MANAGEMENT CONTRACT
BETWEEN
FIDELITY ADVISOR SERIES I:
FIDELITY ADVISOR VALUE STRATEGIES FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AMENDMENT made as of this 1st day of July 1999, by and
between Fidelity Advisor Series I, 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 Value Strategies 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 dated February 28, 1998, to
a modification of said Contract in the manner set forth below.
The Amended Management Contract shall, when executed by duly
authorized officers of the Fund and the Adviser, take effect on
July 1, 1999.
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. Management Fee. 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, while in effect, a Performance
Adjustment. The Performance Adjustment will be in effect only
through the last calendar day of the 18 calendar month period
beginning on the date that this amended Contract takes effect. After
that date, the management fee will be composed of a Basic Fee only.
The Performance Adjustment is subtracted from the Basic Fee if the
Portfolio experiences worse performance than the Standard and Poor's
Daily Stock Price Index of 500 Common Stocks (the "Index"). The
Performance Adjustment is not cumulative. 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, while in effect, 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 .5200%
billion
3 -6 .4900
6 -9 .4600
9 -12 .4300
12 -15 .4000
00 -00 .0000
00 -00 .3700
00 -00 .0000
00 -00 .3500
00 -00 .0000
00 -00 .3400
42 -48 .3350
00 -00 .0000
00 -00 .3200
00 -000 .0000
000 -000 .3100
000 -000 .0000
000 -000 .3000
000 -000 .0000
000 -000 .2900
000 -000 .0000
000 -000 .2800
000 -000 .0000
000 -000 .2700
426 -462 .2650
000 -000 .0000
000 -000 .2550
Over 534 .2500
(ii) Individual Fund Fee Rate. The Individual
Fund Fee Rate shall be .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: This sub-
paragraph (c) will be in effect only through the last calendar
day of the 18 calendar month period beginning on the date that
this amended Contract takes effect, and will have no force or
effect thereafter. 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
worse than the record of the Index as then constituted. The
maximum negative 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 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 that 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 the 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 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. No Performance
Adjustment will be made after the last calendar day of the 18
calendar month period beginning on the date that this amended
Contract takes effect.
(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. While the Performance Adjustment is in effect, the
amount of the 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, 2000 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
subject to the provisions of Section 15 of the 1940 Act, as
modified by or interpreted by any applicable order or orders of
the Securities and Exchange Commission (the "Commission") or any
rules or regulations adopted by, or interpretative releases of,
the Commission.
(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 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 I on behalf of
Fidelity Advisor Value Strategies Fund
By /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
President
