SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(e) or Sec. 240.14a-12
(Name of Registrant as Specified In Its Charter): Fidelity
Advisor Series IV
(Name of Person(s) Filing Proxy Statement): Carol H.
Logan
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:
[X] 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: $125
(2) Form, Schedule or Registration Statement No.: 811-3737
(3) Filing Party: Fidelity Advisor Series IV
(4) Date Filed: August 12, 1994
FIDELITY ADVISOR LIMITED TERM BOND FUND:
CLASS A
CLASS B
INSTITUTIONAL CLASS
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO II
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-522-7297
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the above funds:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Advisor Limited Term Bond Fund: Class A, Class B, and
Institutional Class, Fidelity Institutional Short-Intermediate Government
Portfolio, and Fidelity Institutional Short-Intermediate Government
Portfolio II , (the funds), will be held at the office of Fidelity
Advisor Series IV (the trust), 82 Devonshire Street, Boston, Massachusetts
02109 on November 16, 1994, at 10:15 a.m. The purpose of the Meeting is to
consider and act upon the following proposals, and to transact such other
business as may properly come before the Meeting or any adjournments
thereof.
1. To elect a Board of Trustees.
2. To ratify the selection of Coopers & Lybrand L.L.P . as
independent accountants of the trust.
3. To amend the Declaration of Trust to provide dollar-based voting rights
for shareholders of the trust.
4. To amend the Declaration of Trust regarding shareholder notification of
appointment of Trustees.
5. To amend the Declaration of Trust to provide each fund with the ability
to invest all of its assets in another open-end investment company with
substantially the same investment objective and policies.
6. To adopt a new fundamental investment policy for each fund permitting a
fund to invest all of its assets in another open-end investment company
with substantially the same investment objective and policies.
7. To amend the Bylaws of the Trust not to require
shareholder approval for further amendments to the bylaws.
8. To amend the Class A Distribution and Service Plan of Limited Term Bond
Fund.
9. To amend the Class B Distribution and Service Plan of Limited Term Bond
Fund - Class B .
10. To approve a new Sub-Advisory Agreement with FMR Far East for Limited
Term Bond Fund.
11. To approve a new Sub-Advisory Agreement with FMR U.K. for Limited Term
Bond Fund.
12. To approve an amended management contract for Limited Term Bond Fund.
13. To amend Limited Term Bond Fund's investment objective and to eliminate
certain fundamental investment policies.
14. To replace Limited Term Bond Fund's fundamental portfolio
maturity policy with an identical non-fundamental policy.
15. To replace Limited Term Bond Fund's fundamental investment policies
with identical non-fundamental policies.
16. To adopt a non-fundamental defensive policy for L imited Term
Bond Fund .
17. To amend Limited Term Bond Fund's fundamental investment limitation
concerning borrowing.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
18 . To amend the fundamental investment limitation concerning
diversification for Limited Term Bond Fund.
1 9 . To adopt the standard fundamental investment limitation
concerning diversification for Institutional Short-Intermediate Government
Portfolio.
20 . To eliminate each fund's fundamental investment limitation
concerning short sales of securities.
2 1 . To eliminate each fund's fundamental investment limitation
concerning margin purchases.
2 2 . To amend Institutional Short-Intermediate Government
Portfolio's fundamental investment limitation concerning borrowing.
2 3 . To amend each fund's fundamental investment limitation
concerning underwriting of securities.
2 4 . To amend each fund's fundamental investment limitation
concerning the concentration of its investments in a single industry.
2 5 . To amend Institutional Short-Intermediate Government
Portfolio's fundamental investment limitation concerning real estate.
2 6 . To eliminate Limited Term Bond Fund's fundamental investment
limitation concerning investments in the securities of newly-formed
issuers.
2 7 . To eliminate each fund's fundamental investment limitation
concerning investing in oil, gas, and mineral exploration programs.
2 8 . To eliminate Limited Term Bond Fund's fundamental investment
limitation concerning purchasing the securities of other investment
companies.
2 9 . To eliminate Limited Term Bond Fund's fundamental
investment limitation concerning investing in companies for the
purpose of exercising control or management.
The Board of Trustees has fixed the close of business on September 19,
1994 as the record date for the determination of the shareholders of each
fund entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By the order of the Board of Trustees,
ARTHUR S. LORING, Secretary
September 19, 1994
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, 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. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. All other accounts should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID
SIGNATURE
A. 1) ABC Corp. John Smith,
Treasurer
2) ABC Corp. John Smith,
Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY ADVISOR LIMITED TERM BOND FUND:
CLASS A
CLASS B
INSTITUTIONAL CLASS
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO II
TO BE HELD NOVEMBER 16, 1994
This Proxy Statement is furnished in connection with a solicitation of
proxies made by, and on behalf of, the Board of Trustees of Fidelity
Advisor Series IV (the trust) to be used at the Special Meeting of
Shareholders of Fidelity Advisor Limited Term Bond Fund and Fidelity
Institutional Short-Intermediate Government Portfolio (the funds) and at
any adjournments thereof (the Meeting), to be held November 16, 1994, at
10:15 a.m. at 82 Devonshire Street, Boston, Massachusetts 02109, the
principal executive office of the trust. 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
September 19, 1994. Supplementary solicitations may be made by mail,
telephone, telegraph, or by personal interview by representatives of the
trust. In addition, Boston Financial Data Services may be paid to solicit
shareholders on behalf of Limited Term Bond Fund at an anticipated
cost of $260. The expenses in connection with preparing this Proxy
Statement and its enclosures and of all solicitations will be paid by the
fund ( on behalf of Limited Term Bond) and by FMR ( on behalf of
Short-Intermediate Government). Limited Term Bond Fund and FMR, on
behalf of Short-Intermediate Government Fund, will reimburse
brokerage firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person. All proxy cards solicited by the Board of
Trustees that are properly executed and received by the Secretary prior to
the Meeting, and which are not revoked, will be voted at the Meeting.
Shares represented by such proxies will be voted in accordance with the
instructions thereon. If no specification is made on a proxy card, it will
be voted FOR the matters specified on the proxy card. All proxies not
voted, including broker non-votes, will not be counted toward establishing
a quorum. Shareholders should note that while votes to ABSTAIN will count
toward establishing a quorum, passage of any proposal being considered at
the Meeting will occur only if a sufficient number of votes are cast FOR
the proposal. Accordingly, except for proposals 1 and 2, votes to ABSTAIN
and votes AGAINST will have the same effect in determining whether the
proposal is approved.
If a quorum is present at the Meeting, but sufficient votes to approve one
or more of the proposed items are not received, or if other matters arise
requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting or represented by proxy.
When voting on a proposed adjournment, the persons named as proxies will
vote FOR the proposed adjournment all shares that they are entitled to vote
with respect to each item, unless directed to vote AGAINST the item, in
which case such shares will be voted against the proposed adjournment with
respect to that item. A shareholder vote may be taken on one or more of the
items in this Proxy Statement prior to such adjournment if sufficient votes
have been received and it is otherwise appropriate. A copy of each fund's
annual report for the fiscal year ended November 30, 1993 has been mailed
or delivered to shareholders of the respective fund entitled to vote at the
meeting.
Shares of each fund in the trust issued and outstanding as of July 31,
1994 are indicated in the following table:
FIDELITY ADVISOR LIMITED TERM BOND FUND
CLASS A 12,084,781
CLASS B 67,265
INSTITUTIONAL CLASS 16,967,338
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO 36,886,682
FIDELITY INSTITUTIONAL SHORT INTERMEDIATE GOVERNMENT PORTFOLIO II
10,453
To the knowledge of the trust, substantial (5% or more ) record
ownership of the funds on that date was as follows: for Limited Term Bond
Fund - Class A: KAO Corp. of America, Boulder, CO (16%); for Limited Term
Bond Fund - Class B: Merrill Lynch, Jacksonville, FL (11%) and, Kenneth
Stein, Dallas, TX (18%); and for Institutional Short-Intermediate
Government Portfolio: Yellow Freight Co., St. Louis, MO (5.9%). To the
knowledge of the trust, no other shareholder owned of record or
beneficially more than 5% of the outstanding shares of the funds on that
date other than the shares of Institutional Short-Intermediate Government
Portfolio II held by FMR or its affiliates. FMR has advised the trust that
for Proposals 1 - 7, 19 - 25, and 27, contained in this Proxy Statement, it
will vote its shares at the Meeting FOR each Proposal. Shareholders of
record at the close of business on September 19, 1994 will be entitled to
vote at the Meeting. Each such shareholder will be entitled to one vote for
each share held on that date.
VOTE REQUIRED: A PLURALITY OF ALL VOTES CAST AT THE MEETING IS SUFFICIENT
TO APPROVE PROPOSALS 1 AND 2. APPROVAL OF PROPOSAL 3 REQUIRES THE
AFFIRMATIVE VOTE OF A MAJORITY OF OUTSTANDING VOTING SECURITIES OF EACH
CLASS OF EACH FUND OF THE TRUST, A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES OF EACH FUND OF THE TRUST, AND A MAJORITY OF THE OUTSTANDING
VOTING SECURITIES OF THE ENTIRE TRUST. APPROVAL OF PROPOSALS 4 ,
5 , AND 7 REQUIRES THE AFFIRMATIVE VOTE OF THE MAJORITY OF
OUTSTANDING SHARES OF THE ENTIRE TRUST. APPROVAL OF PROPOSAL 8 REQUIRES
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF
CLASS A SHAREHOLDERS. IN ORDER FOR CLASS B SHAREHOLDERS TO APPROVE PROPOSAL
8 WITH RESPECT TO CLASS B SHARES, AN AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF CLASS B SHAREHOLDERS IS REQUIRED. APPROVAL
OF PROPOSAL 9 REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF CLASS B SHAREHOLDERS. APPROVAL OF
PROPOSALS 6 AND 10 THROUGH 29 REQUIRES THE AFFIRMATIVE VOTE OF A
"MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF THE APPROPRIATE
FUNDS . UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), A
"MAJORITY VOTE OF THE OUTSTANDING VOTING SECURITIES'' MEANS THE AFFIRMATIVE
VOTE OF THE LESSER OF (A) 67% OR MORE OF THE SHARES PRESENT AT THE MEETING
OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING
SHARES ARE PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE
OUTSTANDING SHARES.
1. TO ELECT A BOARD OF TRUSTEES.
Pursuant to the provisions of the Declaration of Trust of Fidelity Advisor
Series IV, the Trustees have determined that the number of Trustees shall
be fixed at twelve. It is intended that the enclosed proxy card will be
voted for the election as Trustees of the twelve nominees listed below,
unless such authority has been withheld in the proxy card.
All nominees named below are currently Trustees of Fidelity Advisor Series
IV and have served in that capacity continuously since originally elected
or appointed. Mr. Cox, Ms. Davis, and Mr. Mann were selected by the trust's
Nominating and Administration Committee (see page ) and were appointed to
the Board in November 1991, December 1992, and October 1993, respectively.
None of the nominees is related to one another. Those nominees indicated by
an asterisk (*) are "interested persons" of the trust by virtue of, among
other things, their affiliation with either the trust, the funds'
investment adviser, Fidelity Management & Research Company (FMR, or the
Adviser), or the funds' distribution agent, Fidelity Distributors
Corporation (FDC). Each of the nominees is currently a Trustee or General
Partner, as the case may be, of other funds advised by FMR.
In the election of Trustees, those twelve nominees receiving the highest
number of votes cast at the Meeting, providing a quorum is present, shall
be elected.
Nominee Principal Occupation(s) Year of
(Age) Election or
Appointme
nt
*J. Gary Burkhead Senior Vice President, is 1990
82 Devonshire Street President of FMR; and President
Boston, MA and a Director of FMR Texas Inc.
(53) (1989), Fidelity Management &
Research (U.K.) Inc., and Fidelity
Management & Research (Far
East) Inc.
Ralph F. Cox Consultant to Western Mining 1991
200 Rivercrest Drive Corporation (1994). Prior to
Fort Worth, TX February 1994, he was President
(62) of Greenhill Petroleum
Corporation (petroleum
exploration and production, 1990).
Until March 1990, Mr. Cox was
President and Chief Operating
Officer of Union Pacific
Resources Company (exploration
and production). He is a Director
of Bonneville Pacific Corporation
(independent power, 1989),
Sanifill Corporation
(non-hazardous waste, 1993),
and CH2M Hill Companies
(engineering). In addition, he
served on the Board of Directors
of the Norton Company
(manufacturer of industrial
devices, 1983-1990) and
continues to serve on the Board
of Directors of the Texas State
Chamber of Commerce, and is a
member of advisory boards of
Texas A&M University and the
University of Texas at Austin.
Phyllis Burke Davis Prior to her retirement in 1992
P.O. Box 264 September 1991, Mrs. Davis
Bridgehampton, NY was the Senior Vice President of
(62) Corporate Affairs of Avon
Products, Inc. She is currently a
Director of BellSouth
Corporation
(telecommunications), Eaton
Corporation (manufacturing,
1991), and the TJX Companies,
Inc. (retail stores, 1990), and
previously served as a Director
of Hallmark Cards, Inc.
(1985-1991) and Nabisco
Brands, Inc. In addition, she
serves as a Director of the New
York City Chapter of the National
Multiple Sclerosis Society, and is
a member of the Advisory
Council of the International
Executive Service Corps. and
the President's Advisory Council
of The University of Vermont
School of Business
Administration.
Richard J. Flynn Financial consultant. Prior to 1983
77 Fiske Hill September 1986, Mr. Flynn was
Sturbridge, MA Vice Chairman and a Director of
(70) the Norton Company
(manufacturer of industrial
devices). He is currently a
Director of Mechanics Bank and
a Trustee of College of the Holy
Cross and Old Sturbridge
Village, Inc.
*Edward C. Johnson President, is Chairman, Chief 1982
3d Executive Officer and a Director
82 Devonshire Street of FMR Corp.; a Director and
Boston, MA Chairman of the Board and of
(64) the Executive Committee of
FMR; Chairman and a Director
of FMR Texas Inc. (1989),
Fidelity Management &
Research (U.K.) Inc., and
Fidelity Management &
Research (Far East) Inc.
E. Bradley Jones Prior to his retirement in 1984, 1990
3881-2 Lander Road Mr. Jones was Chairman and
Chagrin Falls, OH Chief Executive Officer of LTV
(6 7 ) Steel Company. Prior to May
1990, he was a Director of
National City Corporation (a
bank holding company) and
National City Bank of Cleveland.
He is a Director of TRW Inc.
(original equipment and
replacement products),
Cleveland-Cliffs Inc. (mining),
NACCO Industries, Inc. (mining
and marketing), Consolidated
Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale
Materials Handling, Inc. (1989)
and RPM Inc. (manufacturer of
chemical products, 1990). In
addition, he serves as a Trustee
of First Union Real Estate
Investments, Chairman of the
Board of Trustees and a
member of the Executive
Committee of the Cleveland
Clinic Foundation, a Trustee and
a member of the Executive
Committee of University School
(Cleveland), and a Trustee of
Cleveland Clinic Florida.
Donald J. Kirk Professor at Columbia University 1990
680 Steamboat Road Graduate School of Business
Apartment #1-North and a financial consultant. Prior
Greenwich, CT to 1987, he was Chairman of the
(61) Financial Accounting Standards
Board. Mr. Kirk is a Director of
General Re Corporation
(reinsurance) and Valuation
Research Corp. (appraisals and
valuations, 1993). In addition, he
serves as Vice Chairman of the
Board of Directors of the
National Arts Stabilization Fund
and Vice Chairman of the Board
of Trustees of the Greenwich
Hospital Association.
*Peter S. Lynch Vice Chairman of FMR (1992). 1990
82 Devonshire Street Prior to his retirement on May
Boston, MA 31, 1990, he was a Director of
(51) FMR (1989) and Executive Vice
President of FMR (a position he
held until March 31, 1991); Vice
President of Fidelity Magellan
Fund and FMR Growth Group
Leader; and Managing Director
of FMR Corp. Mr. Lynch was
also Vice President of Fidelity
Investments Corporate Services
(1991-1992). He is a Director of
W.R. Grace & Co. (chemicals,
1989) and Morrison Knudsen
Corporation (engineering and
construction). In addition, he
serves as a Trustee of Boston
College, Massachusetts Eye &
Ear Infirmary, Historic Deerfield
(1989) and Society for the
Preservation of New England
Antiquities, and as an Overseer
of the Museum of Fine Arts of
Boston (1990).
Gerald C. McDonough Chairman of G.M. Management 1990
135 Aspenwood Drive Group (strategic advisory
Cleveland, OH services). Prior to his retirement
(65) in July 1988, he was Chairman
and Chief Executive Officer of
Leaseway Transportation Corp.
(physical distribution services).
Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal
working, telecommunications
and electronic products),
Brush-Wellman Inc. (metal
refining), York International
Corp. (air conditioning and
refrigeration, 1989), Commercial
Intertech Corp. (water treatment
equipment, 1992), and
Associated Estates Realty
Corporation (a real estate
investment trust, 1993).
Edward H. Malone Prior to his retirement in 1985, 1990
5601 Turtle Bay Drive Mr. Malone was Chairman,
#2104 General Electric Investment
Naples, FL Corporation and a Vice
(69) President of General Electric
Company. He is a Director of
Allegheny Power Systems, Inc.
(electric utility), General Re
Corporation (reinsurance), and
Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee
of Corporate Property Investors,
the EPS Foundation at Trinity
College, the Naples
Philharmonic Center for the Arts,
and Rensselaer Polytechnic
Institute, and he is a member of
the Advisory Boards of Butler
Capital Corporation Funds and
Warburg, Pincus Partnership
Funds.
Marvin L. Mann Chairman of the Board, 1993
55 Railroad Avenue President, and Chief Executive
Greenwhich, CT Officer of Lexmark International,
(61) Inc. (office machines, 1991).
Prior to 1991, he held positions
of Vice President of International
Business Machines Corporation
("IBM") and President and
General Manager of various IBM
divisions and subsidiaries. Mr.
Mann is a Director of M.A.
Hanna Company (chemicals,
1993) and Infomart (marketing
services, 1991), a Trammell
Crow Co. In addition, he serves
as the Campaign Vice Chairman
of the Tri-State United Way
(1993) and is a member of the
University of Alabama
President's Cabinet (1990).
Thomas R. Williams President of The Wales Group, 1990
21st Floor Inc. (management and financial
191 Peachtree Street, advisory services). Prior to
N.E. retiring in 1987, Mr. Williams
Atlanta, GA served as Chairman of the
(66) Board of First Wachovia
Corporation (bank holding
company), and Chairman and
Chief Executive Officer of The
First National Bank of Atlanta
and First Atlanta Corporation
(bank holding company). He is
currently a Director of BellSouth
Corporation
(telecommunications), ConAgra,
Inc. (agricultural products),
Fisher Business Systems, Inc.
(computer software), Georgia
Power Company (electric utility),
Gerber Alley & Associates, Inc.
(computer software), National
Life Insurance Company of
Vermont, American Software,
Inc. (1989), and AppleSouth,
Inc. (restaurants, 1992).
* Except as otherwise indicated, each individual has held the office shown
or other offices in the same company for the last five years.
As of July 31 , 1994, the nominees and officers of the trust owned,
in the aggregate less than 1 % of any of the funds' outstanding
shares.
If elected, the Trustees will hold office without limit in time except
that (a) any Trustee may resign; (b) any Trustee may be removed by written
instrument, signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees; and (d) a Trustee
may be removed at any Special Meeting of shareholders by a two-thirds vote
of the outstanding voting securities of the trust. In case a vacancy shall
for any reason exist, the remaining Trustees will fill such vacancy by
appointing another Trustee, so long as, immediately after such appointment,
at least two-thirds of the Trustees have been elected by shareholders. If,
at any time, less than a majority of the Trustees holding office has been
elected by the shareholders, the Trustees then in office will promptly call
a shareholders' meeting for the purpose of electing a Board of Trustees.
Otherwise, there will normally be no meeting of shareholders for the
purpose of electing Trustees.
The trust's Board, which is currently composed of three interested and
nine non-interested Trustees, met eleven times during the twelve months
ended November 30, 1993. It is expected that the Trustees will meet at
least ten times a year at regularly scheduled meetings.
As a group, the non-interested Trustees received fees and expenses of
$ 2,907 from the trust in their capacities as Trustees of the funds
for the fiscal year ended November 30, 1993. The non-interested Trustees
also served in similar capacities for other funds advised by FMR (see page
), and received additional compensation for such services.
The Board of Trustees has adopted a policy whereby non-interested
Trustees, upon reaching their 72nd birthday will resign. Under a defined
benefit retirement program, non-interested Trustees, upon reaching age 72,
are entitled to payments during their lifetime based on their basic Trustee
fees and their length of service.
The trust's Audit Committee is composed entirely of Trustees who are not
interested persons of the trust, of FMR or its affiliates and normally
meets four times a year, or as required, prior to meetings of the Board of
Trustees. Currently, Messrs. Kirk (Chairman), Cox, and Jones are members of
the Committee. This Committee oversees and monitors the financial reporting
process, including recommending to the Board the independent accountants to
be selected for the trust (see Proposal 2), reviewing internal controls and
the auditing function (both internal and external), reviewing the
qualifications of key personnel performing audit work, and overseeing
compliance procedures. During the twelve months ended November 30, 1993,
the Committee held five meetings.
The trust's Nominating and Administration Committee is currently
composed of Messrs. Flynn (Chairman), McDonough, and Williams. The
Committee members confer periodically and hold meetings as required. The
Committee is charged with the duties of reviewing the composition and
compensation of the Board of Trustees, proposing additional non-interested
Trustees, monitoring the performance of legal counsel employed by the funds
and the non-interested Trustees, and acting as administrative committee
under the Retirement Plan for non-interested Trustees. During the twelve
months ended November 30, 1993, the Committee held five meetings. The
Nominating and Administration Committee will consider nominees recommended
by shareholders. Recommendations should be submitted to the Committee in
care of the Secretary of the Trust. The trust does not have a compensation
committee; such matters are considered by the Nominating and Administration
Committee.
2. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT ACCOUNTANTS OF THE TRUST.
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand
L.L.P. has been selected as independent accountants for the trust to
sign or certify any financial statements of the trust required by any law
or regulation to be certified by an independent accountant and filed with
the Securities and Exchange Commission (SEC) or any state. Pursuant to the
1940 Act, such selection requires the ratification of shareholders. In
addition, as required by the 1940 Act, the vote of the Trustees is subject
to the right of the trust, by vote of a majority of its outstanding voting
securities at any meeting called for the purpose of voting on such action,
to terminate such employment without penalty. Coopers & Lybrand
L.L.P. has advised the trust that it has no direct or material indirect
ownership interest in the trust.
The services provided to the trust include (1) audit of annual financial
statements and, if requested, an audit of semiannual financial statements;
(2) assistance and consultation in connection with SEC filings; and (3) if
requested, review of the federal income tax returns filed on behalf of the
trust. In recommending the selection of the trust's accountants, the Audit
Committee reviewed the nature and scope of the services to be provided
(including non-audit services) and whether the performance of such services
would affect the accountants' independence. Representatives of 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.
3. TO AMEND THE DECLARATION OF TRUST TO PROVIDE DOLLAR-BASED VOTING RIGHTS
FOR SHAREHOLDERS OF THE TRUST.
The Board of Trustees has approved, and recommends that shareholders of
the trust approve, a P roposal to amend Article VIII, Section
1 of the Declaration of Trust. The amendment would provide voting rights
based on a shareholder's total dollar interest in a fund (dollar-based
voting), rather than on the number of shares owned, for all shareholder
votes for a fund. As a result, voting power would be allocated in
proportion to the value of each shareholder's investment.
BACKGROUND. Limited Term Bond Fund and Institutional Short-Intermediate
Government Portfolio are funds of Fidelity Advisor Series IV, an open-end
management investment company organized as a Massachusetts business trust.
Shareholders of a class or fund vote separately on matters
concerning only that class or fund. Shareholders vote on a fund-wide
basis on matters that affect a fund as a whole, such as approving changes
to fundamental investment policies or limitations, and vote on a
trust-wide basis on matters that affect the trust as a whole, such as
electing trustees or amending the Declaration of Trust. Currently, under
the Declaration of Trust, each share is entitled to one vote, regardless of
the relative value of the shares of each fund in the trust.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights as required by the 1940 Act. In the case where a
trust has several series or funds, such as Fidelity Advisor Series IV,
voting rights may have become disproportionate since the net asset value
per share (NAV) of the separate funds diverge over time. The Staff of the
SEC has issued a "no-action" letter permitting a trust to seek shareholder
approval of a dollar-based voting system. The proposed amendment will
comply with the conditions stated in the no-action letter.
REASON FOR PROPOSAL. If approved, the amendment would provide a more
equitable distribution of voting rights than the one-share, one-vote system
currently in effect for certain votes. The voting power of shareholders
would be commensurate with the value of the shareholders' dollar investment
rather than with the number of shares held.
Under the current voting provisions, an investment in a fund with a lower
NAV may have significantly greater voting power than the same dollar amount
invested in a fund with a higher NAV. The table on the following page
shows the net asset value of the shares of each class of each
fund .
