SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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
The North Carolina Capital Management Trust
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:
CASH PORTFOLIO AND TERM PORTFOLIO
FUNDS OF THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
82 Devonshire Street, Boston, Massachusetts 02109
(800) 222-3232
(704) 372-8798
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Cash Portfolio and Term Portfolio (each a "fund" or
collectively, the "funds") of The North Carolina Capital Management Trust
(the "Trust") will be held at the Omni Charlotte Hotel, Suite___, 222 East
Third Street, Charlotte, North Carolina 28202, on January 22, 1996, 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 approve amendments to the fee schedule for the Management Contract
for each fund.
2. To approve amendments to the fee schedule for the Distribution and
Service Plan for each fund.
3. To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the Trust.
The Board of Trustees has fixed the close of business on November 24, 1995
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
December 14, 1995
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help you avoid the time and expense involved in validating your
vote if you fail to execute your proxy card properly.
1. LOCAL UNITS: The name of the unit and the name of the authorized
finance official exactly as it appears in the registration on the proxy
card.
2. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
3. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
4. 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) City of ABC Mary Jones, Treasurer
2) City of ABC Mary Jones, Treasurer
c/o Mary Jones, Treasurer
B. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
C. 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
D. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
CASH PORTFOLIO AND TERM PORTFOLIO OF
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
TO BE HELD ON JANUARY 22, 1996
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of The North
Carolina Capital Management Trust (the "Trust") to be used at the Special
Meeting of Shareholders of Cash Portfolio and Term Portfolio (each a "fund"
or collectively, the "funds") and at any adjournments thereof, to be held
January 22, 1996 at 9:00 a.m. at the Omni Charlotte Hotel, 222 East Third
Street, Suite ___, Charlotte, North Carolina 28202. 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 December 14, 1995. In order to save the funds' money, FMR
encourages you to return your proxy card by January 5, 1996. 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 Fidelity Management & Research Company ("FMR"), the funds'
investment adviser. The principal business address of FMR and Fidelity
Distributors Corporation ("FDC"), the funds' principal underwriter, is 82
Devonshire Street, Boston, Massachusetts.
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 that are not revoked, will be voted at the Meeting. Shares
represented by such proxies will be voted in accordance with the
instructions thereon. If no specification is made on a proxy card, it will
be voted FOR the matters specified on the proxy card. Only proxies voted
will be counted towards establishing a quorum. Broker non-votes are not
considered voted for this purpose. Shareholders should note that while
votes to ABSTAIN will count toward establishing a quorum, passage of a
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.
On November 24, 1995 there were ____________ shares of Cash Portfolio and
__________ shares of Term Portfolio issued and outstanding. On that date,
to the knowledge of the Trust, substantial (5% or more) record ownership of
Cash Portfolio shares was as follows: ____________. Also on that date, to
the knowledge of the Trust, substantial (5% or more) record ownership of
Term Portfolio shares was as follows: ____________. [To the knowledge of
the Trust, no other shareholder owned of record or beneficially more than
5% of the outstanding shares of either fund on that date other than shares
of _________ held by FMR or its affiliates.] Shareholders of record at the
close of business on November 24, 1995, will be entitled to vote at the
Meeting. Each such shareholder will be entitled to one vote for each share
of a fund held on that date.
FOR A FREE COPY OF EACH FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE
30, 1995 CALL STERLING CAPITAL DISTRIBUTORS, INC., TOLL-FREE AT (800)
222-3232, OR LOCALLY AT (704) 372-8798, OR WRITE TO STERLING CAPITAL
DISTRIBUTORS, INC. AT ONE FIRST UNION CENTER, 301 SOUTH COLLEGE STREET,
SUITE 3200, CHARLOTTE, NORTH CAROLINA 28202.
VOTE REQUIRED: APPROVAL OF PROPOSALS 1 AND 2 REQUIRES THE AFFIRMATIVE VOTE
OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE
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 VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE. A PLURALITY OF ALL VOTES CAST AT THE MEETING
IS SUFFICIENT TO APPROVE PROPOSAL 3.
1. TO APPROVE AMENDMENTS TO THE FEE SCHEDULE OF EACH FUND'S MANAGEMENT
CONTRACT.
The Board of Trustees, including those Trustees who are not "interested
persons" of the Trust or of FMR (the "Independent Trustees"), has approved,
and recommends that shareholders of each fund approve, amendments to the
fee schedule of each fund's management contract with FMR (the "Management
Contracts") which would reduce the management fees payable by each fund to
FMR. The proposed amendments to the fee schedule of the Management
Contracts would revise the current fee schedules to include additional fee
breakpoints. No other amendments or changes to the Management Contracts are
proposed at this time.
FMR is the investment adviser to Cash Portfolio and Term Portfolio
pursuant to separate Management Contracts each dated December 13, 1990.
Each fund's Management Contract was last approved by shareholders on
December 12, 1990. (For more information on FMR, refer to the section
entitled "Activities and Management of FMR" beginning on page __.)
Under the Management Contracts, each fund pays FMR an all-inclusive,
monthly management fee which is calculated based on the average daily net
assets of each fund. If approved, this proposal would modify each fund's
all-inclusive management fee by instituting new fee breakpoints and
providing for lower management fee rates at all asset levels. Proposal 2
to this proxy statement presents proposed changes to each fund's
Distribution and Service Plan fee schedule.
If the proposed changes to each fund's management fee schedule are
approved by shareholders, these changes will take effect on February 1,
1996 (or, if approved later, the first day of the first month following
approval) and will remain in effect through July 31, 1996 and thereafter,
but only so long as the continuance after such date is approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of Independent Trustees and (ii) the vote of either
a majority of the Trustees or by the vote of a majority of the outstanding
shares of each fund. The shareholders of each fund will vote separately on
this Proposal. If the proposed changes to the fee schedule of the
Management Contracts are not approved with respect to a fund, that fund's
existing Management Contract fee schedule will continue in effect through
July 31, 1996, and thereafter subject to continuation by the Board of
Trustees.
PROPOSED MODIFICATION OF MANAGEMENT FEE SCHEDULE. Copies of the current
Management Contract for each fund, with amendments to the management fee
schedule, are attached to this Proxy Statement as Exhibits 1 and 2 on pages
__ and __. The management fee rate for each fund varies based on the
fund's average daily net assets. As each fund's net assets increase, the
marginal management fee rate decreases according to a schedule of
breakpoints that provides for lower fees when assets increase. The rates
shown in each table below are marginal rates. For example, the current
management fee schedule applies a 0.41% rate against the first $100 million
in fund assets, a 0.40% rate against the next $100 million in assets, and
so on. The proposed fee schedule would apply a 0.365% rate against the
first $400 million in assets, a 0.360% rate against the first $400 million
in assets, and so on. In order to reduce each fund's total expenses, the
proposed amendments to each fund's management fee schedule would
restructure the breakpoints and percentages used to calculate the
management fee as illustrated in the following tables:
Management Fee Schedules
Current Proposed
Average Net Total Average Net Total
Assets Management Assets Management
(In Millions) Fee Rate (In Millions) Fee Rate
$0-100 .41% $0-400 .365%
$100-200 .40% $400-800 .360%
$200-800 .39% $800-1,200 .355%
over $800 .38% $1,200-1,600 .350%
$1,600-2,000 .340%
over $2,000 .330%
COMPARISON OF MANAGEMENT FEE. The following chart compares each fund's
management fee under the terms of the current fee schedule of its
Management Contract for the fiscal year ended June 30, 1995 to those fees
the funds would have incurred if the proposed amendments to the management
fee schedules had been in effect during that same period:
Present Proposed Percentage
Management Fee Management Fee Difference
Cash Portfolio $5,555,766 $5,128,746 ( 7.69%)
Term Portfolio $ 261,780 $ 232,344 (11.25%)
As illustrated above, the proposed changes to the management fee schedule
of each fund's Management Contract would have resulted in lower management
fees for each fund for the fiscal year ended June 30, 1995.
Effective November 1, 1995, FMR has voluntarily implemented the proposed
amendments to the fee schedules of each fund's Management Contract. FMR
may cease its voluntary implementation of the proposed amendments to each
fund's management fee schedule at any time.
MATTERS CONSIDERED BY THE BOARD OF TRUSTEES. The proposed amendments to
the fee schedule of the Management Contracts were approved by the Board of
Trustees of the Trust, including all the Independent Trustees, at a meeting
held on October 3, 1995. The Board of Trustees, including the Independent
Trustees, believes that matters bearing on the appropriateness of each
fund's management fees are considered at most, if not all, of their
meetings.
The Board of Trustees, including the Independent Trustees, considered the
annual renewal of the Management Contract for each fund at meetings held on
July 26, 1995 and October 3, 1995. At the July meeting, the Trustees
requested that a revised schedule be presented for consideration at the
October Board meeting and renewed the current fee schedule until that time.
At the October meeting, the Board reviewed materials relating to the
proposed amendments that had been provided to them in advance of the
meeting. The Board asked questions relating to the proposed changes to the
fee schedule of each fund's Management Contract, and had the opportunity to
request further information in connection with its evaluation of the
proposed amendments.
