FIDELITY
SYSTEMATIC INVESTMENT PLANS:
DESTINY PLANS I
DESTINY PLANS II
---------------------------------------------------------------
DEALER AGREEMENT
DEALER AGREEMENT
-------------------------------------------------------------------------------
Gentlemen: As sponsor and principal underwriter, we invite you to join a
Selling Group to distribute
Fidelity Systematic Investment Plans, a plan consisting of
two series, Destiny Plans I and Destiny Plans II
(collectively referred to as the "Plan" or "Plans"), for the
Accumulation of Shares of Fidelity Destiny Portfolios, a
series fund consisting of Destiny I and Destiny II
(collectively referred to as the "Fund") upon the following
terms and conditions.
1. The Dealer Agreement previously in effect is hereby
terminated, effective at the opening of business this date,
and our relations thereafter will be governed by the terms
of this Agreement.
2. All applications for the Plans shall be made on application
forms supplied by us, and all initial payments collected
shall be remitted in full without deduction of any discounts
representing your profit on the sale of Plans, as principal
(hereinafter called "commissions"), together with such
application forms, signed by each applicant (as
"Planholder") to our principal office. Checks or money
orders for initial payments shall be drawn to the order of
State Street Bank & Trust Company, Custodian. A separate
check or money order shall accompany the application form
submitted for each Plan. After the initial payment has been
made and the Plan has been issued, the Planholder may send
all future payments made, payable to State Street Bank &
Trust Company, Custodian, to Boston Financial Data Services,
Inc., P.O. Box 1271, Boston, Massachusetts 02104.
3. Planholders of Destiny Plans I purchase shares of Destiny I
and Planholders of Destiny Plans II purchase shares of
Xxxxxxx XX.
4. We reserve the right in our sole discretion to reject any
Plan application and to return any payment made in
connection therewith. We also reserve the right in our sole
discretion to give any accepted applicant the privilege of
canceling his Plan in accordance with any rights described
in the prospectus effective at the time of purchase of the
Plan. We further reserve the right to refund all or part of
any payment or payments made by any Planholder in the event
that we, in our sole discretion, believe that the
solicitation and/or sale associated therewith was effected
in violation of any applicable State or Federal law or rule
or regulation of the National Association of Securities
Dealers, Inc. In the event of any such refund or refunds you
shall not be entitled to any commissions thereon, and, if
such commissions have been paid, you shall promptly refund
same to us or we may at our option charge the same against
future commissions. To this end you hereby grant us a lien
on any such commissions.
5. On all approved sales of Plans made by you, as evidenced by
the issuance of a Plan Certificate and its acceptance by the
applicant, we shall pay you commissions in accordance with
the terms of this Agreement and the "Dealer Commission and
Service Fee Schedule" which is attached hereto and made a
part of this Agreement. As nearly as practicable, Destiny
Plans I and Destiny Plans II commissions on first-year
payments (1 through 13 on Plans of $150 per month or less
and 1 through 12 on Plans over $150
per month) will be paid monthly as the Creation and
Sales Charges applicable thereto are received by us
from the Custodian. As nearly as practicable,
servicing fees for Destiny Plans II will be paid
monthly as they are received by us from the
Custodian. On Destiny Plans I servicing fees payable
from the 14th through the final monthly payment
(13th through final payments on plans of more than
$150 per month) of a Plan will be accrued as
payments are received and paid to you annually, i.e.
when the 24th, 36th or 48th, etc. payment is made.
Such servicing fees on Destiny Plans I and Destiny
Plans II are not to be construed as earned
commissions, but are designed solely as continuing
compensation for servicing the Planholder's account
during the life of this Agreement. After the
expiration of 18 months from the date on which a
Plan has been issued, if any payment on a Plan is
due, and no payment has been made by the Planholder
for 6 months, the Plan account shall revert back to
us for collection, and in such event no further
commissions or servicing fees with respect to such
account shall be due or payable to you. Your rights
to commissions on Plans sold during the term of this
Agreement shall survive termination of this
Agreement only as outlined in Paragraph 13 hereof.
6. For all plans written after the effective date of this
agreement dealer commission and service fees which are
outlined in Schedule A will be paid according to the tier to
which the dealer firm qualifies. Such qualification is
determined by the face amount written by that dealer in the
previous calendar year. Qualification for the various tiers
can be expected to be amended from time to time.
