Exhibit A(3)(b)
Fidelity Systematic Investment Plans
(Destiny)
___________________________________________
Selling Dealer Agreement
FIDELITY SYSTEMATIC INVESTMENT PLANS
SELLING DEALER AGREEMENT
____________________________________________________________________
Dear Prospective Destiny Dealer:
As sponsor and principal underwriter, we invite you to join a Selling
Group to distribute Fidelity Systematic Investment Plans, a registered
unit investment trust consisting of the multiple periodic payment
plans (each a "Plan and, collectively, the "Plans") listed on Schedule
A attached to this Agreement, in accordance with the following terms
and conditions. The Plans accumulate shares of Fidelity Destiny
Portfolios, a registered investment company consisting of the multiple
series portfolios (each a "Fund" and, collectively, the "Funds")
issuing the multiple share classes (each a "Class" and collectively
the "Classes") listed on Schedule A attached to this Agreement. We may
periodically change the list of Plans, Funds or Classes covered by
this Agreement by giving you written notice of the change.
1. Certain Defined Terms. As used in this Agreement, the term
"Prospectus" means the applicable Plan's prospectus and the applicable
Fund's prospectus and related statement of additional information,
whether in paper format or electronic format, included in the Plan's
or the Fund's then currently effective registration statement (or
post-effective amendment thereto), and any information that we, the
Plans or the Funds may issue to you as a supplement to such
Prospectuses (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933, as amended.
2. Distribution of Plans to Customers.
(a) In all sales of Fund shares to the public through the Plans,
you shall act as a dealer for your own account or as agent for your
customers, and in no transaction shall you have any authority to act
or hold yourself out as agent for us, the Plans, the Funds, or any
other member of the Selling Group. Nothing in this Agreement shall
cause you to be our partner, employee, or agent, or give you authority
to act for us or for any Plan or Fund. Neither we, the Plans, nor the
Funds shall be liable for any of your acts or obligations as a dealer
under this Agreement.
(b) All purchases of Fund shares through the Plans shall be
governed by the terms and conditions set forth in the Plans' and the
Funds' current Prospectus. Plans shall be offered and sold in such
face-amount denominations and periodic investment amounts as we shall
from time to time determine and as is set forth in the Plans'
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount
or right of accumulation) as described in the Prospectus, you agree to
offer and sell shares of the Plans to your customer at the applicable
reduced sales charge. We reserve the right in our sole discretion,
with 30 days' 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.
(c) All applications for the Plans shall be made on application
forms supplied or approved by us. All investments collected shall be
remitted in full, without deduction of any Creation and Sales Charge,
sales load or discounts on the sale of Plans ("Commissions") in
accordance with the procedures set forth in the Prospectus and any
instructions that we may from time to time issue to you.
(d) You will accept Plan applications only from persons who, to the
best of your knowledge and belief, can and will complete all
investments specified in the person's application. If any Planholder
becomes delinquent in making the scheduled investments, it shall be
your responsibility to contact the Planholder for the purpose of
reinstating the investment schedule. You agree to maintain a
persistency rate, as defined in Schedule C attached to this Agreement
("Persistency Rate"), of not less than 75%. If your Persistency Rate
falls below 75% for a twelve-month period, we reserve the right to
terminate this Agreement.
(e) We reserve the right in our sole discretion to reject any Plan
application and return any investment made in connection therewith.
We reserve the right in our sole discretion to give any Planholder the
privilege of canceling their Plan in accordance with any rights
described in the Prospectus effective at the time of purchase of the
Plan. We reserve the right to refund all or part of any investment or
investments 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. ("NASD"). To the extent that any such refund or refunds
are made, you shall not be entitled to any Commissions or 12b-1
Payments (as defined below) and, if such Commissions or 12b-1 Payments
have been paid, you shall promptly refund them to us, or we may, at
our option, deduct them from the Commission Reserve Account provided
for in Paragraph 3(d) or charge those Commissions and 12b-1 Payments
against future Commissions and 12b-1 Payments receivable by you. To
this end you hereby grant us a lien on any such Commissions and 12b-1
Payments.