Fund Net Asset Value $1,000 investment
as of in terms of shares
July 31, 1994 on
July 31, 1994
Limited Term Bond Fund - Class A $ 10.49 95.329
Class B $ 10.48 95.420
Institutional Class $ 10.49 95.329
Institutional Short-Intermediate $ 9.47 105.597
Government Portfolio
Institutional Short-Intermediate $ 9.47 105.597
Government Portfolio II
For example, Institutional Short-Intermediate Government Portfolio
shareholders would have approximately 11 % greater voting power than
Limited Term Bond Fund - Class B shareholders because at current
NAVs, a $1,000 investment in Institutional Short-Intermediate Government
Portfolio would equal 105.597 shares, whereas a $1,000
investment in Limited Term Bond Fund - Class B would equal
95.420 shares. Accordingly, a one share, one-vote system may provide
certain shareholders with a disproportionate ability to affect the vote
relative to shareholders of other funds in the trust. If dollar-based
voting had been in effect, each shareholder would have had 1,000 voting
shares. Their voting power would be proportionate to their economic
interest, which FMR believes is a more equitable result, and is the result
in a typical corporation where each voting share generally has an equal
market price.
On matters requiring trust-wide votes where all funds are required to
vote, or requiring fund-wide votes where all classes are required to
vote, shareholders who own shares with a lower NAV than other funds in
the trust or fund would give other shareholders in the
trust or fund more voting "power" than they currently have. On
matters affecting only one class of one fund, only shareholders of
that class vote on the issue. In this instance, under both the
current Declaration of Trust and an amended Declaration of Trust, all
shareholders of the class would have the same voting rights, since
the NAV is the same for all shares of a single class .
AMENDMENT TO THE DECLARATION OF TRUST. Article VIII, Section I
determines the method of calculating voting rights for all shareholder
votes for a fund. If approved, Article VIII, Section I will be amended as
follows (material to be added is [[ underlined ]] and material
to be deleted is [bracketed]):
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section I. The Shareholders shall have power to vote... On any matter
submitted to a vote of the Shareholders, all shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects only the interests of one
or more Series, then only the Shareholders of such Series shall be entitled
to vote thereon. [Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote.] [[ A shareholder of
each Series shall be entitled to one vote for each dollar of net asset
value (number of Shares owned times net asset value per share) per share of
such Series, on any matter on which such shareholder is entitled to vote
and each fractional dollar amount shall be entitled to a proportionate
fractional vote. ]] There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. Until
Shares are issued, the Trustees may exercise all rights of Shareholders and
may take any action required or permitted by law, this Declaration of Trust
or any Bylaws of Trust to be taken by Shareholders.
CONCLUSION. If approved, the amendment will be implemented on the
effective date of the next prospectus. The Trustees believe the proposed
amendment will benefit the trust by bringing greater equality in voting
rights among all shareholders of the trust. The Trustees recommend that
shareholders vote FOR the proposed amendment to the Declaration of Trust.
If the amendment is not approved, the Declaration of Trust will remain
unchanged.
4. TO AMEND THE DECLARATION OF TRUST REGARDING SHAREHOLDER NOTIFICATION OF
APPOINTMENT OF TRUSTEES.
The trust's Declaration of Trust provides that in the case of a vacancy on
the Board of Trustees, the remaining Trustees shall fill the vacancy by
appointing a person they, in their discretion see fit, consistent with the
limitations of the 1940 Act. Section 16 of the Investment Company Act of
1940 states that a vacancy may be filled by the Trustees, if after filling
the vacancy, at least two-thirds of the Trustees then holding office were
elected by the outstanding shareholders of the trust. It also states that
if at any time less than 50% of the Trustees were elected by shareholders,
a shareholder meeting must be called within 60 days for the purposes of
electing Trustees to fill the existing vacancies.
The Declaration of Trust currently requires that within three months of a
Trustee appointment, notification of such be mailed to each shareholder of
the trust. Trustees also may appoint a Trustee in anticipation of a current
Trustee's retirement or resignation, or in the event of an increase in the
number of Trustees. An appointment in this case currently requires
shareholder notification within three months of the appointment under the
current Declaration of Trust.
Subject to shareholder approval, the Trustees intend to eliminate the
notification requirement from the Trust's Declaration of Trust. The
language to be deleted from the Declaration of Trust is [bracketed].
ARTICLE IV
THE TRUSTEES
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. [Within three months of such appointment
the Trustees shall cause notice of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the trust.] An
appointment of a Trustee may be made by the Trustees then in office [and
notice thereof mailed to Shareholders as aforesaid] in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16 (a) of
the 1940 Act.
Notifying a trust's shareholders in the event of an appointment of a
Trustee is not required by any federal or state law. Such notification to
all shareholders of a trust would be costly to the funds of the trust. If
the proposal is approved, shareholders will be notified of Trustee
appointments in the next financial report for the fund. Other than
eliminating the notification requirement, this proposal does not amend any
other aspect of Trustee resignation or appointment.
CONCLUSION. The Board of Trustees has concluded that the proposed
elimination of the Declaration of Trust's shareholder notification
requirement in the event of an appointment of a Trustee is in the best
interests of the trust's shareholders. The Trustees recommend voting FOR
the proposed amendment. If the proposal is approved, the amendment will
become effective immediately upon shareholder approval. If the proposal is
not approved, the Declaration of Trust's current section entitled
"Resignation and Appointment of Trustees" will remain unchanged.
5. TO AMEND THE DECLARATION OF TRUST TO PROVIDE EACH FUND WITH THE ABILITY
TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY WITH
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
the funds approve, a proposal to amend Article V, Section 1 of the
Declaration of Trust to clarify that the Trustees may authorize the
investment of all of a fund's assets in another open-end investment company
with substantially the same investment objective and policies ("Pooled Fund
Structure"). The purpose of the Pooled Fund Structure is to achieve
operational efficiencies by consolidating portfolio management while
maintaining different distribution and servicing structures. In order to
implement a Pooled Fund Structure, both the Declaration of Trust and the
funds' policies must permit the structure. Currently, each fund's policies
do not allow for such investments. Proposal 6 on page seeks each fund's
shareholder approval to adopt a fundamental investment policy to permit
investment in another open-end investment company. This proposal, which
amends the Declaration of Trust, clarifies the Board's ability to implement
the Pooled Fund Structure if a fund's policies permit it.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled investment, or "master" fund. For
example, a money market fund offering institutional services for large
investors might pool its investments with another money market fund that
offers checkwriting for individuals. This structure allows several feeder
funds with substantially the same objective but different distribution and
servicing features to combine their investments and manage them as one
master pool instead of managing them separately. The feeder funds combine
their investments by investing all of their assets in one master pooled
fund which would be organized as an open-end management investment company
(mutual fund). (Each feeder fund invested in a single master pooled
investment retains its own characteristics, but is able to achieve
operational efficiencies through investing together with the other feeder
funds in the Pooled Fund Structure.) The current Declaration of Trust does
not specifically provide the Trustees the ability to authorize the Pooled
Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take maximum advantage of potential
efficiencies. While neither FMR nor the Trustees have determined
that a fund should invest in a Pooled Fund, the Trustees believe it could
be in the best interest of each fund to adopt such a structure at a future
date. If this proposal is approved, the Declaration of Trust amendment
would provide the Trustees with the power to authorize a fund to invest all
of its assets in a single open-end investment company. The Trustees will
authorize such a transaction only if a Pooled Fund Structure is permitted
under the fund's investment policies (see Proposal 6), if they determine
that a Pooled Fund Structure is in the best interest of a fund, and if,
upon advice of counsel, they determine that the investment will not have
material adverse tax consequences to the fund or its shareholders. The
Trustees will specifically consider the impact, if any, on fees paid by the
fund as a result of adopting a Pooled Fund structure. Although the current
Declaration of Trust does not contain any explicit prohibition against
implementing a Pooled Fund Structure, the specific authority is being
sought in the event the Trustees deem it appropriate to adopt a Pooled Fund
Structure in the future.
AMENDMENT TO THE DECLARATION OF TRUST. If the proposal is approved,
Article V, Section 1 of the Declaration of Trust will be amended as
follows: (material to be added is [[ underlined ]] ):
"Subject to any applicable limitation in the Declaration of Trust or the
Bylaws of the Trust, the Trustees shall have power and authority:
[[ (t) Notwithstanding any other provision hereof, to invest all of
the assets of any series in a single open-end investment company, including
investment by means of transfer of such assets in exchange for an interest
or interests in such investment company;" ]]
CONCLUSION. The Trustees believe the proposed amendment will benefit the
funds by providing the Trustees with the flexibility to adopt a Pooled Fund
Structure in the future if permitted by a fund's investment policies and if
the Trustees determine it to be in the best interest of the fund. The
Trustees recommend that shareholders vote FOR the proposed amendment to the
Declaration of Trust. If approved, the amendment to the Declaration of
Trust will be implemented on the effective date of the next prospectus. If
the proposal is not approved, Article V, Section 1 of the Declaration of
Trust will remain unchanged.
6. TO ADOPT A NEW FUNDAMENTAL INVESTMENT POLICY FOR EACH FUND PERMITTING A
FUND TO INVEST ALL OF ITS ASSETS IN ANOTHER OPEN-END INVESTMENT COMPANY
WITH SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE AND POLICIES.
The Board of Trustees has approved, and recommends that shareholders of
each fund approve, the adoption of a new fundamental investment policy that
would permit each fund to invest all of its assets in another open-end
investment company with substantially the same investment objective and
policies ("Pooled Fund Structure"). The purpose of pooling would be to
achieve operational efficiencies by consolidating portfolio management
while maintaining different distribution and servicing structures.
BACKGROUND. A number of mutual funds have developed so called
"master-feeder" fund structures under which several "feeder" funds invest
all of their assets in a single pooled "master" fund. In order to implement
a Pooled Fund Structure, an amendment to the Declaration of Trust is
proposed, as is the adoption of a new fundamental investment policy.
Proposal 5 proposes to amend the Declaration of Trust, and if approved,
would allow the Trustees to authorize the conversion to a Pooled Fund
Structure when permitted by a fund's policies. This proposal would add a
fundamental policy for each fund that permits a Pooled Fund Structure.
REASON FOR THE PROPOSAL. FMR and the Board of Trustees continually review
methods of structuring mutual funds to take advantage of potential
efficiencies. While neither the Board nor FMR has determined that a fund
should invest in a master fund, the Trustees believe it could be in the
best interests of each fund to adopt such a structure at a future date.
At present, certain of each fund's fundamental investment policies and
limitations would prevent a fund from investing all of its assets in
another investment company, and would require a vote of shareholders before
such a structure could be adopted. To avoid the costs associated with a
subsequent shareholder meeting, the Trustees recommend that shareholders
vote to permit each fund's assets to be invested in a single Pooled Fund,
without a further vote of shareholders, if the Trustees determine that
action to be in the best interests of a fund and its shareholders. Approval
of Proposal 5 provides the Trustees with explicit authority to approve a
Pooled Fund Structure. If shareholders approve this proposal, certain
fundamental and non-fundamental policies and limitations of each fund that
currently prohibit investment in shares of one investment company would be
modified to permit the investment in a Pooled Fund. These policies include
Limited Term Bond Fund's limitation regarding concentration and each fund's
limitation on underwriting.
DISCUSSION. FMR may manage a number of mutual funds with similar
investment objectives, policies, and limitations but with different
features and services (Comparable Funds). Were these Comparable Funds to
pool their assets, operational efficiencies could be achieved, offering the
opportunity to reduce costs. Similarly, FMR anticipates that a Pooled Fund
Structure would facilitate the introduction of new Fidelity mutual funds,
increasing the investment options available to shareholders.
Each fund's method of operation and shareholder services would not be
materially affected by its investment in a Pooled Fund, except that the
assets of a fund would be managed as part of a larger pool. Were a fund to
invest all of its assets in a Pooled Fund, it would hold only a single
investment security, and the Pooled Fund would directly invest in
individual securities pursuant to its investment objective. The Pooled Fund
would be managed by FMR or an affiliate, such as FMR Texas Inc. in the case
of a money market fund. The Trustees would retain the right to withdraw a
fund's investments from a Pooled Fund at any time and would do so if the
Pooled Fund's investment objective and policies were no longer appropriate
for the fund. The fund would then resume investing directly in individual
securities as it does currently. Whenever a fund is asked to vote at a
shareholder meeting of the Pooled Fund, the fund will hold a meeting of its
shareholders if required by applicable law or the fund's policies to vote
on the matters to be considered at the Pooled Fund shareholder meeting. The
fund will cast its votes at the Pooled Fund meeting in the same proportion
as the fund's shareholders voted at theirs. The fund would otherwise
continue its normal operations.
At present, the Trustees have not considered any specific proposal to
authorize pooling of assets. The Trustees will authorize investing each
fund's assets in a Pooled Fund only if they determine that pooling is in
the best interests of the fund and if, upon advice of counsel, they
determine that the investment will not have material adverse tax
consequences to the fund or its shareholders. In determining whether to
invest in a Pooled Fund, the Trustees will consider, among other things,
the opportunity to reduce costs and to achieve operational efficiencies.
The Trustees will not authorize investment in a Pooled Fund if doing so
would materially increase costs (including fees) to shareholders.
FMR intends to seek federal and state regulatory approval in order to
allow the Fidelity funds to invest in Pooled Funds. There is, of course, no
assurance that all necessary regulatory approvals will be obtained, or that
cost reductions or increased efficiencies will be achieved.
FMR may benefit from the use of a Pooled Fund if overall assets are
increased (since FMR's fees are based on assets). Also, FMR's expenses of
providing investment and other services to each fund may be reduced. If a
fund's investment in a Pooled Fund were to reduce FMR's expenses
materially, the Trustees would consider whether a reduction in FMR's
management fee would be appropriate if and when a Pooled Fund Structure is
implemented.
PROPOSED FUNDAMENTAL POLICY. To allow each fund to invest in a Pooled Fund
at a future date, the Trustees recommend that each fund adopt the following
fundamental policy:
"The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objective, policies, and limitations as the fund."
If the proposal is adopted, the Trustees intend to adopt a non-fundamental
investment limitation for each fund which states:
"The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund."
CONCLUSION. The Board of Trustees recommends that each fund's shareholders
vote to adopt a new fundamental policy that would permit each fund, subject
to future review by the Board of Trustees as described above, to invest all
of its assets in an open-end investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
If approved, the amendment will be implemented on the effective date of
the next prospectus revision. If the proposal is not adopted, each
fund's current fundamental investment policies will remain unchanged with
respect to potential investment in Pooled Funds.
7. TO AMEND THE BYLAWS OF THE TRUST NOT TO REQUIRE
SHAREHOLDER APPROVAL FOR FURTHER AMENDMENTS TO THE BYLAWS.
The Board of Trustees has approved for submission to shareholders of the
trust a proposal to amend the Bylaws of the trust to allow the Trustees to
approve any future amendments to the Bylaws without seeking shareholder
approval. Currently, shareholder approval is required to amend the trust's
Bylaws.
In the past, certain state securities (Blue Sky) authorities required that
various operational and investment restrictions be included in a charter or
Bylaw provision amendable only by shareholder vote. No Blue Sky authorities
currently have such a requirement. The Trustees believe that the
Fund s will be able to respond to changing conditions more rapidly,
and without the expense to the funds of a special shareholder meeting, if
the Trustees have the power to amend the Bylaws. If the shareholders vote
in favor of this proposal, the Trustees intend to amend those provisions of
the Bylaws indicated below.
Current Article X of the trust's Bylaws allows amendments to the Bylaws by
majority vote of the Trustees, provided, however, that any amendment which
changes or affects the provisions of Articles VII, X, or XII must be
approved by vote of a majority of the outstanding shares of the Trust
entitled to vote. The proposed amendment to Article X eliminates the
requirement for a shareholder vote to amend Articles VII, X, and XII.
Current Article VII contains provisions which are to be included in any
contract between the trust and a custodian, provisions governing
termination of custodian agreements and the appointment of
success ors or custodians, and provisions governing sub-custodian
arrangements. The Investment Company Act of 1940 (the 1940 Act) and rules
and regulations thereunder impose various requirements with respect to
custodians for registered investment companies. These requirements apply to
the trust regardless of whether they are set forth in the Bylaws. The
Trustees believe that it would be in the best interests of the trust and
its shareholders for the Trustees to have the authority to amend or delete
any provisions in the trust's custodian contracts as they deem necessary,
consistent with the 1940 Act, in order to maintain maximum flexibility in
the operation of the funds.
Current Article XII requires that the Trustees, at least semiannually,
submit to shareholders a written financial report of the transactions of
the funds, including financial statements which must be certified by
independent public accountants, at least annually. These requirements
currently are contained in rules promulgated under the 1940 Act and,
therefore, permit the Trustees to furnish more limited financial statements
if such rules are modified, or if permitted by order of the SEC.
If approved by shareholders of the trust, Article X of the Bylaws will be
amended as indicated below. Material to be deleted is indicated in brackets
[].
ARTICLE X
AMENDMENTS
These Bylaws may be amended at any meeting of the Trustees of the Trust by
a majority vote [; provided, however, that any amendment which changes or
affects the provisions of Article VII, Article X, or Article XII shall be
approved by vote of a majority of the outstanding shares of the Trust
entitled to vote].
CONCLUSION. The Trustees believe the proposed amendment will
benefit the trust by allowing the Trustees the flexibility to amend the
Bylaws in response to, or in anticipation of, statutory and/or regulatory
changes affecting the trust's contractual arrangements with its
custodians or the trust's financial reporting requirements , without
the expense to the funds of a special shareholder meeting.
8. TO AMEND THE CLASS A DISTRIBUTION AND SERVICE PLAN OF LIMITED TERM BOND
FUND.
The Board of Trustees has approved, and recommends that shareholders
approve, an amended Distribution and Service Plan for Class A shares (the
Amended Class A Plan). In addition, Class B shareholders are being asked
to approve the Amended Class A Plan. Class B shares are offered to retail
investors and are subject to a contingent deferred sales charge which
declines for Class B shares held up to a maximum of 5 years. Class B shares
convert automatically to Class A shares of the same Fidelity Advisor Fund
at NAV after a maximum holding period of 6 years. Due to this conversion
feature, and as a condition of an exemptive order received by Fidelity
which permits separate classes, if material changes are made to the Class A
Distribution and Service Plan, a majority of Class B shareholders must
approve the amended Class A Distribution and Service Plan. A copy of the
Amended Class A Plan is attached to this Proxy Statement as Exhibit 1.
Rule 12b-1 (the Rule), promulgated by the Securities and Exchange
Commission (SEC) 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. Under
the Rule, an investment company is deemed to be acting as a distributor of
its shares if it engages "directly or indirectly in financing any activity
which is primarily intended to result in the sale of shares issued by such
company, including, but not necessarily limited to, advertising,
compensation of underwriters, dealers, and sales personnel, the printing
and mailing of prospectuses to other than current shareholders, and the
printing and mailing of sales literature."
THE CURRENT CLASS A PLAN. The Trustees, as provided for by the
Rule, have approved a Distribution and Service Plan for Class A (the Plan).
Under the fund's Plan, Class A pays Fidelity Distributors Corporation
(Distributors) a fee at an annual rate of its average daily net assets
throughout the month. The determination of daily net assets is made at the
close of business each day throughout the month, but the net assets for
purposes of calculating the fee will exclude assets attributable to shares
purchased more than 144 months (12 years) prior to such date. Class A
shares begin accruing time upon initial purchase into Class A. Class B
shares upon conversion into Class A shares begin accruing time under the
Class A Plan as of their initial purchase into Class B. Pursuant to the
Plan for each fund, Class A pays Distributors a distribution fee at an
annual rate of up to . 40 % of its average net assets. Currently the
Trustees have approved a distribution fee for Class A at an annual rate of
. 25 % of average net assets. Distributors may pay all or a portion of
such fee to securities dealers or other persons (investment professionals)
as distribution or service fees pursuant to agreements with investment
professionals. To the extent the fee is not paid to such investment
professionals, Distributors could use such fee for its expenses incurred in
the distribution of Class A shares. The Plan also provides that to the
extent that each fund's payment of management fees to FMR might be
considered to constitute the "indirect" financing of activities "primarily
intended to result in the sale of shares," such payment is expressly
authorized.
If approved by shareholders, the Amended Class A Plan will continue in
effect as long as its continuance is specifically approved at least
annually by a majority of the Board of Trustees, including 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 the Plan or any
agreement related to the Plan (the non-interested Trustees), cast in person
at a meeting called for the purpose of voting on the Plan. The Plan
requires that the Trustees receive, at least quarterly, a written report as
to the amounts expended during the quarter by FMR, or FDC, in connection
with financing any activity primarily intended to result in the sale of
shares issued by the fund and the purposes for which such expenditures were
made.
Although the Plan contemplates that FMR and FDC may engage in various
distribution activities, it does not require them to perform any specific
type of distribution activity or to incur any specific level of expense for
such activities.
THE AMENDED CLASS A PLAN. The Amended Class A Plan is identical to
the current Plan with the exception of the provision which excludes from
the fee calculation assets attributable to shares purchased more than
144 months prior to the date of the distribution fee calculation (144-month
limitation). When the Fidelity Advisor funds were first introduced in the
mid 1980's, the National Association of Securities Dealers, Inc. (NASD)
Rules of Fair Practice set a limit on the amount of front-end sales charges
which a fund could impose. However, no similar limit existed for 12b-1
fees. The 144-month limitation was an effort by FDC and the Board of
Trustees to protect shareholders against indefinite payment on a given
amount of assets. The 144-month period was intended to result in total
distribution charges (front-end plus 12b-1 fees) roughly equivalent to the
front-end sales charge limit then imposed by the NASD.
In July 1993, the NASD amended its Rules of Fair Practice to establish a
combined limit on mutual fund sales loads and 12b-1 fees. Like the
144-month limitation, the NASD Rule restricts a mutual fund's total payment
of 12b-1 fees. Under the NASD Rule, a fund is subject to a limit on
aggregate payments of 7.25% of total new gross sales (6.25% if a service
fee is also imposed), plus interest. When the limit is reached, no further
sales loads by the fund may be paid to the distributor, and no further
payments under the 12b-1 plan can be made, until the fund has further gross
sales that result in an increased limit.
The NASD Rule has become the industry standard restricting distribution
charges. Regardless of whether the proposal is approved, each class is and
will continue to be subject to the NASD Rule. The NASD Rule addresses the
same concerns the 144-month limitation was intended to address. However,
the limitations of the NASD Rule are calculated differently than those of
the 144-month limitation. For example, using reasonable sales, redemption
and performance assumptions, there is a considerable likelihood that many
funds may never reach their NASD cap, because the cap is constantly
replenished by additional gross sales. To the extent that this is true,
funds which contain assets older than 144 months will pay more in 12b-1
fees if the proposal is approved than under the current Plan.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of
the Amended Class A Plan, the trustees considered a variety of factors and
were advised by counsel who are not counsel to FMR or FDC. The Trustees,
Distributors and FMR believe that the implementation of the Amended Class A
Plan would assist in the selling of shares and thus increase its asset
base, which in turn may prove beneficial to each fund and its shareholders
by spreading fixed costs over a larger asset base and making additional
monies available for investing. Positive cash flow affords portfolio
management a greater ability to diversify investments and minimizes the
need to sell securities to meet redemptions. In addition, since each class
is dependent primarily on investment professionals for sales of its shares,
the ongoing payment to investment professionals who have sold shares (by
reeallowance of the distribution fee) should provide incentives to offer
better and continuous services to current shareholders. Investment
professionals also allow investors access to investment alternatives to
which they might otherwise not have been exposed.
The Board recognized that a greater level of fund assets benefits FMR by
increasing its management fee revenues. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and retain
a high caliber of investment and other personnel and to develop and
implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to each
fund.
CONCLUSION. The Board of Trustees recommends that shareholders vote
FOR approval of the amendment to the Class A Distribution and Service Plan.
If Class A shareholders a pprove the Amended Class A Plan, it will be
effective as to shares purchased into Class A regardless of whether
the Class B shareholders approve the amendment. If so approved, the Amended
Class A Plan will become effective the first day of the month following
shareholder approval. If the Amended Class A Plan is not approved by Class
A shareholders, the current Plan will remain in effect unchanged for shares
purchased into Class A. The effect of approval or disapproval of the
Amended Class A Plan by Class B shareholders will depend upon the approval
or disapproval of the proposed amendment to the Class B Plan by Class B
shareholders (see Proposal 9).
9. TO AMEND THE CLASS B DISTRIBUTION AND SERVICE PLAN OF LIMITED TERM BOND
FUND - CLASS B .
The Board of Trustees has approved, and recommends that Class B
shareholders approve, an amended Distribution and Service Plan for Class B
shares (the Amended Class B Plan). In addition, Class B shareholders are
being asked to approve the Amended Class A Plan (see Proposal 8). A copy of
the Amended Class B Plan is attached to this Proxy Statement as Exhibit
2.
Rule 12b-1 (the Rule), promulgated by the Securities and Exchange
Commission (SEC) 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. Under the Rule,
an investment company is deemed to be acting as a distributor of its shares
if it engages "directly or indirectly in financing any activity which is
primarily intended to result in the sale of shares issued by such company,
including, but not necessarily limited to, advertising, compensation of
underwriters, dealers, and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and
mailing of sales literature."