Information Received By the Trustees. In connection with the October
Board meeting, the Board of Trustees received materials relating to the
consideration of the proposed amendments to the fee schedules of each
fund's Management Contract. These materials included: (i) information on
the investment performance of each fund, and how each fund's performance
compared with other institutional funds with the same investment objective
and similar asset sizes to the respective funds; (ii) detailed analyses of
how each fund's expense ratio, and management fee, compared with such other
funds; (iii) performance comparison information for each fund versus
various relevant indices; (iv) sales and redemption data with respect to
each fund; (v) information regarding the performance of other investments
permitted under North Carolina state law; (vi) The economic outlook and the
general investment outlook in the markets in which each fund invests; and
(vii) notable changes in each fund's investments.
The Board of Trustees, including the Independent Trustees, also considered
matters such as (1) FMR's financial condition, (2) arrangements with
respect to the distribution of each fund's shares, (3) the procedures
employed to determine the value of each fund's assets, and (4) FMR's
management of the relationships with each fund's custodian.
Matters considered by the Board of Trustees and the Independent Trustees
in connection with their approval of the proposed amendment to the fee
schedules of each fund's Management Contract included the following:
Performance. The Board of Trustees reviewed each fund's investment
performance as well as the performance of other funds in its peer group,
such as certain institutional money market and bond funds, as compared with
certain indices.
FMR's Personnel and Management Methods. The Board of Trustees and the
Independent Trustees reviewed the background of each fund's portfolio
manager. In addition, the Board reviewed each fund's investment objective
and discipline. The Board also reviewed the abilities of FMR Texas Inc.
("FMR Texas"), the sub-adviser for the Cash Portfolio. (For more
information on FMR Texas, refer to the section entitled "Activities and
Management of FMR Texas" beginning on page __.) The Independent Trustees
also had discussions with senior management of FMR and FMR Texas
responsible for investment operations. Among other things, the Board and
the Independent Trustees considered the size, education and experience of
each entity's investment staff, its use of technology, and FMR's and FMR
Texas's approach to recruiting, training and retaining portfolio managers
and other research, advisory and management personnel.
Nature and Quality of Other Services. The Board of Trustees and the
Independent Trustees considered the nature, quality, cost and extent of
administrative and shareholder services performed by FMR, FMR Texas and
their affiliated companies, both under the Management Contracts and under
separate agreements covering transfer agency functions and pricing and
bookkeeping. The Board of Trustees and the Independent Trustees also
considered the nature and extent of FMR's supervision of third party
service providers, principally custodians.
Expenses. The Board of Trustees and the Independent Trustees considered
each fund's expense ratio and the expense ratios of funds with the same
investment objective and a similar asset size to each fund. They also
considered the amount and nature of fees paid by shareholders of each fund.
Profitability. The Board of Trustees and the Independent Trustees
considered the level of FMR's profits with respect to the management of the
funds. This consideration included an extensive review of FMR's
methodology in allocating its costs to the management of the funds. The
Board of Trustees and the Independent Trustees concluded that the cost
allocation methodology employed by FMR has a reasonable basis and is
appropriate in light of all of the circumstances. They considered the
profits realized by FMR in connection with the operation of the funds and
whether the amount of profit is a fair entrepreneurial profit for the
management of the funds. They also considered the profits realized from
non-fund business which may benefit from or be related to the funds'
business. The Board of Trustees and the Independent Trustees also
considered FMR's profit margins in comparison with available industry data,
both accounting for and ignoring marketing expenses.
Economies of Scale. The Board of Trustees and the Independent Trustees
considered whether there have been economies of scale with respect to the
management of the funds and other funds advised by FMR, whether the funds
have appropriately benefitted from any economies of scale, and whether
there is potential for realization of any further economies of scale.
Other Benefits to FMR. The Board of Trustees and the Independent Trustees
also considered the character and amount of fees paid by each fund to FMR
for services provided by FMR and its affiliates. The Trustees also
considered other related potential benefits to FMR, such as its enhanced
ability to obtain further business in the North Carolina government market
and other markets, as a result of its relationship with the funds. In sum,
the Board of Trustees and the Independent Trustees considered all the
"fall-out" benefits that may accrue to FMR and its affiliates by virtue of
their relationship with the funds.
CONCLUSION. In considering the proposed amendments to the fee schedule of
each fund's Management Contract, the Board of Trustees including the
Independent Trustees concluded that the proposal, which would result in a
reduction in the management fee rate and the implementation of new fee
breakpoints, was in the best interest of each fund's shareholders. Such
changes would reduce the total expenses of each fund without reducing the
services provided to each fund. Thus, the Board of Trustees and the
Independent Trustees voted to approve the submission of the proposed
amendments to the fee schedule of each fund's Management Contract to
shareholders of each fund and recommend that shareholders vote FOR the
proposed amendments.
Approval of the proposed amendments to the fee schedules is contingent
upon shareholder approval of the proposal to amend the fee schedule of each
fund's Distribution and Service Plan. (See the following proposal).
2. TO APPROVE AMENDMENTS TO THE FEE SCHEDULE OF THE DISTRIBUTION AND
SERVICE PLAN FOR EACH FUND.
The Board of Trustees, including the Independent Trustees, has approved,
and recommends that shareholders approve, amendments to the fee schedule of
each fund's Distribution and Service Plan (the "Plans"). Rule 12b-1 (the
"Rule") under the 1940 Act provides that in order for an investment company
(e.g., a mutual fund) to act as a distributor of its shares, a written plan
"describing all material aspects of the proposed financing of distribution"
must be adopted by the company. Pursuant to the Plans, FMR pays FDC a
monthly 12b-1 fee from fees collected pursuant to its Management Contract.
FDC has entered into a Distribution and Service Agent Agreement with
Sterling pursuant to which FDC pays these 12b-1 fees, in full, to Sterling.
The proposed amendments to the fee schedule of each fund's Plan would
modify the amount that FMR pays FDC, and therefore that FDC pays to
Sterling, to provide for lower 12b-1 fees at asset levels greater than $800
million. At asset levels up to $200 million, however, the proposed
amendments would provide for Sterling, through FDC, to receive higher 12b-1
fees than those currently in effect under the Plans. No other amendments
or changes to the Plans are proposed at this time.
The Plans for Cash Portfolio and Term Portfolio were originally approved
by fund shareholders at their June 28, 1983 and September 16, 1987
meetings, respectively. Each Plan was last amended on December 12, 1990.
Under the Plans, FDC and its agent, Sterling, print and distribute
prospectuses and promotional literature, provide cash management advice
through financial management seminars and newsletters to local government
entities in North Carolina, maintain a local office, and maintain an
advisory board composed of local government financial officers. In
addition, Sterling assumes responsibility for certain shareholder servicing
functions under the Plans.
If the proposed changes to each fund's 12b-1 fee schedule are approved by
shareholders, the changes to the Plans will take effect on February 1, 1996
(or, if approved later, the first day of the first month following
approval) and will remain in effect through July 31, 1996 and thereafter,
but only as long as each Plan's continuance is approved at least annually
by (i) the vote cast in person at a meeting called for the purpose, of a
majority of the Independent Trustees and, (ii) the vote of either a
majority of the Trustees or by the vote of a majority of the outstanding
shares of the fund. If the proposed changes to the fee schedule of the
Plans are not approved with respect to a fund, the existing fee schedule
under that fund's Plan will continue in effect through July 31, 1996, and
thereafter subject to continuation by the Board of Trustees.
PROPOSED MODIFICATION OF DISTRIBUTION AND SERVICE FEE SCHEDULES. Copies
of the current Distribution and Service Plan for each fund, with amendments
to the 12b-1 fee schedule, are attached to this Proxy Statement as Exhibits
3 and 4 on pages __ and __. Amendments to the fee schedule of each fund's
Management Contract have been approved by the Trustees and are also
submitted for shareholder approval. (See Proposal 1.) In conjunction with
that proposal, which reduces each fund's total expenses, the proposed
amendments to the fee schedule of each fund's Plan would restructure the
marginal 12b-1 fee rates by providing for increased 12b-1 fees at asset
levels up to $200 million. Fees would remain unchanged for asset levels
ranging from $200-$800 million and would decrease from their current levels
for assets in excess of $800 million, as illustrated in the table below.
For example, the current 12b-1 fee schedule applies a 0.41% rate against
the first $100 million in assets, a 0.15% rate on the next $100 million in
assets, a 0.16% rate on assets in excess of $200 million through $800
million, and a 0.17% rate on assets in excess of $800 million. The
proposed 12b-1 fee schedule would apply a 0.16% rate on the first $1.6
billion in assets, a 0.155% rate on the next $400 million in assets, and, a
0.15% rate on assets in excess of $2 billion.
