0000754510-95-000012.txt : 19950915 0000754510-95-000012.hdr.sgml : 19950915 ACCESSION NUMBER: 0000754510-95-000012 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19950914 EFFECTIVENESS DATE: 19950919 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY SECURITIES FUND CENTRAL INDEX KEY: 0000754510 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-93601 FILM NUMBER: 95573758 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04118 FILM NUMBER: 95573759 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6174391706 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAILZONE ZH-2 CITY: BOSTON STATE: MA ZIP: 02109 485BPOS 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT (No. 2-93601) UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 33 [X] and REGISTRATION STATEMENT (No. 811-4118) UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. [ ] Fidelity Securities Fund (Exact Name of Registrant as Specified in Charter) 82 Devonshire St., Boston, Massachusetts 02109 (Address Of Principal Executive Offices) (Zip Code) Registrant's Telephone Number: 617-563-7000 Arthur S. Loring, Secretary 82 Devonshire Street Boston, Massachusetts 02109 (Name and Address of Agent for Service) It is proposed that this filing will become effective ( ) immediately upon filing pursuant to paragraph (b) (x) on September 19, 1995 pursuant to paragraph (b) ( ) 60 days after filing pursuant to paragraph (a)(i) ( ) on ( ) pursuant to paragraph (a)(i) ( ) 75 days after filing pursuant to paragraph (a)(ii) ( ) on ( ) pursuant to paragraph (a)(ii) of rule 485. If appropriate, check the following box: ( ) this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Registrant has filed a declaration pursuant to Rule 24f-2 under the Investment Company Act of 1940 and intends to file the Notice required by such Rule before September 30, 1995. FIDELITY SECURITIES FUND: FIDELITY DIVIDEND GROWTH FUND CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1................................... Cover Page ... 2a.................................. Expenses .. b, Contents; The Fund at a Glance; Who May Want to c................................ Invest 3a.................................. Financial Highlights .. * b................................... . Performance c,d................................. 4a Charter i................................. The Fund at a Glance; Investment Principles and ii............................... Risks Investment Principles and Risks b................................... . Who May Want to Invest; Investment Principles and c.................................... Risks 5a.................................. Charter .. b Cover Page, The Fund at a Glance, Charter, Doing i................................ Business with Fidelity Charter ii............................... Expenses; Breakdown of Expenses iii.............................. Charter c.................................... Charter; Breakdown of Expenses d................................... . Cover Page; Charter e.................................... Expenses f.................................... g Charter (i).............................. * (ii)............................. 5A................................. Performance . 6a Charter i................................ How to Buy Shares; How to Sell Shares; Transaction ii................................ Details; Exchange Restrictions Charter iii............................... Charter b................................... . Transaction Details; Exchange Restrictions c.................................... * d................................... . Doing Business with Fidelity; How to Buy Shares; e.................................... How to Sell Shares; Investor Services f, Dividends, Capital Gains, and Taxes g................................ 7a.................................. Cover Page; Charter .. Expenses; How to Buy Shares; Transaction Details b................................... . * c.................................... How to Buy Shares d................................... . * e.................................... f Breakdown of Expenses ................................... 8................................... How to Sell Shares; Investor Services; Transaction .. Details; Exchange Restrictions 9................................... * ..
* Not Applicable FIDELITY SECURITIES FUND: FIDELITY DIVIDEND GROWTH FUND CROSS REFERENCE SHEET (continued) FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10, 11.......................... Cover Page 12.................................. Description of the Trust .. 13a - Investment Policies and Limitations c............................ Portfolio Transactions d.................................. 14a - Trustees and Officers c............................ 15a, * b.............................. Trustees and Officers c.................................. 16a FMR, Portfolio Transactions i................................ Trustees and Officers ii.............................. Management Contract iii............................. Management Contract b................................. c, Contracts With FMR Affiliates d............................. e ........................... * f........................... Distribution and Service Plan g........................... * Description of the Trust h................................. Contracts With FMR Affiliates i................................. 17a - Portfolio Transactions d............................ e.............................. * 18a................................ Description of the Trust .. * b................................. 19a................................ Additional Purchase and Redemption Information .. Additional Purchase and Redemption Information; b.................................. Valuation of Portfolio Securities * c.................................. 20.................................. Distributions and Taxes .. 21a,(i),(ii)..................... Contracts With FMR Affiliates * a(iii).......................... Contracts With FMR Affiliates b................................. * c................................. 22a............................... * Performance b................................. 23.................................. Financial Statements ..
* Not Applicable Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how the fund invests and the services available to shareholders. To learn more about the fund and its investments, you can obtain a copy of the fund's most recent financial report and portfolio listing, or a copy of the Statement of Additional Information (SAI) dated September 19, 1995. The SAI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, call Fidelity at 1-800-544-8888. Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, the Federal Reserve Board, or any other agency, and are subject to investment risk, including the possible loss of principal. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. DGF-pro-995 Dividend Growth is a growth fund. It seeks to increase the value of your investment over the long term by investing mainly in equity securities of companies that have the potential for dividend growth. FIDELITY DIVIDEND GROWTH FUND PROSPECTUS SEPTEMBER 19, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS KEY FACTS THE FUND AT A GLANCE WHO MAY WANT TO INVEST EXPENSES The fund's yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of the fund's financial data. PERFORMANCE How the fund has done over time. THE FUND IN DETAIL CHARTER How the fund is organized. INVESTMENT PRINCIPLES AND RISKS The fund's overall approach to investing. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY TYPES OF ACCOUNTS Different ways to set up your account, including tax-sheltered retirement plans. HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, ACCOUNT POLICIES AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS KEY FACTS THE FUND AT A GLANCE GOAL: Capital appreciation (increase in the value of the fund's shares). As with any mutual fund, there is no assurance that the fund will achieve its goal. STRATEGY: Invests mainly in equity securities of companies that have the potential to increase their current dividend, or begin paying a dividend. MANAGEMENT: Fidelity Management & Research Company (FMR) is the management arm of Fidelity Investments, which was established in 1946 and is now America's largest mutual fund manager. Foreign affiliates of FMR may help choose investments for the fund. SIZE: As of July 31, 1995, the fund had over $464 million in assets. WHO MAY WANT TO INVEST The fund may be appropriate for investors who are willing to ride out stock market fluctuations in pursuit of potentially high long-term returns. The fund is designed for those who consider dividends to be an indication of a company's growth potential. It is important to note that the fund does not invest for income. The value of the fund's investments will vary from day to day, and generally reflect market conditions, interest rates, and other company, political, or economic news. In the short-term, stock prices can fluctuate dramatically in response to these factors. Over time, however, stocks have shown greater growth potential than other types of securities. When you sell your shares, they may be worth more or less than what you paid for them. By itself, the fund does not constitute a balanced investment plan. THE SPECTRUM OF FIDELITY FUNDS Broad categories of Fidelity funds are presented here in order of ascending risk. Generally, investors seeking to maximize return must assume greater risk. Dividend Growth Fund is in the GROWTH category. (solid bullet) MONEY MARKET Seeks income and stability by investing in high-quality, short-term investments. (solid bullet) INCOME Seeks income by investing in bonds. (solid bullet) GROWTH AND INCOME Seeks long-term growth and income by investing in stocks and bonds. (right arrow) GROWTH Seeks long-term growth by investing mainly in stocks. (checkmark) EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or hold shares of a fund. See page for more information about these fees. Maximum sales charge on purchases and reinvested distributions None Deferred sales charge on redemptions None Exchange fee None Annual account maintenance fee (for accounts under $2 , 500) $12.00 ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund pays a management fee that varies based on its performance. It also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. The fund's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see page ). The following are projections based on historical expenses, and are calculated as a percentage of average net assets. A portion of the brokerage commissions that the fund paid was used to reduce fund expenses. Without this reduction, the total fund operating expenses would have been 1.21%. Management fee .71% 12b-1 fee None Other expenses .48% Total fund operating expenses 1.19 % EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5% and that its operating expenses are exactly as just described. For every $1,000 you invested, here's how much you would pay in total expenses if you close your account after the number of years indicated: After 1 year $ 12 After 3 years $ 38 After 5 years $ 65 After 10 years $ 14 4 These examples illustrate the effect of expenses, but are not meant to suggest actual or expected costs or returns, all of which may vary. UNDERSTANDING EXPENSES Operating a mutual fund involves a variety of expenses for portfolio management, shareholder statements, tax reporting, and other services. These costs are paid from the fund's assets; their effect is already factored into any quoted share price or return. (checkmark) FINANCIAL HIGHLIGHTS The table that follows is included in the fund's Annual Report and has been audited by Coopers & Lybrand L.L.P., independent accountants. Their report on the financial statements and financial highlights is included in the Annual Report. The financial statements and financial highlights are incorporated by reference into (are legally a part of) the fund's Statement of Additional Information. SELECTED PER-SHARE DATA
1.Years ended July 31 1993 E 1994F 1995 2.Net asset value, beginning of period $ 10.00 $ 10.80 $ 11.68 3.Income from Investment Operations 4. Net investment income (.01) .02 .05 5. Net realized and unrealized gain (loss) on .81 1.01 4.47 investments 6. Total from investment operations .80 1.03 4.52 7.Less Distributions 8. From net investment income -- (.01) (.01) 9. From net realized gain -- -- (.15) 10. In excess of net realized gain -- (.14) -- 11. Total distributions -- (.15) (.16) 12.Net asset value, end of period $ 10.80 $ 11.68 $ 16.04 13.Total return B,C 8.00% 9.51% 39.14% 14.RATIOS AND SUPPLEMENTAL DATA 15.Net assets, end of period (000 omitted) $ 18,457 $ 72,355 $ 464,853 16.Ratio of expenses to average net assets 2.50% A 1.40% 1.19% , D 17.Ratio of expenses to average net assets before 4.18% 1.43% 1.21% expense reductions A 18.Ratio of net investment income to average net (.73)% .13% .78% assets A 19.Portfolio turnover rate 90% 291% 162% A
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. E FROM APRIL 27, 1993 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1993 F EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2 "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES. PERFORMANCE Mutual fund performance is commonly measured as TOTAL RETURN. The total returns that follow are based on historical fund results and do not reflect the effect of taxes. The fund's fiscal year runs from August 1 through July 31. The tables below show the fund's performance over past fiscal years compared to two measures: investing in a broad selection of stocks (S&P 500), and not investing at all (inflation, or CPI). To help you compare this fund to other funds, the chart on page displays calendar-year performance. AVERAGE ANNUAL TOTAL RETURNS Fiscal period Past Life ended 1 of July 31, 1995 Year fund A Dividend 39.14 24.62 Growth % % S&P 500 26.11 15.34 % % Consumer 2.76 2.58 Price % % Index CUMULATIVE TOTAL RETURNS Fiscal period Past Life ended 1 of July 31, 1995 Year fund A Dividend 39.14 64.56 Growth % % S&P 500 26.11 38.12 % % Consumer 2.76 5.90 Price % % Index A FROM APRIL 27, 1993 EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the fund on April 27, 1993. From that date through July 31, 1995, the fund's total return was 64.56%. That $10,000 would have grown to $16,456 (the initial investment plus 64.56% of $10,000). $10,000 OVER LIFE OF FUND Fiscal years 1993 1994 1995 Row: 1, Col: 1, Value: 10000.0 Row: 2, Col: 1, Value: 10150.0 Row: 3, Col: 1, Value: 10480.0 Row: 4, Col: 1, Value: 10700.0 Row: 5, Col: 1, Value: 10800.0 Row: 6, Col: 1, Value: 11550.0 Row: 7, Col: 1, Value: 11820.0 Row: 8, Col: 1, Value: 12080.0 Row: 9, Col: 1, Value: 11680.0 Row: 10, Col: 1, Value: 12171.52 Row: 11, Col: 1, Value: 12493.15 Row: 12, Col: 1, Value: 12302.18 Row: 13, Col: 1, Value: 11715.49 Row: 14, Col: 1, Value: 11786.37 Row: 15, Col: 1, Value: 11604.11 Row: 16, Col: 1, Value: 11310.46 Row: 17, Col: 1, Value: 11826.87 Row: 18, Col: 1, Value: 12616.68 Row: 19, Col: 1, Value: 12485.05 Row: 20, Col: 1, Value: 13041.96 Row: 21, Col: 1, Value: 12474.92 Row: 22, Col: 1, Value: 12691.18 Row: 23, Col: 1, Value: 12732.22 Row: 24, Col: 1, Value: 13142.6 Row: 25, Col: 1, Value: 13768.44 Row: 26, Col: 1, Value: 14404.54 Row: 27, Col: 1, Value: 14907.26 Row: 28, Col: 1, Value: 15728.03 Row: 29, Col: 1, Value: 16456.47 $ $16,456 EXPLANATION OF TERMS UNDERSTANDING PERFORMANCE Because this fund invests in stocks, its performance is related to that of the overall stock market. Historically, stock market performance has been characterized by volatility in the short run and growth in the long run. (checkmark) TOTAL RETURN is the change in value of an investment in the fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. The S&P 500(registered trademark) is the Standard & Poor's Composite Index of 500 Stocks, a widely recognized, unmanaged index of common stock prices. The S&P 500 figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated by the U.S. government. THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average, which currently reflects the performance of over 481 mutual funds with similar objectives. This average, which assumes reinvestment of distributions, is published by Lipper Analytical Services, Inc. Other illustrations of fund performance may show moving averages over specified periods. The fund's recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance or a free annual report, call 1-800-544-8888. YEAR-BY-YEAR TOTAL RETURNS Calendar years 19 94 Dividend Growth 4.27 % Competitive funds average -2.17 % Percentage (%) Row: 1, Col: 1, Value: nil Row: 1, Col: 2, Value: nil Row: 2, Col: 1, Value: nil Row: 2, Col: 2, Value: nil Row: 3, Col: 1, Value: nil Row: 3, Col: 2, Value: nil Row: 4, Col: 1, Value: nil Row: 4, Col: 2, Value: nil Row: 5, Col: 1, Value: nil Row: 5, Col: 2, Value: nil Row: 6, Col: 1, Value: nil Row: 6, Col: 2, Value: nil Row: 7, Col: 1, Value: nil Row: 7, Col: 2, Value: nil Row: 8, Col: 1, Value: nil Row: 8, Col: 2, Value: nil Row: 9, Col: 1, Value: nil Row: 9, Col: 2, Value: nil Row: 10, Col: 1, Value: 4.27 Row: 10, Col: 2, Value: -2.17 (large solid box) Dividend Growth (large hollow box) Competitive funds average TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. THE FUND IN DETAIL CHARTER DIVIDEND GROWTH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. In technical terms, the fund is currently a diversified fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. Fidelity will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. The number of votes you are entitled to is based upon the dollar value of your investment. FMR AND ITS AFFILIATES The fund is managed by FMR, which chooses the fund's investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London, England, and Fidelity Management & Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign investments. Steven Wymer is manager of Dividend Growth, which he has managed since May 1995. Previously, he managed Select Automotive and Chemicals, and he assisted on Magellan. Mr. Wymer joined Fidelity in 1989. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Service Co. (FSC) performs transfer agent servicing functions for the fund. FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far East. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company; therefore, the Johnson family may be deemed under the 1940 Act to form a controlling group with respect to FMR Corp. FMR may use its broker-dealer affiliates and other firms that sell fund shares to carry out the fund's transactions, provided that the fund receives brokerage services and commission rates comparable to those of other broker-dealers. INVESTMENT PRINCIPLES AND RISKS THE FUND SEEKS CAPITAL APPRECIATION by investing primarily in companies that FMR believes have the potential for dividend growth by either increasing their dividends or commencing dividends, if none are currently paid. FMR normally invests at least 65% of the fund's total assets in equity securities of these companies. The fund's strategy is based on the premise that dividends are an indication of a company's financial health and companies that are commencing or increasing their dividends have an enhanced potential for capital growth. Although the fund uses income to evaluate its investments, it is important to recognize that the fund does not invest for income. The value of the fund's domestic and foreign investments varies in response to many factors. Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. Investments in foreign securities may involve risks in addition to those of U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. FMR may use various investment techniques to hedge a portion of the fund's risks, but there is no guarantee that these strategies will work as FMR intends. Also, as a mutual fund, the fund seeks to spread investment risk by diversifying its holdings among many companies and industries. Of course, when you sell your shares of the fund, they may be worth more or less than what you paid for them. FMR normally invests the fund's assets according to its investment strategy. The fund also reserves the right to invest without limitation in preferred stocks and investment-grade debt instruments for temporary, defensive purposes. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which the fund may invest, strategies FMR m ay employ in pursuit of the fund's investment objective, and a summary of related risks . A n y restrictions listed supplement those discussed earlier in this section. A complete listing of the fund's limitations and more detailed information about the fund's investments are contained in the fund's SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with the fund's investment objective and policies and that doing so will help the fund achieve its goal. Current holdings and recent investment strategies are described in the fund's financial reports which are sent to shareholders twice a year. For a free SAI or financial report, call 1-800-544-8888. EQUITY SECURITIES may include common stocks, preferred stocks, convertible securities, and warrants. Common stocks, the most familiar type, represent an equity (ownership) interest in a corporation. Although equity securities have a history of long-term growth in value, their prices fluctuate based on changes in a company's financial condition and on overall market and economic conditions. Smaller companies are especially sensitive to these factors. RESTRICTIONS: With respect to 75% of total assets, the fund may not own more than 10% of the outstanding voting securities of a single issuer. DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest, and must repay the amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values. In general, bond prices rise when interest rates fall, and vice versa. Debt securities have varying degrees of quality and varying levels of sensitivity to changes in interest rates. Longer-term bonds are generally more sensitive to interest rate changes than short-term bonds. Lower-quality debt securities (sometimes called "junk bonds") are considered to have speculative characteristics and involve greater risk of default or price changes due to changes in the issuer's creditworthiness, or they may already be in default. The market prices of these securities may fluctuate more than higher-quality securities and may decline significantly in periods of general economic difficulty. RESTRICTIONS: Purchase of a debt security is consistent with the fund's debt quality policy if it is rated at or above the stated level by Moody's or rated in the equivalent categories by S&P, or is unrated but judged to be of equivalent quality by FMR. The fund currently intends to limit its investments in lower than Baa - quality debt securities to less than 35% of its assets. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve additional risks and considerations. These include risks relating to political or economic conditions in foreign countries, fluctuations in foreign currencies, withholding or other taxes, operational risks, increased regulatory burdens, and the potentially less stringent investor protection and disclosure standards of foreign markets. Additionally, governmental issuers of foreign securities may be unwilling to repay principal and interest when due, and may require that the conditions for payment be renegotiated. All of these factors can make foreign investments, especially those in developing countries, more volatile. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to increase or decrease its exposure to changing security prices, interest rates, currency exchange rates, commodity prices, or other factors that affect security values. These techniques may involve derivative transactions such as buying and selling options and futures contracts, entering into currency exchange contracts or swap agreements, and purchasing indexed securities. FMR can use these practices to adjust the risk and return characteristics of the fund's portfolio of investments. If FMR judges market conditions incorrectly or employs a strategy that does not correlate well with the fund's investments, these techniques could result in a loss, regardless of whether the intent was to reduce risk or increase return. These techniques may increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risk assumed. In addition, these techniques could result in a loss if the counterparty to the transaction does not perform as promised. DIRECT DEBT. Loans and other direct debt instruments are interests in amounts owed to another party by a company, government, or other borrower. They have additional risks beyond conventional debt securities because they may entail less legal protection for the fund, or there may be a requirement that the fund supply additional cash to a borrower on demand. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of some illiquid securities and some other securities may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to the fund. RESTRICTIONS: The fund may not purchase a security if, as a result, more than 10% of its assets would be invested in illiquid securities. OTHER INSTRUMENTS may include securities of closed-end investment companies and real estate-related investments. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry. RESTRICTIONS: With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer. The fund may not invest more than 25% of its total assets in any one industry. These limitations do not apply to U.S. government securities. BORROWING. The fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements. If the fund borrows money, its share price may be subject to greater fluctuation until the borrowing is paid off. If the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage. RESTRICTIONS: The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. LENDING. Lending securities to broker-dealers and institutions, including Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning income. This practice could result in a loss or a delay in recovering the fund's securities. The fund may also lend money to other funds advised by FMR. RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraph restates all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraph, can be changed without shareholder approval. The fund seeks capital appreciation. With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer and may not own more than 10% of the outstanding voting securities of a single issuer. The fund may not invest more than 25% of its total assets in any one industry. The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. Loans, in the aggregate, may not exceed 33% of the fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the fund pays fees related to its daily operations. Expenses paid out of the fund's assets are reflected in its share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. The fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to affiliates who provide assistance with these services. The fund also pays OTHER EXPENSES, which are explained on page . FMR may, from time to time, agree to reimburse the fund for management fees and other expenses above a specified limit. FMR retains the ability to be repaid by the fund if expenses fall below the specified limit prior to the end of the fiscal year. Reimbursement arrangements, which may be terminated at any time without notice, can decrease the fund's expenses and boost its performance. MANAGEMENT FEE The management fee is calculated and paid to FMR every month. The amount of the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE ADJUSTMENT. The performance adjustment either increases or decreases the management fee, depending on how well the fund has performed relative to the S&P 500. Manage = Ba +/- Performa ment sic nce fee fee adjustme nt THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate to an individual fund fee rate, and multiplying the result by the fund's average net assets. The group fee rate is based on the average net assets of all the mutual funds advised by FMR. This rate cannot rise above .52%, and it drops as total assets under management increase. UNDERSTANDING THE MANAGEMENT FEE The basic fee FMR receives is designed to be responsive to changes in FMR's total assets under management. Building this variable into the fee calculation assures shareholders that they will pay a lower rate as FMR's assets under management increase. Another variable, the performance adjustment, rewards FMR when the fund outperforms the S&P 500 (an established index of stock market performance) and reduces FMR's fee when the fund underperforms this index. (checkmark) For July 1995, the group fee rate was .3129 %. The individual fund fee rate is .30%. The basic fee rate for fiscal 1995 was .6129 %. THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing the fund's performance to that of the S&P 500 over the most recent 36-month period. The difference is translated into a dollar amount that is added to or subtracted from the basic fee. The maximum annualized performance adjustment rate is " .20%. The total management fee rate for fiscal 1995 was .71 %. FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These sub-advisers provide FMR with investment research and advice on issuers based outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of the costs of providing these services. The sub-advisers may also provide investment management services. In return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its management fee rate with respect to the fund's investments that the sub-adviser manages on a discretionary basis. OTHER EXPENSES While the management fee is a significant component of the fund's annual operating costs, the fund has other expenses as well. The fund contracts with FSC to perform many transaction and accounting functions. These services include processing shareholder transactions, valuing the fund's investments, and handling securities loans. In fiscal 1995, the fund paid FSC fees equal to .34 % of its average net assets. The fund also pays other expenses, such as legal, audit, and custodian fees; proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. A broker-dealer may use a portion of the commissions paid by the fund to reduce the fund's custodian or transfer agent fees. The fund has adopted a Distribution and Service Plan. This plan recognizes that FMR may use its resources, including management fees, to pay expenses associated with the sale of fund shares. This may include payments to third parties, such as banks or broker-dealers, that provide shareholder support services or engage in the sale of the fund's shares. It is important to note, however, that the fund does not pay FMR any separate fees for this service. The fund's annual portfolio turnover rate for fiscal 1995 was 162 %. This rate varies from year to year. High turnover rates increase transaction costs and may increase taxable capital gains. FMR considers these effects when evaluating the anticipated benefits of short-term investing. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY Fidelity Investments was established in 1946 to manage one of America's first mutual funds. Today, Fidelity is the largest mutual fund company in the country, and is known as an innovative provider of high-quality financial services to individuals and institutions. In addition to its mutual fund business, the company operates one of America's leading discount brokerage firms, FBSI. Fidelity is also a leader in providing tax-sheltered retirement plans for individuals investing on their own or through their employer. Fidelity is committed to providing investors with practical information to make investment decisions. Based in Boston, Fidelity provides customers with complete service 24 hours a day, 365 days a year, through a network of telephone service centers around the country. To reach Fidelity for general information, call these numbers: (small solid bullet) For mutual funds, 1-800-544-8888 (small solid bullet) For brokerage, 1-800-544-7272 If you would prefer to speak with a representative in person, Fidelity has over 80 walk-in Investor Centers across the country. TYPES OF ACCOUNTS You may set up an account directly in the fund or, if you own or intend to purchase individual securities as part of your total investment portfolio, you may consider investing in the fund through a brokerage account. If you are investing through FBSI or another financial institution or investment professional, refer to its program materials for any special provisions regarding your investment in the fund. The different ways to set up (register) your account with Fidelity are listed at right. The account guidelines that follow may not apply to certain retirement accounts. If your employer offers the fund through a retirement program, contact your employer for more information. Otherwise, call Fidelity directly. FIDELITY FACTS Fidelity offers the broadest selection of mutual funds in the world. (solid bullet) Number of Fidelity mutual funds: over 210 (solid bullet) Assets in Fidelity mutual funds: over $ 320 billion (solid bullet) Number of shareholder accounts: over 21 million (solid bullet) Number of investment analysts and portfolio managers: over 200 (checkmark) WAYS TO SET UP YOUR ACCOUNT INDIVIDUAL OR JOINT TENANT FOR YOUR GENERAL INVESTMENT NEEDS Individual accounts are owned by one person. Joint accounts can have two or more owners (tenants). RETIREMENT TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES Retirement plans allow individuals to shelter investment income and capital gains from current taxes. In addition, contributions to these accounts may be tax deductible. Retirement accounts require special applications and typically have lower minimums. (solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under 70 with earned income to invest up to $2,000 per tax year. Individuals can also invest in a spouse's IRA if the spouse has earned income of less than $250. (solid bullet) ROLLOVER IRAS retain special tax advantages for certain distributions from employer-sponsored retirement plans. (solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow self-employed individuals or small business owners (and their employees) to make tax-deductible contributions for themselves and any eligible employees up to $30,000 per year. (solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or those with self-employed income (and their eligible employees) with many of the same advantages as a Keogh, but with fewer administrative requirements. (solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt institutions, including schools, hospitals, and other charitable organizations. (solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to contribute a percentage of their wages on a tax-deferred basis. These accounts need to be established by the trustee of the plan. GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS These custodial accounts provide a way to give money to a child and obtain tax benefits. An individual can give up to $10,000 a year per child without paying federal gift tax. Depending on state laws, you can set up a custodial account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). TRUST FOR MONEY BEING INVESTED BY A TRUST The trust must be established before an account can be opened. BUSINESS OR ORGANIZATION FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER GROUPS Requires a special application. HOW TO BUY SHARES THE FUND'S SHARE PRICE, called net asset value (NAV), is calculated every business day. The fund's shares are sold without a sales charge. Shares are purchased at the next share price calculated after your investment is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. IF YOU ARE NEW TO FIDELITY, complete and sign an account application and mail it along with your check. You may also open your account in person or by wire as described on page . If there is no application accompanying this prospectus, call 1-800-544-8888. IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can: (small solid bullet) Mail in an application with a check, or (small solid bullet) Open your account by exchanging from another Fidelity fund. IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an IRA, for the first time, you will need a special application. Retirement investing also involves its own investment procedures. Call 1-800-544-8888 for more information and a retirement application. If you buy shares by check or Fidelity Money Line(registered trademark), and then sell those shares by any method other than by exchange to another Fidelity fund, the payment may be delayed for up to seven business days to ensure that your previous investment has cleared. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $2,500 For Fidelity retirement accounts $500 TO ADD TO AN ACCOUNT $250 For Fidelity retirement accounts $250 Through automatic investment plans $100 MINIMUM BALANCE $1,000 For Fidelity retirement accounts $500 These minimums may vary for investments through Fidelity Portfolio Advisory Services. Refer to the product materials for details.
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another Fidelity fund account Fidelity fund account with the same with the same registration, including registration, including name, address, and name, address, and taxpayer ID number. taxpayer ID number. (small solid bullet) Use Fidelity Money Line to transfer from your bank account. Call before your first use to verify that this service is in place on your account. Maximum Money Line: $50,000.
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check application. Make your payable to "Fidelity check payable to Dividend Growth Fund." "Fidelity Dividend Indicate your fund Growth Fund." Mail to account number on the address indicated your check and mail to on the application. the address printed on your account statement. (small solid bullet) Exchange by mail: call 1-800-544-6666 for instructions.