THE CURRENT CLASS B PLAN. The Trustees, as provided for by the Rule, have
approved a Distribution and Service Plan for Class B (the Plan). Under each
fund's Plan, Class B pays Fidelity Distributors Corporation (Distributors)
a fee at an annual rate of its average daily net assets throughout the
month. The determination of daily net assets is made at the close of
business each day throughout the month, but the net assets for purposes of
calculating the fee will exclude assets attributable to shares purchased
more than 144 months (12 years) prior to such date. Shares converted from
Class B to Class A begin accruing time from the initial purchase of Class B
shares. Pursuant to the Plan for each fund, Class B pays Distributors a
distribution fee at an annual rate of .75% of its average net assets. Class
B also pays Distributors a service fee at an annual rate of .25% of its
average net assets with which Distributors compensates investment
professionals for personal service and/or the maintenance of shareholder
accounts. Distributors may pay all or a portion of such fee to securities
dealers or other persons (investment professionals) as distribution or
service fees pursuant to agreements with investment professionals. To the
extent the fee is not paid to such investment professionals, Distributors
could use such fee for its expenses incurred in the distribution of Class B
shares. The Plan also provides that to the extent that each fund's payment
of management fees to FMR might be considered to constitute the "indirect"
financing of activities "primarily intended to result in the sale of
shares," such payment is expressly authorized.
If approved by shareholders, the Amended Class B Plan will continue in
effect as long as its continuance is specifically approved at least
annually by a majority of the Board of Trustee s , including 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 the
Plan or any agreement related to the Plan (the non-interested Trustees),
cast in person at a meeting called for the purpose of voting on the Plan.
The Plan requires that the Trustees receive, at least quarterly, a written
report as to the amounts expended during the quarter by FMR, or FDC, in
connection with financing any activity primarily intended to result in the
sale of shares issued by the fund and the purposes for which such
expenditures were made.
Although the Plan contemplates that FMR and FDC may engage in various
distribution activities, it does not require them to perform any specific
type of distribution activity or to incur any specific level of expense for
such activities.
THE AMENDED CLASS B PLAN. The Amended Class B Plan is identical to the
current Plan with the exception of the provision which excludes assets
attributable to shares purchased more than 144 months prior to the date of
the distribution fee calculation (144-month limitation). When the Fidelity
Advisor funds were first introduced in the mid 1980's, the National
Association of Securities Dealers, Inc. (NASD) Rules of Fair Practice set a
limit on the amount of front-end sales charges which a fund could impose.
However, no similar limit existed for 12b-1 fees. The 144-month limitation
was an effort by FDC and the Board of Trustees to protect shareholders
against indefinite payment on a given amount of assets. The 144-month
period was intended to result in total distribution charges (front-end plus
12b-1 fees) roughly equivalent to the front-end sales charge limit then
imposed by the NASD. Since Class B shares convert automatically to Class A
shares after 6 years, the 144-month limitation was included in the current
Plan to allow time to begin accruing upon purchase into Class B shares.
In July 1993, the NASD amended its Rules of Fair Practice to establish a
combined limit on mutual fund sales loads and 12b-1 fees. Like the
144-month limitation, the NASD Rule restricts a mutual fund's total payment
of 12b-1 fees. Under the NASD Rule, a fund is subject to a limit on
aggregate payments of 7.25% of total new gross sales (6.25% if a service
fee is also imposed), plus interest. When the limit is reached, no further
sales loads by the fund may be paid to the distributor, and no further
payments under the 12b-1 plan can be made, until the fund has further gross
sales that result in an increased limit.
The NASD Rule has become the industry standard restricting distribution
charges. Regardless of whether the proposal is approved, each class is and
will continue to be subject to the NASD Rule. The NASD Rule addresses the
same concerns the 144-month limitation was intended to address. However,
the limitations of the NASD Rule are calculated differently than those of
the 144-month limitation. For example, using reasonable sales, redemption
and performance assumptions, there is a considerable likelihood that many
funds may never reach their NASD cap, because the cap is constantly
replenished by additional gross sales. To the extent that this is true,
funds which contain assets older than 144 months will pay more in 12b-1
fees if the proposal is approved than under the current Plan.
TRUSTEE CONSIDERATION. In determining to recommend the adoption of the
Amended Class B Plan, the trustees considered a variety of factors and were
advised by counsel who are not counsel to FMR or FDC. The Trustees,
Distributors and FMR believe that the implementation of the Amended Class B
Plan would assist in the selling of shares and thus increase its asset
base, which in turn may prove beneficial to each fund and its shareholders
by spreading fixed costs over a larger asset base and making additional
monies available for investing. Positive cash flow affords portfolio
management a greater ability to diversify investments and minimizes the
need to sell securities to meet redemptions. In addition, since each class
is dependent primarily on investment professionals for sales of its shares,
the ongoing payment to investment professionals who have sold shares (by
reeallowance of the distribution fee) should provide incentives to offer
better and continuous services to current shareholders. Investment
professionals also allow investors access to investment alternatives to
which they might otherwise not have been exposed.
The Board recognized that a greater level of fund assets benefits FMR by
increasing its management fee revenues. The Board believes that revenues
received by FMR contribute to its continuing ability to attract and retain
a high caliber of investment and other personnel and to develop and
implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to each
fund.
CONCLUSION. The Board of Trustees recommends that shareholders vote
FOR approval of the amendment to the Class B Distribution and Service Plan.
If Class B shareholders approve the Amended Class A Plan (see Proposal 8)
and the Amended Class B Plan, the amended Plans will become effective the
first day of the month following shareholder approval. If Class B
shareholders do not approve the amended Class B Plan, the current Class B
Plan will remain in effect unchanged for shares purchased into Class
B . If Class B shareholders approve the Amended Class B Plan, but do not
approve the Amended Class A Plan (see Proposal 8) the amended Class B Plan
will become effective on the first day of the month following shareholder
approval and the Class A Plan will remain unchanged. In this event, the
144-month period would commence for Class B shares simultaneously with
their conversion to Class A shares.
10. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FIDELITY MANAGEMENT &
RESEARCH (FAR EAST), INC. FOR LIMITED TERM BOND FUND.
In conjunction with its portfolio management responsibilities on behalf of
Limited Term Bond Fund, FMR has entered into sub-advisory agreements with
affiliates whose offices are geographically dispersed around the world. To
strengthen and coordinate these relationships, the Board of Trustees
proposes that shareholders of the fund approve a new sub-advisory agreement
(the proposed agreement) between Fidelity Management & Research Far East
Inc. (FMR Far East) and FMR on behalf of the fund to replace FMR's existing
agreement with FMR Far East. The proposed agreement would allow FMR not
only to receive investment advice and research services from FMR Far East,
but also would permit FMR to grant FMR Far East investment management
authority, as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the fund and its shareholders. Because
FMR pays all of FMR Far East's fees, the proposed agreement would not
affect the fees paid by the fund to FMR .
On June 8, 1994, the Board of Trustees agreed to submit the proposed
agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. If approved by shareholders, the proposed
agreement will replace the sub-advisory agreement with FMR Far East
currently in effect with respect to the fund (the current agreement). The
current agreement, dated December 1, 1990, was approved by the shareholders
on November 14, 1990. A copy of the proposed agreement is attached to this
proxy statement as Exhibit 3.
FMR Far East, with its principal office in Tokyo, is a wholly owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR Far East may also provide investment advisory services to FMR with
respect to other investment companies for which FMR serves as investment
adviser, and to other clients. Currently, FMR Far East's only client other
than FMR is Fidelity International Limited (FIL), an affiliate of FMR
organized under the laws of Bermuda. FIL provides investment advisory
services to non-U.S. investment companies and institutional investors
investing in securities of issuers throughout the world. Edward C. Johnson
3d, President and a Trustee of the trust, is Chairman and a Director of FMR
Far East, Chairman, and a Director of FIL, and a principal stockholder of
both FIL and FMR. For more information on FMR Far East, see the section
entitled "Activities and Management of FMR U.K. and FMR Far East" on page .
Under the current agreement, FMR Far East acts as an investment
consultant to FMR and supplies FMR with investment research information and
portfolio management advice as FMR reasonably requests on behalf of the
fund. FMR Far East provides investment advice and research services with
respect to issuers located outside of the United States, focusing primarily
on companies based in the Far East. Under the current agreement with FMR
Far East, FMR, NOT THE FUND, pays FMR Far East's fee equal to 105% of its
costs incurred in connection with the agreement.
For the fiscal years ended November 30, 1993, 1992, 1991, no fees were
paid by FMR to FMR Far East on behalf of the Fund.
Although FMR employees are expected to consult regularly with FMR Far
East, under the current agreement, FMR Far East has no authority to make
investment decisions on behalf of the fund. Under the proposed agreement,
FMR would continue to receive investment advice from FMR Far East, but it
could also grant investment management authority to FMR Far East with
respect to all or a portion of the fund's assets. If FMR Far East were to
exercise investment management authority on behalf of the fund, it would be
required, subject to the supervision of FMR, to direct the investments of
the fund in accordance with the fund's investment objective, policies, and
limitations as provided in the fund's Prospectus or other governing
instruments and such other limitations as the fund may impose by notice in
writing to FMR or FMR Far East. If FMR grants investment management
authority to FMR Far East with respect to all or a portion of the fund's
assets, FMR Far East would be authorized to buy or sell stocks, bonds, and
other securities for the fund subject to the overall supervision of FMR and
the Board of Trustees. In addition, the proposed agreement would authorize
FMR to delegate other investment management services to FMR Far East,
including, but not limited to, currency management services (including
buying and selling currency options and entering into currency forward and
futures contracts on behalf of the fund), other transactions in futures
contracts and options, and borrowing or lending portfolio securities. If
any of these investment management services were delegated, FMR Far East
would continue to be subject to the control and direction of FMR and the
Board of Trustees and to be bound by the investment objective, policies,
and limitations of the fund. If granted investment management authority,
FMR Far East would also execute orders to purchase and sell securities as
described in the "Portfolio Transactions" section on page .
Allowing FMR to grant investment management authority to FMR Far East
would provide FMR increased flexibility in the assignment of portfolio
managers and give the fund access to managers located abroad who may have
more specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR Far East, the ability to execute
portfolio transactions from points in the Far East that are physically
closer to foreign issuers and the primary markets in which their securities
are traded. Increasing FMR's proximity to foreign markets should enable the
fund to participate more readily in full trading sessions on foreign
exchanges, and to react more quickly to changing market conditions.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR Far East for investment advice as
described above would remain unchanged. However, to the extent that FMR
granted investment management authority to FMR Far East, FMR would pay FMR
Far East 50% of its monthly management fee with respect to the average net
assets managed on a discretionary basis by FMR Far East for investment
management and portfolio execution services.
If approved by shareholders, the proposed agreement would take affect the
first day of the first month following shareholder approval and
would continue in force until June 30, 199 5 and from year to year
thereafter, but only as long as its continuance i s approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of the fund.
The proposed agreement could be transferred to a successor of FMR Far East
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The proposed agreement would be terminable on 60
days' written notice by either party to the agreement and the proposed
agreement would terminate automatically in the event of its assignment
CONCLUSION. The Board of Trustees unanimously recommends that shareholders
of the fund vote FOR the proposed agreement. If the proposed agreement is
not approved by shareholders of the fund, FMR's current agreement on behalf
of the fund will continue in effect
11. TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH FIDELITY MANAGEMENT &
RESEARCH (U.K.), INC. FOR LIMITED TERM BOND FUND.
In conjunction with its portfolio management responsibilities on behalf of
Limited Term Bond Fund, FMR has entered into sub-advisory agreements with
affiliates whose offices are geographically dispersed around the world. To
strengthen and coordinate these relationships, the Board of Trustees
proposes that shareholders of the fund approve a new sub-advisory agreement
(the proposed agreement) between Fidelity Management & Research (U.K.),
Inc. (FMR U.K.) and FMR on behalf of the fund to replace FMR's existing
agreement with FMR U.K. The proposed agreement would allow FMR not only to
receive investment advice and research services from FMR U.K., but would
also permit FMR to grant FMR U.K. investment management authority, as well
as the authority to buy and sell securities if FMR believes it would be
beneficial to the fund and its shareholders. Because FMR pays all of FMR
U.K.'s fees, the proposed agreement would not affect the fees paid by the
fund to FMR.
On June 8, 1994, the Board of Trustees agreed to submit the proposed
agreement to shareholders of the fund pursuant to a unanimous vote of both
the full Board of Trustees and those Trustees who were not "interested
persons" of the trust or FMR. If approved by shareholders, the proposed
agreement will replace the sub-advisory agreement currently in effect with
respect to the fund (the current agreement). The current agreement for the
fund, dated December 1, 1990, was approved by shareholders on November 14,
1990. A copy of the proposed agreement is attached to this proxy statement
as Exhibit 4.
FMR U.K., with its principal office in London, is a wholly owned
subsidiary of FMR established in 1986 to provide investment research to FMR
with respect to foreign securities. This research complements other
research on foreign securities produced by FMR's U.S.-based research
analysts and portfolio managers, or obtained from broker-dealers or other
sources.
FMR U.K. may also provide investment advisory services to FMR with respect
to other investment companies for which FMR serves as investment adviser,
and to other clients. Currently, FMR U.K.'s only client other than FMR is
Fidelity International Limited (FIL), an affiliate of FMR organized under
the laws of Bermuda. FIL provides investment advisory services to non-U.S.
investment companies and institutional investors investing in securities of
issuers throughout the world. Edward C. Johnson 3d, President and a Trustee
of the trust, is Chairman and a Director of FMR U.K., Chairman and a
Director of FIL, and a principal stockholder of both FIL and FMR. For more
information on FMR U.K., see the section entitled "Activities and
Management of FMR U.K. and FMR Far East" on page .
Under the current agreement, FMR U.K. acts as an investment consultant to
FMR and supplies FMR with investment research information and portfolio
management advice as FMR reasonably requests on behalf of the fund. FMR
U.K. provides investment advice and research services with respect to
issuers located outside of the United States focusing primarily on
companies based in Europe. Under the current agreement with FMR U.K., FMR,
NOT THE FUND, pays FMR U.K.'s fee equal to 110% of its costs incurred in
connection with the agreement.
For the fiscal years ended November 30, 1993, 1992, and 1991, no fees were
paid by FMR to FMR U.K. on behalf of the fund.
Although FMR employees are expected to consult regularly with FMR U.K.,
under the current agreement, FMR U.K. has no authority to make investment
decisions on behalf of the fund. Under the proposed agreement, FMR would
continue to receive investment advice from FMR U.K., but it could also
grant investment management authority with respect to all or a portion of
the fund's assets to FMR U.K. If FMR U.K. were to exercise investment
management authority on behalf of the fund, it would be required, subject
to the supervision of FMR, to direct the investments of the fund in
accordance with the fund's investment objective, policies, and limitations
as provided in the fund's Prospectus or other governing instruments and
such other limitations as the fund may impose by notice in writing to FMR
or FMR U.K. If FMR grants investment management authority to FMR U.K. with
respect to all or a portion of the fund's assets, FMR U.K. would be
authorized to buy or sell stocks, bonds, and other securities for the fund
subject to the overall supervision of FMR and the Board of Trustees. In
addition, the proposed agreement would authorize FMR to delegate other
investment management services to FMR U.K., including, but not limited to,
currency management services (including buying and selling currency options
and entering into currency forward and futures contracts on behalf of the
fund), other transactions in futures contracts and options, and borrowing
or lending portfolio securities. If any of these investment management
services were delegated, FMR U.K. would continue to be subject to the
control and direction of FMR and the Board of Trustees and to be bound by
the investment objective, policies, and limitations of the fund. If granted
investment management authority, FMR U.K. would also execute orders to
purchase and sell securities as described in the "Portfolio Transactions"
section on page .
Allowing FMR to grant investment management authority to FMR U.K. would
provide FMR increased flexibility in the assignment of portfolio managers
and give the fund access to managers located abroad who may have more
specialized expertise with respect to local companies and markets.
Additionally, the Trustees believe that the fund and its shareholders may
benefit from giving FMR, through FMR U.K., the ability to execute portfolio
transactions from points in Europe that are physically closer to foreign
issuers and the primary markets in which their securities are traded.
Increasing FMR's proximity to foreign markets should enable the fund to
participate more readily in full trading sessions on foreign exchanges, and
to react more quickly to changing market conditions.
THE PROPOSED AGREEMENT WOULD NOT INCREASE THE FEES PAID TO FMR BY THE
FUND. The fees paid by FMR to FMR U.K. for investment advice as described
above would remain unchanged. However, to the extent that FMR granted
investment management authority to FMR U.K., FMR would pay FMR U.K. 50% of
its monthly management fee with respect to the average net assets managed
on a discretionary basis by FMR U.K. for investment management and
portfolio execution services.
If approved by shareholders, the proposed agreement would take affect the
first day of the first month following shareholder approval and
would continue in force until June 30, 199 5 and from year to year
thereafter, but only as long as its continuance i s approved at least
annually by (i) the vote, cast in person at a meeting called for the
purpose, of a majority of those Trustees who are not "interested persons"
of the trust or FMR and (ii) the vote of either a majority of the Trustees
or by the vote of a majority of the outstanding shares of the fund.
The proposed agreement could be transferred to a successor of FMR U.K.
without resulting in its termination and without shareholder approval, as
long as the transfer did not constitute an assignment under applicable
securities regulations. The proposed agreement would be terminable on 60
days' written notice by either party to the agreement and the proposed
agreement would terminate automatically in the event of its assignment.
CONCLUSION. The Board of Trustees unanimously recommends that shareholders
of each fund vote FOR the proposed agreement. If the proposed agreement is
not approved by shareholders of the fund, FMR's current agreement on
behalf of th e fund will continue in effect.
12. TO APPROVE AN AMENDED MANAGEMENT CONTRACT FOR LIMITED TERM BOND FUND.
The Board of Trustees has approved, and recommends that shareholders of
Limited Term Bond Fund approve, a proposal to amend the fund's management
contract between the fund and FMR (the Amended Contract). The proposal
would modify the management fee that FMR receives from the fund to make it
consistent with the fees paid by comparable Fidelity funds. For 1994,
the normal fee rate for most Fidelity fixed-income funds was approximately
0.46%, compared to 0.41% for the fund. To make fees more consistent,
t he proposal would lower one component of the fund's management
fee and raise another, resulting in a net increase of approximately
0.05 % per year.
A copy of the Amended Contract, marked to indicate the proposed amendment,
is supplied as Exhibit 5 on page . Except for amendments to the
management fee, and the addition of new provisions governing
transactions with broker-dealers, it is substantially identical to the
present contract (which is described in detail under "Present
Management Contract" beginning on page ) . If approved by
shareholders, the Amended Contract will take effect on the first day of the
month following shareholder approval and will remain in effect through June
30, 199 5 , and thereafter subject to continuation by the fund's Board
of Trustees. If the Amended Contract is not approved, the Present
Contract will continue in effect through June 30 , 199 5 , and
thereafter subject to continuation by the fund's Board of Trustees.
PROPOSED AMENDMENTS TO THE MANAGEMENT CONTRACT. The management fee
is an annual percentage of the fund's average net assets, calculated and
paid monthly. The percentage is the sum of two components: a group fee
rate, which varies according to FMR's assets under management, and a fixed
individual fund fee rate. The proposal would modify the group fee ratio
by providing for lower fee rates if FMR's assets under management
remain above $ 120 billion. At the same time, the proposal would
raise the individual fund fee rate from 0 .25% to 0 .30%.
The proposal would also add a new section to the contract governing the
fund's transactions with broker-dealers.
REASONS FOR THE PROPOSAL. FMR recommended the amendment to the
individual fund fee rate in order to bring the fund's management fee rate
in line with the fees of comparable funds it advises. At present, the fund
pays roughly 90% of the normal management fee rate for substantially the
same management services.
In making its request, FMR noted that its efforts have resulted in
strong performance for the fund. These results, in FMR's opinion, reflect
FMR's commitment to developing superior investment management capabilities,
including its investment in portfolio management, research staff, and other
personnel, and in the systems and facilities needed to support their
efforts. FMR's request that the fee be amended reflects its belief that the
fund should bear the same level of fees for those services as other
Fidelity funds with comparable management needs.
FMR also noted that its investments in enhanced research and trading
capabilities have benefited the fund while, because of increases in FMR's
assets under management, the management fee rate has declined. The fund's
management fee rate had declined from .44% to .42% since the group fee
component of the management fee first took effect in January 1989. Finally,
in presenting competitive fee and expense information to the Trustees, FMR
noted that the proposed total management fee rate, at 0.47%, would still be
lower than the fees paid by the majority of intermediate bond funds managed
in the U.S. The median management fee for all U.S. intermediate
investment-grade debt funds is approximately 0.50%, 0.03% higher than the
rate under the Amended Contract. For example, for the period ended November
30, 1993, the fund's total expenses under the Amended Contract would have
been 1.28% for Class A and 0.69% for Institutional Class. Class B had not
yet commenced operations during this period. Class A expenses are higher
than the median total expense level of all U.S. intermediate
investment-grade debt funds (0.76%) and Institutional Class is lower than
the median.
The proposed amendments relating to transactions with broker-dealers
reflect authority previously granted to FMR by the Board of Trustees, and
would not affect the fund's management fee or the way in which it is
managed. They are proposed mainly as part of an attempt to standardize the
terms of management contracts for all funds advised by FMR.
MODIFICATIONS TO GROUP AND INDIVIDUAL FUND FEES. The group fee rate
varies based on the aggregate net assets of all registered investment
companies having management contracts with FMR. As group net assets
increase, the group fee rate declines. The Amended Contract would not
change the group fee calculation for group net assets of $ 120
billion or less. Above $120 billion in group net assets, the group fee
rate declines.
The group fee rate is calculated according to a graduated fee schedule
providing for different rates for different levels of group net assets. The
rate at which the fee declines is determined by fee "breakpoints" that
provide for lower fees when assets increase. The Amended Contract would add
eight new , lower fee breakpoints for group asset levels above
$ 120 billion. (For an explanation of how these breakpoints are
factored into the fee calculation, see the section entitled "Present
Management Contract s " beginning on page .) Group fee rates that
are lower than those contained in the fund's present contract have been
voluntarily implemented by FMR on January 1, 1992, November 1, 1993, and
August 1, 1994. The result at various levels of group net assets is
illustrated by the table below. (The table does not reflect FMR's
voluntary adoption of lower group fee rates for fee rates shown for the
Present Contract.)
EFFECTIVE ANNUAL GROUP FEE RATES
Group Net
Assets Present Amended
($ billions) Contract Contract
120 .1808% .1808%
150 .1746% .1736%
200 .1685% .1652%
250 .16 48 % .1587%
300 .1 623 % .1536%
350 .1 605 % .1494%
400 .1 592 % .1459%
Average group net assets for July 1994 were approximately $258
billion.
The Amended Contract would also increase the fund's individual fund fee
rate , from 0 .25%. to 0 .30% of the fund's average net
assets matching Fidelity's standard rate for domestic fixed-income
funds, and making the fund's management fee rate (the sum of the group and
individual fund fee rates) consistent with other taxable fixed-income funds
advised by FMR.
IMPACT OF PROPOSED FEE. The total management fee paid by the fund for
the fiscal year ended November 30, 1993 amounted to 0.42% of its average
net assets. If the Amended Contract had been in effect, the total
management fee would have been 0.47%. The difference equals about 1
one-half cent per share. The following table illustrates the impact on
the fund's cumulative total return of each class over the past one,
three, and five years if the Amended Contract had been in effect,
and compares the fund's performance to the median return for all
intermediate investment-grade debt funds, tracked by Lipper
Analytical Services, Inc. (Lipper). Lipper is an independent organization
that provides various statistical and other data regarding the mutual fund
industry.
The following table provides the fund's total returns and competitive
median returns under the terms of the Present Contract (including FMR's
voluntary adoption of lower group fee rates and reinvestment of dividends
and capital gains, but excluding the impact of Class A sales charges) for
the periods ended July 31, 1994, and the returns if the Amended Contract
had been in effect during those same periods. If Class A sales charges had
been taken into account, returns would have been lower.
CLASS A*:
Reported
Return Under Competitive
Return Amended Median
Contract Return
One Year 0.17% 0.12% - 0.35%
Three Years 27.42% 27.23% 24.69%
Five Years 47.65% 47.29% 44.77%
INSTITUTIONAL CLASS:
Reported
Return Under Competitive
Return Amended Median
Contract Return
One Year 0.68% 0 . 63% - 0 . 35%
Three Years 28.70% 28.51% 24.69%
Five Years 49.14% 48.77% 44.77%
The fund's one-, three- and five-year rankings among intermediate
investment-grade debt funds for the periods ended July 31, 1994
were as follows:
CLASS A*:
1 Year 3 Years 5 Years
31 out of 105 9 out of 45 9 out of 32
INSTITUTIONAL CLASS :
1 Year 3 Years 5 Years
15 out of 105 7 out of 44 7 out of 31
* Initial offering of Class A Shares, September 10, 1992, at which time a
0.25% 12b-1 fee was imposed. This 12b-1 fee and revised transfer agent
arrangements are not reflected in returns shown for Class A prior to
September 10, 1992.
The following table provides data concerning the fund's management fee and
total expense ratio under the terms of the Present Contract for the
last three fiscal years ended November 30, 1993, and the effect on
those figures i f the Amended Contract had been in effect.
(000
Omitted)
1993 1992 1991
Average Net Assets: $ 196,853 $ 227,617 $ 326,835
MANAGEMENT FEES (ALL CLASSES)*:
PRESENT CONTRACT
Total($) $ 829 $ 966 $ 1,405
Total (%) .42 % .42 % .43 %
AMENDED CONTRACT
Total ($) $ 922 $ 1,077 $ 1,568
Total (%) .47 % .47 % .48 %
RATIO OF TOTAL EXPENSES TO AVERAGE NET ASSETS * :
PRESENT CONTRACT:
Class A 1.23% .82% N/A
Institutional Class .64% .57% .57%
AMENDED CONTRACT:
Class A 1.28% .87% N/A
Institutional Class .69% .62% .62%
* Initial offering of Class B shares, June 30, 1994, at which time a
1.00% 12b-1 fee (includes a .25% shareholder service fee) was imposed.