Distribution and Service Fees
Current Fee Schedule Proposed Fee Schedule
Average Net Assets Distribution and Average Net Assets Distribution and
(In Millions) Service Fee (In Millions) Service Fee
$0-100 .140% $0-400 .160%
$100-200 .150% $400-800 .160%
$200-800 .160% $800-1,200 .160%
over $800 .170% $1,200-1,600 .160%
$1,600-2,000 .155%
over $2,000 .150%
While the fees paid to FDC, and then subsequently passed-through to
Sterling, will increase at asset levels up to $200 million, if the proposal
is approved, the total expenses of each fund will not increase because FDC,
and then Sterling, are paid by FMR from fees collected under the Management
Contracts.
MATTERS CONSIDERED BY THE BOARD OF TRUSTEES. Factors considered by the
Board of Trustees in connection with its approval of the proposed
amendments to the fee schedule of each fund's Plan are summarized in the
following paragraphs.
COMPARISON OF 12B-1 FEES. The following chart compares each fund's 12b-1
fees paid to Sterling under the terms of the current fee schedule to those
fees which would have been if the proposed fee schedule had been in effect
for the fiscal year ended June 30, 1995:
12B-1 FEES
Fiscal Year Ended 6/30/95
As % of As % of
Current fund's Proposed fund's
Fee Average Fee Average
Schedule Net Assets Schedule Net Assets
Cash Portfolio $2,361,376 0.16% $ %
Term Portfolio $ 91,592 0.14% $ %
Circumstances Making Plans Necessary. The Board of Trustees, including
the Independent Trustees, considered the nature and cause of the
circumstances which make continuance of the Plans necessary or appropriate.
The Board recognized that shares of each fund must be sold to the local
treasurer or other financial officer in North Carolina. This distribution
function involves both a substantial educational process against a
historical background of depositing these monies in local banks. In
addition, the Board, including the Independent Trustees, noted that the
North Carolina Local Government Commission requires the funds to maintain
at least one office in the state for the convenience of their shareholders.
Accordingly, the Board, including the Independent Trustees, believes
circumstances necessitate a local presence, as is provided by Sterling, for
both the selling and ongoing servicing activities of each fund.
The Ways In Which the Plans Address Such Circumstances. The Board of
Trustees considered the ways in which the Plans would address the
circumstances described above, including the nature and approximate amount
of expenditures, the relationship of such expenditures to the overall cost
structure of the funds; the nature of the anticipated benefits, and the
time it would take for those benefits to be achieved. The Board concluded
that Sterling provides the local identity, promotional effort, educational
and training activities, communications and servicing which the Board,
including the Independent Trustees, continues to believe are necessary to
successfully market the funds in North Carolina. In light of Sterling's
successful performance, the Board, including the Independent Trustees,
believes that the proposed changes to the fee schedules of each fund's
Plans would benefit each fund and its shareholders.
The Merits Of Possible Alternative Plans. The Board of Trustees,
including the Independent Trustees, considered the merits of other
distribution plans. The Board, including the Independent Trustees,
acknowledged that Sterling's local presence and capabilities for increasing
and maintaining sales of each fund's shares in the North Carolina market
are key benefits of the Plans. Any alternative arrangements which
contemplated exclusive, or even substantial, use of FDC's Boston or
Southeast Regional personnel would not, in the judgment of the Board and of
the Independent Trustees, provide an opportunity for success. Moreover,
given the nature of the Trust, the Board, including the Independent
Trustees, believes that an attempt to pay for selling expenses through a
front-end or back-end sales charge is not feasible.
Interrelationship Between the Plans And the Activities Of Other Persons
Financing Distribution of the funds' Shares. The Board of Trustees,
including the Independent Trustees, has considered the interrelationship
between the Plans and the activities of any other person who finances
distribution of the funds' shares, including whether any payments made by
the funds to other persons are made in such a manner as to constitute the
indirect financing of distribution by the funds. The Board noted that FMR,
through its Management Contract, was the only other party receiving
payments from the funds. The Board, including the Independent Trustees,
believes the amounts FMR retains after payment of 12b-1 fees to FDC are
fair and reasonable compensation for FMR's advisory and management
responsibilities and, other than pursuant to 12b-1 arrangements, do not
involve the indirect financing of distribution expenses. The Board,
including the Independent Trustees, noted that the result of Proposal 2
would be to reduce the amounts retained by FMR under its Management
Contract with each of the funds.
Benefits of the Plans To Other Persons. The Board of Trustees, including
the Independent Trustees, has considered the possible benefits of the Plans
to other persons relative to those expected to inure to the funds. The
Board, including the Independent Trustees, acknowledged that as the assets
of each fund increase, FMR and Sterling will benefit, since FMR's and
Sterling's compensation is based upon fund asset levels, although the
amount of compensation received by those entities as a percentage of fund
assets, decreases as assets increase above specified breakpoints. The
Board believes that the fees payable to FMR and Sterling are fair and
reasonable with respect to the investment advisory and distribution
services FMR and Sterling, respectively, to provide to the funds.
Effect Of The Plans On Existing Shareholders and Whether The Anticipated
Benefits of the Plans Have Been Achieved. The Board of Trustees, including
the Independent Trustees, considered the effect of the Plans on each fund's
existing shareholders. The Board, including the Independent Trustees,
recognized that Sterling serves existing shareholders by its local presence
and provision of facilities, personnel and shareholder services; marketing
and promotional activities; production of a monthly newsletter; and
advisory board organization and participation. The Board also considered
whether the anticipated benefits of the Plans had materialized. The Board
acknowledged that such was the case taking into account current and
historical asset levels and the quality of Sterling's services to the
Trust.
Assistance From Independent Counsel Or Other Expert. The Board of
Trustees, including the Independent Trustees, took into consideration the
advice it received from independent counsel with respect to the approval of
the revised fee schedule under the Plans.
CONCLUSION. The Board, including the Independent Trustees, unanimously
recommends that the shareholders vote FOR the proposed amendments to the
fee schedule for each fund's Plan. Although approval of the proposed
changes to the fee schedule of each fund's Plan would result in the receipt
by Sterling of higher 12b-1 fees for each fund at certain asset levels,
each fund's total expenses would be reduced, assuming shareholder approval
of the proposed change in the management fee rate (see Proposal 1).
Approval of the proposed amendments to the fee schedule of each fund's Plan
is contingent upon shareholder approval of the amendments to each fund's
Management Contract fee schedule presented in Proposal 1.
3. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS OF THE TRUST.
By a vote of the Independent Trustees, the firm of Coopers & Lybrand
L.L.P. has been selected as independent accountants for the Trust, to sign
or certify any financial statements of the Trust required by any law or
regulation to be certified by an independent public 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 an meeting called for the purpose of voting on such
action, to terminate such employment without penalty. Coopers & Lybrand
L.L.P. has advised the Trust that it has no direct or material indirect
ownership interest in the Trust.
The independent accountants examine annual financial statements for each
fund and provide other audit and tax-related services. In recommending the
selection of the Trust's accountants, the Audit Committee of the Board of
Trustees reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such services
would affect the accountants' independence. Representatives of Coopers &
Lybrand L.L.P. are not expected to be present at the Meeting, but have been
given the opportunity to make a statement if they so desire and will be
available should any matter arise requiring their presence.
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.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its Management Contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of Term Portfolio in accordance with its investment
objective, policies and limitations. Under a separate sub-advisory
agreement, between FMR and FMR Texas, FMR Texas directs the investments of
Cash Portfolio, subject to the supervision by FMR. FMR also provides each
fund with all necessary office facilities, equipment and personnel for
servicing each fund's investments, pays the salaries and fees of all
officers of the Trust who are also employees of FMR or of FMR Texas and all
personnel of the Trust (including each fund) or of FMR or of FMR Texas
performing services relating to research, statistical and investment
activities.
In addition, FMR shall perform, or arrange for the performance of, the
management and administrative services necessary for the operation of each
fund. FMR, subject to the supervision of the Board of Trustees, shall
perform various services including: providing each fund with office space,
equipment and facilities for maintaining each fund's organization;
supervising relations with depositories, custodians, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers
and other persons deemed to be necessary or desirable; preparing all
general shareholder communications, including shareholder reports;
conducting shareholder relations; maintaining each fund's existence and
records; investigating the development of and developing and implementing,
if appropriate, management and shareholder services designed to enhance the
value or convenience of each fund as an investment vehicle.
FMR shall pay the following fees and expenses: legal and audit expenses;
custodian, registrar and transfer agent fees and expenses; fees and
expenses related to the registration and qualification of the Trust and the
funds' shares for distribution under state and federal securities laws;
expenses of printing and mailing reports and notices and proxy materials to
shareholders of each fund; all other expenses incidental to holding
meetings of the funds' shareholders, including proxy solicitations
therefor; a pro rata share, based on relative net assets of each fund and
other registered investment companies having Advisory and Service or
Management Contracts with FMR; 50% of insurance premiums for fidelity and
other coverage; its proportionate share of association membership dues;
expenses for typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; and, expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders.
FMR pays all other expenses of each fund with the following exceptions:
interest and taxes; brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments;
fees and expenses of the Trust's Trustees other than those who are
"interested persons" of the Trust or FMR; and such non-recurring or
extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which a fund is a party, and the legal obligation a
fund may have to indemnify the officers and Trustees with respect to such
litigation.