(f) Certificates evidencing shares of the Plans and the Funds are
not available. Any transaction in shares of the Plans will be effected
and evidenced by book-entry on the records maintained by the Plans'
custodian (the "Plan Custodian"), and any transaction in shares of the
Funds will be effected and evidenced by book-entry on the records
maintained by the Funds' transfer agent (the "Fund Transfer Agent").
A confirmation statement evidencing transactions in shares of the
Funds will be transmitted to you.
(g) You may designate the Plan Custodian to execute your customers'
transactions in shares of the Plans, and the Fund Transfer Agent to
execute your customers' transactions in shares of the Funds, in
accordance with the terms of any account, program, plan, or service
established or used by your customers, and to confirm each transaction
to your customers on your behalf. At the time of the transaction, you
guarantee the legal capacity of your customers and any co-owners of
such shares so transacting in such shares.
3. Compensation.
(a) On all approved sales of Plans made by you, we shall pay you
Commissions in accordance with the terms of this Agreement and
Schedule B attached hereto. Upon written notice to you, we or any Plan
or Fund may change or discontinue any schedule of Commissions or issue
a new schedule. Your rights to Commissions on Plans sold during the
term of this Agreement shall survive termination of this Agreement
only as outlined in Paragraph 3(f) below.
(b) If a Class has adopted a 12b-1 plan under the Investment Company
Act of 1940 (a "12b-1 Plan"), we may make distribution or service
payments to you under the 12b-1 Plan ("12b-1 Payments"). If a Class
does not have a currently effective 12b-1 Plan, we, or an affiliate of
ours, may make distribution or service payments to you from our or its
own funds. Any 12b-1 Payments will be made in the amount and manner
set forth in the applicable Prospectus, 12b-1 Plan and Schedule B then
in effect. Upon written notice to you, we or any Class may change or
discontinue any schedule of 12b-1 Payments, or issue a new schedule. A
schedule of 12b-1 Payments will be in effect with respect to a Class
that has a 12b-1 Plan only so long as that Class' 12b-1 Plan remains
in effect.
(c) After the effective date of any change in or discontinuance of
any Commission or 12b-1 Payment schedule, or the termination of a
12b-1 Plan, any Commission or 12b-1 Payments will be allowable or
payable to you only in accordance with such change, discontinuance, or
termination, provided that no such changes shall affect amounts
payable to you as Commissions on a Plan accepted by us prior to such
change. You agree that you will have no claim against us, or any Fund
by virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any Commission or 12b-1 Payment, you
will remit such overpayment.
(d) In the event a Planholder exercises the right under Section 27
of the Investment Company Act of 1940, as amended, to surrender the
Plan within the first 18 months following its issuance, and to receive
the value of the account plus an amount equal to that part of the
excess paid for Commissions which exceeds 15% of the gross investment
made for that Plan, you shall promptly refund to us that part of the
excess paid for Commissions which exceeds 15% of the gross investment
made for that Plan, or we may, at our option, charge that amount
against future Commissions or 12b-1 Payments receivable by you. To
this end you hereby grant us a lien on any such Commissions or 12b-1
Payments. To assure us that you will have sufficient assets to make
such repayment, we shall establish and maintain for the duration of
this Agreement a Commission Reserve Account in your name to which
shall be credited 10% of the Commissions and 12b-1 Payments due and
payable to you, and we shall retain such portion of those Commissions
and 12b-1 Payments, up to a maximum of $5,000, as a reserve from which
any claims for refunds with respect to Plans sold by you can be paid
in the event that you shall fail to honor any request of ours for such
repayment. No interest shall accrue or be paid on the monies held in
any Commission Reserve Account. 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 that we may deem relevant.
(e) After the expiration of 18 months from the date on which a Plan
has been issued, if any investment on a Plan is due, and no investment
has been made by the Planholder for 6 months, we reserve the right to
revert the Plan account back to us for collection, and in such event
no further Commissions or 12b-1 Payments with respect to such account
shall be due or payable to you.
(f) Your Commissions and 12b-1 Payments shall vest, subject to the
limitations set forth in Paragraph 2(e) and this Section 3, as
follows:
(i) Commissions and 12b-1 Payments will be paid to you so long as
this Agreement remains in force and effect and you continue membership
in the NASD.