7. In the event a Planholder exercises his right under Section
27 of the Investment Company Act of 1940, as amended, to
surrender his certificate within the first eighteen months
following its issuance, and to receive the value of his
account plus an amount equal to that part of the excess paid
with respect to that Plan for Creation and Sales charges
which exceeds fifteen per cent of the gross payments made,
you shall promptly refund to us a portion of the commission
previously paid to you with respect to such Plan which bears
the same relationship to the total amount of such commission
as the amount refunded to the Planholder bears to the total
Creation and Sales Charge paid by him with respect to such
Plan, or we may, at our option, charge such amount against
future commissions receivable by you. To this end you hereby
grant us a lien on any such commissions. In order to insure
us that you will have sufficient assets to make such
repayment, we shall initially establish on our books an
account in your name to which shall be credited ten percent
of the commissions due and payable to you and shall retain
such portion of those commissions as a reserve from which
any claims for refund with respect to Plans sold by you can
be paid in the event you shall fail to honor any request of
ours for such repayment. We shall have the right in our
sole discretion to reduce or waive such reserve requirements
on the basis of your refund experience, level of business or
any other circumstances which we may deem relevant.
8. You will accept Plan applications only from persons who to
the best of your knowledge and belief, can and will complete
all payments specified in the applications. If any
Planholder becomes delinquent in his payments, it shall be
your responsibility to contact the Planholder for the
purpose of reinstating the payment schedule.
9. Plans shall be offered and sold in such denominations and
units calling for such periodic payments as we shall from
time to time determine and set forth in the Plans
Prospectus. We reserve the right in our sole discretion,
with 30-day written notice, to suspend, restrict, alter, or
modify in any way the sale of any of the Plans or to
withdraw the offering of the Plans entirely.
10. No person is authorized or permitted to give any information
or make any representations concerning the Plans other than
those which are contained in the current Plans Prospectus
and in such other printed information as may be subsequently
issued by us as information supplemental to such Plans
Prospectus or approved by us in writing for use in
connection therewith. You will not use the words "Fidelity
Destiny Portfolios," "Destiny I or Destiny II" or "Fidelity
Distributors Corporation" whether in writing, by radio or
television or any other advertising media without our prior
written approval.
11. Additional copies of the current Plans Prospectus, any
printed information issued as supplemental to such Plans
Prospectus, and the Plans application forms will be supplied
by us in reasonable quantities upon request.
12. You represent that you are and will remain a member in good
standing of the National Association of Securities Dealers,
Inc. and agree to abide by all of its rules and regulations,
including its Rules of Fair Practice. You further agree to
comply with all applicable State and Federal laws and rules
and regulations of regulatory agencies having jurisdiction.
Reference is hereby specifically made to Section 26, Article
III, of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. which is
incorporated herein as if set forth in full. Any breach of
said Section 26 will immediately and automatically terminate
this Agreement.
13. Your commissions shall vest, subject to the limitation in
the event of non-payment by a Planholder set forth in the
next-to-last sentence of Paragraph 5 and Paragraph 8 hereof,
as follows:
a. Commissions on first-year payments (1 through 13 of
Plans of $150.00 per month or less and 1 through 12 on
Plans over $150.00 per month) and servicing fees on
Plan payments in subsequent years will be paid to you
so long as this Agreement remains in force and effect
and you continue membership in the National Association
of Securities Dealers, Inc. If you should voluntarily
terminate your membership in the National Association
of Securities Dealers, Inc. we reserve the right to
assign Plan accounts as to which you are the Dealer of
record and the right to receive servicing fees with
respect to
such Plan accounts to one of our active dealers.
Nevertheless, we, in our sole discretion, may pay
servicing fees on Plan payments made with respect to
such Plan accounts subsequent to such voluntary
termination to you, your widow, direct beneficiaries
or assignees.
b. Notwithstanding sub-paragraph (a.) above, in the event
your membership in the National Association of
Securities Dealers, Inc. is discontinued or suspended
because of disciplinary proceedings by the National
Association of Securities Dealers, Inc., the Securities
and Exchange Commission, or other regulatory bodies, no
commissions or servicing fees will be paid on any
Investor's payments received during the period of a
suspension or after the effective date of an expulsion
or revocation of a membership; provided, however, that
in the event your National Association of Securities
Dealers, Inc. membership is thereafter reinstated in
good standing, or if such disciplinary action by
another regulatory body is thereafter terminated by
same, payment of such commissions to you shall then
resume, if such payment is allowable under law, rules
or regulations.