FMR is each fund's manager pursuant to Management Contracts dated December
13, 1990, which were approved by each fund's shareholders at their December
12, 1990 meeting. At that meeting, shareholders approved new breakpoints
and percentages used to calculate the management fee as well as the payment
of a distribution and service fee out of the management fee.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies. Information concerning the advisory fees,
net assets, and total expenses of funds with investment objectives similar
to the funds and advised by FMR is contained in the Table of Average Net
Assets and Expense Ratios in Exhibit 3 on page ____.
FMR, its officers and directors, its affiliated companies, and the
Trustees, from time to time have transactions with various banks, including
the custodian banks of 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 Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Messrs.
Burkhead, Arthur S. Loring, Thomas D. Maher, Burnell R. Stehman, David H.
Potel, Kenneth A. Rathgeber, Curtis Hollingsworth, Leonard M. Rush and
Fred L. Henning, Jr. are currently officers of the funds or of the Trust
and officers or employees of FMR or FMR Corp. With the exception of Mr.
Maher, all of these persons are stockholders of FMR Corp. The principal
business address of each of the Directors of FMR is 82 Devonshire Street,
Boston, Massachusetts 02109.
All of the stock of FMR is owned by a parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which was organized on
October 31, 1972. Messrs. Johnson 3d and Burkhead are Directors of FMR
Corp. On __________, Messrs. Johnson 3d and Burkhead 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 Mr. Burkhead is a Trustee, owned in
the aggregate approximately __% of the voting common stock of FMR Corp.
Messrs. Johnson 3d and Burkhead owned approximately __% and __%,
respectively, of the non-voting common and equivalent stock of FMR Corp.
In addition, various trusts for the benefit of members of the Johnson
family and other trusts for the benefit of Johnson family members, through
limited partnership interests in a partnership the corporate general
partner of which is controlled by Mr. Johnson 3d and other Johnson family
members, together owned approximately __% of the non-voting common and
equivalent stock of FMR Corp. Through ownership of voting common stock and
the execution of a shareholders' voting agreement, 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. [To be updated].
During the period ________, 199_ through June 30, 1995, the following
transactions were entered into by Trustees involving more than 1% of the
voting common, non-voting common and equivalent stock, or preferred stock
of FMR Corp.
ACTIVITIES AND MANAGEMENT OF FMR TEXAS
FMR Texas is a wholly owned subsidiary of FMR formed in 1989 to provide
portfolio management services to Fidelity's money market funds and
investment advice with respect to money market instruments.
The Directors of FMR Texas are Edward C. Johnson 3d, Chairman, and J. Gary
Burkhead, President. Mr. Johnson 3d also is President and a Trustee of
other funds advised by FMR; Chairman, Chief Executive Officer, and a
Director of FMR Corp.; Chairman of the Board and of the Executive Committee
of FMR; a Director of FMR; and Chairman and Director of Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.
In addition, Mr. Burkhead is Senior Vice President of FMR; and President
and Director of FMR U.K. and FMR Far East. Each of the Directors are
stockholders of FMR Corp. The principal business address of each of the
Directors is 82 Devonshire Street, Boston, Massachusetts.
FUND TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR or FMR Texas pursuant to authority contained in
each fund's Management Contract and Cash Portfolio's Sub-Advisory Contract
with FMR Texas.
FMR may place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services.
For the fiscal year ended June 30, 1995, each fund paid no brokerage
commissions to affiliated brokers.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The Trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
the Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise the Trust, in care of Fidelity Investments Institutional
Operations Company, 82 Devonshire Street, Boston, Massachusetts 02109
_____________, whether other persons are beneficial owners of shares for
which proxies are being solicited and if so, the number of copies of the
Proxy Statement and Annual Reports you wish to receive in order to supply
copies to the beneficial owners of the respective shares.
EXHIBIT 1
FORM OF
MANAGEMENT CONTRACT
between
THE NORTH CAROLINA [CASH] ((CAPITAL)) MANAGEMENT TRUST: CASH PORTFOLIO
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this [13th] ((____)) day of [December, 1990] ((________,
____,)) by and between The North Carolina [Cash] ((CAPITAL)) Management
Trust, a Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Trust"), on behalf
of Cash Portfolio (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation (hereinafter
called the "Adviser").
1.(a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Trust'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 Trust who are also employees of the Adviser and
of all personnel of the Trust 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 Trust's Board of
Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance of) the management and administrative services necessary for
the operation of the Portfolio. 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 Portfolio's existence and its records; and
(vi) 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
also shall pay the following Portfolio fees and expenses: (i) legal and
audit expenses; (ii) custodian, registrar and transfer agent fees and
expenses; (iii) 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; (iv) expenses of printing and
mailing reports and notices and proxy material to shareholders of the
Portfolio; (v) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (vi) 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; (vii) its proportionate share of association membership
dues; (viii) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; and (ix)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Portfolio as the Trust'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 Trust's Board of Trustees with respect to
Portfolio 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 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.
(d) 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
Trust 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 Trust, and that
the Adviser may be or become interested in the Portfolio as a shareholder
or otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee paid monthly based upon the average daily
net assets of the Portfolio (computed in the manner set forth in the
Declaration of Trust) throughout the month. The fee shall be payable as
soon as practicable after the last day of each month at an annual rate
determined as set forth below. The fee rate shall be determined on a
cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On average daily net assets of the
Portfolio through [$100] (($400)) million [0.410%] ((0.365%))
On average daily net assets in excess
of [$100] (($400)) million through [$200] (($800)) million [0.400%]
((0.360%))
On average daily net assets in excess
of [$200] (($800)) million through [$800] (($1,200)) million [0.390%]
((0.355%))
((ON AVERAGE DAILY NET ASSETS IN EXCESS OF))
(($1,200 MILLION THROUGH $1,600 MILLION)) ((0.350%))
On average daily net assets in excess
of [$800] (($1,600)) million ((THROUGH 2,000 MILLION)) [0.380%]
((0.340%))
((ON AVERAGE DAILY NET ASSETS IN EXCESS))
((OF $2,000 MILLION)) ((0.330%))
provided that the fee so computed shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees of the Trust who are not "interested persons" of the Trust or the
Adviser. In the case of initiation or 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 other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Trust's Trustees other than
those who are "interested persons" of the Trust or the Adviser; and (iv)
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.
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,
[1991] ((1996)), 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 Trust 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 Portfolio 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
Trust 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 Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust 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 Trust. 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 are separate and distinct from those of any and all
other Portfolios.
8. 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, all as of the date written
above.
THE NORTH CAROLINA [CASH] ((CAPITAL)) MANAGEMENT TRUST
on behalf of Cash Portfolio
SEAL By___________________________
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By __________________________
President
EXHIBIT 2
FORM OF
MANAGEMENT CONTRACT
between
THE NORTH CAROLINA [CASH] ((CAPITAL)) MANAGEMENT TRUST: TERM PORTFOLIO
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this [13th] ((____)) day of [December, 1990] ((________,
____,)) by and between The North Carolina [Cash] ((CAPITAL)) Management
Trust, a Massachusetts business trust which may issue one or more series of
shares of beneficial interest (hereinafter called the "Trust"), on behalf
of Term Portfolio (hereinafter called the "Portfolio"), and Fidelity
Management & Research Company, a Massachusetts corporation (hereinafter
called the "Adviser").
1.(a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Trust'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 Trust who are also employees of the Adviser and
of all personnel of the Trust 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 Trust's Board of
Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance of) the management and administrative services necessary for
the operation of the Portfolio. 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 Portfolio's existence and its records; and
(vi) 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
also shall pay the following Portfolio fees and expenses: (i) legal and
audit expenses; (ii) custodian, registrar and transfer agent fees and
expenses; (iii) 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; (iv) expenses of printing and
mailing reports and notices and proxy material to shareholders of the
Portfolio; (v) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (vi) 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; (vii) its proportionate share of association membership
dues; (viii) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; and (ix)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Portfolio as the Trust'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 Trust's Board of Trustees with respect to
Portfolio 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 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.
(d) 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
Trust 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 Trust, and that
the Adviser may be or become interested in the Portfolio as a shareholder
or otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee paid monthly based upon the average daily
net assets of the Portfolio (computed in the manner set forth in the
Declaration of Trust) throughout the month. The fee shall be payable as
soon as practicable after the last day of each month at an annual rate
determined as set forth below. The fee rate shall be determined on a
cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On average daily net assets of the
Portfolio through [$100] (($400)) million [0.410%] ((0.365%))
On average daily net assets in excess
of [$100] (($400)) million through [$200] (($800)) million [0.400%]
((0.360%))
On average daily net assets in excess
of [$200] (($800)) million through [$800] (($1,200)) million[0.390%]
((0.355%))
((ON AVERAGE DAILY NET ASSETS IN EXCESS OF))
(($1,200 MILLION THROUGH $1,600 MILLION)) ((0.350%))
On average daily net assets in excess
of [$800] (($1,600)) million ((THROUGH 2,000 MILLION)) [0.380%]
((0.340%))
((ON AVERAGE DAILY NET ASSETS IN EXCESS))
((OF $2,000 MILLION)) ((0.330%))
provided that the fee so computed shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees of the Trust who are not "interested persons" of the Trust or the
Adviser. In the case of initiation or 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 other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Trust's Trustees other than
those who are "interested persons" of the Trust or the Adviser; and (iv)
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.
