Exhibit 5(k)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this ____ day of ____, 1998, by Fidelity International
Investment Advisors (U.K.) Limited, 00-00 Xxxxx Xxxx, Xxxxxx, Xxxxxxx
(hereinafter called the "U.K. Sub-Advisor") and Fidelity International
Investment Advisors, a Bermuda company with principal offices at
Pembroke Hall, Pembroke, Bermuda (hereinafter called the
"Sub-Advisor").
WHEREAS Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into a
Management Contract with Fidelity School Street Trust, a Massachusetts
business trust which may issue one or more series of shares of
beneficial interest (hereinafter called the "Trust"), on behalf of
Fidelity New Markets Income Fund (hereinafter called the "Portfolio"),
pursuant to which the Advisor acts as investment advisor to the
Portfolio, and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement
with the Advisor (the "Sub-Advisory Agreement") pursuant to which the
Sub-Advisor, directly or through certain of its subsidiaries or other
affiliated persons, shall provide investment advice or investment
management and order execution services to the Portfolio, and
WHEREAS the U.K. Sub-Advisor has personnel in Western Europe and has
been formed in part for the purpose of researching and compiling
information and recommendations with respect to the economies of
various countries, including securities issued and issuers located
outside of North America, principally in the U.K. and Europe.
NOW THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the Sub-Advisor and the U.K.
Sub-Advisor agree as follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the U.K.
Sub-Advisor to perform one or more of the following services with
respect to all or a portion of the investments of the Portfolio, in
connection with the Sub-Advisor's duties under the Sub-Advisory
Agreement. The services and the portion of the investments of the
Portfolio advised or managed by the U.K. Sub-Advisor shall be as
agreed upon from time to time by the Sub-Advisor and the U.K.
Sub-Advisor. The U.K. Sub-Advisor shall pay the salaries and fees of
all personnel of the U.K. 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
Sub-Advisor, the U.K. Sub-Advisor shall provide investment advice to
the Sub-Advisor with respect to all or a portion of the investments of
the Portfolio, and in connection with such advice shall furnish the
Sub-Advisor such factual information, research reports and investment
recommendations 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
Sub-Advisor, the U.K. Sub-Advisor shall 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 U.K. Sub-Advisor. With respect to the portion of the
investments of the Portfolio under its management, the U.K.
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 U.K. Sub-Advisor
may select. The U.K. 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 U.K. Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Trust's Board of
Trustees.
2. Information to be Provided to the Trust and the Advisor: The
U.K. Sub-Advisor shall furnish such reports, evaluations, information
or analyses to the Trust, the Advisor, and the Sub-Advisor as the
Trust's Board of Trustees, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the U.K. 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 U.K.
Sub-Advisor, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account
with brokers or dealers selected by the U.K. Sub-Advisor, which may
include brokers or dealers affiliated with the Advisor, Sub-Advisor or
U.K. Sub-Advisor. The U.K. 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 to any other
accounts over which the U.K. Sub-Advisor, the Sub-Advisor or Advisor
exercise investment discretion. The U.K. 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 U.K. 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 U.K. Sub-Advisor
and the Sub-Advisor have with respect to accounts over which they
exercise investment discretion. The Trustees of the Trust shall
periodically review the commissions paid by the Portfolio to determine
if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the U.K.
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, the Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly U.K. Sub-Advisory Fee.
The U.K. Sub-Advisory Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (a) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or 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 Sub-Advisor
agrees to pay the U.K. Sub-Advisor a monthly Investment Management
Fee. The Investment Management Fee shall be equal to 110% of the U.K.
Sub-Advisor's costs incurred in connection rendering the services
referred to in subparagraph (b) of paragraph 1 of this Agreement.
The U.K. Sub-Advisory Fee shall not be reduced to reflect expense
reimbursements or fee waivers by the Sub-Advisor or Advisor, if any,
in effect from time to time.
(c) PROVISION OF MULTIPLE SERVICES: If the U.K. 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 U.K. 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 U.K.
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory
Agreement or by the Advisor under the Management Contract with the
Portfolio.
6. Interested Persons: It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor as directors,
officers or otherwise and that directors, officers and stockholders of
the Advisor, the Sub-Advisor or the U.K. Sub-Advisor are or may be or
become similarly interested in the Trust, and that the Advisor, the
Sub-Advisor or the U.K. Sub-Advisor may be or become interested in the
Trust as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The Services of the
U.K. Sub-Advisor to the Sub-Advisor are not to be deemed to be
exclusive, the U.K. 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 U.K.
Sub-Advisor's ability to meet all of its obligations hereunder. The
U.K. Sub-Advisor shall for all purposes be an independent contractor
and not an agent or employee of the Advisor, the Sub-Advisor or the
Trust.
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 U.K. Sub-Advisor, the U.K. Sub-Advisor
shall not be subject to liability to the Sub-Advisor, 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:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
_______, 1998 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 U.K. Sub-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 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 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, the U.K. 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.
10. Limitation of Liability: The U.K. Sub-Advisor is hereby
expressly put on notice of the limitation of shareholder liability as
set forth in the Declaration of Trust 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 U.K. Sub-Advisor shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the U.K. 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.
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