Estimated expenses for Class B's first fiscal year of operation is
1.98%.
Effective July 1, 1994 FMR has voluntarily agreed to reimburse the fund
to the extent that total operating expenses exceed an annual rate of 0.90%
(Class A), 0.65% (Institutional Class), and 1.65% (Class B) of average net
assets. This voluntary waiver can be removed by FMR at any time without
prior shareholder notification.
As with all mutual funds, the fund's management fee must be approved by
the fund's Board of Trustees and by the non-interested Trustees (those
Trustees who are not affiliated with Fidelity and are not "interested
persons" under the 1940 Act), who are responsible for protecting the
interests of shareholders. The fund's management fee must also be approved
by the fund's shareholders. The Board has considered and unanimously
approved the Amended Contract, and recommends that shareholders vote in
favor of the proposal.
TRANSACTIONS WITH BROKERS-DEALERS. The fund may execute portfolio
transactions with broker-dealers who provide research and execution
services to the fund or other accounts over which FMR or its affiliates
exercise investment discretion. The selection of such broker-dealers is
generally made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff based upon the quality of research
and execution services provided.
The receipt of research from broker-dealers that execute transactions
on behalf of the fund may be useful to FMR in rendering investment
management services to the fund and to its other clients, and conversely,
such research provided by broker-dealers who execute transaction orders on
behalf of other FMR clients may be useful to FMR in carrying out its
obligations to the fund. The receipt of such research has not reduced FMR's
normal independent research activities; however, it enables FMR to avoid
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
The fund has already been authorized by the Board of Trustees,
consistent with the federal securities laws and the rules and regulations
of the Securities and Exchange Commission, to place portfolio transactions
through broker-dealers who are affiliated with FMR and through
broker-dealers who provide research. The Amended Contract expressly
recognizes this authority.
MATTERS CONSIDERED BY THE BOARD OF TRUSTEES. FMR provided substantial
information to the Trustees to assist in their deliberations. In addition,
the committee requested and reviewed additional data, including analysis
prepared by independent counsel to both the funds and the independent
trustees . In unanimously approving the Amended Contract and
recommending its approval by shareholders, the Trustees of the fund,
including the independent Trustees, considering the best interests
of shareholders of the fund, took into account all factors they deemed
relevant. The factors considered by the independent Trustees
included the nature, quality, and extent of the services furnished by FMR
to the fund; the necessity of FMR maintaining and enhancing its ability to
retain and attract high caliber personnel to serve the fund; the increased
complexity of the securities markets; the investment record of FMR
in managing the fund; extensive financial, personnel, and structural
information as to the Fidelity organization, including the revenues and
expenses of FMR , Fidelity Service Co. (FSC), and Fidelity
Investments Institutional Operations Co. (FIIOC) relating to their mutual
fund activities; whether economies of scale were demonstrated in connection
with FMR's provision of investment management and shareholder services as
assets increased; data on investment performance, management fees and
expense ratios of competitive funds and other Fidelity funds; FMR's
expenditures in developing enhanced shareholder services for the fund;
enhancements in the quality and scope of the shareholder services provided
to the fund's shareholders; the fees cha r ged and services offered by
an affiliate of FMR for providing investment management services to
non-investment company accounts; and possible "spin-off" benefits to FMR
from serving as manager and from affiliates of FMR serving as principal
underwriter and transfer agent of the fund.
The independent Trustees regularly review the fund's monthly and annual
performance materials which include the following: background information,
investment results relative to the current economic climate, performance
charts, top fifteen holdings, portfolio diversification, and ranking in the
applicable competitive universe. The Trustees also reviewed the fund's
one-, three- and five-year total returns for the period ended November 30,
1993 compared to the returns for selected competitive funds, as reported
and restated to include the impact of the proposed fee amendment.
With regard to the section of the Amended Contract describing the changes
to portfolio transactions, the Trustees considered the value of research
provided by the broker-dealers, the quality of the execution services
provided, and the level of commissions paid. While the fund does not
generally purchase securities through a broker-dealer by paying
commissions, the Board of Trustees determined that amending the Present
Contract to expressly recognize the authority of FMR to use affiliated
broker-dealers and broker-dealers who provide research services furthers
the goal of standardizing management contracts for Fidelity funds, and that
explicitly permitting all Fidelity funds to utilize certain broker-dealers
is beneficial to the fund.
ACTION OF THE BOARD OF TRUSTEES AND RECOMMENDED SHAREHOLDER ACTION.
After review and discussion, the Board of Trustees unanimously approved the
changes described above. The Trustees' conclusion that the proposed fee
structure is appropriate was based on a detailed review of the quality and
nature of FMR's advisory and related services to the fund, the
competitiveness of the proposed fee structure and resulting expense ratio
in relation to fees and expense ratios of other comparable mutual funds,
the fund's competitive investment performance, the profitability of FMR
related to the fund, and other factors.
Accordingly, the Trustees unanimously voted to approve the terms and
conditions of the Amended Contract and to recommend that the shareholders
vote FOR the Amended Contract.
13. TO AMEND LIMITED TERM BOND FUND'S INVESTMENT OBJECTIVE AND TO ELIMINATE
CERTAIN FUNDAMENTAL INVESTMENT POLICIES.
The Board of Trustees has approved a proposal that would amend the fund's
fundamental investment objective and eliminate certain of the fund's
fundamental investment policies. The main purpose of the proposal is to
provide a broader range of securities from which to choose in seeking high
current income. The fund's current objective is as follows:
"The fund seeks to provide a high rate of income through investment in
high and upper-medium grade fixed-income obligations."
This proposal, if approved by shareholders, would amend the fund's
fundamental investment objective to read as follows:
"The fund seeks to provide a high rate of income through investment
primarily in investment-grade fixed-income obligations."
Currently, the fund purchases only obligations deemed by FMR to be
equivalent in quality to those rated A or better by Moody's Investors
Service, Inc., (Moody's) or Standard & Poor's Corporation (S&P). In
addition, FMR performs its own credit analysis on securities purchased by
the fund, and the fund may invest in instruments which are either
unrated by rating agencies or rated by rating agencies below A,
if FMR judges them to be of comparable quality to those rated A or
better.
If the proposal is approved, the investment objective will allow the fund
to invest in investment-grade securities, which will include the ability to
purchase securities considered to be of medium grade (equivalent to a
rating of Baa by Moody's or BBB by S&P) . Securities rated Baa/BBB may
possess speculative characteristics and may be more sensitive to economic
changes and changes in the financial condition of issuers. Approval of this
proposal will also enable the fund to invest up to 35% of its assets in
fixed-income securities rated lower than investment-grade, which may
involve greater risk, including the risk of default. At this time, however,
the fund has no current intention of investing more than 5% of its net
assets in securities rated below A quality, and if this proposal is
approved by shareholders, the fund will adopt the following non-fundamental
policy, which may be changed by the Board of Trustees without further
shareholder approval:
" The fund currently intends to limit its investments in debt securities
to those of Baa-quality and above, and currently intends to limit its
investments in debt securities rated Baa to 5% of its net assets. "
Purchase of a debt security is consistent with the fund's debt quality
policies if it is rated at or above the referenced level by Moody's or S&P,
or is unrated but judged to be of equivalent quality by FMR. This proposal,
if approved by shareholders, would place the responsibility for credit
determinations on FMR as the fund's investment manager although the
trustees would retain supervisory responsibilities.
The proposed investment objective and non-fundamental policy define the
fund's quality rating policies and the following t hree
fundamental investment policies would be eliminated :
Under normal circumstances the fund will invest in fixed-income securities
as follows:
(i) Corporate obligations which are rated AAA, AA, or A by S&P, or Aaa,
Aa, or A by Moody's; and
(iv) Commercial paper which at the date of investment is rated A-1
or A-2 by S&P or Prime-1 or Prime-2 by Moody's or, if not rated, is issued
by companies which at the date of investment have an outstanding debt issue
rated AAA, AA or A by S&P or Aaa, Aa, or A by Moody's; and
(v) Such other fixed-income instruments as the Board of Trustees, in
its judgment, deems to be of comparable quality to those enumerated
above.
Fundamental policies can be changed only by shareholder approval, while
non-fundamental policies can be changed or eliminated without shareholder
approval. However, changes in investment policies would continue to be
subject to the supervision of the Board of Trustees, and to appropriate
disclosure to fund shareholders and prospective investors.
CONCLUSION. The Board of Trustees believes that the proposed
changes to the fund's investment objective and policies are in the best
interests of the fund and its shareholders. The Trustees recommend that
shareholders vote FOR the proposed changes. If approved by shareholders,
the amendment s will be implemented on the effective date of the next
prospectus. If the proposal is not approved by shareholders, the current
investment objective and fundamental investment policies will remain
unchanged.
14. TO REPLACE LIMITED TERM BOND FUND'S FUNDAMENTAL PORTFOLIO MATURITY
POLICY WITH AN IDENTICAL NON-FUNDAMENTAL POLICY.
The primary purpose of this proposal is to replace the fund's fundamental
investment policy regarding the dollar weighted average maturity of the
fund's investments with an identical non-fundamental policy. The following
sets forth the fundamental policy that will become non-fundamental if
the proposal is approved :
"The fund will maintain a dollar-weighted average maturity of 10 years or
less, defined herein as "limited term."
While it is not currently anticipated that this change will have any
material impact on the way the fund is managed, approval of this proposal
would permit the fund, in the future, to change the maximum average
maturity of the fund 's investments, consistent with its investment
objective, and applicable regulatory requirements.
Changes in non-fundamental investment policies can be made without
shareholder approval but are subject to the supervision of the Board of
Trustees, and to appropriate disclosure to fund shareholders and
prospective investors.
CONCLUSION. The Board of Trustees believes that replacing the fund's
fundamental maturity policy with an identical non-fundamental policy
is in the best interests of the fund and its shareholders. If approved by
shareholders, the proposal will be implemented on the effective date of the
next prospectus. If not approved by shareholders, the policy will remain
fundamental. The Trustees recommend that shareholders vote FOR the
propos al .
15. TO REPLACE LIMITED TERM BOND FUND'S FUNDAMENTAL INVESTMENT POLICIES
WITH IDENTICAL NON-FUNDAMENTAL POLICIES.
The primary purpose of this proposal is to replace the fund's fundamental
investment policies regarding instruments in which it invests with
identical non-fundamental policies. Fundamental policies can be changed or
eliminated only with shareholder approval. The following policies set forth
partial fundamental investment criteria which would become
non-fundamental :
" Under normal circumstances, the fund will invest in fixed-income
securities as follows:
(ii) Obligations issued or guaranteed as to interest and principal by
the government of the U.S., or any other agency or instrumentality
thereof;
(iii) Obligations (including certificates of deposit and banker's
acceptances) of U.S. banks which at the date of investment have capital
gains, surplus, and undivided profits (as of the date of their most
recently published annual financial statements) in excess of
$100,000,000;
While it is not currently anticipated that this change will have any
material impact on the way the fund is managed, approval of this proposal
would permit the fund, in the future, to amend these policies subject
to the supervision of the Board of Trustees and applicable regulatory
requirements, without seeking additional approval from shareholders. In a
separate but related proposal, shareholders are being asked to approve
amendment to the fund's investment objective and ratings criteria .
See proposal 13 .
Changes in non-fundamental investment policies can be made without
shareholder approval but are subject to the supervision of the Board of
Trustees, and to appropriate disclosure to fund shareholders and
prospective investors.
CONCLUSION. The Board of Trustees has considered this proposal and
believes that replacing the fund's fundamental policies with identical
non-fundamental policies is in the best interests of the fund and its
shareholders. The Trustees recommend that shareholders vote FOR the
proposed change to the fund's investment policies. If approved by
shareholders, the proposal will be implemented on the effective date
of the next prospectus. If shareholders do not approve the proposal, the
policies will remain fundamental.
16. TO ADOPT A NON-FUNDAMENTAL DEFENSIVE POLICY FOR LIMITED TERM
BOND FUND .
The Fund currently does not state a defensive policy under which it
intends to invest for temporary or emergency purposes, other than a policy
to engage in reverse repurchase agreements. Reverse repurchase agreements
are a form of borrowing and are addressed in Proposal 17. The fund proposes
to adopt the following non-fundamental defensive policy that is
expected to become the standard for all Fidelity taxable bond funds.
"FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without limitation in
investment-grade money market or short-term debt instruments for temporary,
defensive purposes."
Under normal conditions, the fund will invest in a diversified
portfolio of fixed-income securities pursuant to its investment objective
and policies. However, when FMR believes market conditions warrant a
temporary, defensive posture, the fund may invest without limit in
investment-grade money market or short-term instruments.
This change is not expected to have any significant effect on the
fund's management. At this time, the proposed non-fundamental policy will
provide the fund with greater flexibility to react to changing market
conditions.
Changes in non-fundamental investment policies can be changed without
shareholder approval but are subject to the supervision of the Board of
Trustees, and to appropriate disclosure to fund shareholders and
prospective investors.
CONCLUSION. The Board of Trustees has considered this proposal and
believes that adopting a non-fundamental defensive policy is in the
best interests of the fund and its shareholders. The Trustees recommend
that shareholders vote FOR the proposed change. If approved by
shareholders, the amendment will be implemented on the effective date of
the next prospectus.
17. TO AMEND LIMITED TERM BOND FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING BORROWING.
Limited Term Bond Fund's current fundamental limitation concerning
borrowing states:
"The fund may not borrow money, except that the fund may borrow money
for temporary or emergency purposes (not for leveraging or investment) or
engage in reverse repurchase agreements, in an amount not exceeding 33 1/3%
of the value of the fund's total assets (including the amount borrowed)
less liabilities (other than borrowings). Any borrowings that come to
exceed 33 1/3% of the fund's total assets by reason of a decline in the net
assets will be reduced within three days to the extent necessary to comply
with the 33 1/3% limitation (the fund will not purchase securities for
investment while borrowings equaling 5% or more of its total assets are
outstanding)."
Subject to shareholder approval, the Trustees intend to replace the
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may borrow money
for temporary or emergency purposes (not for leveraging or investment), in
an amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
the standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page .) If the proposal is approved, the amended
fundamental borrowing limitation cannot be changed without a future vote of
shareholders.
Adoption of the proposed limitation concerning borrowing is not
expected to affect the way in which the fund is managed, its investment
performance, or the securities or instruments in which it invests. However,
the proposal would address several points. First, the proposed limitation
would require the fund to reduce borrowings that come to exceed 33 1/3% of
total assets for any reason. Under the current limitations, the fund must
reduce borrowings that come to exceed 33 1/3% of total assets only when
there is a decline in net assets. Second, the proposed limitation
specifically defines "three days" to exclude Sundays and holidays. In
addition, the fund's current investment limitation prohibits the fund from
purchasing a security while borrowings represent more than 5% of total
assets are outstanding. Subject to shareholder approval, the Trustees
intend to replace these components of the fundamental limitations with
similar non-fundamental investment limitations that could be changed by
vote of the Trustees without further approval of shareholders.
In addition, the fund proposes that the following fundamental
investment policy be eliminated:
"The fund also may engage in reverse repurchase agreements for
temporary or emergency purposes and not for investment purposes."
In a reverse repurchase agreement, a fund sells a portfolio instrument
to another party, such as a bank or broker-dealer, in return for cash and
agrees to repurchase the instrument at a particular price and time. Reverse
repurchase agreements may increase fluctuations in the market value of the
fund's assets and may be viewed as a form of leverage. The fund only enters
into reverse repurchase agreements with parties whose creditworthiness has
been found satisfactory by FMR.
Currently, there is no Federal securities regulation which would
prohibit a fund from engaging in reverse repurchase agreements for
investment purposes. Although the fund has no current intention of
investing in reverse repurchase agreements for investment purposes,
elimination of the fundamental policy prohibiting engagement in reverse
repurchase agreements for investment purposes will contribute to the
overall objectives of standardization. The Board of Trustees believes that
efforts to standardize investment limitations will facilitate FMR's
investment compliance efforts and are in the best interests of
shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment of the fundamental investment limitation concerning borrowing and
the elimination of the fundamental investment policy concerning reverse
repurchase agreements will benefit the fund. Accordingly, the Trustees
recommend that shareholders of the fund vote FOR the proposed amendment and
elimination. If approved, changes will be implemented with the effective
date of the next prospectus. If the proposal is not approved by
shareholders of the fund, the fund's current limitation and policy will
remain unchanged.
ADOPTION OF STANDARDIZED INVESTMENT LIMITATIONS
The primary purpose of Proposals 18 through 29 is to revise several of
the funds' investment limitations to conform to limitations which are the
standard for similar types of funds managed by FMR. The Board of Trustees
has asked FMR to analyze the various fundamental and non-fundamental
investment limitations of the Fidelity funds, and, where practical and
appropriate to a fund's investment objective and policies, propose to
shareholders adoption of standard fundamental limitations and elimination
of certain other fundamental limitations. Generally, when fundamental
limitations are eliminated, Fidelity's standard non-fundamental limitations
replace them. By making these limitations non-fundamental, the Board of
Trustees may amend limitations as they deem appropriate, without seeking
shareholder approval. The Board of Trustees could amend these limitations
to respond, for instance, to developments in the marketplace, or changes in
federal or state law. The costs of shareholder meetings if called for these
purposes are generally borne by the fund and its shareholders.
It is not anticipated that these proposals will substantially affect
the way the funds are currently managed. However, FMR is presenting them to
you for your approval because FMR believes that increased standardization
will help to promote operational efficiencies and facilitate monitoring of
compliance with fundamental and non-fundamental investment limitations.
Although adoption of the new or revised limitations is not likely to have
any impact on the current investment techniques employed by the funds, it
will contribute to the overall objectives of standardization.
1 8 . TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION FOR LIMITED TERM BOND FUND.
Limited Term Bond Fund's current fundamental limitation concerning
diversification states:
"The fund may not purchase the securities of any issuer (except the United
States Government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States) if, as a
result: (a) more than 5% of its total assets would be invested in the
securities of such issuer, provided, however, that up to 25% of its total
assets may be invested without regard to such 5% limitation, or (b) the
fund would hold more than 10% of the voting securities of any issuer."
Subject to shareholder approval, the Trustees intend to replace this
fundamental limitation, with the following fundamental investment
limitation:
"The fund may not with respect to 75% of the funds total assets, purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer."
Because the fund invests mainly in debt securities, FMR does not
currently expect that the approval of this proposal will materially affect
the way the fund is managed, except that the proposed limitation
will permit the fund to hold more than 10% of the voting securities of
one or more issuers. Subject to certain statutory exceptions for securities
of the U.S. government and its agencies and instrumentalities, this
increased investment flexibility will be confined to 25% of the fund's
total assets. The current 10% limitation applicable to purchases of voting
securities of a single issuer will remain in effect with respect to 75% of
the fund's total assets.
State securities regulations (Blue Sky regulations) at one time prohibited
a fund from registering shares for sale if the fund intended to hold more
than 10% of the voting securities of a single issuer. The fund has a
fundamental restriction that incorporates this Blue Sky restriction.
Because the Blue Sky regulations regarding this limitation ha ve been
eliminated, shareholder approval is sought to permit the fund to hold a
higher proportion of voting securities of a single issuer. In addition, the
proposed limit is expected to become the standard for all funds managed by
FMR. (See "Adoption of Standardized Investment Limitations" on page .) The
standard more closely tracks the language of the diversification limitation
required under the 1940 Act.
If the proposal is approved, the new fundamental diversification
limitation could not be changed without a future vote of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. The Trustees recommend voting FOR the
proposed amendment. The new limitation, upon shareholder approval, will be
implemented on the effective date of the next prospectus. If the proposal
is not approved, the fund's current fundamental diversification investment
limitation will remain unchanged.
1 9 . TO ADOPT THE STANDARDIZED FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING DIVERSIFICATION FOR INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT
PORTFOLIO.
Institutional Short-Intermediate Government Portfolio does not currently
have a fundamental limitation describing its policy on diversification.
Pursuant to Section 8(b) of the 1940 Act, a mutual fund must state its
policy relating to, among other things, diversification. Subject to
shareholder approval, the Trustees intend to adopt the following
fundamental investment limitation concerning the diversification of the
fund's investments which is the standard limitation for all funds managed
by FMR and has been recommended by the Board of Trustees:
"The fund may not with respect to 75% of the fund's total assets, purchase
the securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer."
Adoption of this limitation will not affect the way in which the fund is
managed, the investment performance of the fund, or the securities or
instruments in which the fund invests but it will contribute to the
overall objective of standardization.
CONCLUSION. The Board of Trustees has concluded that the proposed adoption
of a fundamental limitation regarding diversification will benefit the
fund. The Trustees recommend voting FOR the proposed amendment. The new
limitation, if approved by shareholders, will be implemented on the
effective date of the next prospectus.
20 . TO ELIMINATE EACH FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING SHORT SALES OF SECURITIES.
Limited Term Bond Fund's current fundamental limitation on selling
securities short states:
"The fund may not make short sales of securities, provided, however, that
the fund may purchase or sell futures contracts."
Institutional Short-Intermediate Government Portfolio's current
fundamental limitation on selling securities short states:
"The fund may not sell securities short (except by selling futures
contracts), unless it owns, or by virtue of ownership of other securities,
has the right to obtain, securities equivalent in kind and amount to the
securities sold."
The Trustees recommend that shareholders vote to eliminate the above
fundamental investment limitations. If the proposal is approved, the
Trustees intend to replace each current fundamental limitation with
a non-fundamental limitation that could be changed without a vote of
shareholders. The proposed non-fundamental limitation is set forth below,
with a brief analysis of the substantive differences between it and the
current limitations.
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. In
an investment technique known as a short sale "against the box," an
investor sells securities short while owning securities equivalent in kind
and amount, or having the right to obtain equivalent securities. The
investor could have the right to obtain equivalent securities, for example,
through its ownership of warrants, options, or convertible bonds. If the
proposal is approved by shareholders of each respective fund, the Trustees
intend to adopt the following non-fundamental investment limitation on
short selling, which would permit short sales against the box:
"The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short."
The proposed non-fundamental limitation would clarify that transactions in
options are not deemed to constitute selling securities short. It would
also permit Limited Term Bond Fund to enter into short sales against the
box.
Certain state regulations currently prohibit mutual funds from entering
into any short sales, other than short sales against the box. If the
proposal is approved, however, the Board of Trustees would be able to
change the proposed non-fundamental limitation in the future, without a
vote of shareholders, if state regulations were to change to permit other
types of short sales, or if waivers from existing requirements were
available, subject to appropriate disclosure to investors.
Neither fund currently anticipates entering into any short sales including
short sales against the box. If the proposal is approved, however, either
fund would be able to change that policy in the future, without a vote of
shareholders, subject to the supervision of the Trustees and the addition
of appropriate disclosure to existing and prospective investors.
Although elimination of the funds' fundamental limitations on short
selling is unlikely to affect each fund's investment techniques at this
time, in the event of a change in state regulatory requirements, each fund
may alter its investment practices in the future. The Board of Trustees
believes that efforts to standardize each fund's investment limitations
will facilitate FMR's investment compliance efforts (see "Adoption of
Standardized Investment Limitations" on page ) and are in the best
interests of the shareholders.
CONCLUSION. The Board of Trustees recommends voting FOR the
proposal to eliminate each fund's fundamental investment limitations
regarding short sales of securities. If approved, the non-fundamental
policy will be implemented on the effective date of the next
prospectus. If the proposal is not approved by the shareholders of each
fund, that fund's current limitation will remain unchanged.
2 1 . TO ELIMINATE EACH FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING MARGIN PURCHASES.
The current fundamental limitation concerning purchasing securities on
margin for each fund states:
"The fund may not make purchase any securities on margin, except for such
short-term credits as are necessary for the clearance of transactions,
provided, however, that the fund may make initial and variation margin
payments in connection with purchases or sales of futures contracts or of
options on futures contracts."
The Trustees recommend that shareholders vote to eliminate the above
fundamental investment limitation. If the proposal is approved, the
Trustees intend to replace the current fundamental limitation with a
non-fundamental limitation for each fund that could be changed without a
vote of shareholders. The proposed non-fundamental limitation is set forth
below, with a brief analysis of the substantive differences between it and
the current limitation.
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the
borrower places with a broker as collateral against the loan. Each fund's
current fundamental limitation prohibits the fund from purchasing
securities on margin, except to obtain such short-term credits as may be
necessary for the clearance of transactions and for initial and variation
margin payments made in connection with the purchase and sale of futures
contracts and options on futures contracts. With these exceptions, mutual
funds are prohibited from entering into most types of margin purchases by
applicable SEC policies. The proposed non-fundamental limitation includes
these exceptions.
If the proposal is approved by shareholders, the Trustees intend to adopt
the following non-fundamental investment limitation, which would prohibit
margin purchases except as permitted under the conditions referred to
above:
"The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin."
Although elimination of each fund's fundamental limitation on margin
purchases is unlikely to affect the fund's investment techniques at this
time, in the event of a change in federal regulatory requirements, the
funds may alter their investment practices in the future. The Board of
Trustees believes that efforts to standardize investment limitations will
facilitate FMR's investment compliance efforts (see "Adoption of
Standardized Investment Limitations" on page ) and are in the best
interests of shareholders.