14. In all sales of the Plans to the public you shall act as a
dealer for your own account and in no transaction shall you
have any authority to act or hold yourself out as agent for
us, the Fund, or any other member of the Selling Group, and
nothing in this Agreement, including the use of the word
"commissions," shall constitute you a partner, employee, or
agent of ours or give you any authority to act for us.
Neither we nor the Fund shall be liable for any of your acts
or obligations as a Dealer under this Agreement.
15. Each party hereto has the right to cancel or amend this
Agreement at any time upon written or telegraphic notice to
the other.
16. You will comply with all applicable State and Federal laws
and with the rules and regulations of authorized regulatory
agencies thereunder. You will not offer Plans for sale
unless such Plans are duly registered under the applicable
State and Federal statutes and the rules and regulations
thereunder.
17. All communications to us shall be sent to the address below
or to such other address as we may authorize in writing. All
communications and/or notices to you shall be duly given,
mailed or telegraphed to you, at the address specified by
you below, or at such other address as you may authorize in
writing.
18. Failure of either party to terminate this Agreement upon the
occurrence of any event set forth in this Agreement as a
cause for termination shall not constitute a waiver of the
right to terminate this Agreement at a later time on account
of such occurrence.
19. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts and no
modification hereof shall be valid unless in writing.
20. We reserve the right to amend this Agreement upon 30-days
notice.
21. This Agreement or any monies due or to become due hereunder
shall not be assignable by you without prior written
approval by us. Any request for an assignment shall be on a
form approved by us, which may be obtained from Boston
Financial Data Services, Inc., P.O. Box 1271, Boston,
Massachusetts 02104.
22. This Agreement supersedes and cancels all previous
agreements between us whether oral or written.
VERY TRULY YOURS,
Fidelity Distributors Corporation
(General Distribution Agent for
Fidelity Systematic Investment Plans)
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
By___________________________________________
The undersigned hereby accepts your invitation to become a member
of the Selling Group referred to herein and agrees to abide by
all the foregoing terms and conditions.
Dated As Of ________ ,19
Firm _____________________________________________
By _______________________________________________
(Authorized Signature)
Address __________________________________________
__________________________________________________
3/86
SCHEDULE A
DEALER COMMISSION AND SERVICE FEE SCHEDULE
--------------------------------------------------------------------------------
PERCENTAGE OF SALES & CREATION
CHARGES PAID TO DEALER
------------------------------
PRODUCTION FIRST TWELVE TRAIL YEAR
LEVEL 1985 FACE AMOUNT PAYMENTS* COMMISSIONS
-------------------------------------------------------------------
I 0 - $ 2,000,000 80% 41.7%
II $ 2,000,001 - $ 30,000,000 85% 50%
III $ 30,000,001 - $182,000,000 89.4% 60%
IV $182,000,001+ 92.4% 92.4%
* May be paid 13 times because a double initial payment
is required on all Plans of $150 per month or less.
FIDELITY
SYSTEMATIC INVESTMENT PLANS:
DESTINY PLANS I
DESTINY PLANS II
------------------------------------------------------
DEALER AGREEMENT APPLICATION
FIRM IDENTIFICATION: Name of Firm:
Address: Street __________________________________
City_______________________State_________Zip______
Telephone_____________
BACKGROUND: Date Organized or Founded ________________________
Total No. of Employees ___________________________
Names of Principal Officers:
President ______________________________________
Vice President(s) ______________________________
______________________________
Mutual Fund Manager_____________________________
ORGANIZATION: Number of Branch Offices ____________________________
States in which firm registered _____________________
Existing Sales Representatives ______________________
Potential Representatives to be
NASD Registered _____________________________________
Has your firm previously sold:
Mutual Funds Yes ______ No _______
Contractual Plans Yes _____ No _______
MARKETING: 1. What is the estimated population of your Trade
Area?
Under 50,0000___50-100,000____100-250,000___
250-500,000___Over 500,000____
2. What was your firm's average Mutual Fund sales
ticket in the past year?