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,
[1991] ((1996)), 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 Trust 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 Portfolio 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
Trust 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 Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust 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 Trust. 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 are separate and distinct from those of any and all
other Portfolios.
8. 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, all as of the date written
above.
THE NORTH CAROLINA [CASH] ((CAPITAL)) MANAGEMENT TRUST
on behalf of Term Portfolio
SEAL By ____________________
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By _____________________
President
Exhibit 3
FORM OF
THE NORTH CAROLINA [CASH] ((CAPITAL)) MANAGEMENT TRUST:
CASH PORTFOLIO
DISTRIBUTION AND SERVICE PLAN
THIS PLAN made as of the [13th] ((____)) day of [December , 1990]
((__________)), by and between THE NORTH CAROLINA [CASH] ((CAPITAL))
MANAGEMENT TRUST a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Trust"),
on behalf of CASH PORTFOLIO, a series of the Trust (hereinafter called the
"Portfolio"), FIDELITY MANAGEMENT & RESEARCH COMPANY a Massachusetts
Corporation (hereinafter called the "Adviser"), and FIDELITY DISTRIBUTORS
CORPORATION, a Massachusetts corporation (hereinafter called the
"Distributor");
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, the Trust intends to distribute the Portfolio's shares of
beneficial interest ("shares") in accordance with Rule 12b-1 under the Act,
and desires to adopt a Distribution and Service Plan pursuant to such Rule,
and the Board of Trustees of the Trust has determined that there is a
reasonable likelihood that this will benefit the Portfolio and its
shareholders; and
WHEREAS, the Trust desires to increase the level of shareholder services
provided within the State of North Carolina, and the Board of Trustees has
determined that there is a reasonable likelihood that such in-state service
will benefit the Portfolio and its shareholders; and
WHEREAS, the Trust desires to retain the Distributor to provide, or secure
the provision of through an agent(s), facilities and personnel and to
render services with respect to the Portfolio in accordance with such
Distribution and Service Plan in the manner and on the terms and conditions
hereinafter set forth; and
WHEREAS, the Trust understands that the Distributor has retained the
services of Sterling Capital Distributors, Inc. ("Sterling"), a corporation
organized and existing under the laws of the State of North Carolina, as
its agent to perform or provide various of the facilities, personnel and
services described herein:
NOW, THEREFORE, the Trust hereby adopts a Distribution and Service Plan on
behalf of the Portfolio in accordance with Rule 12b-1 under the Act, and
the parties hereto agree to the following terms and conditions of the Plan:
1. Subject to the supervision of the Board of Trustees, the Trust hereby
retains the Distributor to provide facilities, personnel and a program with
respect to the marketing and promotional activities of the Portfolio (the
"Distribution Services"). Without limiting the generality of the
foregoing, the Distributor shall be responsible for, and shall accomplish
itself, through its affiliates, or through its agent, Sterling, the
following: (i) formulate and implement marketing and promotional
activities, including but not limited to direct mail promotions, regional
orientation meetings and financial management seminars; (ii) prepare and
contract for printing of a periodic newsletter and the mailing and
distribution thereof, such newsletter to be distributed to potential and
participating local units and to provide information regarding the
Portfolio and items of technical and general interest to local treasurers
and/or other financial officials; (iii) provide office space and equipment,
telephone facilities and dedicated personnel as necessary to provide the
services hereunder; (iv) arrange and contract for the preparation and
printing of sales literature and seminar materials and the mailing and
distribution thereof; (v) bear the expenses of printing (not including
typesetting) and distributing Prospectuses and Statements of Additional
Information to other than existing shareholders; (vi) obtain, evaluate and
provide to the Portfolio such information, analyses and opinions with
respect to marketing and promotional activities as the Portfolio may, from
time to time, reasonably request; and (vii) organize and maintain a Trust
advisory board comprised of local government financial officials. Such
board shall meet at least semi-annually with a primary purpose of providing
a representative review of Trust, Distributor or Sterling service
initiatives, as well as providing an informal communication device between
shareholders and the Trust. The Board shall not be responsible for
providing any advice with respect to investment matters.
2. Subject to the supervision of the Board of Trustees, the Distributor
shall also facilitate and coordinate a program whereby certain shareholder
servicing functions (the "Shareholder Services") are provided by the
Distributor, its affiliates, or its agent, Sterling, within the boundaries
of the state of North Carolina. Such program shall be undertaken in
conjunction with the Trust's transfer agent, and shall be subject to such
controls, provisions and procedures as shall be satisfactory to
Distributors and said transfer agent. To the extent deemed practicable by
the Distributor, such program shall provide for the following functions and
services to be performed, in whole or in part, in North Carolina: (i)
establishment, maintenance and close-out of shareholder accounts; (ii)
shareholder inquiry, communication and problem resolution services; (iii)
completion of shareholder audit confirmations; (iv) receipt of orders for
transactions in shares of the Portfolio, and timely conveyance of such
orders to the Trust or its transfer agent; and (v) such concomitant duties
as are deemed appropriate by the Distributor.
3. The Distributor, its affiliates or its agent(s) shall directly bear all
costs of rendering the services to be performed under this Plan, including
but not limited to the compensation of personnel necessary to provide such
services, and all other costs for travel, office space, facilities,
equipment, printing, telephone service, heat, light, power and other
utilities.
4. The Portfolio shall, from time to time, furnish or otherwise make
available to the Distributor such financial reports, proxy statements and
other information relating to the business and affairs of the Portfolio as
the Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
5. The Adviser agrees to pay the Distributor as soon as practicable after
the end of each month and the Distributor agrees to accept, as full
compensation for all services and facilities to be provided hereunder, a
fee based on the monthly average of the net assets of the Portfolio
determined as of the close of business on each business day throughout the
month. The fee shall be payable by the Adviser from the Management Fee
paid to the Adviser by the Portfolio pursuant to the Management Contract
dated [December 13, 1990] ((___________)) between the Adviser and the
Portfolio. The fee due the Distributor shall be payable at an annual rate
determined on a cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On the first [$100] (($400)) million of
average daily net assets [0.140%] ((0.16%))
On average daily net assets in
excess of [$100] (($400)) million to
[$200 million] (($800 MILLION)) [0.150%] ((0.16%))
On average daily net assets in
excess of [$200] (($800)) million to
[$800 million] (($1,200 MILLION)) [0.160%] ((0.16%))
On average daily net assets in
excess of [$800 million] (($1,200 MILLION TO
$1,600 MILLION)) [0.170%] ((0.16%))
((ON AVERAGE DAILY NET ASSETS IN
EXCESS OF $1,600 MILLION TO
$2,000 MILLION)) ((0.155%))
((ON AVERAGE DAILY NET ASSETS IN
EXCESS OF $2,000 MILLION)) ((0.150%))
All parties to this Plan understand that the agreement between the
Distributor and its agent, Sterling, will provide for a full pass-through
to Sterling of the fees payable hereunder, such payments by the Distributor
to Sterling to be made in consideration of Sterling's responsibilities
under its agreement with the Distributor. The Distributor, in consultation
with Sterling, reserves the right to reduce or waive the distribution fee
from time to time.
If this Plan becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for the part
of the month the Plan is in effect shall be prorated based on the number of
business days during such month that this Plan was in effect.
6. Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or relieve or deprive the Board of Trustees of the Trust
of the responsibility for and control of the conduct of the affairs of the
Portfolio.
7. This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Portfolio," and upon
approval by a vote of the Trustees of the Trust, and of the Trustees who
are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements related to the Plan, cast in person at a meeting called for the
purpose of voting on this Plan. For the purposes of this Plan, the terms
"interested persons" and "majority of the outstanding voting securities of
the Portfolio" are used as defined in the Act.
8. This Plan shall remain in effect until July 31, [1991] ((1996)), and
from year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of the Trustees of the Trust and of
the Trustees who are not interested persons of the Trust, and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on this Plan. If such annual approval is not
obtained, the Plan shall expire 12 months after the date of the last
approval. This Plan may be amended at any time by the Board of Trustees
provided that (a) any amendment to increase materially the amount to be
spent for the services described herein shall be effective only upon
approval by a vote of a majority of the outstanding shares of the
Portfolio, and (b) any material amendments of this Plan shall be effective
only upon approval in the manner provided in the first sentence in this
paragraph.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Trustees who are not interested
persons of the Trust and who have no direct or indirect financial interest
in the operation of this Plan or in any agreements related to this Plan, or
by a vote of a majority of the outstanding voting securities of the
Portfolio.