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a and check to a Fidelity Fidelity Investor Center. Investor Center. Call Call 1-800-544-9797 for 1-800-544-9797 for the the center nearest you. center nearest you.
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for set up your account retirement accounts. and to arrange a wire (small solid bullet) Wire to: transaction. Not Bankers Trust available for retirement Company, accounts. Bank Routing (small solid bullet) Wire within 24 hours to: #021001033, Bankers Trust Account #00163053. Company, Specify "Fidelity Bank Routing Dividend Growth Fund" #021001033, and include your Account #00163053. account number and Specify "Fidelity your name. Dividend Growth Fund" and include your new account number and your name.
Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic Account Builder. Sign up for this service when opening your account, or call 1-800-544-6666 to add it.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next share price calculated after your order is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods described on these two pages. TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made in writing, except for exchanges to other Fidelity funds, which can be requested by phone or in writing. Call 1-800-544-6666 for a retirement distribution form. IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth of shares in the account to keep it open ($500 for retirement accounts). TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign up for these services in advance. CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect you and Fidelity from fraud. Your request must be made in writing and include a signature guarantee if any of the following situations apply: (small solid bullet) You wish to redeem more than $100,000 worth of shares, (small solid bullet) Your account registration has changed within the last 30 days, (small solid bullet) The check is being mailed to a different address than the one on your account (record address), (small solid bullet) The check is being made payable to someone other than the account owner, or (small solid bullet) The redemption proceeds are being transferred to a Fidelity account with a different registration. You should be able to obtain a signature guarantee from a bank, broker (including Fidelity Investor Centers), dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. SELLING SHARES IN WRITING Write a "letter of instruction" with: (small solid bullet) Your name, (small solid bullet) The fund's name, (small solid bullet) Your fund account number, (small solid bullet) The dollar amount or number of shares to be redeemed, and (small solid bullet) Any other applicable requirements listed in the table at right. Unless otherwise instructed, Fidelity will send a check to the record address. Deliver your letter to a Fidelity Investor Center, or mail it to: Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 ACCOUNT TYPE SPECIAL REQUIREMENTS
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request: except retirement $100,000. (small solid bullet) For Money Line transfers to All account types your bank account; minimum: $10; maximum: $100,000. (small solid bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s), address, and taxpayer ID number. Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must Tenant, be signed by all persons Sole Proprietorship required to sign for , UGMA, UTMA transactions, exactly as their Retirement account names appear on the account. (small solid bullet) The account owner should Trust complete a retirement distribution form. Call 1-800-544-6666 to request one. Business or (small solid bullet) The trustee must sign the Organization letter indicating capacity as trustee. If the trustee's name is not in the account registration, provide a copy of the trust document certified Executor, within the last 60 days. Administrator, (small solid bullet) At least one person Conservator, authorized by corporate Guardian resolution to act on the account must sign the letter. (small solid bullet) Include a corporate resolution with corporate seal or a signature guarantee. (small solid bullet) Call 1-800-544-6666 for instructions. Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire except retirement feature before using it. To verify that it is in place, call 1-800-544-6666. Minimum wire: $5,000. (small solid bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be wired on the next business day.
Check (check_graphic) All account types (small solid bullet) Minimum check: $500. except retirement (small solid bullet) All account owners must sign a signature card to receive a checkbook.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days a year. Whenever you call, you can speak with someone equipped to provide the information or service you need. 24-HOUR SERVICE ACCOUNT ASSISTANCE 1-800-544-6666 ACCOUNT BALANCES 1-800-544-7544 ACCOUNT TRANSACTIONS 1-800-544-7777 PRODUCT INFORMATION 1-800-544-8888 QUOTES 1-800-544-8544 RETIREMENT ACCOUNT ASSISTANCE 1-800-544-4774 AUTOMATED SERVICE (checkmark) STATEMENTS AND REPORTS that Fidelity sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except reinvestments, that affects your account balance or your account registration) (small solid bullet) Account statements (quarterly) (small solid bullet) Financial reports (every six months) To reduce expenses, only one copy of most financial reports will be mailed to your household, even if you have more than one account in the fund. Call 1-800-544-6666 if you need copies of financial reports or historical account information. TRANSACTION SERVICES EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other Fidelity funds by telephone or in writing. Note that exchanges out of the fund are limited to four per calendar year, and that they may have tax consequences for you. For details on policies and restrictions governing exchanges, including circumstances under which a shareholder's exchange privilege may be suspended or revoked, see page . SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your account. FIDELITY MONEY LINE(registered trademark) enables you to transfer money by phone between your bank account and your fund account. Most transfers are complete within three business days of your call. REGULAR INVESTMENT PLANS One easy way to pursue your financial goals is to invest money regularly. Fidelity offers convenient services that let you transfer money into your fund account, or between fund accounts, automatically. While regular investment plans do not guarantee a profit and will not protect you against loss in a declining market, they can be an excellent way to invest for retirement, a home, educational expenses, and other long-term financial goals. Certain restrictions apply for retirement accounts. Call 1-800-544-6666 for more information. REGULAR INVESTMENT PLANS FIDELITY AUTOMATIC ACCOUNT BUILDERSM TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly or (small solid bullet) For a new account, complete the quarterly appropriate section on the fund application. (small solid bullet) For existing accounts, call 1-800-544-6666 for an application. (small solid bullet) To change the amount or frequency of your investment, call 1-800-544-6666 at least three business days prior to your next scheduled investment date.
DIRECT DEPOSIT TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Every pay (small solid bullet) Check the appropriate box on the fund period application, or call 1-800-544-6666 for an authorization form. (small solid bullet) Changes require a new authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after bimonthly, both accounts are opened. quarterly, or (small solid bullet) To change the amount or frequency of annually your investment, call 1-800-544-6666.
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES The fund distributes substantially all of its net income and capital gains to shareholders each year. Normally, dividends and capital gains are distributed in September and December. DISTRIBUTION OPTIONS When you open an account, specify on your application how you want to receive your distributions. If the option you prefer is not listed on the application, call 1-800-544-6666 for instructions. The fund offers four options: 1. REINVESTMENT OPTION. Your dividend and capital gain distributions will be automatically reinvested in additional shares of the fund. If you do not indicate a choice on your application, you will be assigned this option. 2. INCOME-EARNED OPTION. Your capital gain distributions will be automatically reinvested, but you will be sent a check for each dividend distribution. 3. CASH OPTION. You will be sent a check for your dividend and capital gain distributions. 4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and capital gain distributions will be automatically invested in another identically registered Fidelity fund. FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested. When you are over 59 years old, you can receive distributions in cash. When the fund deducts a distribution from its NAV, the reinvestment price is the fund's NAV at the close of business that day. Cash distribution checks will be mailed within seven days. UNDERSTANDING DISTRIBUTIONS As a fund shareholder, you are entitled to your share of the fund's net income and gains on its investments. The fund passes its earnings along to its investors as DISTRIBUTIONS. The fund earns dividends from stocks and interest from bond, money market, and other investments. These are passed along as DIVIDEND DISTRIBUTIONS. The fund realizes capital gains whenever it sells securities for a higher price than it paid for them. These are passed along as CAPITAL GAIN DISTRIBUTIONS. (checkmark) TAXES As with any investment, you should consider how your investment in the fund will be taxed. If your account is not a tax-deferred retirement account, you should be aware of these tax implications. TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may also be subject to state or local taxes. If you live outside the United States, your distributions could also be taxed by the country in which you reside. Your distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. For federal tax purposes, the fund's income and short-term capital gain distributions are taxed as dividends; long-term capital gain distributions are taxed as long-term capital gains. Every January, Fidelity will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other Fidelity funds - are subject to capital gains tax. A capital gain or loss is the difference between the cost of your shares and the price you receive when you sell them. Whenever you sell shares of the fund, Fidelity will send you a confirmation statement showing how many shares you sold and at what price. You will also receive a consolidated transaction statement every January. However, it is up to you or your tax preparer to determine whether this sale resulted in a capital gain and, if so, the amount of tax to be paid. Be sure to keep your regular account statements; the information they contain will be essential in calculating the amount of your capital gains. "BUYING A DIVIDEND." If you buy shares just before the fund deducts a distribution from its NAV, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable distribution. EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the fund and its investments and these taxes generally will reduce the fund's distributions. However, an offsetting tax credit or deduction may be available to you. If so, your tax statement will show more taxable income or capital gains than were actually distributed by the fund, but will also show the amount of the available offsetting credit or deduction. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, the fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is open. Fidelity normally calculates the fund's NAV as of the close of business of the NYSE, normally 4 p.m. Eastern time. THE FUND'S NAV is the value of a single share. The NAV is computed by adding the value of the fund's investments, cash, and other assets, subtracting its liabilities, and then dividing the result by the number of shares outstanding. The fund's assets are valued primarily on the basis of market quotations. Foreign securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. If quotations are not readily available, or if the values have been materially affected by events occurring after the closing of a foreign market, assets are valued by a method that the Board of Trustees believes accurately reflects fair value. THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to sell one share) are its NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your Social Security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require the fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be liable for losses resulting from unauthorized transactions if it does not follow reasonable procedures designed to verify the identity of the caller. Fidelity will request personalized security codes or other information, and may also record calls. You should verify the accuracy of your confirmation statements immediately after you receive them. If you do not want the ability to redeem and exchange by telephone, call Fidelity for instructions. IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of unusual market activity), consider placing your order by mail or by visiting a Fidelity Investor Center. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. The fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they would disrupt management of the fund. WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the next offering price calculated after your order is received and accepted. Note the following: (small solid bullet) All of your purchases must be made in U.S. dollars and checks must be drawn on U.S. banks. (small solid bullet) Fidelity does not accept cash. (small solid bullet) When making a purchase with more than one check, each check must have a value of at least $50. (small solid bullet) The fund reserves the right to limit the number of checks processed at one time. (small solid bullet) If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees the fund or its transfer agent has incurred. TO AVOID THE COLLECTION PERIOD associated with check and Money Line purchases, consider buying shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal Reserve check, or direct deposit instead. YOU MAY BUY OR SELL SHARES OF THE FUND THROUGH A BROKER, who may charge you a fee for this service. If you invest through a broker or other institution, read its program materials for any additional service features or fees that may apply. CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with FDC may enter confirmed purchase orders on behalf of customers by phone, with payment to follow no later than the time when the fund is priced on the following business day. If payment is not received by that time, the financial institution could be held liable for resulting fees or losses. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your request is received and accepted. Note the following: (small solid bullet) Normally, redemption proceeds will be mailed to you on the next business day, but if making immediate payment could adversely affect the fund, it may take up to seven days to pay you. (small solid bullet) Fidelity Money Line redemptions generally will be credited to your bank account on the second or third business day after your phone call. (small solid bullet) The fund may hold payment on redemptions until it is reasonably satisfied that investments made by check or Fidelity Money Line have been collected, which can take up to seven business days. (small solid bullet) Redemptions may be suspended or payment dates postponed when the NYSE is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC. (small solid bullet) If you sell shares by writing a check and the amount of the check is greater than the value of your account, your check will be returned to you and you may be subject to additional charges. FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from accounts with a value of less than $2,500, subject to an annual maximum charge of $60.00 per shareholder. It is expected that accounts will be valued on the second Friday in November of each year. Accounts opened after September 30 will not be subject to the fee for that year. The fee, which is payable to the transfer agent, is designed to offset in part the relatively higher costs of servicing smaller accounts. The fee will not be deducted from retirement accounts (except non-prototype retirement accounts), accounts using regular investment plans, or if total assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is determined by aggregating Fidelity mutual fund accounts maintained by FSC or FBSI which are registered under the same social security number or which list the same social security number for the custodian of a Uniform Gifts/Transfers to Minors Act account. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days' notice to reestablish the minimum balance. If you do not increase your balance, Fidelity reserves the right to close your account and send the proceeds to you. Your shares will be redeemed at the NAV on the day your account is closed. FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. FDC may, at its own expense, provide promotional incentives to qualified recipients who support the sale of shares of the fund without reimbursement from the fund. Qualified recipients are securities dealers who have sold fund shares or others, including banks and other financial institutions, under special arrangements in connection with FDC's sales activities. In some instances, these incentives may be offered only to certain institutions whose representatives provide services in connection with the sale or expected sale of significant amounts of shares. EXCHANGE RESTRICTIONS As a shareholder, you have the privilege of exchanging shares of the fund for shares of other Fidelity funds. However, you should note the following: (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) If you exchange into a fund with a sales charge, you pay the percentage-point difference between that fund's sales charge and any sales charge you have previously paid in connection with the shares you are exchanging. For example, if you had already paid a sales charge of 2% on your shares and you exchange them into a fund with a 3% sales charge, you would pay an additional 1% sales charge. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Because excessive trading can hurt fund performance and shareholders, the fund reserves the right to temporarily or permanently terminate the exchange privilege of any investor who makes more than four exchanges out of the fund per calendar year. Accounts under common ownership or control, including accounts with the same taxpayer identification number, will be counted together for purposes of the four exchange limit. (small solid bullet) The exchange limit may be modified for accounts in certain institutional retirement plans to conform to plan exchange limits and Department of Labor regulations. See your plan materials for further information. (small solid bullet) The fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if the fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to the fund. Although the fund will attempt to give you prior notice whenever it is reasonably able to do so, it may impose these restrictions at any time. The fund reserves the right to terminate or modify the exchange privilege in the future. OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose administrative fees of up to $7.50 and redemption fees of up to 1.50% on exchanges. Check each fund's prospectus for details. This prospectus is printed on recycled paper using soy-based inks. FIDELITY DIVIDEND GROWTH FUND A FUND OF FIDELITY SECURITIES FUND STATEMENT OF ADDITIONAL INFORMATION SEPTEMBER 19, 1995 This Statement is not a prospectus but should be read in conjunction with the fund's current Prospectus (dated September 19, 1995). Please retain this document for future reference. The fund's financial statements and financial highlights, included in the Annual Report for the fiscal year ended July 31, 1995, are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation of Portfolio Securities Performance Additional Purchase and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contract Distribution and Service Plan Contracts With FMR Affiliates Description of the Trust Financial Statements Appendix INVESTMENT ADVISER Fidelity Management & Research Company (FMR) INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc. (FMR U.K.) Fidelity Management & Research (Far East) Inc. (FMR Far East) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT Fidelity Service Company (FSC) DGF-ptb-995 INVESTMENT POLICIES AND LIMITATIONS The following policies and limitations supplement those set forth in the Prospectus. Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of the fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitation will be determined immediately after and as a result of the fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the fund's investment policies and limitations. The fund's fundamental investment policies and limitations cannot be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940) of the fund. However, except for the fundamental investment limitations listed below, the investment policies and limitations described in this Statement of Additional Information are not fundamental and may be changed without shareholder approval. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) with respect to 75% of the fund's total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, (a) more than 5% of the fund's total assets would be invested in the securities of that issuer, or (b) the fund would hold more than 10% of the outstanding voting securities of that issuer; (2) issue senior securities, except as permitted under the Investment Company Act of 1940; (3) borrow money, except that the fund may borrow money for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount will be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation; (4) underwrite securities issued by others, except to the extent that the fund may be considered an underwriter within the meaning of the Securities Act of 1933 in the disposition of restricted securities; (5) purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry; (6) purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); (7) purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities); or (8) lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (9) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies, and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short, and provided that transactions in futures contracts and options are not deemed to constitute selling securities short. (ii) The fund does not currently intend to purchase securities on margin, except that the fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin. (iii) The fund may borrow money only (a) from a bank or from a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party (reverse repurchase agreements are treated as borrowings for purposes of fundamental investment limitation (3)). The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase any security if, as a result, more than 10% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. (v) The fund does not currently intend to purchase interests in real estate investment trusts that are not readily marketable or interests in real estate limited partnerships that are not listed on an exchange or traded on the NASDAQ National Market System, if, as a result, the sum of such interests and other investments considered illiquid under limitation (iv) would exceed 10% of the fund's net assets. (vi) The fund does not currently intend to lend assets other than securities to other parties, except by (a) lending money (up to 5% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) acquiring loans, loan participations, or other forms of direct debt instruments and, in connection therewith, assuming any associated unfunded commitments of the sellers. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of business enterprises that, including predecessors, have a record of less than three years of continuous operation. (ix) The fund does not currently intend to purchase warrants, valued at the lower of cost or market, in excess of 5% of the fund's net assets. Included in that amount, but not to exceed 2% of the fund's net assets, may be warrants that are not listed on the New York Stock Exchange or the American Stock Exchange. Warrants acquired by the fund in units or attached to securities are not subject to these restrictions. (x) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xi) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's limitations on futures and options transactions, see the section entitled "Limitations on Futures and Options Transactions" on page . AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with financial institutions that are, or may be considered to be, "affiliated persons" of the fund under the Investment Company Act of 1940. These transactions may include repurchase agreements with custodian banks; short-term obligations of, and repurchase agreements with, the 50 largest U.S. banks (measured by deposits); municipal securities; U.S. government securities with affiliated financial institutions that are primary dealers in these securities; short-term currency transactions; and short-term borrowings. In accordance with exemptive orders issued by the Securities and Exchange Commission (SEC), the Board of Trustees has established and periodically reviews procedures applicable to transactions involving affiliated financial institutions. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve significant risks in addition to the risks inherent in U.S. investments. The value of securities denominated in foreign currencies and of dividends and interest paid with respect to such securities will fluctuate based on the relative strength of the U.S. dollar. Foreign investments involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments, and may be affected by actions of foreign governments adverse to the interests of U.S. investors. Such actions may include the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or convert currency into U.S. dollars, or other government intervention. There is no assurance that FMR will be able to anticipate these potential events or counter their effects. These risks are magnified for investments in developing countries, which may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities. Economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Foreign markets may offer less protection to investors than U.S. markets. It is anticipated that in most cases the best available market for foreign securities will be on an exchange or in over-the-counter markets located outside of the United States. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. issuers. Foreign security trading practices, including those involving securities settlement where fund assets may be released prior to receipt of payment, may result in increased risk in the event of a failed trade or the insolvency of a foreign broker-dealer, and may involve substantial delays. In addition, the costs of foreign investing, including withholding taxes, brokerage commissions and custodial costs, are generally higher than for U.S. investors. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers, and listed companies than in the United States. It may also be difficult to enforce legal rights in foreign countries. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to U.S. issuers. Some foreign securities impose restrictions on transfer within the United States or to U.S. persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. American Depository Receipts (ADR's) as well as other "hybrid" forms of ADRs including European Depository Receipts (EDRs) and Global Depository Receipts (GDRs), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are an alternative to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. These risks include foreign exchange risk as well as the political and economic risks of the underlying issuer's country. FOREIGN CURRENCY TRANSACTIONS. The fund may conduct foreign currency transactions on a spot (i.e., cash) basis or by entering into forward contracts to purchase or sell foreign currencies at a future date and price. The fund will convert currency on a spot basis from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers generally do not charge a fee for conversion, they do realize a profit based on the difference between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Forward contracts are generally traded in an interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The parties to a forward contract may agree to offset or terminate the contract before its maturity, or may hold the contract to maturity and complete the contemplated currency exchange. The fund may use currency forward contracts for any purpose consistent with its investment objective. The following discussion summarizes the principal currency management strategies involving forward contracts that could be used by the fund. The fund may also use swap agreements, indexed securities, and options and futures contracts relating to foreign currencies for the same purposes. When the fund agrees to buy or sell a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction, the fund will be able to protect itself against an adverse change in foreign currency values between the date the security is purchased or sold and the date on which payment is made or received. This technique is sometimes referred to as a "settlement hedge" or "transaction hedge." The fund may also enter into forward contracts to purchase or sell a foreign currency in anticipation of future purchases or sales of securities denominated in foreign currency, even if the specific investments have not yet been selected by FMR. The fund may also use forward contracts to hedge against a decline in the value of existing investments denominated in foreign currency. For example, if the fund owned securities denominated in pounds sterling, it could enter into a forward contract to sell pounds sterling in return for U.S. dollars to hedge against possible declines in the pound's value. Such a hedge, sometimes referred to as a "position hedge," would tend to offset both positive and negative currency fluctuations, but would not offset changes in security values caused by other factors. The fund could also hedge the position by selling another currency expected to perform similarly to the pound sterling - for example, by entering into a forward contract to sell Deutschemarks or European Currency Units in return for U.S. dollars. This type of hedge, sometimes referred to as a "proxy hedge," could offer advantages in terms of cost, yield, or efficiency, but generally would not hedge currency exposure as effectively as a simple hedge into U.S. dollars. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the hedged securities are denominated. The fund may enter into forward contracts to shift its investment exposure from one currency into another. This may include shifting exposure from U.S. dollars to a foreign currency, or from one foreign currency to another foreign currency. For example, if the fund held investments denominated in Deutschemarks, the fund could enter into forward contracts to sell Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes known as a "cross-hedge," will tend to reduce or eliminate exposure to the currency that is sold, and increase exposure to the currency that is purchased, much as if the fund had sold a security denominated in one currency and purchased an equivalent security denominated in another. Cross-hedges protect against losses resulting from a decline in the hedged currency, but will cause the fund to assume the risk of fluctuations in the value of the currency it purchases. Under certain conditions, SEC guidelines require mutual funds to set aside appropriate liquid assets in a segregated custodial account to cover currency forward contracts. As required by SEC guidelines, the fund will segregate assets to cover currency forward contracts, if any, whose purpose is essentially speculative. The fund will not segregate assets to cover forward contracts entered into for hedging purposes, including settlement hedges, position hedges, and proxy hedges. Successful use of currency management strategies will depend on FMR's skill in analyzing and predicting currency values. Currency management strategies may substantially change the fund's investment exposure to changes in currency exchange rates, and could result in losses to the fund if currencies do not perform as FMR anticipates. For example, if a currency's value rose at a time when FMR had hedged the fund by selling that currency in exchange for dollars, the fund would be unable to participate in the currency's appreciation. If FMR hedges currency exposure through proxy hedges, the fund could realize currency losses from the hedge and the security position at the same time if the two currencies do not move in tandem. Similarly, if FMR increases the fund's exposure to a foreign currency, and that currency's value declines, the fund will realize a loss. There is no assurance that FMR's use of currency management strategies will be advantageous to the fund or that it will hedge at an appropriate time. FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or administer the day-to-day operations of any company. The fund, however, may exercise its rights as a shareholder and may communicate its views on important matters of policy to management, the Board of Directors, and shareholders of a company when FMR determines that such matters could have a significant effect on the value of the fund's investment in the company. The activities that the fund may engage in, either individually or in conjunction with others, may include, among others, supporting or opposing proposed changes in a company's corporate structure or business activities; seeking changes in a company's directors or management; seeking changes in a company's direction or policies; seeking the sale or reorganization of the company or a portion of its assets; or supporting or opposing third party takeover efforts. This area of corporate activity is increasingly prone to litigation and it is possible that the fund could be involved in lawsuits related to such activities. FMR will monitor such activities with a view to mitigating, to the extent possible, the risk of litigation against the fund and the risk of actual liability if the fund is involved in litigation. No guarantee can be made, however, that litigation against the fund will not be undertaken or liabilities incurred. FUTURES AND OPTIONS. The following sections pertain to futures and options: Asset Coverage for Futures and Options Positions, Combined Positions, Correlation of Price Changes, Futures Contracts, Futures Margin Payments, Limitations on Futures and Options Transactions, Liquidity of Options and Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put and Call Options. ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with guidelines established by the Securities and Exchange Commission with respect to coverage of options and futures strategies by mutual funds, and if the guidelines so require will set aside appropriate liquid assets in a segregated custodial account in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or option strategy is outstanding, unless they are replaced with other suitable assets. As a result, there is a possibility that segregation of a large percentage of the fund's assets could impede portfolio management or the fund's ability to meet redemption requests or other current obligations. COMBINED POSITIONS. The fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, to adjust the risk and return characteristics of the overall position. For example, the fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. CORRELATION OF PRICE CHANGES. Because there are a limited number of types of exchange-traded options and futures contracts, it is likely that the standardized contracts available will not match the fund's current or anticipated investments exactly. The fund may invest in options and futures contracts based on securities with different issuers, maturities, or other characteristics from the securities in which it typically invests, which involves a risk that the options or futures position will not track the performance of the fund's other investments. Options and futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments match the fund's investments well. Options and futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect correlation may also result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, or from imposition of daily price fluctuation limits or trading halts. The fund may purchase or sell options and futures contracts with a greater or lesser value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. If price changes in the fund's options or futures positions are poorly correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments. FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When the fund sells a futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when the fund enters into the contract. Some currently available futures contracts are based on specific securities, such as U.S. Treasury bonds or notes, and some are based on indices of securities prices, such as the Standard & Poor's Composite Index of 500 Stocks (S&P 500). Futures can be held until their delivery dates, or can be closed out before then if a liquid secondary market is available. The value of a futures contract tends to increase and decrease in tandem with the value of its underlying instrument. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying instrument, much as if it had purchased the underlying instrument directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying instrument had been sold. FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the purchaser and seller are required to deposit "initial margin" with a futures broker, known as a futures commission merchant (FCM), when the contract is entered into. Initial margin deposits are typically equal to a percentage of the contract's value. If the value of either party's position declines, that party will be required to make additional "variation margin" payments to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. Initial and variation margin payments do not constitute purchasing securities on margin for purposes of the fund's investment limitations. In the event of the bankruptcy of an FCM that holds margin on behalf of the fund, the fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM's other customers, potentially resulting in losses to the fund. LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the Commodity Futures Trading Commission (CFTC) and the National Futures Association, which regulate trading in the futures markets. The fund intends to comply with Rule 4.5 under the Commodity Exchange Act, which limits the extent to which the fund can commit assets to initial margin deposits and option premiums. In addition, the fund will not: (a) sell futures contracts, purchase put options, or write call options if, as a result, more than 25% of the fund's total assets would be hedged with futures and options under normal conditions; (b) purchase futures contracts or write put options if, as a result, the fund's total obligations upon settlement or exercise of purchased futures contracts and written put options would exceed 25% of its total assets; or (c) purchase call options if, as a result, the current value of option premiums for call options purchased by the fund would exceed 5% of the fund's total assets. These limitations do not apply to options attached to or acquired or traded together with their underlying securities, and do not apply to securities that incorporate features similar to options. The above limitations on the fund's investments in futures contracts and options, and the fund's policies regarding futures contracts and options discussed elsewhere in this Statement of Additional Information, may be changed as regulatory agencies permit. LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid secondary market will exist for any particular options or futures contract at any particular time. Options may have relatively low trading volume and liquidity if their strike prices are not close to the underlying instrument's current price. In addition, exchanges may establish daily price fluctuation limits for options and futures contracts, and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible for the fund to enter into new positions or close out existing positions. If the secondary market for a contract is not liquid because of price fluctuation limits or otherwise, it could prevent prompt liquidation of unfavorable positions, and potentially could require the fund to continue to hold a position until delivery or expiration regardless of changes in its value. As a result, the fund's access to other assets held to cover its options or futures positions could also be impaired. OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures contracts are similar to forward currency exchange contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures contracts call for payment or delivery in U.S. dollars. The underlying instrument of a currency option may be a foreign currency, which generally is purchased or delivered in exchange for U.S. dollars, or may be a futures contract. The purchaser of a currency call obtains the right to purchase the underlying currency, and the purchaser of a currency put obtains the right to sell the underlying currency. The uses and risks of currency options and futures are similar to options and futures relating to securities or indices, as discussed above. The fund may purchase and sell currency futures and may purchase