CONCLUSION. The Board of Trustees recommends voting FOR the
proposal to eliminate each fund's investment limitation regarding margin
purchases. If approved, the proposal will be implemented on the effective
date of the next prospectus. If the proposal is not approved by the
shareholders of each fund, that fund's current limitation will remain
unchanged.
2 2 . TO AMEND SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO'S
FUNDAMENTAL INVESTMENT LIMITATION CONCERNING BORROWING.
Institutional Short-Intermediate Government Portfolio's current
fundamental limitation concerning borrowing states:
"The fund may not borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) or
engage in reverse repurchase agreements, in an amount not exceeding 33 1/3%
of the value of the fund's total assets (including the amount borrowed)
less liabilities (other than borrowings). Any borrowings that come to
exceed 33 1/3% of the fund's total assets by reason of a decline in the net
assets will be reduced within three days to the extent necessary to comply
with the 33 1/3% limitation. The fund will not purchase securities while
temporary bank borrowings in excess of 5% of its total assets are
outstanding."
Subject to shareholder approval, the Trustees intend to replace the
fund's current fundamental investment limitation with the following amended
fundamental investment limitation governing borrowing:
"The fund may not borrow money, except that the fund may borrow money
for temporary or emergency purposes (not for leveraging or investment), in
an amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation."
The primary purpose of the proposal is to revise the fund's fundamental
borrowing limitation to conform to a limitation that is expected to become
the standard for all funds managed by FMR. (See "Adoption of Standardized
Investment Limitations" on page .) If the proposal is approved, the amended
fundamental borrowing limitation cannot be changed without a future vote of
shareholders.
Adoption of the proposed limitation concerning borrowing is not
expected to affect the way in which the fund is managed, its investment
performance, or the securities or instruments in which it invests. However,
the proposal would address several points. First, the proposed limitation
would require the fund to reduce borrowings that come to exceed 33 1/3% of
total assets for any reason. Under the current limitations, the fund must
reduce borrowings that come to exceed 33 1/3% of total assets only when
there is a decline in net assets. Second, the proposed limitation
specifically defines "three days" to exclude Sundays and holidays. In
addition, the fund's current investment limitation prohibits the fund from
purchasing a security while borrowings represent more than 5% of total
assets are outstanding. Subject to shareholder approval, the Trustees
intend to replace these components of the fundamental limitations with
similar non-fundamental investment limitations that could be changed by
vote of the Trustees without further approval of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit each fund. Accordingly, the Trustees recommend that
shareholders of the fund vote FOR the proposed amendment. The amended
limitation, upon shareholder approval, will be implemented with the
effective date of the next prospectus. If the proposal is not approved by
the shareholders of a fund, that fund's current limitation will
remain unchanged.
2 3 . TO AMEND EACH FUND ' S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING UNDERWRITING OF SECURITIES.
The current fundamental limitation concerning underwriting for Limited
Term Bond Fund states:
"The fund may not underwrite any securities, except to the extent that the
purchase of bonds in accordance with the fund's investment objective,
policies, and limitations, either directly from the issuer, or from an
underwriter for an issuer, may be deemed to be underwriting."
The current fundamental limitation concerning underwriting for
Institutional Short-Intermediate Government Portfolio states:
"The portfolio may not underwrite securities issued by others, except to
the extent that the purchase of bonds in accordance with the portfolio's
investment objective, policies, and limitations, either directly from the
issuer, or from an underwriter for an issuer, may be deemed to be
underwriting . "
Subject to shareholder approval, the Trustees intend to replace this
limitation with the following fundamental limitation governing
underwriting:
"The fund may not underwrite securities issued by others, except to the
extent that the fund may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of restricted securities."
The primary purpose of the proposed amendment is to clarify that the funds
are not prohibited from selling restricted securities if, as a result of
such sale, the fund is considered an underwriter under federal securities
laws. The proposal also serves to conform the fund's fundamental investment
limitation concerning underwriting to a limitation which is expected to
become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) If the proposal is
approved, the new limitation may not be changed without a future vote of
shareholders.
Adoption of the proposed limitation concerning underwriting is not
expected to affect the way in which the funds are managed, their investment
performance, or the securities or instruments in which the y invest.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit e ach fund. Accordingly, the Trustees
recommend that shareholders of the funds vote FOR the proposed amendment.
The amended limitation, upon shareholder approval, will be implemented with
the effective date of the next prospectus. If the proposal is not approved
by the shareholders of each fund, that fund's current limitation will
remain unchanged.
2 4 . TO AMEND EACH FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING THE CONCENTRATION OF ITS INVESTMENTS IN A SINGLE INDUSTRY.
Limited Term Bond Fund's current fundamental investment limitation
concerning the concentration of its investments within a single industry
states:
"The fund may not purchase the securities of any issuer (except the United
States government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States) if, as a
result, more than 25% of the fund's total assets would be invested in any
one industry, provided, however, that the fund may invest more than 25% of
its total assets in the obligations of banks."
Institutional Short-Intermediate Government Portfolio's current
fundamental investment limitation concerning the concentration of its
investments within a single industry states:
"The fund may not purchase any security if, as a result, more than 25% of
the value of its total assets would be invested in the securities of
companies having their principal business activities in the same industry
(this limitation does not apply to securities issued or guaranteed by the
United States government, its agencies or its instrumentalities ) ."
Subject to shareholder approval, the Trustees of e ach fund intend
to replace each fundamental investment limitation with the following
amended fundamental investment limitation governing concentration:
"The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry."
The primary purpose of the proposal is to revise each fund's fundamental
concentration limitation to conform to a limitation which is expected to
become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) Adoption of the proposed
concentration limitation is not expected to affect the way in which the
funds are managed, their investment performance, or the securities or
instruments in which they invest. However, the proposed limitation would
clarify that the funds cannot invest more than 25% of their total assets in
companies, as opposed to issuers, whose principal business activities are
in the same industry. In addition, the current fundamental investment
limitation for Limited Term Bond Fund reserve s freedom of action to
invest more than 25% of total assets in the obligations of banks. The
proposed limitation would not allow the fund to invest more than 25% of
total assets in the obligations of banks. If the proposal is approved,
the new fundamental concentration limitation cannot be changed without a
future vote of shareholders.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. The Trustees recommend voting FOR the
proposed amendment. The new limitation, upon shareholder approval, will be
implemented with the effective date of the next prospectus. If the proposal
is not approved, the fund's current fundamental investment limitation will
remain unchanged.
2 5 . TO AMEND INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO'S
FUNDAMENTAL INVESTMENT LIMITATION CONCERNING REAL ESTATE.
Institutional Short-Intermediate Government Portfolio's current
fundamental investment limitation concerning real estate states:
"The fund may not purchase or sell real estate (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
Subject to shareholder approval, the Trustees of the fund intend to
replace this fundamental investment limitation with the following amended
fundamental investment limitation governing purchases and sales of real
estate:
"The fund may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business)."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is authorized to invest and to conform the
fund's fundamental real estate limitation to a limitation which is expected
to become the standard for all funds managed by FMR. (See "Adoption of
Standardized Investment Limitations" on page .) If the proposal is
approved, the new fundamental real estate limitation may not be changed
without a future vote of shareholders.
Adoption of the proposed limitation concerning real estate is not expected
to affect significantly the way in which the fund is managed, or the
way in which securities or instruments are selected for the fund.
However, to the extent that the fund invests to a greater extent in real
estate related securities, it will be subject to the risks of the real
estate market. This industry is sensitive to factors such as changes in
real estate values and property taxes, overbuilding, variations in rental
income, and interest rates. Performance could also be affected by the
structure, cash flow, and management skill of real estate companies.
The fund does not expect to acquire real estate. However, the proposed
limitation would clarify several points. First, the proposed limitation
would make it explicit that the fund may acquire a security or other
instrument that is secured by a mortgage or other right to foreclose on
real estate, in the event of default. Any investments in these securities
are, of course, subject to the fund's investment objective and policies and
to other limitations regarding diversification and concentration. Also the
proposed limitation specifically permits the fund to sell real estate
acquired as a result of ownership of securities or other instruments.
However, in light of the types of securities in which the fund regularly
invests, FMR considers this to be a remote possibility.
CONCLUSION. The Board of Trustees has concluded that the proposed
amendment will benefit the fund. The Trustees recommend voting FOR the
proposed amendment. The new limitation, upon shareholder approval, will be
implemented with the effective date of the next prospectus. If the proposal
is not approved, the fund's current fundamental investment limitation will
remain unchanged.
2 6 . TO ELIMINATE LIMITED TERM BOND FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING INVESTMENTS IN THE SECURITIES OF NEWLY-FORMED
ISSUERS.
The fund's current fundamental investment limitation regarding investments
in securities of newly-formed issuers states:
"The fund may not purchase the securities of any issuer (except the United
States government, its agencies or instrumentalities or securities which
are backed by the full faith and credit of the United States) if, as a
result more than 5% of the fund's total assets would be invested in
securities where the payment of principal and interest are the
responsibility of a company with less than three years' operating history."
If the proposal is approved, the Trustees intend to replace the current
fundamental limitation with the following non-fundamental limitation, which
could be changed without a vote of shareholders:
"The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation."
Newly-formed or "unseasoned issuers" are issuers with less than three
years of continuous operation. The purpose of the fundamental limitation on
investments in unseasoned issuers is to comply with state laws and to limit
the risks associated with investing in companies that have no proven track
record in business and whose prospects are uncertain. The proposed
non-fundamental limitation will clarify the fact that the fund's unseasoned
issuers limitation is applicable only to securities issued by newly-formed
entities engaged in a trade or business with a prior history of operations
of less than three years and not to pools of asset-backed securities and
foreign government securities. The proposal will have no current impact on
the fund. However, adoption of a standard non-fundamental limitation will
facilitate FMR's compliance efforts (see "Adoption of Standardized
Investment Limitations" on page ) and will enable the fund to respond more
promptly if applicable state laws change in the future.
CONCLUSION. The Board of Trustees has determined that it is in the
best interests of the shareholders to replace the fund's fundamental
investment limitation concerning investments in unseasoned issuers with a
non-fundamental limitation. Accordingly, the Trustees recommend that
shareholders vote FOR the proposal to eliminate the fund's fundamental
investment limitation regarding investments in securities of newly-formed
issuers. If the proposal is approved, the new non-fundamental limitation
will be implemented with the effective date of the next prospectus. If the
proposal is not approved, the current limitation will remain unchanged.
2 7 . TO ELIMINATE EACH FUND'S FUNDAMENTAL INVESTMENT LIMITATION
CONCERNING INVESTING IN OIL, GAS, AND MINERAL EXPLORATION PROGRAMS.
Currently both funds maintain fundamental investment limitations
specifying that each fund may not "invest in oil, gas, or other mineral
exploration or development programs." Investment in oil, gas, or other
mineral exploration programs is permitted under federal standards for
mutual funds, but currently is prohibited by some state regulations.
The Trustees recommend that shareholders of each fund vote to eliminate
this fundamental investment limitation. If the proposal is approved by
shareholders the Trustees intend to adopt the following
non-fundamental investment limitation, which could be changed in the future
without a shareholder vote:
"The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases."
This proposal will have no current impact on either fund. However,
adoption of a standardized non-fundamental investment limitation will
facilitate FMR's investment compliance efforts (see "Adoption of
Standardized Investment Limitations" on page ), and will enable the fund to
respond more promptly if applicable state laws change in the future. In
addition, the new limitation will, for the first time,
specifically refer to leases.
CONCLUSION. The Board of Trustees recommends voting FOR the
proposal to eliminate each fund's fundamental investment limitation
concerning investment in oil, gas, and other mineral exploration programs.
If approved, the proposal will be implemented with the effective date of
each fund's next prospectus. If the proposal is not approved by the
shareholders of each fund, each fund's current limitation will remain
unchanged.
2 8 . TO ELIMINATE LIMITED TERM BOND FUND'S FUNDAMENTAL INVESTMENT
LIMITATION CONCERNING PURCHASING THE SECURITIES OF OTHER INVESTMENT
COMPANIES.
Limited Term Bond Fund's current fundamental investment limitation
concerning purchasing the securities of other investment companies states:
"The fund may not purchase the securities of other investment companies or
investment trusts."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation. If the proposal is approved by
shareholders of the fund, the Trustees intend to adopt the following
non-fundamental investment limitation, which could be changed without a
shareholder vote:
The fund does not currently intend to (a) purchase securities of other
investment companies except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers or
exchange, or as a result of a reorganization, consolidation, or merger.
The ability of mutual funds to invest in other investment companies is
restricted by the 1940 Act and by some state regulations. Any securities
issued by other investment companies would also have to meet the fund's
credit and maturity standards. In some cases, other investment companies
may incur expenses that are comparable to expenses paid by the fund, which
would be taken into account in considering investments in such securities.
The fund's current fundamental investment limitation recites certain of
the applicable federal and former state restrictions. The federal
restrictions will remain applicable to the fund whether or not they are
recited in a fundamental limitation. As a result, elimination of the above
fundamental limitation is not expected to have any impact on the fund's
investment practices, except to the extent that regulatory requirements may
change in the future. Adoption of a standardized non-fundamental investment
limitation will facilitate FMR's investment compliance efforts (see
"Adoption of Standardized Investment Limitations" on page ).
CONCLUSION. The Board of Trustees recommends voting FOR the
proposal to eliminate the fund's fundamental investment limitation
concerning purchasing the securities of other investment companies. If
approved, the proposal will be implemented on the effective date of the
next prospectus. If the proposal is not approved, the fund's current
limitation will remain unchanged.
2 9 . TO ELIMINATE LIMITED TERM BOND FUND'S FUNDAMENTAL
INVESTMENT LIMITATION CONCERNING THE INVESTMENT IN COMPANIES FOR THE
PURPOSE OF EXERCISING CONTROL OR MANAGEMENT.
The current fundamental investment limitation concerning investment in
companies for the purpose of exercising control or management states:
"The fund may not invest in companies for the purpose of exercising
control or management."
The Trustees recommend that shareholders of the fund vote to eliminate the
above fundamental investment limitation.
While the fund invests primary in fixed-income obligations, FMR
believes that by eliminating this restriction the fund would make clear
that it may freely exercise its rights as a security holder. For example,
the fund may give or withhold its consent to a proposed action by the
management of an authority or agency or other issuer of portfolio
securities; may solicit support from other holders of the same or similar
securities, or take other action, including instituting litigation, when
FMR believes such action may be appropriate in order to protect the value
of the fund's investments.
The fund does not intend to become involved in directing or administering
the day-to-day operations of any issuer or portfolio securities. FMR
believes that it should be able to communicate freely the fund's views as a
security holder on important matters of policy to management of an issuer
of portfolio securities when FMR believes that activities of an issuer may
affect significantly the value of a portfolio investment. FMR believes that
the fund currently may engage in such activities without necessarily
violating the fund's restriction on investing for the purpose of exercising
control or management. However, FMR believes that elimination of the
restriction would eliminate any potentially inhibiting effect on FMR in
dealing with issuers of its portfolio investments.
Whether or not the restriction is eliminated, the fund may be drawn into
lawsuits relating to such activities. The fund will seek to avoid
litigation whenever possible. The fund also will conduct its activities
with a view to mitigating, to the extent possible, the risks of litigation
against the fund, and the risk of actual liability if the fund is drawn
into litigation. No guarantee can be made, however, that litigation against
each fund may not be undertaken or liabilities incurred.
This proposal will have no current impact on the fund. However, adoption
of a standardized non-fundamental investment limitation will facilitate
FMR's investment compliance efforts (see "Adoption of Standardized
Investment Limitations" on page ).
CONCLUSION. The Board of Trustees recommends voting FOR the
proposal to eliminate the fund's fundamental investment limitation
concerning investment in companies for the purpose of exercising control.
If approved, the proposal will be implemented on the effective date of the
next prospectus. If the proposal is not approved, the fund's current
limitation will remain unchanged.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the
contrary will be voted on such matters in accordance with the judgment of
the persons therein designated.
ACTIVITIES AND MANAGEMENT OF FMR
FMR, a corporation organized in 1946, serves as investment adviser to a
number of investment companies whose net assets as of July 31 , 1994,
were in excess of $ 255 billion. The Fidelity family of funds
currently includes a number of funds with a broad range of investment
objectives and permissible portfolio compositions. The Boards of these
funds are substantially identical to that of this trust. In addition, FMR
serves as investment adviser to certain other funds which are generally
offered to limited groups of investors. Information concerning the advisory
fees, net assets, and total expenses of the funds advised by FMR is
contained in the Table of Average Net Assets and Expense Ratios in Exhibit
.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East),
both wholly owned subsidiaries of FMR formed in 1986, supply investment
research information, and may supply portfolio management services to FMR
in connection with certain funds advised by FMR. FMR Texas Inc., a wholly
owned subsidiary of FMR formed in 1989, supplies portfolio management and
research services in connection with certain money market funds advised by
FMR.
FMR, its officers and directors, its affiliated companies and personnel,
and the Trustees, may from time to time have transactions with various
banks, including the custodian banks for certain of the funds advised by
FMR. Those transactions which have occurred to date have included mortgages
and personal and general business loans. In the judgment of FMR, the terms
and conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
The Consolidated Statement of Financial Condition of Fidelity Management &
Research Company and subsidiaries as of December 31, 1993 is shown
beginning on page .
The Directors of FMR are Edward C. Johnson 3d, Chairman of the Board; J.
Gary Burkhead, President; and Peter S. Lynch, Vice Chairman. Each of the
Directors is also a Trustee of the trust. Messrs. Johnson 3d, Burkhead,
John H. Costello, Gary L. French, Michael Gray, Curtis
Hollingsworth, Arthur S. Loring, Leonard M. Rush, and Thomas J.
Steffanci, are currently officers of the trust and officers or employees of
FMR or FMR Corp. With the exception of Mr. Costello and Mr. Rush ,
all of these persons are stockholders of FMR Corp. FMR's address is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of the Directors of FMR.
All of the stock of FMR is owned by a parent company, FMR Corp., 82
Devonshire Street, Boston, Massachusetts, which was organized on October
31, 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions, FSC, which is the transfer and
shareholder servicing agent for certain of the retail funds advised by FMR,
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for certain institutional customers, and
Fidelity Investments Retail Marketing Company, which provides marketing
services to various companies within the Fidelity organization. Messrs.
Johnson 3d, Burkhead, William L. Byrnes, James C. Curvey, and Caleb Loring,
Jr. and Ms. Abigail P. Johnson are the Directors of FMR Corp. On July
31 , 1994, Messrs. Johnson 3d, Burkhead, Curvey, and Loring, Jr., and
Ms. Johnson owned approximately 24 %, 3 %, 3 %,
13 %, and 24 %, respectively, of the voting common stock of FMR
Corp. In addition, various Johnson family members and various trusts for
the benefit of Johnson family members, for which Messrs. Burkhead, Curvey,
or Loring, Jr. are Trustees, owned in the aggregate approximately
32 % of the voting common stock of FMR Corp. Messrs. Johnson 3d,
Burkhead, and Curvey owned approximately 2 %, 3 % and
1 %, respectively, of the non-voting common stock of FMR Corp. In
addition, various trusts for the benefit of members of the Johnson family,
for which Mr. Loring, Jr. is the sole Trustee, and other trusts for the
benefit of Johnson family members, through limited partnership interests in
a partnership the corporate general partner of which is controlled by Mr.
Johnson 3d, Mr. Loring, Jr., and other Johnson family members, together
owned approximately 43 % of the non-voting common 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.
During the period October 1, 1992 through July 31, 1994, the
following transactions were entered into by officers and/or Trustees of the
trust or of FMR Corp. involving more than 1% of the voting
common, non-voting common or preferred stock of FMR Corp. Mr. C. Bruce
Johnstone redeemed an aggregate of 25,500 shares of non-voting common stock
for an aggregate cash payment of approximately $3.4 million. Mr. Morris J.
Smith redeemed 15,000 shares of non-voting common stock for a cash payment
of approximately $1.8 million. Mr. Edward C. Johnson 3d converted 2,064
shares of voting common stock into 2,064 shares of non-voting common stock.
Mr. Caleb Loring, Jr. purchased 1,064 shares of voting common stock with a
cash payment of approximately $166,000.
ACTIVITIES AND MANAGEMENT OF FMR U.K. AND FMR FAR EAST
FMR U.K. and FMR Far East are wholly owned subsidiaries of FMR formed in
1986 to provide investment research information with respect to certain
funds for which FMR acts as investment adviser. Under sub-advisory
agreements with FMR U.K. and FMR Far East, FMR pays fees equal to 110% of
FMR U.K.'s costs and 105% of FMR Far East's costs, respectively, in
connection with research services provided for the benefit of certain
Fidelity funds.
The Statements of Financial Condition of FMR U.K. and FMR Far East as of
December 31, 1993 are shown on pages and , respectively.
Funds managed by FMR with respect to which FMR currently has sub-advisory
agreements with either FMR U.K. or FMR Far East, and the net assets of each
of these funds, are indicated in the Table of Average Net Assets and
Expense Ratios in Exhibit on page .
The Directors of FMR U.K. and FMR Far East are Edward C. Johnson 3d,
Chairman, and J. Gary Burkhead, President. Each of the Directors is also a
Trustee of the trust. Messrs. Johnson 3d and Burkhead are described in
Proposal 1. The principal business address of the Directors and FMR U.K.
and FMR Far East is 82 Devonshire Street, Boston, Massachusetts.
PRESENT MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with each fund's investment
objective, policies, and limitations. FMR also provides each fund with all
necessary office facilities and personnel for servicing the fund's
investments, and compensates all officers of the trust, all Trustees who
are "interested persons" of the trust or of FMR, and all personnel of the
trust or FMR performing services relating to research, statistical, and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of each fund's shares under federal and state
law; developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
LIMITED TERM BOND FUND
In addition to the management fee payable to FMR and the fees payable to
Fidelity Service Co. (FSC, for pricing and bookkeeping services for all
classes of Limited Term Bond Fund) and FIIOC (Transfer Agent for Class
B and Institutional Class of Limited Term Bond Fund) and/or State Street
(the Transfer Agent for Class A of Limited Term Bond Fund), Limited Term
Bond Fund pay s all of their expenses, without limitation, that are
not assumed by those parties. Each fund pays for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although the management
contracts provide that th e fund will pay for typesetting, printing,
and mailing prospectuses, statements of additional information, notices,
and reports to existing shareholders, the trust has entered into revised
transfer agent agreements with the Transfer Agents, pursuant to which each
Transfer Agent bears the cost of providing these services to existing
shareholders. Other expenses paid by Limited Term Bond Fund include
interest, taxes, brokerage commissions, Limited Term Bond Fund's
proportionate share of insurance premiums and Investment Company Institute
dues, and the costs of registering shares under federal and state
securities laws. Limited Term Bond Fund is also liable for such
nonrecurring expenses as may arise, including costs of any litigation to
which a fund may be a party and any obligation it may have to indemnify the
trust's officers and Trustees with respect to litigation.
FMR is Limited Term Bond Fund's manager pursuant to the Present
Contract dated January 29, 1989, which was approved by shareholders on
November 15, 1988. For the services of FMR under th e contract,
Limited Bond Fund pays FMR a monthly management fee composed of the sum of
two elements: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of
the registered investment companies with which FMR has management contracts
and is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown in the following table on the left. On the right, the
effective fee rate schedule shows the results of cumulatively applying the
annualized rates at varying asset levels. For example, the effective annual
fee rate at $2 58 billion of average group net assets - their
approximate level for July 1994 - was .1 597 %, which is the
weighted average of the respective fee rates for each level of group net
assets up to $ 258 billion.
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE
RATES
Average Annualized Group Effective
Group Fee Rate Net Annual
Assets Assets Fee Rate
$ 0 - 3 billion .3700% $ 0.5 .3700%
billion
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .16 95
24 - 30 .1800 200 .16 58
30 - 36 .1750 225 .16 29
36 - 42 .1700 250 .1 604
42 - 48 .1650 275 .1 583
48 - 66 .1600 300 .1 565
66 - 84 .1550 325 .1 548
84 - 120 .1500 350 .1 533
120 - 1 74 .1450 400 .1507
1 74 - 228 .1400
228 - 282 .13 75
282 - 336 .13 50
Over 336 .1 325
Under the fund's Present Contract with FMR, the group fee rate is based
on a schedule with breakpoints ending at .1500% for average group assets in
excess of $84 billion. The group fee rate breakpoints shown above for
average group assets in excess of $120 billion and under $228 billion were
voluntarily adopted by FMR on January 1, 1992. The additional breakpoints
shown above for average group assets in excess of $228 billion were
voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints, pending shareholder
approval of a new management contract reflecting the revised schedule. (See
proposal 12). The revised group fee rate schedule is identical to the above
schedule for average group assets under $156 billion. For average group
assets in excess of $156 billion, the group fee rate schedule voluntarily
adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE
RATES
Average Group
Annualized
Group Net
Effective
Assets Rate Assets Annual
Fee Rate
$ 120 - 156 .1450% $150 billion .1736%
billion
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
Over 372 .1200 325 .1514
350 .1494
375 .1476
400 .1459
* Each was approved pending shareholder approval of a new management
contract reflecting the extended schedule. The extended schedule provides
for lower management fees as total assets under management increase.