10. Nothing herein contained shall limit the freedom of the Distributor or
any "affiliated person," as defined in the Act, to render investment
supervisory and corporate administrative services to other investment
companies, to act as distributor, adviser or investment counselor to other
persons, firms or corporations and to engage in other business activities.
11. Neither the Distributor nor any of its employees or agents are
authorized to make any representations with respect to the sale of shares
except those contained in the then current Prospectus and Statement of
Additional Information of the Portfolio.
12. The provisions of this Paragraph 12 shall be applicable only with
respect to the provision of Distribution Services. The provision of
Shareholder Services shall not be affected by this Paragraph 12, but shall
be governed by the provisions of Paragraph 13, below. The Portfolio will
indemnify and hold the Distributor harmless from judgments against the
Distributor resulting from specific acts or omissions in the performance of
Distribution Services under this Plan which are the result of written
instructions of a majority of the Board of Trustees of the Trust, so long
as there is an express finding that such acts or omissions did not
constitute willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties or a breach of fiduciary duty. The Portfolio shall
similarly indemnify and hold harmless any agent of the Distributor with
respect to such judgments against the agent resulting from specific acts or
omissions in the performance of Distribution Services under this Plan which
are the result of written instructions of a majority of the Board of
Trustees of the Trust, so long as there is an express finding that such
acts or omissions did not constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or a breach of fiduciary
duty. No provision of this Paragraph 12 shall be deemed to protect the
Distributor or an agent against any liability to the Portfolio or its
shareholders to which it might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
its Distribution Services duties or the reckless disregard of its
Distribution Services obligations under this Plan. No provision hereof
shall be deemed to protect any Trustee or officer of the Trust against any
such liability to which he might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
his duties or the reckless disregard of his obligation.
13. The provisions of this Paragraph 13 shall be applicable only with
respect to the provision of Shareholder Services. The provision of
Distribution Services shall not be affected by this Paragraph 13, but shall
be governed by the provisions of Paragraph 12, above.
A. The Trust shall indemnify and hold the Distributor harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Trust, including by a shareholder, which names the Distributor and/or
the Trust as a party and is not based on and does not result from the
Distributor's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with the
Distributor's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by the Distributor's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Trust, or from the Distributor's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Trust, or as a result of the Distributor's acting in
reliance upon advice reasonably believed by the Distributor to have been
given by counsel for the Trust.
B. The Distributor shall indemnify and hold the Trust harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit
brought by any person other than the Distributor, which names the Trust
and/or the Distributor as a party and is based upon and arises out of acts,
errors or omissions of the Distributor constituting negligence, lack of
good faith or willful misconduct in the performance of the Distributor's
Shareholder Service duties under this Agreement.
14. In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the
"Indemnified Party") shall inform the other party (the "Indemnifying
Party") of the relevant facts known to Indemnified Party concerning the
matter in question. The Indemnified Party shall use reasonable care to
identify and promptly to notify the Indemnifying Party concerning any
matter which presents, or appears likely to present, a claim for
indemnification. The Indemnifying Party shall have the election of
defending the Indemnified Party against any claim which may be the subject
of indemnification or of holding the Indemnified Party harmless hereunder.
In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
defense of the claim and, if so requested by the Indemnifying Party, the
Indemnified Party shall incur no further legal or other expenses related
thereto for which it shall be entitled to indemnity or to being held
harmless hereunder; provided, however, that nothing herein shall prevent
the Indemnified Party from retaining counsel at its own expense to defend
any claim. Except with the Indemnifying Party's prior written consent,
the Indemnified Party shall in no event confess any claim or make any
compromise in any matter in which the Indemnifying Party will be asked to
indemnify or hold Indemnified Party harmless hereunder.
15. The Distributor shall provide the Trust, for review by its Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended pursuant to the Plan and the purposes for
which such expenditures were made. Such written report shall be in a form
satisfactory to the Trust and shall supply all information necessary for
the Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
16. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Trust shall be committed to the
discretion of the Trustees who are not interested persons.
17. The Trust shall preserve copies of this Plan and any agreements
related to and all reports made pursuant to Section 15 hereof, for a period
of not less than six years from the date of this Plan or any such report,
as the case may be, the first two years in an easily accessible place.
18. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
19. The Distributor is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this Plan and
any agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and neither the Distributor nor its agents shall
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. In addition, neither the Distributor nor its
agents shall seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Distributor understands that the rights and
obligations of any series of the Trust under the Trust's Declaration of
Trust are separate and distinct from those of any and all other series.
20. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise the remainder of the Plan shall not be
affected thereby.
THE NORTH CAROLINA [CASH] ((CAPITAL))
MANAGEMENT TRUST
on behalf of Cash Portfolio
by___________________
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
by___________________
President
FIDELITY DISTRIBUTORS CORPORATION
by______________________
President
Exhibit 4
FORM OF
THE NORTH CAROLINA [CASH] ((CAPITAL)) MANAGEMENT TRUST:
TERM PORTFOLIO
DISTRIBUTION AND SERVICE PLAN
THIS PLAN made as of the [13th]((____)) day of [December, 1990]
((______________)), by and between THE NORTH CAROLINA [CASH] ((CAPITAL))
MANAGEMENT TRUST, a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Trust"), on behalf of TERM PORTFOLIO, a series of the Trust (hereinafter
called the "Portfolio"), FIDELITY MANAGEMENT & RESEARCH COMPANY, a
Massachusetts Corporation (hereinafter called the "Adviser"), and FIDELITY
DISTRIBUTORS CORPORATION, a Massachusetts corporation (hereinafter called
the "Distributor"):
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, the Trust intends to distribute the Portfolio's shares of
beneficial interest ("shares") in accordance with Rule 12b-1 under the Act,
and desires to adopt a Distribution and Service Plan pursuant to such Rule,
and the Board of Trustees of the Trust has determined that there is a
reasonable likelihood that this will benefit the Portfolio and its
shareholders; and
WHEREAS, the Trust desires to increase the level of shareholder services
provided within the State of North Carolina, and the Board of Trustees has
determined that there is a reasonable likelihood that such in-state service
will benefit the Portfolio and its shareholders; and
WHEREAS, the Trust desires to retain the Distributor to provide, or secure
the provision of through an agent(s), facilities and personnel and to
render services with respect to the Portfolio in accordance with such
Distribution and Service Plan in the manner and on the terms and conditions
hereinafter set forth; and
WHEREAS, the Trust understands that the Distributor has retained the
services of Sterling Capital Distributors, Inc. ("Sterling"), a corporation
organized and existing under the laws of the State of North Carolina, as
its agent to perform or provide various of the facilities, personnel and
services described herein:
NOW, THEREFORE, the Trust hereby adopts a Distribution and Service Plan on
behalf of the Portfolio in accordance with Rule 12b-1 under the Act, and
the parties hereto agree to the following terms and conditions of the Plan:
1. Subject to the supervision of the Board of Trustees, the Trust hereby
retains the Distributor to provide facilities, personnel and a program with
respect to the marketing and promotional activities of the Portfolio (the
"Distribution Services"). Without limiting the generality of the
foregoing, the Distributor shall be responsible for, and shall accomplish
itself, through its affiliates, or through its agent, Sterling, the
following: (i) formulate and implement marketing and promotional
activities, including but not limited to direct mail promotions, regional
orientation meetings and financial management seminars; (ii) prepare and
contract for printing of a periodic newsletter and the mailing and
distribution thereof, such newsletter to be distributed to potential and
participating local units and to provide information regarding the
Portfolio and items of technical and general interest to local treasurers
and/or other financial officials; (iii) provide office space and equipment,
telephone facilities and dedicated personnel as necessary to provide the
services hereunder; (iv) arrange and contract for the preparation and
printing of sales literature and seminar materials and the mailing and
distribution thereof; (v) bear the expenses of printing (not including
typesetting) and distributing Prospectuses and Statements of Additional
Information to other than existing shareholders; (vi) obtain, evaluate and
provide to the Portfolio such information, analyses and opinions with
respect to marketing and promotional activities as the Portfolio may, from
time to time, reasonably request; and (vii) organize and maintain a Trust
advisory board comprised of local government financial officials. Such
board shall meet at least semi-annually with a primary purpose of providing
a representative review of Trust, Distributor or Sterling service
initiatives, as well as providing an informal communication device between
shareholders and the Trust. The Board shall not be responsible for
providing any advice with respect to investment matters.
2. Subject to the supervision of the Board of Trustees, the Distributor
shall also facilitate and coordinate a program whereby certain shareholder
servicing functions (the "Shareholder Services") are provided by the
Distributor, its affiliates, or its agent, Sterling, within the boundaries
of the state of North Carolina. Such program shall be undertaken in
conjunction with the Trust's transfer agent, and shall be subject to such
controls, provisions and procedures as shall be satisfactory to
Distributors and said transfer agent. To the extent deemed practicable by
the Distributor, such program shall provide for the following functions and
services to be performed, in whole or in part, in North Carolina: (i)
establishment, maintenance and close-out of shareholder accounts; (ii)
shareholder inquiry, communication and problem resolution services; (iii)
completion of shareholder audit confirmations; (iv) receipt of orders for
transactions in shares of the Portfolio, and timely conveyance of such
orders to the Trust or its transfer agent; and (v) such concomitant duties
as are deemed appropriate by the Distributor.