(ii) In the event this Agreement is terminated by its terms or
otherwise, we reserve the right to assign Plan accounts as to which
you are the Dealer of record and the right to receive Commissions or
12b-1 Payments with respect to such Plan accounts to one of our active
dealers.
(iii) If you should voluntarily terminate your membership in the
NASD, we reserve the right to assign Plan accounts as to which you are
the Dealer of record and the right to receive Commissions or 12b-1
Payments with respect to such Plan accounts to one of our active
dealers. Nevertheless, we may, in our sole discretion, pay you
Commissions or 12b-1 Payments on Plan investments made with respect to
such Plan accounts subsequent to such voluntary termination.
(iv) In the event your membership in the NASD is discontinued or
suspended because of disciplinary proceedings by the NASD, the
Securities and Exchange Commission, or other regulatory bodies, we
reserve the right to assign Plan accounts as to which you are the
Dealer of record and the right to receive Commissions or 12b-1
Payments with respect to such Plan accounts to one of our active
dealers. If we do not assign Plan accounts as to which you are the
Dealer of record and the right to receive Commissions or 12b-1
Payments with respect to such Plan accounts to one of our active
dealers, no Commissions or 12b-1 Payments will be paid to you on any
Planholder's investments 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 NASD 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 or 12b-1 Payments to you shall then
resume, without any retroactive payments, if such payment is allowable
under applicable laws, rules or regulations.
(v) Subject to the foregoing, if you otherwise comply with all of
the terms of this Agreement you are under no obligation to transfer
Plans or Commissions or 12b-1 Payments earned on Plans sold by you to
another dealer firm. If you choose to release Plans sold by you and
subsequent Commissions and 12b-1 Payments to another firm, you must
complete and sign an Assignment of Amounts Due form and return it to
the Plan Custodian.
4. Information Regarding the Plans and the Funds.
(a) You agree to deliver or cause to be delivered to each customer,
at or prior to the time of any purchase of shares, a copy of the then
current Prospectus (including any stickers thereto), unless such
Prospectus has already been delivered to the customer, and to each
customer who so requests, a copy of the then current statement of
additional information (including any stickers thereto). Upon your
request, we will furnish you with a reasonable number of copies of the
Plan's and the Fund's current Prospectuses or statements of additional
information (including any stickers thereto).
(b) No person is authorized or permitted to give any information or
make any representations concerning the Plans or the Funds other than
those that are contained in the current Prospectus, any sticker to
such Prospectus, unless approved by us in writing for use in
connection with the Prospectus. In buying shares of the Plans from us
under this Agreement, you will rely only on the representations
contained in the Prospectus.
(c) Any printed or electronic information that we furnish you
(other than the Plans' and the Funds' Prospectuses and periodic
reports) is our sole responsibility and not the responsibility of the
respective Plans or Funds. You agree that neither the Plans nor the
Funds will have any liability or responsibility to you with respect to
any such printed or electronic information. We, or the respective
Plans or Funds, will bear the expense of qualifying its shares under
the state securities laws.
(d) You may not use any sales literature or advertising material,
including material disseminated through radio, television, or other
electronic media, concerning "Fidelity," "Destiny," the Plans or the
Funds, other than the printed or electronic information referred to in
paragraph (c) above, in connection with the offer or sale of Fund
shares through the Plans without obtaining our prior written approval.
You may not distribute or make available to investors any information
that we furnish you marked "FOR DEALER USE ONLY" or that otherwise
indicates that it is confidential or not intended to be distributed to
investors.
5. Status as a Registered Broker/Dealer.
(a) You represent that you are and will remain (i) registered as a
broker/dealer under the 1934 Act, (ii) qualified to act as a
broker/dealer in the states where you transact business, and (iii) a
member in good standing of the NASD. You agree to maintain your
broker/dealer registration and qualifications and your NASD membership
in good standing throughout the term of this Agreement.
(b) You represent and agree to abide by all NASD rules and
regulations, including its Rules of Fair Practice. Reference is hereby
specifically made to Rule 2830 of the rules of Fair Practice of the
NASD, which is incorporated herein as if set forth in full. Any breach
of Rule 2830 will immediately and automatically terminate this
Agreement. You further agree to comply with all applicable State and
Federal laws and rules and regulations of regulatory agencies having
jurisdiction. You will not offer Plans for sale unless such Plans are
duly registered under applicable State and Federal statutes and the
rules and regulations thereunder.