The individual fund fee rate for Limited Term Bond Fund is 0.25%. Based
on the average net assets of funds advised by FMR for July 1994, the annual
management fee rate would be calculated as follows:
Group Individual Fund Management
Fee Rate Fee Rate Fee Rate
.1 597 + .25% = .4 097 %
One twelfth (1/12) of this annual management fee rate is then applied
to the fund's average net assets for the current month, giving a dollar
amount which is the fee for that month.
During the fiscal years ended November 30, 1993, 1992, and 1991,
Limited Term Bond Fund paid fees of $818,426, $963,611, and $1,405,168,
respectively, to FMR for its services as investment adviser to the fund.
These fees were equivalent to.42%,.42%, and .43%, respectively, of the
fund's average net assets for those years.
SUB-ADVISER. On December 1, 1990 FMR entered into sub-advisory
agreements on behalf of Limited Term Bond Fund with FMR U.K. and FMR Far
East pursuant to which FMR U.K. and FMR Far East supply FMR with investment
research and recommendations concerning foreign securities for the benefit
of the fund. The sub-advisory agreements provide that FMR will pay fees to
FMR U.K. and FMR Far East equal to 110% and 105%, respectively, of FMR
U.K.'s and FMR Far East's costs incurred in connection with each agreement,
said costs to be determined in relation to the assets of the fund that
benefits from the services of the sub-advisers.
INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO
FMR is Institutional Short-Intermediate Government Portfolio's manager
pursuant to a m anagement contract dated July 29, 1986 , which
was approved by shareholders on September 23, 1987 . For the services
of FMR under th e contract, Institutional Short-Intermediate
Government Portfolio pays FMR a monthly management fee at the annual rate
of 0 .45% of the average net assets of the fund. For the fiscal years
ended November 30, 1993, 1992, and 1991, FMR received $1,146,451, $850,514,
and $691,085, respectively, as investment adviser to the fund before
reduction of fees and expenses of the non-interested Trustees amounting to
$1,622, $1,469, and $1,321, respectively.
LIMITED TERM BOND FUND AND INSTITUTIONAL SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO
To comply with the California Code of Regulations, FMR will reimburse
the funds if and to the extent that its aggregate annual
operating expenses exceed specified percentages of its average net assets.
The applicable percentages are 2 1/2% of the first $30 million, 2% of the
next $70 million, and 1 1/2% of average net assets in excess of $100
million. When calculating a fund's expenses for purposes of this
regulation, a fund may exclude interest, taxes, brokerage commissions, and
extraordinary expenses, as well as a portion of its distribution plan
expenses.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in its
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR will
consider various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions. Commissions for foreign investments for
Limited Term Bond Fund traded on foreign exchanges generally will be higher
than for U.S. investments and may not be subject to negotiation.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). FMR maintains a listing of broker-dealers who
provide such services on a regular basis. However, as many transactions on
behalf of the funds are placed with broker-dealers (including
broker-dealers on the list) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such
transactions directed to such broker-dealers solely because such services
were provided. The selection of such broker-dealers is generally made by
FMR (to the extent possible consistent with execution considerations) based
upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and, conversely, research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
funds to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
funds and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of
FMR Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such regulations, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
funds and review the commissions paid by the funds over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
For the fiscal years ended November 30, 1993 and November 30, 1992,
Limited Term Bond Fund's portfolio turnover rates were 59 % and
7 %, respectively. For the fiscal years ended November 30, 1993 and
November 30, 1992, Institutional Short-Intermediate Government Portfolio's
portfolio turnover rates were 351 % and 355 %, respectively.
Because a high turnover rate increases transaction costs and may increase
taxable gains, FMR carefully weighs the anticipated benefits of short-term
investing against these consequences.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. The funds seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for the funds to seek such
recapture.
Although the Trustees and officers of the funds are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to the fund. In some cases, this system could have a detrimental
effect on the price or value of the security as far as the funds are
concerned. In other cases, however, the ability of the funds to participate
in volume transactions will produce better executions and prices for the
funds. It is the current opinion of the Trustees that the desirability of
retaining FMR as investment adviser to the fund outweighs any disadvantages
that may be said to exist from exposure to simultaneous transactions.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
LIMITED TERM BOND FUND
FIIOC is transfer, dividend disbursing, and shareholders' servicing agent
for Class B and Institutional Class of Limited Term Bond Fund. Under the
trust's contracts with FIIOC, Limited Term Bond Fund pays a per account fee
of $95 and a monetary transaction fee of $20 or $17.50, depending upon the
nature of the services provided. Fees for certain institutional retirement
plan accounts are based on the net asset value of all such accounts in the
funds. FIIOC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FIIOC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional information,
and all other reports, notices, and statements to shareholders, with the
exception of proxy statements.
Transfer agent fees, including reimbursement for out-of-pocket expenses,
paid to FIIOC on behalf of Institutional Class for the fiscal years ended
November 30, 1993, 1992, and 1991 were $180,350, $104,717, and $186,896,
respectively.
The trust has a contract with FSC which provides that FSC will perform the
calculations necessary to determine Limited Term Bond Fund's net asset
value per share and dividends, and maintain Limited Term Bond Fund's
accounting records. Prior to July 1, 1991, the annual fee for these pricing
and bookkeeping services was based on two schedules, one pertaining to
Limited Term Bond Fund's average net assets, and one pertaining to the type
and number of transactions Limited Term Bond Fund made. The fee rates in
effect as of July 1, 1991 are based on Limited Term Bond Fund's average net
assets, specifically, .04% for the first $500 million of average net assets
and .02% for average net assets in excess of $500 million. The fee is
limited to a minimum of $45,000 and a maximum of $750,000 per year. Pricing
and bookkeeping fees, including related out-of-pocket expenses, paid to FSC
by Limited Term Bond Fund for the fiscal years ended November 30, 1993,
1992, and 1991, were $81,106, $97,683, and $117,716, respectively.
INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO
FIIOC is transfer, dividend disbursing, and shareholders' servicing
agent for Institutional Short-Intermediate Government Portfolio. In
addition, FIIOC bears the expense of typesetting, printing, and mailing
prospectuses, statements of additional information, and all other reports,
notices, and statements to shareholders, with the exception of proxy
statements. Institutional Short-Intermediate Government Portfolio has an
agreement with FSC under which FSC performs calculations necessary to
determine the net asset value and dividends of the fund and maintains the
portfolio and general accounting records of the fund. The costs of these
services are borne by FMR pursuant to its management contract with
Institutional Short-Intermediate Government Portfolio.
LIMITED TERM BOND FUND AND INSTITUTIONAL SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO
Each fund has a separate distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the funds, which are continuously
offered. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR, in the case of Institutional
Short-Intermediate Government Portfolio, and by FDC, in the case of Limited
Term Bond Fund.
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
Services Co.,, 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.
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
________
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Fidelity Management & Research Company
(a Wholly-Owned Subsidiary of FMR Corp.):
We have audited the accompanying consolidated statement of financial
condition of Fidelity Management & Research Company as of December 31,
1993. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the consolidated financial position of Fidelity
Management & Research Company as of December 31, 1993, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 28, 1994
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
________
ASSETS
($000)
Cash and cash equivalents $ 109
Management fees receivable 103,826
Invested assets:
Managed funds (market value $59,845,000) 56,416
Other investments (fair value $25,816,000) 20,822
Property and equipment, net 141,584
Deferred income taxes 35,910
Note receivable from affiliate 11,250
Prepaid expenses and other assets 9,597
Total Assets $ 379,514
LIABILITIES AND STOCKHOLDER'S EQUITY
Payable to mutual funds $ 8,580
Accounts payable and accrued expenses 30,349
Payable to parent company 235,232
Other liabilities 3,871
Total Liabilities 278,032
Stockholder's equity:
Common stock, $.30 par value;
authorized 50,000 shares;
issued and outstanding
26,500 shares 8
Additional paid-in capital 50,074
Retained earnings 51,400
Total Stockholder's Equity 101,482
Total Liabilities and Stockholder's Equity $ 379,514
The accompanying notes are an integral part
of the consolidated statement of financial condition.
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO CONSOLIDATED STATEMENT
OF FINANCIAL CONDITION
________
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Fidelity Management & Research Company and Subsidiaries (the Company)
provide investment management and advisory services and other services
principally for the Fidelity Investments Family of Funds. The Company also
provides computer support and systems development services to affiliated
companies.
On March 1, 1993, ownership of the Company's wholly-owned subsidiary,
Fidelity Investments Institutional Services Company, Inc. was distributed
to the Company's parent. As of that date, this subsidiary had total assets
and stockholder's equity of approximately $73,000,000, and $60,000,000,
respectively.
PRINCIPLES OF CONSOLIDATION
The consolidated statement of financial condition includes the accounts of
Fidelity Management & Research Company and its wholly-owned subsidiaries.
All intercompany accounts have been eliminated.
INVESTED ASSETS
Managed funds investments (consisting primarily of Fidelity Mutual Funds)
are carried at the lower of aggregate cost or market. Other investments
consist primarily of investments in limited partnerships which are carried
at cost. Certain restrictions exist with respect to the sale or transfer of
these investments to third parties. For managed funds investments and other
investments, fair value is determined by the quoted market price except in
the case of restricted investments which are valued based on management's
assessment of fair value. When the Company has determined that an
impairment, which is deemed other than temporary, in the market or fair
value of an investment has occurred, the carrying value of the investment
is reduced to its net realizable value.
INCOME TAXES
The Company is included in the consolidated federal and certain state
income tax returns filed by FMR Corp.
Effective January 1, 1993, FMR Corp. and the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse.
Adoption of this statement did not have a material impact on the Company's
financial position.
FIDELITY MANAGEMENT & RESEARCH COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF FMR CORP.)
NOTES TO CONSOLIDATED STATEMENT
OF FINANCIAL CONDITION
(CONTINUED)
________
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED:
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation of furniture and equipment is computed over the
estimated useful lives of the related assets, which are principally three
to five years, using the straight-line method. Leasehold improvements are
amortized over the lesser of their economic useful lives or the period of
the lease. Maintenance and repairs are charged to operations when incurred.
Renewals and betterments of a nature considered to materially extend the
useful life of the assets are capitalized.
PENSION AND PROFIT SHARING PLANS
The Company participates in FMR Corp.'s noncontributory defined benefit
pension plan covering all of its eligible employees. There are no
statistics available for the actuarial data of this separate company. There
are no unfunded vested benefits.
The Company also participates in FMR Corp.'s defined contribution profit
sharing and retirement plans covering substantially all eligible employees.
B. PROPERTY AND EQUIPMENT, NET
At December 31, 1993, property and equipment, at cost, consist of (in
thousands):
Furniture $ 1,853
Equipment (principally computer related) 320,141
Leasehold improvements 6,712 328,706
Less: Accumulated depreciation and amortization 187,122
$ 141,584
C. NOTE RECEIVABLE FROM AFFILIATE
On December 2, 1993, the Company issued a non-recourse mortgage to an
affiliate for property located in Irving, Texas. The $11,250,000 note
receivable is due on January 1, 2009, and accrues interest at 7.6325%.
Payments of principal and interest are due monthly.
D. TRANSACTIONS WITH AFFILIATED COMPANIES
In connection with its operations, the Company provides services to and
obtains services from affiliated companies. Transactions related to these
services are settled, in the normal course of business, through an
intercompany account with the Company's parent, FMR Corp. The terms of
these transactions may not be the same as those which would otherwise exist
or result from agreements and transactions among unrelated parties.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
________
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Fidelity Management & Research (U.K.) Inc.
(a Wholly-Owned Subsidiary of Fidelity Management & Research Company):
We have audited the accompanying statement of financial condition of
Fidelity Management & Research (U.K.) Inc. as of December 31, 1993. This
financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Fidelity Management &
Research (U.K.) Inc. as of December 31, 1993, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
________
ASSETS
Investments (market value $3,180,192) $ 2,537,448
Equipment, net of accumulated
depreciation of $859,335 914,770
Accounts receivable from parent 2,806,932
Deferred income taxes 23,520
Total Assets $ 6,282,670
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Subordinated loan $ 1,608,100
Accounts payable to affiliate 1,452,719
Income taxes payable 173,009
Other liabilities 131
Total Liabilities 3,233,959
Stockholder's equity:
Common stock, $1 par value;
authorized 300,000 shares;
issued and outstanding 100 shares 100
Additional paid-in capital 900
Retained earnings 3,047,711
Total Stockholder's Equity 3,048,711
Total Liabilities and Stockholder's Equity $ 6,282,670
The accompanying notes are an integral part
of the statement of financial condition.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
NOTES TO STATEMENT OF
FINANCIAL CONDITION
________
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF REPORTING
The statement of financial condition is presented in accordance with United
States generally accepted accounting principles. The functional and
reporting currency for Fidelity Management & Research (U.K.) Inc. (the
Company) is the U.S. dollar.
BUSINESS
The Company is a wholly-owned subsidiary of Fidelity Management & Research
Company (the parent). The Company is a registered investment advisor and
provides research and investment advisory services under subadvisory
agreements with its parent. The Company also provides research advice to
the parent and an affiliate pursuant to a research joint venture agreement.
Intercompany transactions are settled during the normal course of business.
INVESTMENTS
Investments consist of shares held in Fidelity mutual funds and are carried
at the lower of aggregate cost or market. The fair value of investments is
equal to the quoted market price.
EQUIPMENT
Equipment is stated at cost less accumulated depreciation. Depreciation is
computed over the estimated useful lives of the related assets, which vary
from three to five years, using the straight-line method. Maintenance and
repairs are charged to operations when incurred.
SUBORDINATED LOAN
The Company has a subordinated loan payable to its parent and due on March
31, 1994. The loan is subordinated in all respects to the rights of senior
creditors. Interest is payable annually at a rate of 4.375%. Repayment or
modification of this loan is subject to regulatory approval.
INCOME TAXES
The Company is included in the consolidated federal income tax return filed
by FMR Corp., the parent Company of Fidelity Management & Research Company.
The Company is allocated a charge by FMR Corp. representing the sum of the
applicable foreign and U.S. statutory income tax rates.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
NOTES TO STATEMENT
OF FINANCIAL CONDITION
(CONTINUED)
________
A. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES, CONTINUED:
Effective January 1, 1993, FMR Corp. and the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse.
Adoption of this statement did not have a material impact on the Company's
financial position.
B. NET CAPITAL REQUIREMENT:
The Company is subject to certain financial regulatory resource rules which
require the Company to maintain a certain level of net capital (as
defined). At December 31, 1993, the minimum net capital requirement of
approximately $422,000 has been satisfied by the Company.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
________
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Fidelity Management & Research (Far East) Inc.
(a Wholly-Owned Subsidiary of Fidelity Management & Research Company):
We have audited the accompanying statement of financial condition of
Fidelity Management & Research (Far East) Inc. as of December 31, 1993.
This financial statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Fidelity Management &
Research (Far East) Inc. as of December 31, 1993, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993
________
ASSETS
Cash $ 24,294
Investments (market value $618,049) 569,958
Furniture and equipment, net of
accumulated depreciation of $10,704 642
Prepaid expenses and other assets 143,427
Receivable from parent company 840,906
Total Assets $ 1,579,227
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to affiliate $ 795,567
Income taxes payable 168,646
Total Liabilities 964,213
Stockholder's equity:
Common stock, $1 par value;
authorized 300,000 shares;
issued and outstanding 100 shares 100
Additional paid-in capital 900
Retained earnings 614,014
Total Stockholder's Equity 615,014
Total Liabilities and Stockholder's Equity $ 1,579,227
The accompanying notes are an integral part
of the statement of financial condition.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
(A WHOLLY-OWNED SUBSIDIARY OF FIDELITY MANAGEMENT & RESEARCH COMPANY)
NOTES TO STATEMENT
OF FINANCIAL CONDITION
________
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BUSINESS
Fidelity Management & Research (Far East) Inc. (the Company) is a
wholly-owned subsidiary of Fidelity Management & Research Company (the
parent). The Company is a registered investment advisor and provides
research advice to the parent and an affiliate pursuant to a research joint
venture agreement. Intercompany transactions are settled during the normal
course of business.
INVESTMENTS
Investments consist of shares held in a Fidelity mutual fund and are
carried at the lower of cost or market. The fair value of investments is
equal to the quoted market price.
FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost less accumulated depreciation.
Depreciation is computed over the estimated useful lives of the related
assets, which vary from three to five years, using the straight-line
method. Maintenance and repairs are charged to operations when incurred.
INCOME TAXES
The Company is included in the consolidated federal income tax return filed
by FMR Corp., the parent company of Fidelity Management & Research Company.
The Company is allocated a charge by FMR Corp. representing the sum of the
applicable foreign and U.S. statutory income tax rates.
Effective January 1, 1993, FMR Corp. and the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates
in effect for the year in which the differences are expected to reverse.
Adoption of this statement did not have a material impact on the Company's
financial position.
EXHIBIT 1
The language to be added to the current contract is
[[ underlined ]] ; the language to be deleted is set forth in
[brackets].
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR LIMITED TERM BOND [[ FUND ]] [PORTFOLIO]
[RETAIL] CLASS [[ A SHARES ]]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for [the Retail Class] [[Fidelity
Advisor Limited Term Bond fund: Class A ("Class A"), a class of shares
of ]] Fidelity Advisor Limited Term Bond [Portfolio]
[[ Fund ]] (the "[Portfolio] [[ Fund ]] "), a series
of Fidelity [[ Advisor Series IV ]] [Income Trust] (the
"Trust").
2. The [[ Trust ]] [Fund] has entered into a General
Distribution Agreement on behalf of the Fund [Portfolio] with
Fidelity Distributors Corporation (the "Distributor"), [a wholly owned
subsidiary of FIdelity Management & Research Company (the "Adviser")] under
which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of [the Portfolio] the
Fund's shares of beneficial interest (the "Shares"). Such efforts may
include, but neither are required to include nor are limited to, the
following: (1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising; (2) preparation, printing and
distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the [[ Fund ]] [Portfolio] and
reports to recipients other than existing shareholders of the [Portfolio]
[[ Fund ]] ; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the
Distributor may, from time to time, deem advisable; (5) making payments to
securities dealers and others engaged in the sale of Shares or who engage
in shareholder support services [[ ("Investment
Professionals") ]] ; and (6) providing training, marketing and
support to [such dealers] [[ Investment Professionals ]]
and others with respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement, [[and
paragraph 2 hereof, all with respect to the Class A Shares:]] [ the
Retail Class of the Portfolio] [[ Class A ]] shall pay to the
Distributor a monthly fee at the annual rate of .40% [of such class'
average] (or such lesser amount as the Trustees may, from time to time,
determine) of [[the]] [ its ] average daily net assets [[of
Class A ]] throughout the month. The determination of daily net assets
shall be made at the close of business each day throughout the month and
computed in the manner specified in the [Portfolio's ] [[the
Fund's]] then current Prospectus for the determination of the net asset
value of the [[ Class A shares, but shall exclude assets
attributable to ]] [ (i) shares purchased more than 144 months
prior to such day or (ii) ] any other class of the Fund . The
Distributor may , [[but shall not be required to,]] use all or any
portion of the fee received pursuant to the Plan to compensate
[[Investment Professionals]] [ securities dealers or other
persons ] who have engaged in the sale of [[Class A]] Shares
or in shareholder support services pursuant to agreements with the
Distributor, or to pay any of the expenses associated with other activities
authorized under paragraph 2 hereof.
4. [Each Class of the Portfolio] [[ The Fund ]] presently
pays, and will continue to pay, a management fee to [the Advisor]
[[ Fidelity Management & Research Company (the "Adviser") ]]
pursuant to a management agreement between the [Portfolio]
[[ Fund ]] and the Adviser (the "Management Contract"). It is
recognized that the Adviser may use its management fee revenue, as well as
its past profits or its resources from any other source, to reimburse the
Distributor for expenses incurred in connection with the distribution of
[[ Class A ]] Shares, including the activities referred to in
paragraphs 2 hereof. To the extent that the payment of management fees by
the [class] [[ Fund ]] to the Adviser should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of [[ Class A ]] Shares within the meaning of Rule 12b-1, then
such payment shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Fund" (as defined in the Act), [of the
Retail Class] [[ of Class A, ]] this Plan having been approved
by a vote of a majority of the Trustees of the [Fund]
[[ Trust ]] , including a majority of Trustees who are not
"interested persons" of the [Fund] [[ Trust ]] (as defined in
the Act) and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (the
"Independent Trustees"), cast in person at a meeting called for the purpose
of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until [July 31, 1993] [[ June 30, 1995 ]] , and
from year to year thereafter; provided, however, that such continuance
is subject to approval annually by a vote of a majority of the Trustees of
the [Fund] [[ Trust ]] , including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on
this Plan. This Plan may be amended at any time by the Board of Trustees,
provided that (a) any amendment to increase materially the fee provided for
in paragraph 3 hereof or any amendment of the Management Contract to
increase the amount to be paid by the [Portfolio] [[ Fund ]]
thereunder shall be effective only upon approval by a vote of a majority of
the outstanding voting securities of [[ Class A ]] [Retail
Class] in the case of the Plan, or upon approval by a vote of a
majority of the outstanding voting securities of the [Portfolio],
[[ Fund ]] in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in
the manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of [the class]
[[ Class A ]] .
8. During the existence of this Plan, the [Fund] [[ Trust ]]
shall require the Adviser and/or the Distributor to provide the [Fund]
[[ Trust ]] , for review by the [Fund] Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended in connection with financing any activity primarily intended to
result in the sale of shares of [shares of the Retail Class] [[ Class
A Shares]] (making estimates of such costs where necessary
or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of [ shares of the class] [[ Class A Shares]] .
10. Consistent with the limitation of shareholder liability as set forth
in the [Fund's] [[ Trust's ]] Declaration of Trust, any
obligation assumed by [the Retail Class] [[ Class A ]] pursuant
to this Plan and any agreement related to this Plan shall be limited in all
cases to [the Retail Class] [[ Class A ]] and its assets
and shall not constitute an obligation of any shareholder of the [Fund]
[[ Trust ]] or of any other series of the [[ Trust or
class of such series . ]]
11. If any provision of the 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.
EXHIBIT 2
The language to be deleted is set forth in [brackets].
FORM OF DISTRIBUTION AND SERVICE PLAN
[[ FIDELITY ADVISOR LIMITED TERM BOND FUND
CLASS B SHARES ]]
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for Fidelity Advisor Limited
Term Bond Fund Class B: ("Class B"), a class of shares of Fidelity
Advisor Limited Term Bond Fund (the "Fund"), a series of Fidelity Advisor
Series IV (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the
"Distributor") under which the Distributor uses all reasonable efforts,
consistent with its other business, to secure purchasers of the Fund's
shares of beneficial interest (the "shares"). Such efforts may include,
but neither are required to include nor are limited to, the following: (1)
formulation and implementation of marketing and promotional activities,
such as mail promotions and television, radio, newspaper, magazine and
other mass media advertising; (2) preparation, printing and distribution of
sales literature; (3) preparation, printing and distribution of
prospectuses of the Fund and reports to recipients other than existing
shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the
Distributor may, from time to time, deem advisable; (5) making payments to
securities dealers and others engaged in the sale of shares or who engage
in shareholder support services ( " Investment Professionals"); and
(6) providing training, marketing and support to Investment Professionals
with respect to the sale of shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General
Distribution Agreement with respect to shares of Class B ( " Class B
Shares"), the Distributor is hereby specifically authorized to make
payments to Investment Professionals in connection with the sale of the
Class B Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class B Shares attributable to a particular
Investment Professional, or may take such other form as may be approved by
the Trustees.
4. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement and
paragraphs 2 and 3 hereof, all with respect to the Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from
time to time, determine) of the average daily net assets of Class B
throughout the month. The determination of daily net assets shall be made
at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the
determination of the net asset value of Class B Shares, but shall exclude
assets attributable to [ (i) Class B Shares purchased more than 144
months prior to such date or (ii) ] any other class of shares of the
Fund. The Distributor may, but shall not be required to, use all or any
portion of the distribution fee received pursuant to the Plan to compensate
Investment Professionals who have engaged in the sale of Class B Shares or
in shareholder support services pursuant to agreements with the
Distributor, or to pay any of the expenses associated with other activities
authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent
deferred sales charges, which may be imposed upon the sale or redemption of
Class B Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate
of 0.25% (or such lesser amount as the Trustees may, from time to time,
determine) of the average daily net assets of Class B throughout the month.
The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified
in the Fund's then current Prospectus for the determination of the net
asset value of Class B Shares, but shall exclude assets attributable to any
other class of shares of the Fund. In accordance with such terms as the
Trustees may from time to time establish, the Distributor may use all or a
portion of such service fees to compensate Investment Professionals for
personal service and/or the maintenance of shareholder accounts, or for
other services for which "service fees" lawfully may be paid in accordance
with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management and Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to reimburse the Distributor for expenses incurred in connection
with the distribution of Class B Shares, including the activities referred
to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class
B Shares within the meaning of Rule 12b-1, then such payment shall be
deemed to be authorized by this Plan.
