Exhibit 5(b)
MANAGEMENT CONTRACT
BETWEEN
FIDELITY ADVISOR SERIES II:
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
MODIFICATION AMENDED AND RESTATED this 1st day of August 1997, by and
between Fidelity Advisor Series II, 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 Growth Opportunities Fund
(hereinafter called the "Portfolio"), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser") as
set forth in its entirety below.
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
modified January 1, 1995 and on December 30, 1988, to a further
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 August 1, 1997 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, composed of a Basic Fee and a Performance
Adjustment. The Performance Adjustment is added to or subtracted from the
Basic Fee depending on whether the Portfolio experienced better or worse
performance than the Standard and Poor's Composite Index of 500 Stocks (the
"Index"). The Performance Adjustment is not cumulative. An increased fee
will result even though the performance of the Portfolio over some period
of time shorter than the performance period has been behind that of the
Index, and, conversely, a reduction in the fee will be made for a month
even though the performance of the Portfolio over some period of time
shorter than the performance period has been ahead of that of the Index.
The Basic Fee and the Performance Adjustment will be computed as follows:
(a) Basic Fee Rate: The annual Basic Fee Rate shall be the sum of the
Group Fee Rate and the Individual Fund Fee Rate calculated to the nearest
millionth decimal place as follows:
(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 0.5200%
3 - 6 0.4900%
6 - 9 0.4600%
9 - 12 0.4300%
12 - 15 0.4000%
15 - 18 0.3850%
18 - 21 0.3700%
21 - 24 0.3600%
24 - 30 0.3500%
30 - 36 0.3450%
36 - 42 0.3400%
42 - 48 0.3350%
48 - 66 0.3250%
66 - 84 0.3200%
84 - 102 0.3150%
102 - 138 0.3100%
138 - 174 0.3050%
174 - 210 0.3000%
210 - 246 0.2950%
246 - 282 0.2900%
282 - 318 0.2850%
318 - 354 0.2800%
354 - 390 0.2750%
390 - 426 0.2700%
426 - 462 0.2650%
462 - 498 0.2600%
498 - 534 0.2550%
Over 534 0.2500%
(ii) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be
0.30%.
(b) Basic Fee. One-twelfth of the Basic Fee Rate shall be applied to the
average of the net assets of the Portfolio (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 resulting dollar amount comprises the Basic Fee.
(c) Performance Adjustment Rate: The Performance Adjustment Rate is 0.02%
for each percentage point (the performance of the Portfolio and the Index
each being calculated to the nearest 0.01%) that the Portfolio's investment
performance for the performance period was better or worse than the record
of the Index as then constituted. The maximum performance adjustment rate
is 0.20%.
The performance period will commence with the first day of the first full
month following the Portfolio's commencement of operations. During the
first eleven months of the performance period for the Portfolio, there will
be no performance adjustment. Starting with the twelfth month of the
performance period, the performance adjustment will take effect. Following
the twelfth month a new month will be added to the performance period until
the performance period equals 36 months. Thereafter the performance period
will consist of the current month plus the previous 35 months.
The Portfolio's investment performance for the performance period shall be
the cumulative monthly asset-weighted investment performance of all classes
of shares of the Portfolio over the performance period. The asset-weighted
investment performance for the Portfolio for a given month will be
calculated by multiplying the investment performance of each class for the
month by its average net assets (determined as of the close of business on
each business day of the month), adding the results together and dividing
the sum by the aggregate net assets of all classes of the Portfolio for
that month. Any class that does not complete a full month of operations in
a given month will be excluded from the calculation of the Portfolio's
investment performance for that month, and its assets will be excluded from
the aggregate net assets of the Portfolio in determining the Portfolio's
investment performance for that month.
The investment performance of each class will be measured by comparing (i)
the opening net asset value of one share of the class on the first business
day of the month with (ii) the closing net asset value of one share of the
class as of the last business day of such month. In computing the
investment performance of each class and the investment record of the
Index, distributions of realized capital gains, the value of capital gains
taxes per share paid or payable on undistributed realized long-term capital
gains accumulated to the end of such period and dividends paid out of
investment income on the part of the Portfolio, and all cash distributions
of the securities included in the Index, will be treated as reinvested in
accordance with Rule 205-1 or any other applicable rules under the
Investment Advisers Act of 1940, as the same from time to time may be
amended. Although the investment performance of the Portfolio for the
performance period shall be rounded to the nearest 0.01%, this shall not
prevent the monthly investment performance of the classes or of the
Portfolio from being rounded to a greater number of decimal places.
(d) Performance Adjustment. One-twelfth of the annual Performance
Adjustment Rate will be applied to the average of the net assets of the
Portfolio (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 and the performance
period.
(e) In case 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 for that month. The Basic Fee
Rate will be computed on the basis of and applied to net assets averaged
over that month ending on the last business day on which this Contract is
in effect. The amount of this Performance Adjustment to the Basic Fee will
be computed on the basis of and applied to net assets averaged over the
36-month period ending on the last business day on which this Contract is
in effect provided that if this Contract has been in effect less than 36
months, the computation will be made on the basis of the period of time
during which it has been in effect.
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 July 31, 1998
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.
FIDELITY ADVISOR SERIES II
on behalf of Fidelity Advisor Growth Opportunities Fund
By /s/ Xxxxxx X. Xxxxx
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/ Xxxxxx X. Xxxxx
President