and write currency options to increase or decrease its exposure to different foreign currencies. The fund may also purchase and write currency options in conjunction with each other or with currency futures or forward contracts. Currency futures and options values can be expected to correlate with exchange rates, but may not reflect other factors that affect the value of the fund's investments. A currency hedge, for example, should protect a Yen-denominated security from a decline in the Yen, but will not protect the fund against a price decline resulting from deterioration in the issuer's creditworthiness. Because the value of the fund's foreign-denominated investments changes in response to many factors other than exchange rates, it may not be possible to match the amount of currency options and futures to the value of the fund's investments exactly over time. OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of over-the-counter (OTC) options (options not traded on exchanges) generally are established through negotiation with the other party to the option contract. While this type of arrangement allows the fund greater flexibility to tailor an option to its needs, OTC options generally involve greater credit risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded. PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the fund pays the current market price for the option (known as the option premium). Options have various types of underlying instruments, including specific securities, indices of securities prices, and futures contracts. The fund may terminate its position in a put option it has purchased by allowing it to expire or by exercising the option. If the option is allowed to expire, the fund will lose the entire premium it paid. If the fund exercises the option, it completes the sale of the underlying instrument at the strike price. The fund may also terminate a put option position by closing it out in the secondary market at its current price, if a liquid secondary market exists. The buyer of a typical put option can expect to realize a gain if security prices fall substantially. However, if the underlying instrument's price does not fall enough to offset the cost of purchasing the option, a put buyer can expect to suffer a loss (limited to the amount of the premium paid, plus related transaction costs). The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option's strike price. A call buyer typically attempts to participate in potential price increases of the underlying instrument with risk limited to the cost of the option if security prices fall. At the same time, the buyer can expect to suffer a loss if security prices do not rise sufficiently to offset the cost of the option. WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes the opposite side of the transaction from the option's purchaser. In return for receipt of the premium, the fund assumes the obligation to pay the strike price for the option's underlying instrument if the other party to the option chooses to exercise it. When writing an option on a futures contract, the fund will be required to make margin payments to an FCM as described above for futures contracts. The fund may seek to terminate its position in a put option it writes before exercise by closing out the option in the secondary market at its current price. If the secondary market is not liquid for a put option the fund has written, however, the fund must continue to be prepared to pay the strike price while the option is outstanding, regardless of price changes, and must continue to set aside assets to cover its position. If security prices rise, a put writer would generally expect to profit, although its gain would be limited to the amount of the premium it received. If security prices remain the same over time, it is likely that the writer will also profit, because it should be able to close out the option at a lower price. If security prices fall, the put writer would expect to suffer a loss. This loss should be less than the loss from purchasing the underlying instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline. Writing a call option obligates the fund to sell or deliver the option's underlying instrument, in return for the strike price, upon exercise of the option. The characteristics of writing call options are similar to those of writing put options, except that writing calls generally is a profitable strategy if prices remain the same or fall. Through receipt of the option premium, a call writer mitigates the effects of a price decline. At the same time, because a call writer must be prepared to deliver the underlying instrument in return for the strike price, even if its current value is greater, a call writer gives up some ability to participate in security price increases. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. Under the supervision of the Board of Trustees, FMR determines the liquidity of the fund's investments and, through reports from FMR, the Board monitors investments in illiquid instruments. In determining the liquidity of the fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the fund to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days, over-the-counter options, and non-government stripped fixed-rate mortgage-backed securities. Also, FMR may determine some restricted securities, government-stripped fixed-rate mortgage-backed securities, loans and other direct debt instruments, emerging market securities, and swap agreements to be illiquid. However, with respect to over-the-counter options the fund writes, all or a portion of the value of the underlying instrument may be illiquid depending on the assets held to cover the option and the nature and terms of any agreement the fund may have to close out the option before expiration. In the absence of market quotations, illiquid investments are priced at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, the fund were in a position where more than 10% of its net assets was invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INDEXED SECURITIES. The fund may purchase securities whose prices are indexed to the prices of other securities, securities indices, currencies, precious metals or other commodities, or other financial indicators. Indexed securities typically, but not always, are debt securities or deposits whose value at maturity or coupon rate is determined by reference to a specific instrument or statistic. Gold-indexed securities, for example, typically provide for a maturity value that depends on the price of gold, resulting in a security whose price tends to rise and fall together with gold prices. Currency-indexed securities typically are short-term to intermediate-term debt securities whose maturity values or interest rates are determined by reference to the values of one or more specified foreign currencies, and may offer higher yields than U.S. dollar-denominated securities of equivalent issuers. Currency-indexed securities may be positively or negatively indexed; that is, their maturity value may increase when the specified currency value increases, resulting in a security that performs similarly to a foreign-denominated instrument, or their maturity value may decline when foreign currencies increase, resulting in a security whose price characteristics are similar to a put on the underlying currency. Currency-indexed securities may also have prices that depend on the values of a number of different foreign currencies relative to each other. The performance of indexed securities depends to a great extent on the performance of the security, currency, or other instrument to which they are indexed, and may also be influenced by interest rate changes in the United States and abroad. At the same time, indexed securities are subject to the credit risks associated with the issuer of the security, and their values may decline substantially if the issuer's creditworthiness deteriorates. Recent issuers of indexed securities have included banks, corporations, and certain U.S. government agencies. Indexed securities may be more volatile than the underlying instruments. INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order issued by the SEC, the fund has received permission to lend money to, and borrow money from, other funds advised by FMR or its affiliates. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. A fund will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements), and will borrow through the program only when the costs are equal to or lower than the cost of bank loans. A fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs. LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are interests in amounts owed by a corporate, governmental, or other borrower to lenders or lending syndicates (loans and loan participations), to suppliers of goods or services (trade claims or other receivables), or to other parties. Direct debt instruments are subject to the fund's policies regarding the quality of debt securities. Purchasers of loans and other forms of direct indebtedness depend primarily upon the creditworthiness of the borrower for payment of principal and interest. Direct debt instruments may not be rated by any nationally recognized rating service. If the fund does not receive scheduled interest or principal payments on such indebtedness, the fund's share price and yield could be adversely affected. Loans that are fully secured offer the fund more protections than an unsecured loan in the event of non-payment of scheduled interest or principal. However, there is no assurance that the liquidation of collateral from a secured loan would satisfy the borrower's obligation, or that the collateral could be liquidated. Indebtedness of borrowers whose creditworthiness is poor involves substantially greater risks and may be highly speculative. Borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or may pay only a small fraction of the amount owed. Direct indebtedness of developing countries also involves a risk that the governmental entities responsible for the repayment of the debt may be unable, or unwilling, to pay interest and repay principal when due. Investments in loans through direct assignment of a financial institution's interests with respect to a loan may involve additional risks to the fund. For example, if a loan is foreclosed, the fund could become part owner of any collateral, and would bear the costs and liabilities associated with owning and disposing of the collateral. In addition, it is conceivable that under emerging legal theories of lender liability, the fund could be held liable as a co-lender. Direct debt instruments may also involve a risk of insolvency of the lending bank or other intermediary. Direct debt instruments that are not in the form of securities may offer less legal protection to the fund in the event of fraud or misrepresentation. In the absence of definitive regulatory guidance, the fund relies on FMR's research in an attempt to avoid situations where fraud or misrepresentation could adversely affect the fund. A loan is often administered by a bank or other financial institution that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. Unless, under the terms of the loan or other indebtedness, the fund has direct recourse against the borrower, it may have to rely on the agent to apply appropriate credit remedies against a borrower. If assets held by the agent for the benefit of the fund were determined to be subject to the claims of the agent's general creditors, the fund might incur certain costs and delays in realizing payment on the loan or loan participation and could suffer a loss of principal or interest. Direct indebtedness purchased by the fund may include letters of credit, revolving credit facilities, or other standby financing commitments obligating the fund to pay additional cash on demand. These commitments may have the effect of requiring the fund to increase its investment in a borrower at a time when it would not otherwise have done so, even if the borrower's condition makes it unlikely that the amount will ever be repaid. The fund will set aside appropriate liquid assets in a segregated custodial account to cover its potential obligations under standby financing commitments. The fund limits the amount of total assets that it will invest in any one issuer or in issuers within the same industry (see limitations 1 and 5). For purposes of these limitations, the fund generally will treat the borrower as the "issuer" of indebtedness held by the fund. In the case of loan participations where a bank or other lending institution serves as financial intermediary between the fund and the borrower, if the participation does not shift to the fund the direct debtor-creditor relationship with the borrower, SEC interpretations require the fund, in appropriate circumstances, to treat both the lending bank or other lending institution and the borrower as "issuers" for these purposes. Treating a financial intermediary as an issuer of indebtedness may restrict the fund's ability to invest in indebtedness related to a single financial intermediary, or a group of intermediaries engaged in the same industry, even if the underlying borrowers represent many different companies and industries. LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate debt securities has been in existence for many years and has weathered previous economic downturns, the 1980s brought a dramatic increase in the use of such securities to fund highly leveraged corporate acquisitions and restructurings. Past experience may not provide an accurate indication of the future performance of the high-yield bond market, especially during periods of economic recession. In fact, from 1989 to 1991, the percentage of lower-quality securities that defaulted rose significantly above prior levels, although the default rate decreased in 1992 , 1993 , and 1994 . The market for lower-quality debt securities may be thinner and less active than that for higher-quality debt securities, which can adversely affect the prices at which the former are sold. If market quotations are not available, lower-quality debt securities will be valued in accordance with procedures established by the Board of Trustees, including the use of outside pricing services. Judgment plays a greater role in valuing high-yield corporate debt securities than is the case for securities for which more external sources for quotations and last-sale information are available. Adverse publicity and changing investor perceptions may affect the ability of outside pricing services to value lower-quality debt securities and the fund's ability to dispose of these securities. Since the risk of default is higher for lower-quality debt securities, FMR's research and credit analysis are an especially important part of managing securities of this type held by the fund. In considering investments for the fund, FMR will attempt to identify those issuers of high-yielding securities whose financial condition is adequate to meet future obligations, has improved, or is expected to improve in the future. FMR's analysis focuses on relative values based on such factors as interest or dividend coverage, asset coverage, earnings prospects, and the experience and managerial strength of the issuer. The fund may choose, at its expense or in conjunction with others, to pursue litigation or otherwise to exercise its rights as a security holder to seek to protect the interests of security holders if it determines this to be in the best interest of the fund's shareholders. REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts, commercial and residential mortgage-backed securities, and real estate financings. Real estate-related instruments are sensitive to factors such as real estate values and property taxes, interest rates, cash flow of underlying real estate assets, overbuilding, and the management skill and creditworthiness of the issuer. Real estate-related instruments may also be affected by tax and regulatory requirements, such as those relating to the environment. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a security and simultaneously commits to sell that security back to the original seller at an agreed-upon price. The resale price reflects the purchase price plus an agreed-upon incremental amount which is unrelated to the coupon rate or maturity of the purchased security. To protect the fund from the risk that the original seller will not fulfill its obligation, the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to the fund in connection with bankruptcy proceedings), it is the fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. RESTRICTED SECURITIES generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933, or in a registered public offering. Where registration is required, the fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. The fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SECURITIES LENDING. The fund may lend securities to parties such as broker-dealers or institutional investors, including Fidelity Brokerage Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and a subsidiary of FMR Corp. Securities lending allows the fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans will be made only to parties deemed by FMR to be of good standing. Furthermore, they will only be made if, in FMR's judgment, the consideration to be earned from such loans would justify the risk. FMR understands that it is the current view of the SEC Staff that a fund may engage in loan transactions only under the following conditions: (1) the fund must receive 100% collateral in the form of cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the borrower must increase the collateral whenever the market value of the securities loaned (determined on a daily basis) rises above the value of the collateral; (3) after giving notice, the fund must be able to terminate the loan at any time; (4) the fund must receive reasonable interest on the loan or a flat fee from the borrower, as well as amounts equivalent to any dividends, interest, or other distributions on the securities loaned and to any increase in market value; (5) the fund may pay only reasonable custodian fees in connection with the loan; and (6) the Board of Trustees must be able to vote proxies on the securities loaned, either by terminating the loan or by entering into an alternative arrangement with the borrower. Cash received through loan transactions may be invested in any security in which the fund is authorized to invest. Investing this cash subjects that investment, as well as the security loaned, to market forces (i.e., capital appreciation or depreciation). SHORT SALES "AGAINST THE BOX." If the fund enters into a short sale against the box, it will be required to set aside securities equivalent in kind and amount to the securities sold short (or securities convertible or exchangeable into such securities) and will be required to hold such securities while the short sale is outstanding. The fund will incur transaction costs, including interest expenses, in connection with opening, maintaining, and closing short sales against the box. SWAP AGREEMENTS. Swap agreements can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. Swap agreements can take many different forms and are known by a variety of names. The fund is not limited to any particular form of swap agreement if FMR determines it is consistent with the fund's investment objective and policies. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements will tend to shift the fund's investment exposure from one type of investment to another. For example, if the fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factors that determine the amounts of payments due to and from the fund. If a swap agreement calls for payments by the fund, the fund must be prepared to make such payments when due. In addition, if the counterparty's creditworthiness declined, the value of a swap agreement would be likely to decline, potentially resulting in losses. The fund expects to be able to eliminate its exposure under swap agreements either by assignment or other disposition, or by entering into an offsetting swap agreement with the same party or a similarly creditworthy party. The fund will maintain appropriate liquid assets in a segregated custodial account to cover its current obligations under swap agreements. If the fund enters into a swap agreement on a net basis, it will segregate assets with a daily value at least equal to the excess, if any, of the fund's accrued obligations under the swap agreement over the accrued amount the fund is entitled to receive under the agreement. If the fund enters into a swap agreement on other than a net basis, it will segregate assets with a value equal to the full amount of the fund's accrued obligations under the agreement. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by FMR pursuant to authority contained in the management contract. If FMR grants investment management authority to the sub-advisers (see the section entitled "Management Contract"), the sub-advisers are authorized to place orders for the purchase and sale of portfolio securities, and will do so in accordance with the policies described below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. In selecting broker-dealers, subject to applicable limitations of the federal securities laws, FMR considers various relevant factors, including, but not limited to: the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability, and financial condition of the broker-dealer firm; the broker-dealer's execution services rendered on a continuing basis; the reasonableness of any commissions; and arrangements for payment of fund expenses. Generally, commis sions for investments traded on foreign exchanges will be higher than for investments traded on U.S. exchanges and may not be subject to negotiation. The fund may execute portfolio transactions with broker-dealers who provide research and execution services to the fund or other accounts over which FMR or its affiliates exercise investment discretion. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing, or selling securities; and the availability of securities or the purchasers or sellers of securities. In addition, such broker-dealers may furnish analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) in accordance with a ranking of broker-dealers determined periodically by FMR's investment staff based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the fund may be useful to FMR in rendering investment management services to the fund or its other clients, and conversely, such research provided by broker-dealers who have executed transaction orders on behalf of other FMR clients may be useful to FMR in carrying out its obligations to the fund. The receipt of such research has not reduced FMR's normal independent research activities; however, it enables FMR to avoid the additional expenses that could be incurred if FMR tried to develop comparable information through its own efforts. Subject to applicable limitations of the federal securities laws, broker-dealers may receive commissions for agency transactions that are in excess of the amount of commissions charged by other broker-dealers in recognition of their research and execution services. In order to cause the fund to pay such higher commissions, FMR must determine in good faith that such commissions are reasonable in relation to the value of the brokerage and research services provided by such executing broker-dealers, viewed in terms of a particular transaction or FMR's overall responsibilities to the fund and its other clients. In reaching this determination, FMR will not attempt to place a specific dollar value on the brokerage and research services provided, or to determine what portion of the compensation should be related to those services. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the fund or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by non-affiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the benefit of the Johnson family own, directly or indirectly, more than 25% of the voting common stock of FIL. FMR may allocate brokerage transactions to broker-dealers who have entered into arrangements with FMR under which the broker-dealer allocates a portion of the commissions paid by the fund toward payment of the fund's expenses, such as transfer agent fees or custodian fees. The transaction quality must, however, be comparable to those of other qualified broker-dealers. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute portfolio transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. The Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund and review the commissions paid by the fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For the fiscal periods ended July 31, 1995 and 1994, the fund's portfolio turnover rates were 162% and 291%, respectively. Because a high turnover rate increases transaction costs and may increase taxable gains, FMR carefully weighs the anticipated benefits of short-term investing against these consequences. For fiscal 1995, 1994, and the period April 27, 1993 (commencement of operations) through July 31, 1993 , the fund paid brokerage commissions of $706,003, $435,988, and $13,612, respectively. The fund pays both commissions and spreads in connection with the placement of portfolio transactions. FBSI is paid on a commission basis. During fiscal 1995, 1994, and 1993, the fund paid brokerage commissions of $265,073, $151,676, and $8,520, respectively, to FBSI. During fiscal 1995, this amounted to approximately 38% of the aggregate brokerage commissions paid by the fund for transactions involving approximately 51% of the aggregate dollar amount of transactions for which the fund paid brokerage commissions. The difference between the percentage of brokerage commissions paid to and the percentage of the dollar amount of transactions effected through FBSI is a result of the low commission rates charged by FBSI. During fiscal 1995, the fund paid brokerage commissions of $905 to FBS. FBS is paid on a commission basis. During fiscal 1994 and 1993, no fees were paid to FBSL. During fiscal 1995, the fund paid $658,322 in commissions to brokerage firms that provided research services involving approximately $458,673,584 of transactions. The provision of research services was not necessarily a factor in the placement of all this business with such firms. From time to time the Trustees will review whether the recapture for the benefit of the fund of some portion of the brokerage commissions or similar fees paid by the fund on portfolio transactions is legally permissible and advisable. The fund seeks to recapture soliciting broker-dealer fees on the tender of portfolio securities, but at present no other recapture arrangements are in effect. The Trustees intend to continue to review whether recapture opportunities are available and are legally permissible and, if so, to determine in the exercise of their business judgment whether it would be advisable for the fund to seek such recapture. Although the Trustees and officers of the fund are substantially the same as those of other funds managed by FMR, investment decisions for the fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and accounts are managed by the same investment adviser, particularly when the same security is suitable for the investment objective of more than one fund or account. When two or more funds are simultaneously engaged in the purchase or sale of the same security, the prices and amounts are allocated in accordance with procedures believed to be appropriate and equitable for each fund. In some cases this system could have a detrimental effect on the price or value of the security as far as the fund is concerned. In other cases, however, the ability of the fund to participate in volume transactions will produce better executions and prices for the fund. It is the current opinion of the Trustees that the desirability of retaining FMR as investment adviser to the fund outweighs any disadvantages that may be said to exist from exposure to simultaneous transactions. VALUATION OF PORTFOLIO SECURITIES Portfolio securities are valued by various methods depending on the primary market or exchange on which they trade. Most equity securities for which the primary market is the U.S. are valued at last sale price or, if no sale has occurred, at the closing bid price. Most equity securities for which the primary market is outside the U.S. are valued using the official closing price or the last sale price in the principal market where they are traded. If the last sale price (on the local exchange) is unavailable, the last evaluated quote or last bid price is normally used. Short-term securities are valued either at amortized cost or at original cost plus accrued interest, both of which approximate current value. Convertible securities and fixed-income securities are valued primarily by a pricing service that uses a vendor security valuation matrix which incorporates both dealer-supplied valuations and electronic data processing techniques. This two-fold approach is believed to more accurately reflect fair value because it takes into account appropriate factors such as institutional trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data, without exclusive reliance upon quoted, exchange, or over-the counter prices. Use of pricing services has been approved by the Board of Trustees. Securities and other assets for which there is no readily available market are valued in good faith by a committee appointed by the Board of Trustees. The procedures set forth above need not be used to determine the value of the securities owned by the fund if, in the opinion of a committee appointed by the Board of Trustees, some other method (e.g., closing over-the-counter bid prices in the case of debt instruments traded on an exchange) would more accurately reflect the fair market value of such securities. Generally, the valuation of foreign and domestic equity securities, as well as corporate bonds, U.S. government securities, money market instruments, and repurchase agreements, is substantially completed each day at the close of the NYSE. The values of any such securities held by the fund are determined as of such time for the purpose of computing the fund's net asset value. Foreign security prices are furnished by independent brokers or quotation services which express the value of securities in their local currency. FSC gathers all exchange rates daily at the close of the NYSE using the last quoted price on the local currency and then translates the value of foreign securities from their local currency into U.S. dollars. Any changes in the value of forward contracts due to exchange rate fluctuations and days to maturity are included in the calculation of net asset value. If an extraordinary event that is expected to materially affect the value of a portfolio security occurs after the close of an exchange on which that security is traded, then the security will be valued as determined in good faith by a committee appointed by the Board of Trustees. PERFORMANCE The fund may quote performance in various ways. All performance information supplied by the fund in advertising is historical and is not intended to indicate future returns. The fund's share price, yield, and total return fluctuate in response to market conditions and other factors, and the value of fund shares when redeemed may be more or less than their original cost. TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all aspects of the fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the fund's net asset value (NAV) over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment in the fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. For example, a cumulative total return of 100% over ten years would produce an average annual total return of 7.18%, which is the steady annual rate of return that would equal 100% growth on a compounded basis in ten years. While average annual total returns are a convenient means of comparing investment alternatives, investors should realize that the fund's performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of the fund. In addition to average annual total returns, the fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. NET ASSET VALUE. Charts and graphs using the fund's net asset values, adjusted net asset values, and benchmark indices may be used to exhibit performance. An adjusted NAV includes any distributions paid by the fund and reflects all elements of its return. Unless otherwise indicated, the fund's adjusted NAVs are not adjusted for sales charges, if any. MOVING AVERAGES. The fund may illustrate performance using moving averages. A long-term moving average is the average of each week's adjusted closing NAV for a specified period. A short-term moving average is the average of each day's adjusted closing NAV for a specified period. Moving Average Activity Indicators combine adjusted closing NAVs from the last business day of each week with moving averages for a specified period to produce indicators showing when an NAV has crossed, stayed above, or stayed below its moving average. On July 28, 1995, the 13-week and 39-week long-term moving averages were $15.07 and $13.53, respectively. HISTORICAL FUND RESULTS. The following table shows the fund's total returns for periods ended July 31, 1995.
Average Annual Total Returns Cumulative Total Returns
One One Year Life of Year Life of Fund* Fund* Dividend Growth 39.14% 24.62% 39.14% 64.56%
* From April 27, 1993 (commencement of operations). Note: If FMR had not reimbursed certain fund expenses during these periods, the fund's total returns would have been lower. The following table shows the income and capital elements of the fund's cumulative total return. The table compares the fund's return to the record of the Standard and Poor's Composite Index of 500 Stocks (S&P 500(registered trademark)), the Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for the fund. The S&P 500 and the DJIA comparisons are provided to show how the fund's total return compared to the record of a broad average of common stock prices and a narrower set of stocks of major industrial companies, respectively, over the same period. The fund has the ability to invest in securities not included in either index, and its investment portfolio may or may not be similar in composition to the indices. Figures for the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks and, unlike the fund's returns, do not include the effect of paying brokerage commissions and other costs of investing. During the period from April 27, 1993 (commencement of operations) to July 31, 1995, a hypothetical $10,000 investment in Dividend Growth would have grown to $16,456, assuming all distributions were reinvested. This was a period of fluctuating stock prices and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in the fund today.
FIDELITY DIVIDEND GROWTH FUND INDICES
Period Value of Value of Value of Total S&P 500 DJIA Cost of Ended Initial Reinvested Reinvested Value Living** July 31 $10,000 Dividend Capital Gain Investment Distributions Distributions 1995 $ 16,040 $ 27 $ 389 $ 16,456 $ 13,812 $ 14,723 $ 10,590 1994 $ 11,680 $ 10 $ 137 $ 11,827 $ 10,953 $ 11,469 $ 10,306 1993* $ 10,800 $ 0 $ 0 $ 10,800 $ 10,416 $ 10,493 $ 10,028
* From April 27, 1993 (commencement of operations). ** From month-end closest to initial investment date. Explanatory Notes: With an initial investment of $10,000 made on April 27, 1993, the net amount invested in fund shares was $10,000. The cost of the initial investment ($10,000), together with the aggregate cost of reinvested dividends and capital gain distributions for the period covered (their cash value at the time they were reinvested), amounted to $10,312. If distributions had not been reinvested, the amount of distributions earned from the fund over time would have been smaller, and cash payments for the period would have amounted to $20 for dividends and $290 for capital gains distributions. Tax consequences of different investments have not been factored into the above figures. PERFORMANCE COMPARISONS. The fund's performance may be compared to the performance of other mutual funds in general, or to the performance of particular types of mutual funds. These comparisons may be expressed as mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. In addition to the mutual fund rankings, the fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, it is important to remember the risk and return characteristics of each type of investment. For example, while stock mutual funds may offer higher potential returns, they also carry the highest degree of share price volatility. Likewise, money market funds may offer greater stability of principal, but generally do not offer the higher potential returns available from stock mutual funds. From time to time, the fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund may quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the basis of risk-adjusted performance. Rankings that compare the performance of Fidelity funds to one another in appropriate categories over specific periods of time may also be quoted in advertising. The fund may be compared in advertising to Certificates of Deposit (CDs) or other investments issued by banks or other depository institutions. Mutual funds differ from bank investments in several respects. For example, the fund may offer greater liquidity or higher potential returns than CDs, the fund does not guarantee your principal or your return, and fund shares are not FDIC insured. Fidelity may provide information designed to help individuals understand their investment goals and explore various financial strategies. Such information may include information about current economic, market, and political conditions; materials that describe general principles of investing, such as asset allocation, diversification, risk tolerance, and goal setting; questionnaires designed to help create a personal financial profile; worksheets used to project savings needs based on assumed rates of inflation and hypothetical rates of return; and action plans offering investment alternatives. Materials may also include discussions of Fidelity's asset allocation funds and other Fidelity funds, products, and services. Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns of the capital markets in the United States, including common stocks, small capitalization stocks, long-term corporate bonds, intermediate-term government bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation (based on the CPI), and combinations of various capital markets. The performance of these capital markets is based on the returns of different indices. Fidelity funds may use the performance of these capital markets in order to demonstrate general risk-versus-reward investment scenarios. Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. The risks associated with the security types in any capital market may or may not correspond directly to those of the funds. Ibbotson calculates total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. In advertising materials, Fidelity may reference or discuss its products and services, which may include other Fidelity funds; retirement investing; brokerage products and services; model portfolios or allocations ; saving for college or other goals; charitable giving; and the Fidelity credit card. In addition, Fidelity may quote or reprint financial or business publications and periodicals as they relate to current economic and political conditions, fund management, portfolio composition, investment philosophy, investment techniques, the desirability of owning a particular mutual fund, and Fidelity services and products. Fidelity may also reprint, and use as advertising and sales literature, articles from Fidelity Focus, a quarterly magazine provided free of charge to Fidelity fund shareholders. The fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. VOLATILITY. The fund may quote various measures of volatility and benchmark correlation in advertising. In addition, the fund may compare these measures to those of other funds. Measures of volatility seek to compare the fund's historical share price fluctuations or total returns to those of a benchmark. Measures of benchmark correlation indicate how valid a comparative benchmark may be. All measures of volatility and correlation are calculated using averages of historical data. MOMENTUM INDICATORS indicate the fund's price movements over specific periods of time. Each point on the momentum indicator represents the fund's percentage change in price movements over that period. The fund may advertise examples of the effects of periodic investment plans, including the principle of dollar cost averaging. In such a program, an investor invests a fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer shares when prices are high and more shares when prices are low. While such a strategy does not assure a profit or guard against loss in a declining market, the investor's average cost per share can be lower than if fixed numbers of shares are purchased at the same intervals. In evaluating such a plan, investors should consider their ability to continue purchasing shares during periods of low price levels. The fund may be available for purchase through retirement plans or other programs offering deferral of, or exemption from, income taxes, which may produce superior after-tax returns over time. For example, a $1,000 investment earning a taxable return of 10% annually would have an after-tax value of $1,949 after ten years, assuming tax was deducted from the return each year at a 31% rate. An equivalent tax-deferred investment would have an after-tax value of $2,100 after ten years, assuming tax was deducted at a 31% rate from the tax-deferred earnings at the end of the ten-year period. As of July 31, 1995, FMR advised over $25 billion in tax-free fund assets, $77 billion in money market fund assets, $214 billion in equity fund assets, $ 52 billion in international fund assets, and $22 billion in Spartan fund assets. The fund may reference the growth and variety of money market mutual funds and the adviser's innovation and participation in the industry. The equity funds under management figure represents the largest amount of equity fund assets under management by a mutual fund investment adviser in the United States, making FMR America's leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide information and communications network for the purpose of researching and managing investments abroad. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION The fund is open for business and its net asset value per share (NAV) is calculated each day the New York Stock Exchange (NYSE) is open for trading. The NYSE has designated the following holiday closings for 1995: New Year's Day (observed), President's Day (observed), Good Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday schedule to be observed in the future, the NYSE may modify its holiday schedule at any time. In addition, the fund will not process wire purchases and redemptions on days when the Federal Reserve Wire System is closed. FSC normally determines the fund's NAV as of the close of the NYSE (normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if trading on the NYSE is restricted or as permitted by the Securities and Exchange Commission (SEC). To the extent that portfolio securities are traded in other markets on days when the NYSE is closed, the fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. In addition, trading in some of the fund's portfolio securities may not occur on days when the fund is open for business. If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing the fund's NAV. Shareholders receiving securities or other property on redemption may realize a gain or loss for tax purposes, and will incur any costs of sale, as well as the associated inconveniences. Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940 Act), the fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) the fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or the fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the Prospectus, the fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DISTRIBUTIONS. If you request to have distributions mailed to you and the U.S. Postal Service cannot deliver your checks, or if your checks remain uncashed for six months, Fidelity may reinvest your distributions at the then-current NAV. All subsequent distributions will then be reinvested until you provide Fidelity with alternate instructions. DIVIDENDS. A portion of the fund's income may qualify for the dividends-received deduction available to corporate shareholders to the extent that the fund's income is derived from qualifying dividends. Because the fund may earn other types of income, such as interest, income from securities loans, non-qualifying dividends, and short-term capital gains, the percentage of dividends from the fund that qualifies for the deduction generally will be less than 100%. The fund will notify corporate shareholders annually of the percentage of fund dividends that qualifies for the dividends-received deduction. A portion of the fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. Gains (losses) attributable to foreign currency fluctuations are generally taxable as ordinary income, and therefore will increase (decrease) dividend distributions. Short-term capital gains are distributed as dividend income. The fund will send each shareholder a notice in January describing the tax status of dividends and capital gain distributions for the prior year. CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on the sale of securities and distributed to shareholders are federally taxable as long-term capital gains, regardless of the length of time shareholders have held their shares. If a shareholder receives a long-term capital gain distribution on shares of the fund, and such shares are held six months or less and are sold at a loss, the portion of the loss equal to the amount of the long-term capital gain distribution will be considered a long-term loss for tax purposes. Short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. As of July 31, 1995 , the fund hereby designates approximately $1,155,000 as a capital gain dividend for the purpose of the dividend-paid deduction. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid with respect to foreign securities. Foreign governments may also impose taxes on other payments or gains with respect to foreign securities. If, at the close of its fiscal year, more than 50% of the fund's total assets are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns. TAX STATUS OF THE FUND. The fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company and avoid being subject to federal income or excise taxes at the fund level, the fund intends to distribute substantially all of its net investment income and net realized capital gains within each calendar year as well as on a fiscal year basis. The fund intends to comply with other tax rules applicable to regulated investment companies, including a requirement that capital gains from the sale of securities held less than three months constitute less than 30% of the fund's gross income for each fiscal year. Gains from some forward currency contracts, futures contracts, and options are included in this 30% calculation, which may limit the fund's investments in such instruments. If the fund purchases shares in certain foreign investment entities, defined as passive foreign investment companies (PFICs) in the Internal Revenue Code, it may be subject to U.S. federal income tax on a portion of any excess distribution or gain from the disposition of such shares. Interest charges may also be imposed on the fund with respect to deferred taxes arising from such distributions or gains. Generally, the fund will elect to mark-to-market any PFIC shares. Unrealized gains will be recognized as income for tax purposes and must be distributed to shareholders as dividends. The fund is treated as a separate entity from the other funds of Fidelity Securities Fund for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting the fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether the fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent organized in 1972. The voting common stock of FMR Corp. is divided into two classes. Class B is held predominantly by members of the Edward C. Johnson 3d family and is entitled to 49% of the vote on any matter acted upon by the voting common stock. Class A is held predominantly by non-Johnson family member employees of FMR Corp. and its affiliates and is entitled to 51% of the vote on any such matter. The Johnson family group and all other Class B shareholders have entered into a shareholders' voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Under the 1940 Act, control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company. Therefore, through their ownership of voting common stock and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the 1940 Act, to form a controlling group with respect to FMR Corp. At present, the principal operating activities of FMR Corp. are those conducted by three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; Fidelity Investments Institutional Operations Company, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. T he business address of each Trustee and officer who is an "interested person" (as defined in the Investment Company Act of 1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also the address of FMR. The business address of all the other trustees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are "interested persons" by virtue of their affiliation with either the trust or FMR are indicated by an asterisk (*). *EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief Executive Officer and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia University Graduate School of Business and a financial consultant. From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation (reinsurance), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) is Vice Chairman of FMR (1992). Prior to his retirement on May 31, 1990, he was a Director of FMR (1989) and Executive Vice President of FMR (a position he held until March 31, 1991); Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services (1991-1992). He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and construction). In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for the Preservation of New England Antiquities, and as an Overseer of the Museum of Fine Arts of Boston (1990). GERALD C. McDONOUGH (66), Trustee (1989), is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration, 1989), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). Prior to 1991, he held the positions of Vice President of International Business Machines Corporation ("IBM") and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS (66), Trustee, is President of The Wales Group, Inc. (management and financial advisory services). Prior to retiring in 1987, Mr. Williams served as Chairman of the Board of First Wachovia Corporation (bank holding company), and Chairman and Chief Executive Officer of The First National Bank of Atlanta and First Atlanta Corporation (bank holding company). He is currently a Director of BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc. (restaurants, 1992). WILLIAM J. HAYES (61), Vice President (1994), is Vice President of Fidelity's equity funds; Senior Vice President of FMR; and Managing Director of FMR Corp. ROBERT H. MORRISON (55), Manager of Security Transactions of Fidelity's equity funds is Vice President of FMR. ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LLC (1994-1995). JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity Funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current Trustee of the fund for his or her services as trustee for the fiscal year ended July 31, 1995. COMPENSATION TABLE
Trustees Aggregate Pension or Estimated Annual Total Compensation Retirement Benefits Upon Compensation from Benefits Accrued Retirement from from the Fund the Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Complex* J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0 Ralph F. Cox 54 5,200 52,000 125,000 Phyllis Burke Davis 52 5,200 52,000 122,000 Richard J. Flynn 66 0 52,000 154,500 Edward C. Johnson 3d ** 0 0 0 0 E. Bradley Jones 53 5,200 49,400 123,500 Donald J. Kirk 54 5,200 52,000 125,000 Peter S. Lynch ** 0 0 0 0 Gerald C. McDonough 53 5,200 52,000 125,000 Edward H. Malone 53 5,200 44,200 128,000 Marvin L. Mann 53 5,200 52,000 125,000 Thomas R. Williams 52 5,200 52,000 126,500
* Information is as of December 31, 1994 for 206 funds in the complex. ** Interested trustees of the fund are compensated by FMR. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. As of July 31, 1995, the Trustees and officers of the fund owned, in the aggregate, less than 1 % of the fund's total outstanding shares. Also, as of that date, Charles Schwab & Co., Inc./Mutual Fund Department, San Francisco, CA, was known by the fund to own of record or beneficially approximately 5.8% of the fund's total outstanding shares. MANAGEMENT CONTRACT The fund employs FMR to furnish investment advisory and other services. Under its management contract with the fund, FMR acts as investment adviser and, subject to the supervision of the Board of Trustees, directs the investments of the fund in accordance with its investment objective, policies, and limitations. FMR also provides the fund with all necessary office facilities and personnel for servicing the fund's investments, compensates all officers of the fund and all Trustees who are "interested persons" of the trust or of FMR, and all personnel of the fund or FMR performing services relating to research, statistical, and investment activities. In addition, FMR or its affiliates, subject to the supervision of the Board of Trustees, provide the management and administrative services necessary for the operation of the fund. These services include providing facilities for maintaining the fund's organization; supervising relations with custodians, transfer and pricing agents, accountants, underwriters, and other persons dealing with the fund; preparing all general shareholder communications and conducting shareholder relations; maintaining the fund's records and the registration of the fund's shares under federal and state laws; developing management and shareholder services for the fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to FSC, the fund pays all of its expenses, without limitation, that are not assumed by those parties. The fund pays for the typesetting, printing, and mailing of its proxy materials to shareholders, legal expenses, and the fees of the custodian, auditor and non-interested Trustees. Although the fund's current management contract provides that the fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices, and reports to shareholders, the trust, on behalf of the fund has entered into a revised transfer agent agreement with FSC, pursuant to which FSC bears the costs of providing these services to existing shareholders. Other expenses paid by the fund include interest, taxes, brokerage commissions, and the fund's proportionate share of insurance premiums and Investment Company Institute dues. The fund is also liable for such non-recurring expenses as may arise, including costs of any litigation to which the fund may be a party, and any obligation it may have to indemnify its officers and Trustees with respect to litigation. FMR is the fund's manager pursuant to a management contract dated August 1, 1994, which was approved by shareholders on July 13, 1994. For the services of FMR under the contract, the fund pays FMR a monthly management fee composed of the sum of two elements: a basic fee and a performance adjustment based on a comparison of the fund's performance to that of the Standard & Poor's Composite Index of 500 stocks (S&P 500). COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two elements: a group fee rate and an individual fund fee rate. The group fee rate is based on the monthly average net assets of all of the registered investment companies with which FMR has management contracts and is calculated on a cumulative basis pursuant to the graduated fee rate schedule shown below on the left. The schedule below on the right shows the effective annual group fee rate at various asset levels, which is the result of cumulatively applying the annualized rates on the left. For example, the effective annual fee rate at $ 333 billion of group net assets - the approximate level for July 1995 - was .3129 %, which is the weighted average of the respective fee rates for each level of group net assets up to $ 333 billion. GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate $ 0 - 3 billion .5200% $ 0.5 billion .5200% 3 - 6 .4900 25 .4238 6 - 9 .4600 50 .3823 9 - 12 .4300 75 .3626 12 - 15 .4000 100 .3512 15 - 18 .3850 125 .3430 18 - 21 .3700 150 .3371 21 - 24 .3600 175 .3325 24 - 30 .3500 200 .3284 30 - 36 .3450 225 .3253 36 - 42 .3400 250 .3223 42 - 48 .3350 275 .3198 48 - 66 .3250 300 .3175 66 - 84 .3200 325 .3153 84 - 102 .3150 350 .3133 102 - 138 .3100 138 - 174 .3050 174 - 228 .3000 228 - 282 .2950 282 - 336 .2900 Over 336 .2850 Prior to August 1, 1994, the group fee rate was based on a schedule with breakpoints ending at .3000% for average group assets in excess of $174 billion. The additional breakpoints shown above for average group assets in excess of $228 billion were voluntarily adopted by FMR on November 1, 1993. The fund's current management contract reflects this extension of the group fee rate schedule. On August 1, 1994, FMR voluntarily revised the prior extensions to the group fee rate schedule, and added new breakpoints. The revised group fee rate schedule provides for lower management fee rates as FMR's assets under management increase. The revised group fee rate schedule is identical to the above schedule for average group assets under $210 billion. For average group assets in excess of $210 billion, the group fee rate schedule voluntarily adopted by FMR is as follows: GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate $ 138 - 174 billion .3050% $150 billion .3371% 174 - 210 .3000 175 .3325 210 - 246 .2950 200 .3284 246 - 282 .2900 225 .3249 282 - 318 .2850 250 .3219 318 - 354 .2800 275 .3190 354 - 390 .2750 300 .3163 Over 390 .2700 325 .3137 350 .3113 375 .3090 400 .3067 The individual fund fee rate is .30%. Based on the average group net assets of the funds advised by FMR for July 1995, the annual basic fee rate would be calculated as follows: Group Fee Rate Individual Fund Fee Rate Basic Fee Rate . 3129 % + .30% = . 6129 % One-twelfth of this annual basic fee rate is applied to the fund's net assets averaged for the most recent month, giving a dollar amount, which is the fee for that month. COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward or downward adjustment, depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, the record of the S&P 500 (the Index) over the same period. The fund's performance period commenced on May, 1993 . Starting with the twelfth month, the performance adjustment takes effect. Each month subsequent to the twelfth month, a new month is added to the performance period until the performance period equals 36 months. Thereafter, the performance period consists of the most recent month plus the previous 35 months. Each percentage point of difference, calculated to the nearest 1.0% (up to a maximum difference of (plus/minus)10.00 ) is multiplied by a performance adjustment rate of .02%. Thus, the maximum annualized adjustment rate is (plus/minus).20%. This performance comparison is made at the end of each month. One twelfth (1/12) of this rate is then applied to the fund's average net assets for the entire performance period, giving a dollar amount which will be added to (or subtracted from) the basic fee. The fund's performance is calculated based on change in net asset value. For purposes of calculating the performance adjustment, any dividends or capital gain distributions paid by the fund are treated as if reinvested in fund shares at the net asset value as of the record date for payment. The record of the Index is based on change in value and is adjusted for any cash distributions from the companies whose securities compose the Index. Because the adjustment to the basic fee is based on the fund's performance compared to the investment record of the Index, the controlling factor is not whether the fund's performance is up or down per se, but whether it is up or down more or less than the record of the Index. Moreover, the comparative investment performance of the is based solely on the relevant performance period without regard to the cumulative performance over a longer or shorter period of time. During the fiscal years ended July 31, 1995 and 1994 and the fiscal period April 27, 1993 (commencement of operations) to July 31, 1993, FMR received $ 1,231,708 , $ 462,784 and $ 15,075 , respectively, for its services as investment adviser to the fund. These fees, which include both the basic fee and the performance adjustment, were equivalent to .71 %, .67 %, and .62 % (annualized) , respectively, of the average net assets of the fund for each of those years. For fiscal 1995, 1994 and 1993 the upward performance adjustments amounted to $ 154,186 , $ 31,912 , and $ 0 , respectively. FMR may, from time to time, voluntarily reimburse all or a portion of the fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). FMR retains the ability to be repaid for these expense reimbursements in the amount that expenses fall below the limit prior to the end of the fiscal year. Expense reimbursements by FMR will increase the fund's total returns and repayment of the reimbursement by the fund will lower its total returns. To comply with the California Code of Regulations, FMR will reimburse the fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating the fund's expenses for purposes of this regulation, the fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its distribution plan expenses and custodian fees attributable to investments in foreign securities. SUB-ADVISERS. FMR has entered into sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to the sub-advisory agreements, FMR may receive investment advice and research services outside the United States from the sub-advisers. FMR may also grant the sub-advisers investment management authority as well as the authority to buy and sell securities if FMR believes it would be beneficial to the fund. Currently, FMR U.K. and FMR Far East each focus on issuers in countries other than the United States such as those in Europe, Asia, and the Pacific Basin. FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of FMR U.K. and FMR Far East. For providing non-discretionary investment advice and research services, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection with providing investment advice and research services. For providing discretionary investment management and executing portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its monthly management