3. The Distributor, its affiliates or its agent(s) shall directly bear all
costs of rendering the services to be performed under this Plan, including
but not limited to the compensation of personnel necessary to provide such
services, and all other costs for travel, office space, facilities,
equipment, printing, telephone service, heat, light, power and other
utilities.
4. The Portfolio shall, from time to time, furnish or otherwise make
available to the Distributor such financial reports, proxy statements and
other information relating to the business and affairs of the Portfolio as
the Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
5. The Adviser agrees to pay the Distributor as soon as practicable after
the end of each month and the Distributor agrees to accept, as full
compensation for all services and facilities to be provided hereunder, a
fee based on the monthly average of the net assets of the Portfolio
determined as of the close of business on each business day throughout the
month. The fee shall be payable by the Adviser from the Management Fee
paid to the Adviser by the Portfolio pursuant to the Management Contract
dated [December 13, 1990] ((___________)) between the Adviser and the
Portfolio. The fee due the Distributor shall be payable at an annual rate
determined on a cumulative basis pursuant to the following schedule:
The Annual Fee
Rate Is
On the first [$100] (($400)) million of
average daily net assets [0.140%] ((0.16%))
On average daily net assets in
excess of [$100] (($400)) million to
[$200 million] (($800 MILLION)) [0.150%] ((0.16%))
On average daily net assets in
excess of [$200] (($800)) million to
[$800 million] (($1,200 MILLION)) [0.160%] ((0.16%))
On average daily net assets in
excess of [$800 million] (($1,200 MILLION TO
$1,600 MILLION)) [0.170%] ((0.16%))
((ON AVERAGE DAILY NET ASSETS IN
EXCESS OF $1,600 MILLION TO
$2,000 MILLION)) ((0.155%))
((ON AVERAGE DAILY NET ASSETS IN
EXCESS OF $2,000 MILLION)) ((0.150%))
All parties to this Plan understand that the agreement between the
Distributor and its agent, Sterling, will provide for a full pass-through
to Sterling of the fees payable hereunder, such payments by the Distributor
to Sterling to be made in consideration of Sterling's responsibilities
under its agreement with the Distributor. The Distributor, in consultation
with Sterling, reserves the right to reduce or waive the distribution fee
from time to time.
If this Plan becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for the part
of the month the Plan is in effect shall be prorated based on the number of
business days during such month that this Plan was in effect.
6. Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or relieve or deprive the Board of Trustees of the Trust
of the responsibility for and control of the conduct of the affairs of the
Portfolio.
7. This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Portfolio," and upon
approval by a vote of the Trustees of the Trust, and of the Trustees who
are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements related to the Plan, cast in person at a meeting called for the
purpose of voting on this Plan. For the purposes of this Plan, the terms
"interested persons" and "majority of the outstanding voting securities of
the Portfolio" are used as defined in the Act.
8. This Plan shall remain in effect until July 31, [1991] ((1996)) and
from year to year thereafter, provided, however, that such continuance is
subject to approval annually by a vote of the Trustees of the Trust and of
the Trustees who are not interested persons of the Trust, and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on this Plan. If such annual approval is not
obtained, the Plan shall expire 12 months after the date of the last
approval. This Plan may be amended at any time by the Board of Trustees
provided that (a) any amendment to increase materially the amount to be
spent for the services described herein shall be effective only upon
approval by a vote of a majority of the outstanding shares of the
Portfolio, and (b) any material amendments of this Plan shall be effective
only upon approval in the manner provided in the first sentence in this
paragraph.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Trustees who are not interested
persons of the Trust and who have no direct or indirect financial interest
in the operation of this Plan or in any agreements related to this Plan, or
by a vote of a majority of the outstanding voting securities of the
Portfolio.
10. Nothing herein contained shall limit the freedom of the Distributor or
any "affiliated person," as defined in the Act, to render investment
supervisory and corporate administrative services to other investment
companies, to act as distributor, adviser or investment counselor to other
persons, firms or corporations and to engage in other business activities.
11. Neither the Distributor nor any of its employees or agents are
authorized to make any representations with respect to the sale of shares
except those contained in the then current Prospectus and Statement of
Additional Information of the Portfolio.
12. The provisions of this Paragraph 12 shall be applicable only with
respect to the provision of Distribution Services. The provision of
Shareholder Services shall not be affected by this Paragraph 12, but shall
be governed by the provisions of Paragraph 13, below. The Portfolio will
indemnify and hold the Distributor harmless from judgments against the
Distributor resulting from specific acts or omissions in the performance of
Distribution Services under this Plan which are the result of written
instructions of a majority of the Board of Trustees of the Trust, so long
as there is an express finding that such acts or omissions did not
constitute willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties or a breach of fiduciary duty. The Portfolio shall
similarly indemnify and hold harmless any agent of the Distributor with
respect to such judgments against the agent resulting from specific acts or
omissions in the performance of Distribution Services under this Plan which
are the result of written instructions of a majority of the Board of
Trustees of the Trust, so long as there is an express finding that such
acts or omissions did not constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or a breach of fiduciary
duty. No provision of this Paragraph 12 shall be deemed to protect the
Distributor or an agent against any liability to the Portfolio or its
shareholders to which it might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
its Distribution Services duties or the reckless disregard of its
Distribution Services obligations under this Plan. No provision hereof
shall be deemed to protect any Trustee or officer of the Trust against any
such liability to which he might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
his duties or the reckless disregard of his obligation.
13. The provisions of this Paragraph 13 shall be applicable only with
respect to the provision of Shareholder Services. The provision of
Distribution Services shall not be affected by this Paragraph 13, but shall
be governed by the provisions of Paragraph 12, above.
A. The Trust shall indemnify and hold the Distributor harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Trust, including by a shareholder, which names the Distributor and/or
the Trust as a party and is not based on and does not result from the
Distributor's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with the
Distributor's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by the Distributor's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Trust, or from the Distributor's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Trust, or as a result of the Distributor's acting in
reliance upon advice reasonably believed by the Distributor to have been
given by counsel for the Trust.
B. The Distributor shall indemnify and hold the Trust harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit
brought by any person other than the Distributor, which names the Trust
and/or the Distributor as a party and is based upon and arises out of acts,
errors or omissions of the Distributor constituting negligence, lack of
good faith or willful misconduct in the performance of the Distributor's
Shareholder Service duties under this Agreement.
14. In the event that either party requests the other to indemnify or hold
it harmless hereunder, the party requesting indemnification (the
"Indemnified Party") shall inform the other party (the "Indemnifying
Party") of the relevant facts known to Indemnified Party concerning the
matter in question. The Indemnified Party shall use reasonable care to
identify and promptly to notify the Indemnifying Party concerning any
matter which presents, or appears likely to present, a claim for
indemnification. The Indemnifying Party shall have the election of
defending the Indemnified Party against any claim which may be the subject
of indemnification or of holding the Indemnified Party harmless hereunder.
In the event the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
defense of the claim and, if so requested by the Indemnifying Party, the
Indemnified Party shall incur no further legal or other expenses related
thereto for which it shall be entitled to indemnity or to being held
harmless hereunder; provided, however, that nothing herein shall prevent
the Indemnified Party from retaining counsel at its own expense to defend
any claim. Except with the Indemnifying Party's prior written consent,
the Indemnified Party shall in no event confess any claim or make any
compromise in any matter in which the Indemnifying Party will be asked to
indemnify or hold Indemnified Party harmless hereunder.
15. The Distributor shall provide the Trust, for review by its Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended pursuant to the Plan and the purposes for
which such expenditures were made. Such written report shall be in a form
satisfactory to the Trust and shall supply all information necessary for
the Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
16. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Trust shall be committed to the
discretion of the Trustees who are not interested persons.
17. The Trust shall preserve copies of this Plan and any agreements
related to and all reports made pursuant to Section 15 hereof, for a period
of not less than six years from the date of this Plan or any such report,
as the case may be, the first two years in an easily accessible place.
18. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
19. The Distributor is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this Plan and
any agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and neither the Distributor nor its agents shall
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. In addition, neither the Distributor nor its
agents shall seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Distributor understands that the rights and
obligations of any series of the Trust under the Trust's Declaration of
Trust are separate and distinct from those of any and all other series.
20. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise the remainder of the Plan shall not be
affected thereby.
THE NORTH CAROLINA [CASH] ((CAPITAL))
MANAGEMENT TRUST
on behalf of Term Portfolio
by________________
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
by________________
President
FIDELITY DISTRIBUTORS CORPORATION
by_________________
President
FORM OF
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) W. Olin
Nisbett III, J. Calvin Rivers, Jr. and David H. Potel, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
The North Carolina Capital Management Trust: Cash Portfolio as indicated
above which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the Omni Charlotte Hotel, 222 East
Third Street, Charlotte, North Carolina 28202, on January 22, 1996 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.