7. This Plan shall become effective upon the first business day of the
month following approval by "a vote of at least a majority of the
outstanding voting securities of the Fund " (as defined in the Act)
of Class B, this Plan having been approved by a vote of a majority of the
Trustees of the Trust, including a majority of Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan (the "Independent Trustees"), cast in
person at a meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain in
effect until June 30, 1995 , and from year to year thereafter;
provided, however, that such continuance is subject to approval annually by
a vote of a majority of the Trustees of the Trust, including a majority of
the Independent Trustees, cast in person at a meeting called for the
purpose of voting on this Plan. This Plan may be amended at any time by the
Board of Trustees, provided that (a) any amendment to increase materially
the fees provided for in paragraphs 4 and 5 hereof or any amendment of the
Management Contract to increase the amount to be paid by the Fund
thereunder shall be effective only upon approval by a vote of a majority of
the outstanding voting securities of Class B in the case of this Plan, or
upon approval by a vote of the majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in
the manner provided in the first sentence of paragraph 8 .
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Class B Shares (making estimates of such
costs where necessary or desirable) and the purposes for which such
expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Class B Shares.
12. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Class B and its assets and shall not constitute an
obligation of any shareholder of the Trust or of any other class of the
Fund, series of the Trust or class of such series.
13. 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.
EXHIBIT 3
The language to be added to the current contract [[ is
underlined; ]] the language to be deleted is set forth in [brackets].
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY ADVISOR SERIES IV
ON BEHALF OF
FIDELITY ADVISOR LIMITED TERM BOND FUND
AGREEMENT made this [1st day of December, 1990,] ___ day of ____, 1994, by
and between [[ Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts (hereinafter called the "Advisor") ]] ; Fidelity
Management & Research (Far East) Inc. [, a Massachusetts business trust
with principal offices at 82 Devonshire Street, Boston, Massachusetts]
(hereinafter called the "Sub-Advisor"); [[ and Fidelity Advisor
Series IV, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Trust") on
behalf of Fidelity Advisor Limited Term Bond Fund (hereinafter called the
"Portfolio"). ]]
WHEREAS [[ the Trust and ]] the Advisor [[ have ]]
[has] entered into a Management Contract [[ on behalf of the
Portfolio, ]] [with Income Trust , a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Fund"), on behalf of Equity Portfolio: Income
(hereinafter called the "Portfolio"),] pursuant to which the Advisor is to
act as investment [[ manager ]] [adviser] of the Portfolio; and
WHEREAS the Sub-Advisor [[ and its subsidiaries and other affiliated
persons have ]] [has] personnel in [Asia and the Pacific Basin]
[[ various locations throughout the world ]] and [[ have
been ]] formed [[ in part ]] for the purpose of
researching and compiling information and recommendations with respect to
the economies of various countries, [[ and securities of ]]
issuers located [outside of North America, principally in Asia and the
Pacific Basin.] [[ in such countries, and providing investment
advisory services in connection therewith; ]]
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
[[ 1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with respect
to all or a portion of the investments of the Portfolio. The services and
the portion of the investments of the Portfolio to be advised or managed by
the Sub-Advisor shall be as agreed upon from time to time by the Advisor
and the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, ]] the Sub-Advisor shall [act as an investment consultant to
the Adviser and] [[ provide investment advice to the Portfolio and
the Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice ]] shall furnish
[[ the Portfolio ]] and the Advisor [[ such ]]
factual information, research reports and investment recommendations
[relating to non-U.S. issuers of securities located in, and economies of,
various countries outside the U.S., all] as the Advisor may reasonably
require. Such information may include written and oral reports and
analyses.
[[ (b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money, or lending securities on behalf of the Portfolio. All investment
management and any other activities of the Sub-Advisor shall at all times
be subject to the control and direction of the Advisor and the Trust's
Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust shall
periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, ]] [2. The Sub-Adviser will be
compensated by the Adviser on the following basis for the services to be
furnished hereunder:] the Advisor agrees to pay the Sub-Advisor [[ a
monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be equal to ]]
[a monthly fee equal to] 105% of the Sub-Advisor's costs incurred in
connection with [the Agreement, said costs to be determined in relation to
the assets of the Portfolio that benefit from the services of the
Sub-Advisor.] [[ rendering the services referred to in subparagraph
(a) of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the Advisor, if
any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
6. Interested Persons: ]] It is understood that Trustees, officers,
and shareholders of the [[ Trust ]] are or may be or become
interested in the Advisor or the Sub-Advisor as directors, officers or
otherwise and that directors, officers and stockholders of the Advisor or
the Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
[5.] [[ 7. Services to Other Companies or Accounts: ]] The
services of the Sub-Advisor to the Advisor are not to be deemed to be
exclusive, the Sub-Advisor being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. [4.] The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or the
[Fund]. [[ Trust. ]] [The Sub-Advisor shall have no authority to
act for, represent, bind or obligate the Advisor or the Fund, and shall in
no event have discretion to interest or reinvest assets held by the
Portfolio.]
[[ 8. Standard of Care: ]] In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Advisor, the
Sub-Advisor shall not be subject to liability to the Advisor, the Trust or
to any shareholder of the Portfolio for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
[[ 9. Duration and Termination of Agreement; Amendments: ]]
[6.](a) Subject to prior termination as provided in subparagraph (d) of
this paragraph [6] [[ 9, ]] this Agreement shall continue in
force until [July 31, 1992] [[ June 30, 199_ ]] and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph [6] 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Trustees of the [Fund] [[ Trust ]] who are not parties to this
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or with respect to the Portfolio by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7.] [[ 10. Limitation of Liability: ]] The Sub-Advisor is
hereby expressly put on notice of the limitation of shareholder liability
as set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all cases to
the Portfolio and its assets, and the Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek satisfaction
of any such obligation from the Trustees or any individual Trustee.
[[ 11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof. ]]
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 4
The language t o be added to the current contract [[ is
underlined; ]] the language to be deleted is set forth in [brackets].
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY ADVISOR SERIES IV
ON BEHALF OF
FIDELITY ADVISOR LIMITED TERM BOND FUND
AGREEMENT made this [1st day of December, 1990,] [[ ___ day of ____,
1994, by and between Fidelity Management & Research Company, a
Massachusetts corporation with principal offices at 82 Devonshire Street,
Boston, Massachusetts (hereinafter called the "Advisor"); ]] Fidelity
Management & Research (U.K.) Inc. [, a Massachusetts business trust with
principal offices at 82 Devonshire Street, Boston, Massachusetts]
(hereinafter called the "Sub-Advisor"); [[ and Fidelity Advisor
Series IV, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Trust") on
behalf of Fidelity Advisor Limited Term Bond Fund (hereinafter called the
"Portfolio"). ]]
WHEREAS [[ the Trust and ]] the Advisor [[ have ]]
[has] entered into a Management Contract [[ on behalf of the
Portfolio, ]] [with Income Trust , a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Fund"), on behalf of Equity Portfolio: Income
(hereinafter called the "Portfolio"),] pursuant to which the Advisor is to
act as investment [[ manager ]] [adviser] of the Portfolio; and
WHEREAS the Sub-Advisor [[ and its subsidiaries and other affiliated
persons have ]] [has] personnel in [Western Europe] [[ various
locations throughout the world ]] and [[ have been ]]
formed [[ in part ]] for the purpose of researching and
compiling information and recommendations with respect to the economies of
various countries, [[ and securities of ]] issuers located
[outside of North America, principally in Western Europe.] [[ in such
countries, and providing investment advisory services in connection
therewith; ]]
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
[[ 1. Duties: The Advisor may, in its discretion, appoint the
Sub-Advisor to perform one or more of the following services with respect
to all or a portion of the investments of the Portfolio. The services and
the portion of the investments of the Portfolio to be advised or managed by
the Sub-Advisor shall be as agreed upon from time to time by the Advisor
and the Sub-Advisor. The Sub-Advisor shall pay the salaries and fees of all
personnel of the Sub-Advisor performing services for the Portfolio relating
to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the
Advisor, ]] the Sub-Advisor shall [act as an investment consultant to
the Adviser and] [[ provide investment advice to the Portfolio and
the Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice ]] shall furnish
[[ the Portfolio ]] and the Advisor [[ such ]]
factual information, research reports and investment recommendations
[relating to non-U.S. issuers of securities located in, and economies of,
various countries outside the U.S., all] as the Advisor may reasonably
require. Such information may include written and oral reports and
analyses.
[[ (b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the Advisor,
manage all or a portion of the investments of the Portfolio in accordance
with the investment objective, policies and limitations provided in the
Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Trust or Advisor may impose with respect to the Portfolio by notice to the
Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities through such broker-dealers as the
Sub-Advisor may select. The Sub-Advisor may also be authorized, but only to
the extent such duties are delegated in writing by the Advisor, to provide
additional investment management services to the Portfolio, including but
not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money, or lending securities on behalf of the Portfolio. All investment
management and any other activities of the Sub-Advisor shall at all times
be subject to the control and direction of the Advisor and the Trust's
Board of Trustees.
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved by
the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. Information to be Provided to the Trust and the Advisor: The
Sub-Advisor shall furnish such reports, evaluations, information or
analyses to the Trust and the Advisor as the Trust's Board of Trustees or
the Advisor may reasonably request from time to time, or as the Sub-Advisor
may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Sub-Advisor shall place all
orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Sub-Advisor,
which may include brokers or dealers affiliated with the Advisor or
Sub-Advisor. The Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of l934) to the Portfolio and/or to the other
accounts over which the Sub-Advisor or Advisor exercise investment
discretion. The Sub-Advisor is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Advisor has with respect to accounts over
which it exercises investment discretion. The Trustees of the Trust shall
periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
4. Compensation: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph (a)
of paragraph 1 of this Agreement, ]] [2. The Sub-Adviser will be
compensated by the Adviser on the following basis for the services to be
furnished hereunder:] the Advisor agrees to pay the Sub-Advisor [[ a
monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be equal to ]]
[a monthly fee equal to] 110% of the Sub-Advisor's costs incurred in
connection with [the Agreement, said costs to be determined in relation to
the assets of the Portfolio that benefit from the services of the
Sub-Advisor.] [[ rendering the services referred to in subparagraph
(a) of paragraph 1 of this Agreement. The Sub-Advisory Fee shall not be
reduced to reflect expense reimbursements or fee waivers by the Advisor, if
any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment Management
Fee shall be equal to: (i) 50% of the monthly management fee rate
(including performance adjustments, if any) that the Portfolio is obligated
to pay the Advisor under its Management Contract with the Advisor,
multiplied by: (ii) the fraction equal to the net assets of the Portfolio
as to which the Sub-Advisor shall have provided investment management
services divided by the net assets of the Portfolio for that month. If in
any fiscal year the aggregate expenses of the Portfolio exceed any
applicable expense limitation imposed by any state or federal securities
laws or regulations, and the Advisor waives all or a portion of its
management fee or reimburses the Portfolio for expenses to the extent
required to satisfy such limitation, the Investment Management Fee paid to
the Sub-Advisor will be reduced by 50% of the amount of such waivers or
reimbursements multiplied by the fraction determined in (ii). If the
Sub-Advisor reduces its fees to reflect such waivers or reimbursements and
the Advisor subsequently recovers all or any portion of such waivers and
reimbursements, then the Sub-Advisor shall be entitled to receive from the
Advisor a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Advisor required by such limitations are
in excess of the Advisor's management fee, the Investment Management Fee
paid to the Sub-Advisor will be reduced to zero for that month, but in no
event shall the Sub-Advisor be required to reimburse the Advisor for all or
a portion of such excess reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same period,
the fees paid to the Sub-Advisor with respect to such investments shall be
calculated exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the
Portfolio, which expenses payable by the Portfolio shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and other
investment instruments; (iii) fees and expenses of the Trust's Trustees
other than those who are "interested persons" of the Trust, the Sub-Advisor
or the Advisor; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefore;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligation which the Portfolio may have to indemnify
the Trust's Trustees and officers with respect thereto.
6. Interested Persons: ]] It is understood that Trustees, officers,
and shareholders of the [[ Trust ]] are or may be or become
interested in the Advisor or the Sub-Advisor as directors, officers or
otherwise and that directors, officers and stockholders of the Advisor or
the Sub-Advisor are or may be or become similarly interested in the Trust,
and that the Advisor or the Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
[5.] [[ 7. Services to Other Companies or Accounts: ]] The
services of the Sub-Advisor to the Advisor are not to be deemed to be
exclusive, the Sub-Advisor being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Advisor's ability to meet all of its
obligations hereunder. [4.] The Sub-Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Advisor or the
[Fund]. [[ Trust. ]] [The Sub-Advisor shall have no authority to
act for, represent, bind or obligate the Advisor or the Fund, and shall in
no event have discretion to interest or reinvest assets held by the
Portfolio.]
[[ 8. Standard of Care: ]] In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Advisor, the
Sub-Advisor shall not be subject to liability to the Advisor, the Trust or
to any shareholder of the Portfolio for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
[[ 9. Duration and Termination of Agreement; Amendments: ]]
[6.](a) Subject to prior termination as provided in subparagraph (d) of
this paragraph [6] [[ 9, ]] this Agreement shall continue in
force until [July 31, 1992] [[ June 30, 199_ ]] and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph [6] [[ 9, ]] the terms of any continuance or
modification of this Agreement must have been approved by the vote of a
majority of those Trustees of the [Fund] [[ Trust ]] who are
not parties to this Agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or with respect to the Portfolio by vote of a
majority of its outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment.
[7.] [[ 10. Limitation of Liability: ]] The Sub-Advisor is
hereby expressly put on notice of the limitation of shareholder liability
as set forth in the Declaration of Trust or other organizational document
of the Trust and agrees that any obligations of the Trust or the Portfolio
arising in connection with this Agreement shall be limited in all cases to
the Portfolio and its assets, and the Sub-Advisor shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Portfolio. Nor shall the Sub-Advisor seek satisfaction
of any such obligation from the Trustees or any individual Trustee.
[[ 11. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof. ]]
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the 1940
Act as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
[SIGNATURE LINES OMITTED]
EXHIBIT 5
The language t o be added to the current contract [[ is
underlined; ]] the language to be deleted is set forth in [brackets].
FORM OF
MANAGEMENT CONTRACT
BETWEEN
[[ FIDELITY ADVISOR SERIES IV
FIDELITY ADVISOR ]] LIMITED TERM [[ BOND FUND ]]
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
[[ MODIFICATION ]] [AGREEMENT] made this [[ 1st day of
_____ 1994, ]] [29th day of January, 1989] by and between
[[ Fidelity Advisor Series IV, ]] [Income Portfolios]a
Massachusetts business trust which may issue one or more series of shares
of beneficial interest (hereinafter called the "Fund"), on behalf of
[[ Fidelity Advisor ]] Limited Term [Series] [[ Bond
Fund ]] (hereinafter called the "Portfolio"), and Fidelity Management
& Research Company, a Massachusetts corporation (hereinafter called the
"Adviser").
[[ Required authorization and approval by shareholders and Trustees
having been obtained, the Fund, on behalf of the Portfolio, and the Adviser
hereby consent, pursuant to Paragraph 6 of the existing Management Contract
dated January 29, 1989, to a modification of said Contract in the manner
set forth below. The Modified Management Contract shall when executed by
duly authorized officers of the Fund and the Adviser, take effect on the
later of December 1, 19 94 or the first day of the month
following approval. ]]
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio office
space and all necessary office facilities, equipment and personnel for
servicing the investments of the Portfolio; and shall pay the salaries and
fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) [[ The Adviser shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio. ]]
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. [[ The Adviser will be compensated on the following
basis ]] for the services and facilities to be furnished
hereunder.[,]. The Adviser shall receive a monthly management fee, payable
monthly as soon as practicable after the last day of each month, [which
shall be computed as follows:] [[ composed of a Group Fee and an
Individual Fund Fee. ]]
[[ (a) ]] [(i)] Group Fee Rate. The Group Fee Rate shall be
based upon the monthly average of the net assets of the registered
investment companies having Advisory and Service or Management Contracts
with the Adviser (computed in the manner set forth in the fund's
Declaration of Trust or other organizational document) determined as of the
close of business on each business day throughout the month. The Group Fee
Rate shall be determined on a cumulative basis pursuant to the following
schedule:
Average Net Assets Annualized Fee Rate (for each level)
$ 0 - 3 billion .3700%
3 - 6 .3400%
6 - 9 .3100%
9 - 12 .2800%
12 - 15 .2500%
15 - 18 .2200%
18 - 21 .2000%
21 - 24 .1900%
24 - 30 .1800%
30 - 36 .1750%
36 - 42 .1700%
42 - 48 .1650%
48 - 66 .1600%
66 - 84 .1550%
[Over 84]
[[ 84 - 120 [[ .1500%
120 - 156 .1450%
156 - 192 .1400%
192 - 228 .1350%
228 - 264 .1300%
264 - 300 .1275%
300 - 336 .1250%
336 - 372 .1225%
Over 372 ]] .1200% ]]
[[ (b)[(ii)] ]] Individual Fund Fee Rate. The Individual Fund
Fee Rate shall be [[ .30%. ]] [.25%]
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the
Annual [[ Management ]] Fee Rate. One-twelfth of the Annual
[[ Management ]] Fee Rate shall be applied to the average of
the net assets of the [Series] [[ Portfolio ]] (computed in the
manner set forth in the [[ Fund's ]] Declaration of Trust [of
the Trust] [[ or other organizational document) ]] determined
as of the close of business on each business day throughout the month.
[[ (c) ]] In case of [initiation of] termination of this
Contract during any month, the fee for that month shall be reduced
proportionately on the basis of the number of business days during which it
is in effect, and the fee computed upon the average net assets for the
business days it is so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other
investment instrument .
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until [[ June
30, 19 95]] [July 31, 1989] and indefinitely thereafter, but only so
long as the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
8. [[ This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of laws provisions thereof. ]]
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[SIGNATURE LINES OMITTED]
EXHIBIT 6
FUNDS ADVISED BY FMR - TABLE OF AVERAGE NET ASSETS AND EXPENSE RATIOS (A)
RATIO OF RATIO OF NET
ADVISORY FEES ADVISORY FEES
TO AVERAGE TO AVERAGE RATIO OF
AVERAGE NET ASSETS NET ASSETS EXPENSES TO
INVESTMENT FISCAL NET ASSETS PURSUANT TO PAID AVERAGE NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) ADVISORY CONTRACT TO FMR
(B) ASSETS (C)
GROWTH AND INCOME
Balanced (3) 7/31/93 $ 2,154.5 0.53% 0.53% 0.93%
Dividend Growth (3) 7/31/93** 9.2 0.62(dagger) - 2.50(dagger)
Global Balanced (1) 7/31/93** 35.7 0.77(dagger) 0.77(dagger) 2.12(dagger)
Growth & Income 7/31/93 5,195.4 0.53 0.53 0.83
Puritan (3) 7/31/93 6,319.2 0.47 0.47 0.74
Advisor Income &
Growth 10/31/93 870.1 0.53 0.53 1.51
International Growth
& Income (2) 10/31/93 301.5 0.77 0.77 1.52
Advisor Equity Portfolio
Income :
Class A (3) 11/30/93 19.1 0.50 0.50 1.77
Institutional Class (3) 11/30/93 167.8 0.50 0.50 0.79
Convertible Securities (3) 11/30/93 782.6 0.53 0.53 0.92
Equity-Income II (3) 11/30/93 3,544.3 0.53 0.53 0.88
Variable Insurance
Products:
Equity-Income 12/31/93 952.1 0.53 0.53 0.62
Equity-Income (3) 1/31/94 6,040.5 0.38 0.38 0.66
Real Estate (3) 1/31/94 417.9 0.63 0.63 1.13
Utilities Income (3) 1/31/94 1,394.4 0.53 0.53 0.86
U.S. Equity Index 2/28/94 1,647.0 0.28 - 0.28
Market Index 4/30/94 300.9 0.45 0.45 0.45
Fidelity Fund (3) 6/30/94 1,545.0 0.41 0.41 0.65
ASSET ALLOCATION
Asset Manager 9/30/93 4,704.2 0.72 0.72 1.09
Asset Manager:
Growth (3)(4) 9/30/93 566.0 0.73 0.63 1.19
Asset Manager:
Income (3)(4) 9/30/93 79.1 0.44 - 0.65
Variable Insurance
Products II:
Asset Manager (3) 12/31/93 1,432.9 0.72 0.72 0.88
Index 500 12/31/93 20.8 0.28 - 0.28
GROWTH
RATIO OF RATIO OF NET
ADVISORY FEES ADVISORY FEES
TO AVERAGE TO AVERAGE RATIO OF
AVERAGE NET ASSETS NET ASSETS EXPENSES
TO
INVESTMENT FISCAL NET ASSETS PURSUANT TO PAID AVERAGE
NET
OBJECTIVE AND FUND YEAR END (A) (MILLIONS) ADVISORY CONTRACT TO FMR
(B)
ASSETS (C)
Blue Chip Growth 7/31/93 589.5 0.72 0.72 1.25
Low-Priced Stock (3) 7/31/93 2,048.8 0.76 0.76 1.12
OTC Portfolio 7/31/93 1,202.7 0.74 0.74 1.08
Advisor Strategic
Opportunities (3) 9/30/93 $ 219.2 0.54% 0.54% 1.57%
Destiny I 9/30/93# 2,920.5 0.60(dagger) 0.60(dagger) 0.65(dagger)
Destiny II 9/30/93# 1,100.8 0.71(dagger) 0.71(dagger) 0.84(dagger)
Strategic
Opportunities (3) 9/30/93 19.2 0.54 0.54 0.89
Advisor Emerging Asia
Fund, Inc. (5) 10/31/94** 117.0 1.01(dagger) 1.01(dagger) 1.86(dagger)
Advisor Global
Resources (3) 10/31/93 14.4 0.77 0.77 2.62
Advisor Growth
Opportunities 10/31/93 1,204.5 0.68 0.68 1.64
Advisor Overseas (2) 10/31/93 65.5 0.77 0.77 2.38
Canada (2) 10/31/93 61.1 0.86 0.86 2.00
Capital Appreciation (3) 10/31/93 1,139.1 0.48 0.48 0.86
Disciplined Equity (3) 10/31/93 622.1 0.70 0.70 1.09
Diversified
International (2) 10/31/93 119.1 0.73 0.73 1.47
Emerging Markets (2) 10/31/93 144.4 0.77 0.77 1.91
Europe (2) 10/31/93 488.3 0.64 0.64 1.25
Europe Capital
Appreciation (2) 10/31/94** 231.8 0.78(dagger) 0.78(dagger) 1.58(dagger)
Japan (1) 10/31/93 98.4 0.77 0.77 1.71
Latin America (2) 10/31/93** 114.6 0.77(dagger) 0.77(dagger) 1.94(dagger)
Overseas (2) 10/31/93 1,025.1 0.77 0.77 1.27
Pacific Basin (1) 10/31/93 251.2 0.80 0.80 1.59
Southeast Asia (1) 10/31/93** 139.3 0.77(dagger) 0.71(dagger) 2.00(dagger)
Stock Selector (3) 10/31/93 459.7 0.71 0.71 1.10
Value (3) 10/31/93 1,100.8 0.72 0.72 1.11
Worldwide (2) 10/31/93 148.9 0.78 0.78 1.40
Advisor Equity Portfolio
Growth :
Class A (3) 11/30/93 176.0 0.66 0.66 1.84
Institutiona l Class (3) 11/30/93 226.7 0.66 0.66 0.94
Emerging Growth (3) 11/30/93 620.6 0.80 0.80 1.19
Growth Company (3) 11/30/93 2,119.8 0.75 0.75 1.07
New Millennium 11/30/93** 187.5 0.68(dagger) 0.68(dagger) 1.32(dagger)
Retirement Growth (3) 11/30/93 2,404.1 0.76 0.76 1.05
Congress Street 12/31/93 63.4 0.46 0.46 0.61
Contrafund (3) 12/31/93 4,138.1 0.69 0.69 1.06
Exchange 12/31/93 187.7 0.54 0.54 0.57
Trend (3) 12/31/93 1,296.7 0.65 0.65 0.92
Variable Insurance
Products:
Growth 12/31/93 $ 1,016.0 0.63% 0.63% 0.71%
Overseas (2) 12/31/93 398.7 0.77 0.77 1.03
Mid-Cap Stock (3) 1/31/95** 17.6 0.62(dagger) 0.62(dagger) 2.23(dagger)
Select Portfolios:
Air Transportation (3) 2/28/94 17.8 0.63 0.63 2.31
American Gold 2/28/94 313.4 0.63 0.63 1.49
Automotive (3) 2/28/94 133.8 0.63 0.63 1.68
Biotechnology (3) 2/28/94 549.9 0.63 0.63 1.61
Brokerage and Investment
Management (3) 2/28/94 69.3 0.63 0.63 1.77
Chemicals (3) 2/28/94 27.4 0.63 0.63 1.93
Computers (3) 2/28/94 41.2 0.63 0.63 1.89
Construction and
Housing (3) 2/28/94 42.1 0.63 0.63 1.66
Consumer Products (3) 2/28/94 9.0 0.63 0.49 2.48
