Exhibit
GENERAL DISTRIBUTION AGREEMENT
between
VARIABLE INSURANCE PRODUCTS FUND III
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 19th day of December 1996, Variable Insurance
Products Fund III, a Massachusetts business trust having its principal
place of business in Boston, Massachusetts and which may issue one or
more series of beneficial interest ("Issuer"), with respect to shares
of Growth & Income Portfolio, a series of the Issuer, and Fidelity
Distributors Corporation, a Massachusetts corporation having its
principal place of business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein
contained, the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to
sell shares on behalf of the Issuer during the term of this Agreement
and subject to the registration requirements of the Securities Act of
1933, as amended ("1933 Act"), and of the laws governing the sale of
securities in the various states ("Blue Sky Laws") under the following
terms and conditions: Distributors (i) shall have the right to sell,
as agent on behalf of the Issuer, shares authorized for issue and
registered under the 1933 Act, and (ii) may sell shares under offers
of exchange, if available, between and among the funds advised by
Fidelity Management & Research Company ("FMR") or any of its
affiliates.
2. Sales of Shares by the Issuer - The rights granted to Distributors
shall be nonexclusive in that the Issuer reserves the right to sell
its shares to investors on applications received and accepted by the
Issuer. Further, the Issuer reserves the right to issue shares in
connection with the merger or consolidation, or acquisition by the
Issuer through purchase or otherwise, with any other investment
company, trust, or personal holding company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its
treasury in the event that in the discretion of the Issuer treasury
shares shall be sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all
shares sold to investors by Distributors or the Issuer will be sold at
the public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in
the manner described in the Issuer's current Prospectus and/or
Statement of Additional Information. The Issuer shall in all cases
receive the net asset value per share on all sales. If a sales charge
is in effect, Distributors shall have the right subject to such rules
or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of
1940 to pay a portion of the sales charge to dealers who have sold
shares of the Issuer. If a fee in connection with the shareholder
redemptions is in effect, the Issuer shall collect the fee on behalf
of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such
fees.
5. Suspension of Sales - If and whenever the determination of net
asset value is suspended and until such suspension is terminated, no
further orders for shares shall be processed by Distributors except
such unconditional orders as may have been placed with Distributors
before it had knowledge of the suspension. In addition, the Issuer
reserves the right to suspend sales and Distributors' authority to
process orders for shares on behalf of the Issuer if, in the judgment
of the Issuer, it is in the best interests of the Issuer to do so.
Suspension will continue for such period as may be determined by the
Issuer. If a fee in connection with shareholder redemptions is in
effect, the Issuer shall collect the fee on behalf of Distributors
and, unless otherwise agreed upon by the issuer and Distributors,
Distributors shall be entitled to receive all of such fees.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the Issuer. This shall not prevent Distributors from entering into
like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. This does not obligate
Distributors to register as a broker or dealer under the Blue Sky Laws
of any jurisdiction in which it is not now registered or to maintain
its registration in any jurisdiction in which it is now registered.
If a sales charge is in effect, Distributors shall have the right to
enter into sales agreements with dealers of its choice for the sale of
shares of the Issuer to the public at the public offering price only
and fix in such agreements the portion of the sales charge which may
be retained by dealers, provided that the Issuer shall approve the
form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently
effective Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other
than those contained in the appropriate registration statements or
Prospectuses and Statements of Additional Information filed with the
Securities and Exchange Commission under the 1933 Act (as these
registration statements), Prospectuses and Statements of Additional
Information may be amended from time to time), or contained in
shareholder reports or other material that may be prepared by or on
behalf of the Issuer for Distributors' use. This shall not be
construed to prevent Distributors from preparing and distributing
sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be
bought or sold by or through Distributors, and Distributors may
participate directly or indirectly in brokerage commissions or
"spreads" for transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all
action necessary to register shares under the 1933 Act (subject to the
necessary approval of its shareholders) so that there will be
available for sale the number of shares Distributors may reasonably be
expected to sell. The Issuer shall make available to Distributors
such number of copies of its currently effective Prospectus and
Statement of Additional Information as Distributors may reasonably
request. The Issuer shall furnish to Distributors copies of all
information, financial statements and other papers which Distributors
may reasonably request for use in connection with the distribution of
shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in
connection with the preparation, setting in type and filing of any
registration statement, Prospectus and Statement of Additional
Information under the 1933 Act and amendments for the issuer of its
shares, (b) in connection with the registration and qualification of
shares for sale in the various states in which the Board of Trustees
of the Issuer shall determine it advisable to qualify such shares for
sales (including registering the Issuer as a broker or dealer or any
officer of the Issuer as agent or salesman in any state), (c) of
preparing, setting in type, printing and mailing any report or other
communication to shareholders of that Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the
Issuer, it is recognized by the Issuer that FMR may make payment to
Distributors with respect to any expenses incurred in the distribution
of shares of the Issuer, such payments payable from the past profits
or other resources of FMR including management fees paid to it by the
Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold
harmless Distributors and each of its directors and officers and each
person, if any, who controls Distributors within the meaning of
Section 15 of the 1933 Act against any loss, liability, claim, damages
or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages, or expense and
reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any shares, based upon the ground that
the registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements not
misleading under the 1933 Act, or any other statute or the common law.