________________________________ ________
Name of Unit
_________________ ___ ______________ __
Signature, Title Signature, Title
NOTE: Local units (such as municipalities, authorities, agencies and
political subdivisions) should sign the name of the unit exactly as it
appears with the signature(s) and title(s) of the authorized official(s).
Date _______ _, 1996
________________________________________________
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
047, 620 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 approve amendments to the fee schedule for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
Management Contract for each fund.
2. To approve amendments to the fee schedule for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
Distribution and Service Plan for each fund.
3. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
independent accountants of the Trust.
NC-PXC-1295 658191101 047 HH
FORM OF
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) W. Olin
Nisbett III, J. Calvin Rivers, Jr. and David H. Potel, or any one or more
of them, attorneys, with full power of substitution, to vote all shares of
The North Carolina Capital Management Trust: Term Portfolio as indicated
above which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the Omni Charlotte Hotel, 222 East
Third Street, Charlotte, North Carolina 28202, on January 22, 1996 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.
________________________________ ________
Name of Unit
_________________ ___ ______________ __
Signature, Title Signature, Title
NOTE: Local units (such as municipalities, authorities, agencies and
political subdivisions) should sign the name of the unit exactly as it
appears with the signature(s) and title(s) of the authorized official(s).
Date _______ _, 1996
________________________________________________
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
047, 620 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 approve amendments to the fee schedule for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
Management Contract for each fund.
2. To approve amendments to the fee schedule for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
Distribution and Service Plan for each fund.
3. To ratify the selection of Coopers & Lybrand L.L.P. as FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
independent accountants of the Trust.
NC-PXC-1295 658191200 620 HH
EXHIBIT 1
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
RATIO OF NET
ADVISORY FEES
TO AVERAGE RATIO OF
AVERAGE NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS)(B) TO FMR (C) ASSETS (D)
INCOME
Advisor Emerging
Markets Income:
Class A 12/31/94** 20.0 0.70(dagger) 1.50(dagger)*
Class B ((hollow diamond)) 12/31/94** 2.6 .70(dagger) 2.25(dagger)*
Global Bond (yen) 12/31/94 554.7 0.71 1.14
New Markets Income (yen) 12/31/94 237.6 0.49* 1.28*
Short-Term World
Income (yen) 12/31/94 329.4 0.61 1.01
Spartan Bond
Strategist ((pound)) 12/31/94 21.5 0.70 0.70
Variable Insurance
Products:
High Income 12/31/94 492.5 0.61 0.71
Variable Insurance
Products II:
Investment Grade
Bond 12/31/94 113.5 0.46 0.67
Spartan Long-Term
Government Bond 1/31/95 63.1 0.65 0.65
U.S. Bond Index 2/28/95 332.4 .07* 0.32*
Capital & Income ((pound)) 4/30/95 2,392.2 0.71 0.96
Intermediate Bond ((pound)) 4/30/95 2,089.0 0.38 0.68
Investment Grade Bond ((pound)) 4/30/95 992.1 0.46 0.75
Short-Term Bond ((pound)) 4/30/95 1,681.4 0.46 0.69
Spartan Government
Income 4/30/95 252.4 0.65 0.65
Spartan High Income 4/30/95 661.9 0.80 0.80
Spartan Short-Intermediate
Government 4/30/95 56.4 0.10* 0.10*
The North Carolina Capital
Management Trust:
Term Portfolio 6/30/95 65.4 0.41 0.41
Ginnie Mae 7/31/95 737.2 0.45 0.75
Mortgage Securities 7/31/95 375.6 0.45 0.77
Spartan Limited Maturity
Government 7/31/95 871.3 0.65 0.65
Spartan Ginnie Mae 8/31/95 383.4 0.65 0.65
Government Securities 9/30/95 794.0 0.45 0.71
Short-Intermediate
Government 9/30/94 146.8 0.46 0.95
Spartan Investment
Grade Bond ((pound)) 9/30/94 115.0 0.65 0.65
Spartan Short-Term
Income ((pound)) 9/30/94 1,228.6 0.54 0.54
Advisor Government
Investment:
Class A 10/31/94 91.1 - 0.74
Class B 10/31/94 1.0 - 1.70
Advisor High Yield:
Class A 10/31/94 610.4 0.60 1.20
Class B 10/31/94 8.4 0.60 2.20
Advisor Short Fixed
Income 10/31/94 807.8 0.46 0.97
Advisor Limited
Term Bond:
Class A 11/30/94 106.3 0.41 1.02
Class B 11/30/94 1.6 0.41 1.65(dagger)
Institutional Class 11/30/94 181.7 0.41 0.61
Institutional Short-
Intermediate
Government:
Class I 11/30/94 353.6 0.45 0.45
Class II 11/30/94** 98.5 0.45 0.70(dagger)
(a) All fund data are as of the fiscal year end noted in the chart or as of
September 30,1995, if fiscal year end figures are not yet available.
(b) 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.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(d) 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. Funds so
affected are indicated by an (*).
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
(yen) 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.
((pound)) Fidelity Management & Research Company has entered into
sub-advisory agreements with FMR U.K. and FMR Far East, with respect to the
fund.
((hollow diamond)) The ratio of net advisory fees to average net assets
paid to FMR represents the amount as of the prior fiscal year end. Updated
ratios will be presented for each class of shares of the fund when the next
fiscal year end figures are available.
EXHIBIT 2
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
RATIO OF NET
ADVISORY FEES
TO AVERAGE RATIO OF
AVERAGE NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) (B) TO FMR (C) ASSETS
(C)
TAXABLE MONEY MARKET ((yen))
Variable Insurance
Products:
Money Market 12/31/93 $ 307.3 0.13% 0.22%
Select Money Market 2/28/94 462.6 0.13 0.72
Institutional Cash:
Domestic Money
Market:
Class A 3/31/94 762.8 0.12* 0.18*
Class B ((hollow diamond)) 3/31/95** 18.2 0.12* 0.50(dagger)*
Money Market :
Class A 3/31/94 5,263.1 0.15* 0.18*
Class B 3/31/94** 34.4 0.15(dagger)* 0.50(dagger)*
U.S. Government:
Class A 3/31/94 4,830.3 0.14* 0.18*
Class B ((hollow diamond)) 3/31/95** 10.0 0.14* 0.43(dagger)*
U.S. Treasury 3/31/94 1,898.0 0.15* 0.18*
U.S. Treasury II:
Initial Class 3/31/94 4,916.5 0.14* 0.18*
Class B 3/31/94** 1.5 0.14(dagger)* 0.50(dagger)*
Spartan Money Market 4/30/94 4,512.4 0.31* 0.31*
Spartan U.S. Government
Money Market 4/30/94 799.3 0.45 0.45
The North Carolina
Capital Management Trust:
Cash Portfolio 6/30/94 1,391.7 0.39 0.39
Daily Money Fund:
Capital Reserves:
Money Market 7/31/94 664.6 0.47* 0.98*
U.S. Government
Money Market 7/31/94 314.4 0.47* 0.98*
Money Market 7/31/94 1,510.6 0.41* 0.65*
U.S. Treasury:
Class A 7/31/94 2,669.0 0.50 0.60
Class B 7/31/94** 0.2 0.50(dagger) 1.35(dagger)*
U.S. Treasury Income 7/31/94 1,124.7 0.20* 0.20*
Spartan U.S. Treasury
Money Market 7/31/94 1,601.5 0.45* 0.45*
Daily Income Trust 8/31/94 2,126.5 0.30 0.56
RATIO OF NET
ADVISORY FEES
TO AVERAGE RATIO OF
AVERAGE NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) (B) TO FMR (C) ASSETS
(C)
Money Market Trust:
Domestic Money
Market 8/31/94 $ 424.8 0.42% 0.42%
Retirement Government
Money Market 8/31/94 1,508.8 0.42 0.42
Retirement Money
Market 8/31/94 2,233.6 0.42 0.42
U.S. Government 8/31/94 173.2 0.42 0.42
U.S. Treasury 8/31/94 165.3 0.42 0.42
Cash Reserves 11/30/94 12,398.9 0.19 0.52
State and Local Asset
Management Series:
Government Money
Market 11/30/94 396.6 0.43 0.43
U.S. Government
Reserves 11/30/94# 1,103.0 0.20(dagger) 0.36(dagger)*
(a) All fund data are as of the fiscal year end noted in the chart or as of
September 30,1994, if fiscal year end figures are not yet available.
(b) 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.
(c) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations. Funds so affected
are indicated by an (*).
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
((yen)) Fidelity Management & Research Company has entered into a
sub-advisory agreement with FMR Texas Inc., with respect to each fund.
((hollow diamond)) The ratio of net advisory fees to average net assets
paid to FMR represents the amount as of the prior fiscal year end. Updated
ratios will be presented for each class of shares of the fund when the next
fiscal year end figures are available.
Differences between printed and EDGAR versions of enclosed Proxy Statement
1. Text in printed version which is underscored to show insertions have
been enclosed with (( )) in the EDGAR version.
2. Text in printed version which is struck through to show deletions have
been enclosed with [ ] in the EDGAR version.