Under $5,000_____$5-10,000_____$10-25,000 _______
Over $25,000______
3. Sales include: Voluntary ___________
Systematic (Contractual)_______ Both _________
4. Does your firm sponsor or hold meetings for the
public concerning Mutual Funds?
Yes _____ No_____
5. What do you consider the most important source of
your current Mutual Fund sales?
Advertisements _________ Direct Mail _________
Seminars _________ Other _________
Telephone Calls __________ Word of Mouth ________
Existing Clients __________
------------------------------------------------------
_________________________ SIGNED__________________
DATE TITLE __________________
[Letterhead of United Services Planning Association, Inc.]
February 21, 1986
Xx. Xxxxxxx X. Xxxx
Director of Broker/Dealer Sales
Fidelity Distributors
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX 00000
Dear Xxxx:
Enclosed is a Dealer Agreement which has been corrected in accordance with our
telephone conversation today. Based on those corrections and the specifics of
how certain passages of the agreement will be interpreted as specified below,
you will find that this agreement has been signed by our Chief Executive
Officer. We are in hopes that the agreement will be countersigned immediately
and a copy returned to us by overnight express mail so that we will be in a
position to inform our representatives that they may sell Fidelity Xxxxxxx XX.
With regard to paragraph 2 of the enclosed Dealer Agreement, it is our
understanding that even though the agreement says a separate check or money
order shall accompany each application, you are prepared to continue to accept
applications which are associated with accounts which will be initiated by U.S.
military allotment. This represents no change from our current practice.
The second provision of paragraph 7 sets up a reserving requirement against
which Fidelity can collect claims for refund due to cancellation of individual
plans. It is our understanding that you do not intend to apply this reserve
provision to business with our firm.
All other indications to the contrary, it is our understanding that you will
continue to pay first-year commissions and trail-year commissions at the rate of
92.4 percent on all business which we have placed on the books under existing
Dealer Agreements prior to the execution of this new agreement. The first
sentence of paragraph 6 in the new agreement
Xx. Xxxxxxx X. Xxxx -2- February 21, 1986
specifies that this agreement applies to all plans written after the
effective date. We clearly understand that it is your intention to continue
the higher level of commissions for all plans sold under the previous
existing Dealer's Agreement.
If you will acknowledge that these interpretations are correct by signing below,
then return a copy of this letter along with an executed copy of the Dealer
Agreement, we will be prepared to initiate sales in Destiny I and II under this
agreement. We understand that you will be having a Dealer's Agreement typeset
which will reflect this exact same wording. We expect to execute one of the
typeset agreements when they are ready, but would prefer not to wait to begin
selling the plans.
Sincerely,
/s/ XXXXX X. XXXXX
XXXXX X. XXXXX
LCS/eml
Enclosure: Dealer Agreement
This letter accurately states our
arrangements.
/s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx,
Fidelity
/s/ Xxxxxxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxxxxxx X. Xxxxxxx
Vice President
AMENDMENT TO PARAGRAPH #3 OF THIS LETTER
Paragraph 5 of the agreement indicates that a plan which is 18 months past issue
and which has received no payment for six months will revert back to Fidelity
Distributors Corporation. We understand that your present intention is not to
enforce the provision for USPA accounts under this new Dealer Agreement,
although you may in the future.
20. We reserve the right to amend this Agreement upon 30-days notice.
21. This Agreement or any monies due or to become due hereunder shall not be
assignable by you without prior written approval by us. Any request for an
assignment shall be on a form approved by us, which may be obtained from
Boston Financial Data Services, Inc., P.O. Box 1271, Boston, Massachusetts
02104.
22. This Agreement supersedes and cancels all previous agreements between us
whether oral or written.
VERY TRULY YOURS,
Fidelity Distributors Corporation
(General Distribution Agent for
Fidelity Systematic Investment Plans)
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
By
-------------------------------------------------------------------
The undersigned hereby accepts your invitation to become a member of the Selling
Group referred to herein and agrees to abide by all the foregoing terms and
conditions, as modified by the letter agreement dated February 21, 1986, copy
attached. Dated As Of May 12, 1986
Firm UNITED SERVICES PLANNING ASSOCIATION, INC.
----------------------------------------------------------------
By /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. (Authorized Signature) Chairman/CEO
Address 4100 South Xxxxx
--------------------------------------------------------------
Fort Worth TX 76109
----------------------------------------------------------------------
3/86
