhouse as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of Trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting it to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
10. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
FMR Far East for the fund.
11. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
FMR U.K. for the fund.
12. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
limitation concerning the purchase and sale of physical
commodities.
13. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
limitation concerning real estate.
14. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
limitation concerning diversification.
20. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning borrowing.
21. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning the concentration of its
investments in a single industry.
CHA1-PXC-794 CUSIP# 316069301/FUND# 321
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.
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FIDELITY CHARLES STREET TRUST: FIDELITY ASSET MANAGER: INCOME
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Richard J. Flynn, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
FIDELITY CHARLES STREET TRUST as indicated above 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
September 21, 1994 at 9:00 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
314, 321, 328 HH
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 twelve nominees specified below as [ ]FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann, and Thomas R. Williams.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Price Waterhouse as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust.
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of Trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting it to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
7. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
fund.
10. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
FMR Far East for the fund.
11. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
FMR U.K. for the fund.
CHA1-PXC-794 CUSIP# 316069103/FUND# 314