(c) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you, (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief, (iii) you are found by the SEC, the NASD, or any other federal
or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, or (iv) you cease to be a member in good standing of the
NASD, this Agreement will terminate effective immediately upon our
giving notice of termination to you. You agree to notify us promptly
and to immediately suspend sales of shares of the Plans in the event
of any such filing or violation, or in the event that you cease to be
a member in good standing of the NASD.
6. Customers Lists. We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
7. Indemnification.
(a) We will indemnify and hold you harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of us, our agents and
employees, in carrying out our obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
8. Arbitration. In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts, in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
9. Term and Termination.
(a) This Agreement, with respect to any 12b-1 Plan, will continue
in effect for one year from its effective date, and thereafter will
continue automatically for successive annual periods; provided,
however, that such continuance is subject to termination at any time
without penalty if a majority of a Fund's Trustees who are not
interested persons of the Fund (as defined in the Investment Company
Act of 1940), or a majority of the outstanding shares of the Fund,
vote to terminate or not to continue the 12b-1 Plan.
(b) This Agreement, other than with respect to a 12b-1 Plan, will
continue in effect from year to year after its effective date, unless
terminated as provided below:
(i) Either party to this Agreement may terminate the Agreement without
cause by giving the other party at least thirty (30) days' written
notice of its intention to terminate.
(ii) This Agreement may be terminated in accordance with the
provisions of paragraphs 2(d), 5(c) or 10(a) hereof.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The Termination of this Agreement with respect to any one Plan
or Fund will not cause its termination with respect to any other Plan
or Fund.
10. Assignment and Amendment.
a) This Agreement or any money due or to become due under this
Agreement shall not be assigned 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 the Plan Custodian. Absent our prior
written approval, this Agreement will terminate automatically in the
event of its assignment (as defined in the Investment Company Act of
1940).
b) We may amend any provision of the Agreement by giving you written
notice of the amendment.
11. Notices. All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery with a confirming copy by mail. All
notices to us shall be given or sent to us at our offices located at
00 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Destiny
- Broker Dealer Services Group. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph.
12. Miscellaneous.
(a) The singular shall include the plural, and vice-versa. The
captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their construction or effect.
(b) This Agreement, as it may be amended from time to time, shall
become effective as of the date when it is accepted and dated below by
us. This Agreement is to be construed in accordance with the laws of
the Commonwealth of Massachusetts. This Agreement supersedes and
cancels any prior agreement between us, whether oral or written,
relating to the sale of shares of the Plans or any other subject
covered by this Agreement.
Very truly yours,
Fidelity Distributors Corporation
00 Xxxxxxxxxx Xx.
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______________, ____.
Firm:_____________________
Address:__________________
__________________
By:_______________________
(Authorized Signature)
_______________________
(Printed Signature)
Title:____________________
SCHEDULE A
LIST OF THE SEPARATE SERIES OF FIDELITY SYSTEMATIC INVESTMENT PLANS
Fidelity Destiny Plans I: Original
Fidelity Destiny Plans I: New
Fidelity Destiny Plans II: Original
Fidelity Destiny Plans II: New
LIST OF THE SEPARATE SERIES AND CLASSES OF FIDELITY DESTINY PORTFOLIOS
Fidelity Destiny Portfolios I: Class O
Fidelity Destiny Portfolios I: Class N
Fidelity Destiny Portfolios II: Class O
Fidelity Destiny Portfolios II: Class N
SCHEDULE B
DEALER COMMISSION AND 12B-1 PAYMENT SCHEDULE
This Schedule B sets forth the Commissions and 12b-1 Payments payable
to the selling dealer pursuant to Section 3 of the Selling Dealer
Agreement between the selling dealer and Fidelity Distributors
Corporation ("FDC"). Capitalized terms not otherwise defined herein
shall have the meanings specified in the Selling Dealer Agreement.