However, the Issuer does not agree to indemnify Distributors or hold
it harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Issuer by or on behalf of Distributors. In no case (i) is the
indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against
any liability to the Issuer or its security holders to which
Distributors or such person would otherwise be subject by reason of
wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Issuer to
be liable under its indemnity agreement contained in this paragraph
with respect to any claim made against Distributors or any person
indemnified unless Distributors or person, as the case may be, shall
have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person
shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve
the Issuer from any liability which it may have to Distributors or any
person against whom such action is brought otherwise than on account
of its indemnity agreement contained in this paragraph. The Issuer
shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to
enforce any claim, but if the Issuer elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to
Distributors or person or persons, defendant or defendants in the
suit. In the event the Issuer elects to assume the defense of any
suit and retain counsel, Distributors, officers or directors or
controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit,
it will reimburse Distributors, officers or directors or controlling
person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The
Issuer agrees to notify Distributors promptly of the commencement of
any litigation or proceedings against it or any of its officers or
trustees in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and
hold harmless the Issuer and each of its Board members and officers
and each person, if any, who controls the Issuer within the meaning of
Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any shares, based
upon the 1933 Act or any other statute or common law, alleging any
wrongful act of Distributors or any of its employees or alleging that
the registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements not
misleading, insofar as the statement or omission was made in reliance
upon, and in conformity with information furnished to the Issuer by or
on behalf of Distributors. In no case (i) is the indemnity of
Distributors in favor or the Issuer or any person indemnified to be
deemed to protect the Issuer or any person against any liability to
which the Issuer or such person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of
its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in
this paragraph with respect to any claim made against the Issuer or
any person indemnified unless the Issuer or person, as the case may
be, shall have notified Distributors in writing of the claim within a
reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served
upon the Issuer or any such person (or after the Issuer or such person
shall have received notice of service on any designated agent).
However, failure to notify Distributors of any claim shall not relieve
Distributors from any liability which it may have to the Issuer or any
person against whom the action is brought otherwise than on account of
its indemnity agreement contained in this paragraph. In the case of
any notice to Distributors, it shall be entitled to participate, at
its own expense, in the defense or, if it so elects, to assume the
defense of any suit brought to enforse the claim, but if Distributors
elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Issuer, to its officers
and Board and to any controlling person or persons, defendant or
defendants in the suit. In the event that Distributors elects to
assume the defense of any suit and retain counsel, the Issuer or
controlling persons, defendant or defendants in the suits, shall bear
the fees and expense of any additional counsel retained by them. If
Distributors does not elect to assume the defense of any suit, it will
reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees
and expenses of any counsel retained by them. Distributors agrees to
notify the Issuer promptly of the commencement of any litigation or
proceedings against it in connection with the issuer and sale of any
of the shares.
12. Effective Date - This agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force
until March 31, 1998 and thereafter from year to year, provided
continuance is approved annually by the vote of a majority of the
Board members of the Issuer, and by the vote of those Board members of
the Issuer who are not "interested persons" of the Issuer and, if a
plan under Rule 12b-1 under the Investment Company Act of 1940 is in
effect, by the vote of those Board members of the Issuer who are not
"interested persons" of the Issuer and who are not parties to the
Distribution and Service Plan or this Agreement and have no financial
interest in the operation of the Distribution and Service Plan or in
any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval.
This Agreement shall automatically terminate in the event of its
assignment. As used in this paragraph, the terms "assignment" and
"interested persons" shall have the respective meanings specified in
the Investment Company Act of 1940 as now in effect or as hereafter
amended. In addition to termination by failure to approve continuance
or by assignment, this Agreement may at any time be terminated by
either party upon not less than sixty days' prior written notice to
the other party.
13. Notice - Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party to
the party giving notice: if to the Issuer, at 00 Xxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, and if to Distributors, at 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
14. Limitation of Liability - Distributors is expressly put on notice
of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Issuer
and agrees that the obligations assumed by the Issuer under this
contract shall be limited in all cases to the Issuer and its assets.
Distributors shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. Distributors
understands that the rights and obligations of each series of shares
of the Issuer under the Issuer's Declaration of Trust or other
organizational document are separate and distinct from those of any
and all other series.
15. 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.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its
name and behalf, and its seal affixed, by one of its officers duly
authorized, and the Distributor has executed this instrument in its
name and behalf, and its corporate seal affixed, by one of its
officers duly authorized, as of the day and year first above written.
VARIABLE INSURANCE PRODUCTS FUND III
By:/s/ J. Gary Burkhead___________________
J. Xxxx Xxxxxxxx
FIDELITY DISTRIBUTORS CORPORATION
By:/s/ Xxxxxx Loring___________________
Xxxxxx Xxxxxx