Defense and
Aerospace (3) 2/28/94 4.6 0.63 - 2.53
Developing
Communications (3) 2/28/94 177.0 0.63 0.63 1.56
Electronics (3) 2/28/94 54.3 0.63 0.63 1.67
Energy (3) 2/28/94 126.1 0.63 0.63 1.66
Energy Service (3) 2/28/94 94.0 0.63 0.63 1.65
Environmental
Services (3) 2/28/94 56.6 0.63 0.63 2.03
Financial Services (3) 2/28/94 168.8 0.62 0.62 1.63
Food and Agriculture (3) 2/28/94 110.1 0.62 0.62 1.64
Health Care (3) 2/28/94 552.3 0.63 0.63 1.55
Home Finance (3) 2/28/94 224.4 0.63 0.63 1.58
Industrial Equipment (3) 2/28/94 58.2 0.63 0.63 1.68
Industrial Materials (3) 2/28/94 33.8 0.64 0.64 2.08
Insurance (3) 2/28/94 22.4 0.63 0.63 1.93
Leisure (3) 2/28/94 88.1 0.63 0.63 1.53
Medical Delivery (3) 2/28/94 105.8 0.63 0.63 1.79
Multimedia (3) (6) 2/28/94 62.8 0.63 0.63 1.63
Natural Gas (3) 2/28/94** 45.1 0.63(dagger) 0.63(dagger) 1.93(dagger)
Paper and Forest
Products (3) 2/28/94 27.0 0.64 0.64 2.07
Precious Metals and
Minerals (3) 2/28/94 378.4 0.63 0.63 1.55
Regional Banks (3) 2/28/94 201.0 0.62 0.62 1.60
Retailing (3) 2/28/94 $ 57.7 0.62% 0.62% 1.83%
Software and Computer
Services (3) 2/28/94 172.2 0.63 0.63 1.57
Technology (3) 2/28/94 163.4 0.63 0.63 1.54
Telecommunications (3) 2/28/94 353.3 0.63 0.63 1.53
Transportation (3) 2/28/94 10.5 0.63 0.63 2.39
Utilities (3) 2/28/94 310.9 0.63 0.63 1.35
Magellan (3) 3/31/94 29,816.4 0.76 0.76 0.99
Small Cap Stock 4/30/94** 572.2 0.68(dagger) 0.68(dagger) 1.18(dagger)
Fidelity Fifty (3) 6/30/94 44.2 0.63 0.63 1.58
CURRENCY PORTFOLIOS
Deutsche Mark
Peformance, L.P. 12/31/93 8.4 0.50 - 1.50
Sterling
Performance, L.P. 12/31/93 3.0 0.50 - 1.50
Yen Performance, L.P. 12/31/93 4.0 0.50 - 1.50
INCOME
Ginnie Mae 7/31/93 953.2 0.47 0.47 0.80
Mortgage Securities 7/31/93 428.9 0.47 0.47 0.76
Spartan Limited Maturity
Government 7/31/93 1,653.7 0.65 0.65 0.65
Spartan Ginnie Mae 8/31/93 766.9 0.65 0.41 0.41
Government Securities 9/30/93** 616.6 0.47(dagger) 0.47(dagger)
0.69(dagger)
Short-Intermediate
Government 9/30/93 167.6 0.47 0.18 0.61
Spartan Investment
Grade Bond (3) 9/30/93 59.1 0.65 0.65 0.65
Spartan Short-Term
Income (3) 9/30/93 547.0 0.65 0.20 0.20
Advisor Government
Investment 10/31/93 40.8 0.46 - 0.68
Advisor High Yield 10/31/93 299.1 0.51 0.51 1.11
Advisor Short Fixed
Income 10/31/93 359.6 0.47 0.47 0.95
Advisor Institutional
Limited Term Bond:
Class A 11/30/93 174.3 0.42 0.42 0.64
Institutional Class 11/30/93 22.5 0.42 0.42 1.23
Institutional Short-
Intermediate
Government:
Class I 11/30/93 $ 255.2 0.45% 0.45% 0.45%
Class II 11/30/94** .1 0.45(dagger) 0.45(dagger) 0.70(dagger)
Advisor Emerging
Markets Income 12/31/94** 6.2 0.71(dagger) - 1.50(dagger)
Global Bond (2) 12/31/93 434.1 0.71 0.71 1.17
New Markets Income (2) 12/31/93** 114.6 0.71(dagger) 0.28(dagger)
1.24(dagger)
Short-Term World
Income (2) 12/31/93 400.1 0.62 0.62 1.00
Spartan Bond
Strategist (3) 12/31/93** 15.4 0.70(dagger) 0.70(dagger) 0.70(dagger)
Variable Insurance
Products:
High Income 12/31/93 343.1 0.51 0.50 0.64
Variable Insurance
Products II:
Investment Grade
Bond 12/31/93 98.9 0.47 0.47 0.68
Spartan Long-Term
Government Bond 1/31/94 85.8 0.65 0.65 0.65
U.S. Bond Index 2/28/94 190.2 0.32 - 0.32
Capital & Income (3) 4/30/94 2,644.6 0.71 0.71 0.97
Intermediate Bond (3) 4/30/94 1,782.5 0.31 0.31 0.64
Investment Grade Bond (3) 4/30/94 1,026.3 0.41 0.41 0.74
Short-Term Bond (3) 4/30/94 2,230.0 0.46 0.46 0.80
Spartan Government
Income 4/30/94 397.4 0.65 0.65 0.65
Spartan High Income 4/30/94 671.4 0.75 0.75 0.75
Spartan Short-Intermediate
Government 4/30/94 61.7 0.65 0.10 0.10
The North Carolina Capital
Management Trust:
Term Portfolio 6/30/94 74.1 0.41 0.41 0.41
MONEY MARKET
Daily Money Fund:
Capital Reserves:
Money Market (4) 7/31/93 443.3 0.50 0.31 0.95
U.S. Government
Money Market (4) 7/31/93 269.5 0.50 0.38 0.95
Money Market (4) 7/31/93 1,554.7 0.50 0.50 0.61
U.S. Treasury (4) 7/31/93 $ 2,841.7 0.50% 0.50% 0.57%
U.S. Treasury
Income (4) 7/31/93 1,166.9 0.42 0.20 0.20
Spartan U.S. Treasury
Money Market (4) 7/31/93 2,138.9 0.55 0.42 0.42
Daily Income Trust (4) 8/31/93 2,302.8 0.30 0.30 0.57
Money Market Trust:
Domestic Money
Market (4) 8/31/93 690.3 0.42 0.42 0.42
Retirement Government
Money Market (4) 8/31/93 1,338.8 0.42 0.42 0.42
Retirement Money
Market (4) 8/31/93 1,661.1 0.42 0.42 0.42
U.S. Government (4) 8/31/93 297.5 0.42 0.42 0.42
U.S. Treasury (4) 8/31/93 181.5 0.42 0.42 0.42
U.S. Government
Reserves (4) 9/30/93 1,139.5 0.43 0.43 0.73
Cash Reserves (4) 11/30/93 9,761.4 0.14 0.13 0.48
State and Local Asset
Management Series:
Government Money
Market (4) 11/30/93 844.5 0.43 0.43 0.43
Variable Insurance
Products:
Money Market (4) 12/31/93 307.3 0.14 0.13 0.22
Select Money Market (4) 2/28/94 462.6 0.13 0.13 0.72
Institutional Cash:
Domestic Money
Market (4) 3/31/94 762.8 0.20 0.12 0.18
Money Market :
Class A (4) 3/31/94 5,263.1 0.20 0.15 0.18
Class B (4) 3/31/94** 34.4 0.20(dagger) 0.15(dagger) 0.50(dagger)
U.S. Government (4) 3/31/94 4,830.3 0.20 0.14 0.18
U.S. Treasury (4) 3/31/94 1,898.0 0.20 0.15 0.18
U.S. Treasury II:
Class A (4) 3/31/94 4,916.5 0.20 0.14 0.18
Class B (4) 3/31/94** 1.5 0.20(dagger) 0.14(dagger) 0.50(dagger)
Spartan Money Market (4) 4/30/94 4,512.4 0.45 0.31 0.31
Spartan U.S. Governmenrt
Money Market (4) 4/30/94 799.3 0.45 0.45 0.45
The North Carolina
Capital Management Trust:
Cash Portfolio (4) 6/30/94 1,391.7 0.39 0.39 0.39
TAX-EXEMPT INCOME
Daily Money Fund:
Capital Reserves:
Municipal Money
Market (4) 7/31/93 $ 91.7 0.50% 0.22% 0.95%
Spartan Aggressive
Municipal 8/31/93** 6.4 0.60(dagger) 0.60(dagger) 0.60(dagger)
Spartan Intermediate
Municipal 8/31/93** 82.6 0.55(dagger) - -
Spartan Maryland
Municipal Income 8/31/93** 13.4 0.55(dagger) - -
Spartan Municipal
Income 8/31/93 869.8 0.55 0.47 0.47
Spartan Municipal
Money Market (4) 8/31/93 1,561.2 0.50 0.27 0.27
Spartan Short-
Intermediate
Municipal 8/31/93# 819.9 0.55(dagger) 0.55(dagger) 0.55(dagger)
Advisor High Income
Municipal 10/31/93 316.4 0.42 0.42 0.92
Daily Tax-Exempt
Money (4) 10/31/93 504.9 0.50 0.50 0.61
Spartan New Jersey
Municipal Money
Market (4) 10/31/93 329.1 0.50 0.44 0.44
Tax-Exempt Money
Market Trust (4) 10/31/93 2,789.6 0.27 0.27 0.49
Advisor Institutional
Limited Term
Tax-Exempt:
Class A 11/30/93 22.1 0.42 0.24 0.65
Institutional Class 11/30/93 15.4 0.42 - 0.90
Advisor Short-Inter-
Mediate Tax Exempt 11/30/94** 6.5 0.41(dagger) - 0.75(dagger)
Connecticut Municipal
Money Market (4) 11/30/93 300.3 0.42 0.42 0.61
High Yield Tax-Free 11/30/93 2,161.9 0.42 0.42 0.56
New Jersey Tax-Free
Money Market (4) 11/30/93 357.5 0.42 0.42 0.63
Spartan Connecticut
Municipal:
High Yield 11/30/93 450.4 0.55 0.55 0.55
Money Market (4) 11/30/93 128.5 0.50 0.24 0.24
Spartan Florida Municipal:
Income 11/30/93 $ 377.5 0.55% 0.25% 0.25%
Money Market (4) 11/30/93 204.4 0.50 0.18 0.18
Spartan New Jersey
Municipal High Yield 11/30/93 399.2 0.55 0.55 0.55
Aggressive Tax-Free 12/31/93 891.9 0.47 0.47 0.64
Insured Tax-Free 12/31/93 426.3 0.42 0.42 0.61
Limited Term
Municipals 12/31/93 1,174.6 0.41 0.41 0.57
Michigan Tax-Free:
High Yield 12/31/93 528.9 0.42 0.42 0.59
Money Market (4) 12/31/93 161.3 0.42 0.41 0.62
Minnesota Tax-Free 12/31/93 320.0 0.42 0.42 0.61
Municipal Bond 12/31/93 1,279.8 0.37 0.37 0.49
Ohio Tax-Free:
High Yield 12/31/93 442.1 0.41 0.41 0.57
Money Market (4) 12/31/93 244.4 0.42 0.42 0.59
Spartan Pennsylvania
Municipal:
High Yield 12/31/93 283.2 0.55 0.55 0.55
Money Market (4) 12/31/93 218.8 0.50 0.50 0.50
Massachusetts Tax-Free:
High Yield 1/31/94 1,365.4 0.41 0.41 0.54
Money Market (4) 1/31/94 577.0 0.41 0.41 0.66
New York Tax-Free:
High Yield 1/31/94 477.9 0.41 0.41 0.58
Insured 1/31/94 395.2 0.41 0.41 0.58
Money Market (4) 1/31/94 564.0 0.41 0.41 0.62
Spartan Massachusetts
Municipal Money
Market (4) 1/31/94 339.5 0.50 0.40 0.40
Spartan New York
Municipal:
High Yield 1/31/94 427.7 0.55 0.55 0.55 Intermediate 1/31/94** 4.3
0.55(dagger) - -
Money Market (4) 1/31/94 446.6 0.50 0.50 0.50
California Tax-Free:
High Yield 2/28/94 588.0 0.41 0.41 0.57
Insured 2/28/94 299.5 0.41 0.29 0.48
Money Market (4) 2/28/94 540.0 0.41 0.41 0.64
Spartan California
Municipal:
High Yield 2/28/94 598.5 0.55 0.52 0.52
Intermediate 2/28/94** $ 7.7 0.55(dagger)% -% -%
Money Market (4) 2/28/94 944.0 0.50 0.21 0.21
Institutional Tax-
Exempt Cash (4) 5/31/94 2,549.9 0.20 0.14 0.18
(a) All fund data are as of the fiscal year end noted in the chart or as of
June 30, 1994, if fiscal year end figures are not yet available. Average
net assets are computed on the basis of average net assets of each fund at
the close of business on each business day throughout its fiscal period.
(b) Reflects reductions for any expense reimbursement paid by or due from
FMR pursuant to voluntary or state expense limitations.
(c) 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 cer
tain portfolio trades have been directed.
(dagger) Annualized
# Year end changed
** Less than a complete fiscal year
(1) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: Fidelity Management & Research
(U.K.) Inc. (FMR U.K.), Fidelity Management & Research (Far East) Inc. (FMR
Far East), Fidelity Investments Japan Ltd. (FIJ), Fidelity International
Investment Advisors (FIIA), and Fidelity International Investment Advisors
(U.K.) Limited (FIIAL U.K.), with respect to the fund.
(2) Fidelity Management & Research Company has entered into sub-advisory
agreements with the following affiliates: FMR U.K., FMR Far East, FIJ (New
Markets Income and Advisor Emerging Markets only), FIIA, and FIIAL U.K.,
with respect to the fund.
(3) Fidelity Management & Research Company has entered into sub-advisory
agreements with FMR U.K. and FMR Far East, with respect to the fund.
(4) Fidelity Management & Research Company has entered into a sub-advisory
agreement with FMR Texas Inc., with respect to the fund.
(5) Fidelity Management & Research Company has entered into sub-advisory
agreements with FIIA and FIJ, with respect to the fund.
(6) Effective April 25, 1994, Select Broadcast and Media Portfolio has been
renamed to Multimedia Portfolio.
FAIV-PXS- 9 94 CUSIP #315809400 / FUND #662
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
__________________________________________________________________________
____________________
FIDELITY ADVISOR SERIES IV: FIDELITY ADVISOR LIMITED TERM BOND FUND - CLASS
A
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Marvin L. Mann, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series IV as indicated above which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the fund to
be held at the office of the trust at 82 Devonshire St., Boston, MA 02109,
on November 16, 1994 at 10:15 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
087, 287, 662, 663, 687H
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
__________________________________________________________________________
___________________
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Coopers & Lybrand L.L.P . as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting i t to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
7. To amend the Bylaws of the Trust not to require FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
shareholder approval for further amendments to the
bylaws.
8. To amend the Class A Distribution and Service Plan . FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
10. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
FMR Far East.
11. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
FMR U.K.
12. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
fund.
13. To amend the fund's investment objective and to FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
eliminate certain fundamental investment policies.
14. To replace the fund's fundamental portfolio maturity FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
with an identical non-fundamental policy.
15. To replace the fund's fundamental investment policies FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
with identical non-fundamental policies.
16. To adopt a non-fundamental defensive policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
fund.
17. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning borrowing.
18. To amend the fund' s fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning diversification for the fund.
20. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning short sales of securities.
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning margin purchases.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning the underwriting of securities.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning the concentration of its
investments in a single industry.
26. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 26.
limitation concerning investments in securities of
newly-formed issuers.
27 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
28 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 28.
limitation concerning purchasing the securities of
other investment companies.
29 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 29.
limitation concerning investment in companies for the
purpose of exercising control or management.
ALTBA-PXC-994 CUSIP# 315809202/FUND #287
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
__________________________________________________________________________
____________________
FIDELITY ADVISOR SERIES IV: FIDELITY ADVISOR LIMITED TERM BOND FUND - CLASS
B
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Marvin L. Mann, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series IV as indicated above which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the fund to
be held at the office of the trust at 82 Devonshire St., Boston, MA 02109,
on November 16, 1994 at 10:15 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
087, 287, 662, 663, 687 H
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
__________________________________________________________________________
____________________
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Coopers & Lybrand L.L.P . as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
7. To amend the Bylaws of the Trust not to require FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
shareholder approval of further amendments to the
bylaws.
8. To amend the Class A Distribution and Service Plan. FOR [ ] AGAINST [ ] ABSTAIN [ ] 8.
9. To amend the Class B Distribution and Service Plan. FOR [ ] AGAINST [ ] ABSTAIN [ ] 9.
10. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
FMR Far East.
11. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
FMR U.K.
12. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
fund.
13. To amend the fund's investment objective and to FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
eliminate certain fundamental investment policies.
14. To replace the fund's fundamental portfolio maturity FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
policy with an identical non-fundamental policy.
15. To replace the fund's fundamental investment policies FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
with identical non-fundamental policies.
16. To adopt a non-fundamental defensive policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
fund .
17. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning borrowing.
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning diversification.
20. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning short sales of securities.
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning margin purchases.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning the underwriting of securities.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning the concentration of its
investments in a single industry.
26. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 26.
limitation concerning investments in securities of
newly-formed issuers.
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
28. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 28.
limitation concerning purchasing the securities of
other investment companies.
29. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 29.
limitation concerning the investment in companies for
the purpose of exercising control or management.
ALTBB-PXC-994 CUSIP# 315809509/FUND #687
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
__________________________________________________________________________
____________________
FIDELITY ADVISOR SERIES IV: FIDELITY ADVISOR LIMITED TERM BOND FUND -
INSTITUTIONAL CLASS
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Marvin L. Mann, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series IV as indicated above which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the fund to
be held at the office of the trust at 82 Devonshire St., Boston, MA 02109,
on November 16, 1994 at 10:15 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
087, 287, 562, 563, 687
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
__________________________________________________________________________
____________________
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Coopers & Lybrand L.L.P . as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
7. To amend the Bylaws of the Trust not to require FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
shareholder approval of further amendments to the
bylaws.
10. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 10.
FMR Far East.
11. To approve a new Sub-Advisory Agreement with FOR [ ] AGAINST [ ] ABSTAIN [ ] 11.
FMR U.K.
12. To approve an amended management contract for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 12.
fund.
13. To amend the fund's investment objective and to FOR [ ] AGAINST [ ] ABSTAIN [ ] 13.
eliminate certain fundamental investment policies.
14. To replace the fund's fundamental portfolio maturity FOR [ ] AGAINST [ ] ABSTAIN [ ] 14.
policy with an identical non-fundamental policy.
15. To replace the fund's fundamental investment policies FOR [ ] AGAINST [ ] ABSTAIN [ ] 15.
with identical non-fundamental policies.
16. To adopt a non -fundamental defensive policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 16.
fund .
17. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 17.
limitation concerning borrowing.
18. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 18.
limitation concerning diversification.
20. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning short sales of securities.
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning margin purchases.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning the underwriting of securities.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning the concentration of its
investments in a single industry.
26 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 26.
limitation concerning investments in securities of
newly-formed issuers.
27 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
28. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 28.
limitation concerning purchasing the securities of
other investment companies.
29. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 29.
limitation concerning the investment in companies for
the purpose of exercising control or management.
ALTBI-PXC-994 CUSIP# 315809103/FUND #087
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------
- --------------------
FIDELITY ADVISOR SERIES IV: FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Marvin L. Mann, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series IV as indicated above which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the fund to
be held at the office of the trust at 82 Devonshire St., Boston, MA 02109,
on November 16, 1994 at 10:15 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
087, 287, 662, 663, 687
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
- --------------------------------------------------------------------------
- --------------------
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Coopers & Lybrand L.L.P . as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
7. To amend the Bylaws of the Trust not to require FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
shareholder approval of further amendments to the
bylaws.
19. To adopt the standardized fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning diversification for the fund.
20. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning short sales of securities.
21. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning margin purchases.
22. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning borrowing.
23. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning underwriting of securities.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning the concentration of its
investments in a single industry.
25. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 25.
limitation concerning real estate.
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas and mineral
exploration programs.
ISIGI-PXC-994 CUSIP# 315809400/FUND #662
Vote this proxy card TODAY! Your prompt response will
save your fund the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
__________________________________________________________________________
____________________
FIDELITY ADVISOR SERIES IV: FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO II
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Marvin L. Mann, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Fidelity Advisor Series IV as indicated above which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the fund to
be held at the office of the trust at 82 Devonshire St., Boston, MA 02109,
on November 16, 1994 at 10:15 a.m. and at any adjournments thereof. All
powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This
Proxy shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting and
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1994
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
087, 287, 662, 663, 687
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
__________________________________________________________________________
____________________
1. To elect the 12 nominees specified below as [ ] FOR all nominees [ ] 1.
Trustees: J. Gary Burkhead, Ralph F. Cox, Phyllis listed (except as WITHHOLD
Burke Davis, Richard J. Flynn, Edward C. Johnson marked to the contrary authority to
3d, E. Bradley Jones, Donald J. Kirk, Peter S. below). vote for all
Lynch, Gerald C. McDonough, Edward H. Malone, nominees.
Marvin L. Mann and Thomas R. Williams
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S), WRITE THE NAME(S) OF
THE NOMINEE(S) ON THE LINE BELOW.)
__________________________________________________________________________
___________________
2. To ratify the selection of Coopers & Lybrand L.L.P . as FOR [ ] AGAINST [ ] ABSTAIN [ ] 2.
independent accountants of the trust
3. To amend the Declaration of Trust to provide FOR [ ] AGAINST [ ] ABSTAIN [ ] 3.
dollar-based voting rights for shareholders of the trust.
4. To amend the Declaration of Trust regarding FOR [ ] AGAINST [ ] ABSTAIN [ ] 4.
shareholder notification of appointment of trustees.
5. To amend the Declaration of Trust to provide the fund FOR [ ] AGAINST [ ] ABSTAIN [ ] 5.
with the ability to invest all of its assets in another
open-end investment company with substantially the
same investment objective and policies.
6. To adopt a new fundamental investment policy for the FOR [ ] AGAINST [ ] ABSTAIN [ ] 6.
fund permitting the fund to invest all of its assets in
another open-end investment company with
substantially the same investment objective and
policies.
7. To amend the Bylaws of the Trust not to require FOR [ ] AGAINST [ ] ABSTAIN [ ] 7.
shareholder approval of further amendments to the
bylaws.
19. To adopt the standardized fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 19.
limitation concerning diversification for the fund.
20. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 20.
limitation concerning short sales of securities.
21 . To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 21.
limitation concerning margin purchases.
22 . To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 22.
limitation concerning borrowing.
23 . To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 23.
limitation concerning the underwriting of securities.
24. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 24.
limitation concerning the concentration of its
investments in a single industry.
25. To amend the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 25.
limitation concerning real estate.
27. To eliminate the fund's fundamental investment FOR [ ] AGAINST [ ] ABSTAIN [ ] 27.
limitation concerning investing in oil, gas, and mineral
exploration programs.
ISIGII-PXC-994 CUSIP# 315809301/FUND #663
URGENT PROXY MATERIALS ...
PLEASE CAST YOUR VOTE NOW!
Dear Fidelity Funds Shareholder:
In November, we are holding a special shareholder meeting for the following
Fidelity Advisor Funds:
(solid bullet) Fidelity Advisor Limited Term Bond Fund -- Class A, Class B
and Insitutional Class
(solid bullet) Fidelity Institutional Short-Intermediate Government
Portfolio
(solid bullet) Fidelity Institutional Short-Intermediate Government
Portfolio II
The matters to be discussed are important, and directly affect your
investment. As a shareholder, you cast one vote for each share and
fractional votes for fractional shares of each Fund you own. YOU MAY THINK
YOUR VOTE IS INSIGNIFICANT, BUT EVERY VOTE IS CRITICALLY IMPORTANT. We
must continue sending requests to vote until a majority of the shares are
voted prior to the meeting and additional mailings are expensive.
THIS PACKAGE CONTAINS A SEPARATE VOTING CARD FOR EACH FUND YOU OWN. IF
THERE IS MORE THAN ONE CARD IN YOUR PACKAGE, IT IS IMPORTANT THAT YOU VOTE
EACH CARD. If you have purchased shares in any fund(s) after the most
recent annual report record date(s), you will find a copy of the annual
report enclosed.
The enclosed Proxy Statement details the proposals under consideration. A
list of each issue can be found on first page of the Proxy Statement.
After you have read the material, PLEASE CAST YOUR VOTE PROMPTLY BY SIGNING
AND RETURNING THE ENCLOSED PROXY CARD(S). It is important that you sign
your proxy card exactly as it appears on the registration of the proxy
card. A postage-paid envelope has been provided. Your time will be well
spent, and you will help save the cost of additional mailings.
These proposals have been carefully considered by the Funds' Board of
Trustees, which is responsible for protecting your interests as a
shareholder. THE BOARD BELIEVES THESE PROPOSALS ARE FAIR AND REASONABLE,
AND RECOMMENDS THAT YOU APPROVE THEM. If you have any questions about any
of the proposals, please do not hesitate to contact your investment
professional immediately. If you are a participant in an employer
sponsored retirement plan, please call your toll free retirement benefits
number with questions.
IN THE WEEKS AHEAD, YOU MAY RECEIVE MAILINGS SIMILAR TO THIS IF YOU OWN
OTHER FIDELITY FUNDS. THESE WILL BE SEPARATE PROXIES, AND, LIKE THIS ONE,
WILL REQUIRE YOUR PROMPT ATTENTION. REMEMBER, THIS IS YOUR OPPORTUNITY TO
VOICE YOUR OPINION ON MATTERS AFFECTING YOUR FUNDS. YOUR PARTICIPATION IS
EXTREMELY IMPORTANT NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
Thank you. We appreciate your prompt action.
Sincerely,
Fidelity Investments
FAIV-pxl-994