As nearly as practicable, Commission and 12b-1 Payments due you will
be paid monthly as they are received by FDC from the Plan Custodian or
the Funds' Custodian, as the case may be.
a. Commissions
The production levels for Commission payments outlined in this
Schedule B that you qualify for shall be determined by the reference
to the aggregate face amount of the Plans sold by you in the previous
calendar year. All Commissions and 12b-1 Payments shall be paid at the
highest rate for which you qualify. The qualification criteria for the
various production levels can be expected to be amended from time to
time.
PRODUCTION CALENDAR YEAR PERCENTAGE OF COMMISSIONS PAID TO DEALER
LEVEL FACE AMOUNT FIRST TWELVE INVESTMENTS SUBSEQUENT INVESTMENTS
All Plans Original Plans New Plans
I Up to $2,000,000 80.0% 41.7% n/a
II $2,000,001 to $30,000,000 85.0 50.0 n/a
III $30,000,001 to $182,000,000 89.4 60.0 n/a
IV $182,000,001 and above 92.4 92.4 n/a
b. 12b-1 Payments
For Plans that invest in Classes of the Funds with a 12b-1 fee:
(i) You agree to cooperate as requested with programs that the
Plans, the Funds, FDC or their affiliates provide to enhance service
provided to Planholders (i.e. shareholders who own Fund shares
directly or indirectly through the Plans) and to take an active role
in providing such shareholder services, including, but not limited to
providing certain information and assistance with respect to
Planholder accounts, responding to Planholder inquiries or advising us
of such inquiries where appropriate.
(ii) You agree to assign an active registered representative to each
Planholder account on your and our records and to reassign accounts
when registered representatives leave your firm. You also agree to
instruct your representatives to maintain regular contact with
Planholders whose Plan accounts are assigned to them. With respect to
Planholder accounts which are held in nominee or "street" name, you
agree to provide such documentation and verification that active
representatives are assigned to all such Planholder accounts as FDC
may require from time to time.
(iii) Subject to the terms and conditions set forth in the Fund's
Prospectus and applicable 12b-1 Plan, and further subject to your
maintaining satisfactory service to Planholders under the above
paragraphs (i) and (ii), as determined in FDC's sole discretion, you
will be entitled to an annual service fee of up to 0.25% of the assets
of your clients in accounts of the Plans and the Funds, provided, such
assets have been in such accounts for a minimum of twelve months.
Service fees will not be paid on clients' assets resulting from Plan
investments subject to Creation and Sales Charges, even if such
payments have been accelerated, until the assets resulting from each
investment have been in the Plan account for twelve months. Assets in
employer-sponsored retirement plans for the benefit of your employees
or affiliates are not eligible for service fees, nor are accounts not
assigned to an active registered representative.
(iv) FDC, in its sole discretion, reserves the right to withhold
making 12b-1 Payments to you in respect of any assets invested in a
Class during such time as the aggregate "Custodian Fees" and annual
"Service Charges" payable by FDC to the Plan Custodian on behalf of
the shareholders of such Class exceed the transfer agent fees payable
in respect of such Class to the Fund's Transfer Agent.
SCHEDULE C
PERSISTENCY RATE
Your Persistency Rate is defined as:
(1) (a) the total number of plans you have opened within the last 60
months, but not within the past 12 months
(b) less the number of accounts
(i) closed pursuant to a refund or cancellation privilege,
(ii) closed without reaching the face amount of the Plan,
(iii) closed as a result of a face change or transfer of
account registration, and
(iv) that are not current, divided by
(2) (a) the total number of plans you have opened within the last 60
months, but not within the past 12 months,
(b) less the number of accounts
(i) closed pursuant to the 45-day refund privilege and
(ii) closed as a result of a face change or transfer of
account registration.
A current account, for purposes of calculating the Persistency Rate,
is an open account that:
(i) is less than 7 regular monthly investments in arrears,
(ii) for which an investment has been made within the last
six months, or
(iii) for which the Commissions are equal to or less than
nine percent of total investments made.
DESTINY
FIDELITY INVESTMENTS
FIDELITY SYSTEMATIC INVESTMENT PLANS
00 XXXXXXXXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000
NATIONWIDE: 0 000 000-0000
IN ALASKA OR OVERSEAS (CALL COLLECT): 000 000-0000
Fidelity Distributors Corporation