fee rate (including any performance adjustment) with respect to the fund's average net assets managed by the sub-adviser on a discretionary basis. For providing investment advice and research services, the fees paid to the sub-advisers for fiscal 1995, 1994, and 1993 were as follows: Fiscal Year FMR U.K. FMR Far East 1995 $ 10,609 $ 10,654 1994 $ 868 $ 1,097 1993* $ 16 $ 33 * From April 27, 1993 (commencement of operations). For providing discretionary investment management and executing portfolio transactions f or the fiscal years ended July 31, 1995, 1994, and 1993 , no fees were paid by FMR to FMR U.K. and FMR Far East on behalf of the fund . DISTRIBUTION AND SERVICE PLAN The Trustees have approved a Distribution and Service Plan on behalf of the fund (the Plan) pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the Rule). The Rule provides in substance that a mutual fund may not engage directly or indirectly in financing any activity that is primarily intended to result in the sale of shares of a fund except pursuant to a plan approved on behalf of the fund under the Rule. The Plan, as approved by the Trustees, allows the fund and FMR to incur certain expenses that might be considered to constitute indirect payment by the fund of distribution expenses. Under the Plan, if the payment of management fees by the fund to FMR is deemed to be indirect financing by the fund of the distribution of its shares, such payment is authorized by the Plan. The Plan also specifically recognizes that FMR, either directly or through FDC, may use its management fee revenue, past profits, or other resources, without limitation, to pay promotional and administrative expenses in connection with the offer and sale of shares of the fund. In addition, the Plan provides that FMR may use its resources, including its management fee revenues, to make payments to third parties that assist in selling shares of the fund, or to third parties, including banks, that render shareholder support services. No third party payments were made in fiscal 1995. Prior to approving the Plan, the Trustees carefully considered all pertinent factors relating to the implementation of the Plan, and have determined that there is a reasonable likelihood that the Plan will benefit the the fund and its shareholders. In particular, the Trustees noted that the Plan does not authorize payments by the fund other than those made to FMR under its management contract with the fund. To the extent that the Plan gives FMR and FDC greater flexibility in connection with the distribution of shares of the fund, additional sales of fund shares may result. Furthermore, certain shareholder support services may be provided more effectively under the Plan by local entities with whom shareholders have other relationships. The Plan was approved by FMR as the then sole shareholder of the fund on April 22, 1993. The Glass-Steagall Act generally prohibits federally and state chartered or supervised banks from engaging in the business of underwriting, selling, or distributing securities. Although the scope of this prohibition under the Glass-Steagall Act has not been clearly defined by the courts or appropriate regulatory agencies, FDC believes that the Glass-Steagall Act should not preclude a bank from performing shareholder support services, or servicing and recordkeeping functions. FDC intends to engage banks only to perform such functions. However, changes in federal or state statutes and regulations pertaining to the permissible activities of banks and their affiliates or subsidiaries, as well as further judicial or administrative decisions or interpretations, could prevent a bank from continuing to perform all or a part of the contemplated services. If a bank were prohibited from so acting, the Trustees would consider what actions, if any, would be necessary to continue to provide efficient and effective shareholder services. In such event, changes in the operation of the fund might occur, including possible termination of any automatic investment or redemption or other services then provided by the bank. It is not expected that shareholders would suffer any adverse financial consequences as a result of any of these occurrences. In addition, state securities laws on this issue may differ from the interpretations of federal law expressed herein, and banks and financial institutions may be required to register as dealers pursuant to state law. The fund may execute portfolio transactions with, and purchase securities issued by, depository institutions that receive payments under the Plan. No preference for the instruments of such depository institutions will be shown in the selection of investments. CONTRACTS WITH FMR AFFILIATES FSC is transfer, dividend disbursing, and shareholder servicing agent for the fund. FSC receives annual account fees and asset-based fees for each retail account and certain institutional accounts based on account size. In addition, the fees for retail accounts are subject to increase based on postal rate changes. With respect to certain institutional retirement accounts, FSC receives asset-based fees only. The asset-based fees are subject to adjustment if the year-to-date total return of the Standard & Poor's Composite Index of 500 Stocks is greater than positive or negative 15%. FSC also collects small account fees from certain accounts with balances of less than $2,500. FSC pays out-of-pocket expenses associated with providing transfer agent services. In addition, FSC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. FSC also performs the calculations necessary to determine the fund's net asset value per share and dividends, and maintains the fund's accounting records. The annual fee rates for these pricing and bookkeeping services are based on the fund's average net assets, specifically, .06% for the first $500 million of average net assets and .03% for average net assets in excess of $500 million. The fee is limited to a minimum of $45,000 and a maximum of $750,000 per year. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC for fiscal 1995, 1994, and 1993 were $ 105,291 , $ 49,300 , and $ 11,610 , respectively. For fiscal 19 95 , 19 94 , and 19 93 , the fund did not incur any securities lending fees. The fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls for FDC to use all reasonable efforts, consistent with its other business, to secure purchasers for shares of the fund, which are continuously offered at net asset value. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FMR. DESCRIPTION OF THE TRUST TRUST ORGANIZATION. Fidelity Dividend Growth Fund is a fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. Currently, there are four funds of the trust: Fidelity OTC Portfolio, Fidelity Growth & Income Portfolio, Fidelity Blue Chip Growth Fund, and Fidelity Dividend Growth Fund. The Declaration of Trust permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to the trust or a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. The assets of the trust received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fund. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trust are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trust, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of the trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable for the obligations of the trust. The Declaration of Trust provides that the trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the trust or the Trustees include a provision limiting the obligations created thereby to the trust and its assets. The Declaration of Trust provides for indemnification out of each fund's property of any shareholder held personally liable for the obligations of the fund. The Declaration of Trust also provides that each fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the fund and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which a fund itself would be unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is remote. The Declaration of Trust further provides that the Trustees, if they have exercised reasonable care, will not be liable for any neglect or wrongdoing, but nothing in the Declaration of Trust protects Trustees against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. VOTING RIGHTS. Each fund's capital consists of shares of beneficial interest. As a shareholder, you receive one vote for each dollar value of net asset value you own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and nonassessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of the trust or a fund may, as set forth in the Declaration of Trust, call meetings of the trust or a fund for any purpose related to the trust or fund, as the case may be, including, in the case of a meeting of the entire trust, the purpose of voting on removal of one or more Trustees. The trust or any fund may be terminated upon the sale of its assets to another open-end management investment company, or upon liquidation and distribution of its assets, if approved by vote of the holders of a majority of the trust or the fund, as determined by the current value of each shareholder's investment in the fund or trust. If not so terminated, the trust and its funds will continue indefinitely. Each fund may invest all of its assets in another investment company. CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts, is custodian of the assets of the fund. The custodian is responsible for the safekeeping of a fund's assets and the appointment of the subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies of a fund or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Morgan Guaranty Trust Company of New York, The Bank of New York, and Chemical Bank, each headquartered in New York, also may serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the Board of Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds advised by FMR. The Boston branch of the fund's custodian leases its office space from an affiliate of FMR at a lease payment which, when entered into, was consistent with prevailing market rates. Transactions that have occurred to date include mortgages and personal and general business loans. In the judgment of FMR, the terms and conditions of those transactions were not influenced by existing or potential custodial or other fund relationships. AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, serves as the trust's independent accountant. The auditor examines financial statements for the fund and provides other audit, tax, and related services. FINANCIAL STATEMENTS The fund's financial statements and financial highlights for the fiscal year ended July 31, 1995 are included in the fund's Annual Report, which is a separate report supplied with this Statement of Additional Information. The fund's financial statements and financial highlights are incorporated herein by reference. APPENDIX DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS: AAA - Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge d ." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. AA - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high - grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long - term risks appear somewhat larger than the Aaa securities. A - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper - medium - grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. BAA - Bonds which are rated Baa are considered as medium - grade obligations, ( i.e., they are neither highly protected nor poorly secured ) . Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. BA - Bonds which are rated Ba are judged to have speculative elements ; t heir future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B - Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. CAA - Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. CA - Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings. C - Bonds which are rated C are the lowest - rated class of bonds and issue s so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating classification from Aa through B in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category. DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS: AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's to a debt obligation. Capacity to pay interest and repay principal is extremely strong. AA - Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the higher-rated issues only in small degree. A - Debt rated A has a strong capacity to pay interest and repay principal, although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories . BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher-rated categories. BB - Debt rate BB has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB- rating. B - Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB - rating. CCC - Debt rated CCC has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating. CC - Debt rated CC is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC debt rating. C - The rating C is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC- debt rating. The C rating may be used to cover a situation where a bankruptcy petition has been filed but debt service payments are continued. CI - The rating CI is reserved for income bonds on which no interest is being paid. D - Debt rated D is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating will also be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. FIDELITY BLUE CHIP GROWTH FUND CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1................................... Cover Page ... 2a.................................. Expenses .. b, Contents; The Fund at a Glance; Who May Want to c................................ Invest 3a.................................. Financial Highlights .. * b................................... . c, Performance d................................ 4a Charter i................................. The Fund at a Glance; Investment Principles and ii............................... Risks Investment Principles and Risks b................................... . Who May Want to Invest; Investment Principles and c.................................... Risks 5a.................................. Charter .. b Cover Page; The Fund at a Glance; Charter; Doing i................................. Business with Fidelity Charter ii............................... Expenses; Breakdown of Expenses iii.............................. Charter c.................................... Charter; Breakdown of Expenses d................................... . Cover Page; Charter e.................................... Expenses f.................................... g Charter i.................................. * ii................................. 5A................................. Performance .. 6a Charter i................................. How to Buy Shares; How to Sell Shares; Transaction ii............................... Details; Exchange Restrictions Charter iii.............................. Charter b................................... Transaction Details; Exchange Restrictions c.................................... * d................................... . Doing Business with Fidelity; How to Buy Shares; e.................................... How to Sell Shares; Investor Services f, Dividends, Capital Gains, and Taxes g................................ 7a.................................. Cover Page; Charter .. Expenses; How to Buy Shares; Transaction Details b................................... . Sales Charge Reductions and Waivers c.................................... How to Buy Shares d................................... . * e................................... * f.................................... 8................................... How to Sell Shares; Investor Services; Transaction ... Details; Exchange Restrictions 9................................... * ...
* Not Applicable FIDELITY BLUE CHIP GROWTH FUND CROSS REFERENCE SHEET (continued) FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10.................................. Cover Page .. Cover Page 11.................................. . 12.................................. Description of the Trust .. 13a- c............................ Investment Policies and Limitations Portfolio Transactions d.................................. 14a- c............................ Trustees and Officers 15a, Trustees and Officers b.............................. Trustees and Officers c.................................. 16a FMR; Portfolio Transactions i............................... Trustees and Officers ii............................. Management Contract iii............................ Management Contract b................................. c, Contracts with FMR Affiliates d.............................. * e-g.............................. Description of the Trust h.................................. Contracts with FMR Affiliates i.................................. 17a-c............................. Portfolio Transactions .. * d,e............................... 18a................................ Description of the Trust .. * b.................................. 19a................................ Additional Purchase and Redemption Information .. Additional Purchase and Redemption Information; b.................................. Valuation of Portfolio Securities * c.................................. 20.................................. Distributions and Taxes .. 21a, Contracts with FMR Affiliates b.............................. c. * ................................ 22a................................ * .. Performance b.................................. 23.................................. Financial Statements ..
* Not Applicable Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how the fund invests and the services available to shareholders. To learn more about the fund and its investments, you can obtain a copy of the fund's most recent financial report and portfolio listing, or a copy of the Statement of Additional Information (S AI) d ated September 19, 1995. The S AI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, call Fidelity at 1-800-544-8888. Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, the Federal Reserve Board, or any other agency, and are subject to investment risk, including the possible loss of principal. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. BCF-pro-995 Blue Chip Growth is a growth fund. It seeks to increase the value of your investment over the long term by investing mainly in common stocks of well-known and established companies. FIDELITY BLUE CHIP GROWTH FUND PROSPECTUS SEPTEMBER 19, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS KEY FACTS THE FUND AT A GLANCE WHO MAY WANT TO INVEST EXPENSES The fund's sales charge (load) and its yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of the fund's financial data. PERFORMANCE How the fund has done over time. THE FUND IN DETAIL 9 CHARTER How the fund is organized. INVESTMENT PRINCIPLES AND RISKS The fund's overall approach to investing. 13 BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY TYPES OF ACCOUNTS Different ways to set up your account, including tax-sheltered retirement plans. HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, ACCOUNT POLICIES AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS SALES CHARGE REDUCTIONS AND WAIVERS KEY FACTS THE FUND AT A GLANCE GOAL: Long-term growth of capital. As with any mutual fund, there is no assurance that the fund will achieve its goal. STRATEGY: Invests mainly in common stocks of well-known and established companies. MANAGEMENT: Fidelity Management & Research Company (FMR) is the management arm of Fidelity Investments, which was established in 1946 and is now America's largest mutual fund manager. Foreign affiliates of FMR may help choose investments for the fund. SIZE: As of July 31, 1995, the fu nd h ad over $6.4 billion in ass ets. WHO MAY WANT TO INVEST The fund may be appropriate for investors who are willing to ride out stock market fluctuations in pursuit of potentially high long-term returns. The fund is designed for those who are looking for an investment that focuses on well-known, established (blue chip) companies. The value of the fund's investments will vary from day to day, and generally reflect market conditions, interest rates, and other company, political, or economic news. In the short-term, stock prices can fluctuate dramatically in response to these factors. Over time, however, stocks have shown greater growth potential than other types of securities. When you sell your shares, they may be worth more or less than what you paid for them. By itself, the f und does not constitute a balanced investment plan. THE SPECTRUM OF FIDELITY FUNDS Broad categories of Fidelity funds are presented here in order of ascending risk. Generally, investors seeking to maximize return must assume greater risk. Blue Chip Growth is in the GROWTH category. (solid bullet) MONEY MARKET Seeks income and stability by investing in high-quality, short-term investments. (solid bullet) INCOME Seeks income by investing in bonds. (solid bullet) GROWTH AND INCOME Seeks long-term growth and income by investing in stocks and bonds. (right arrow) GROWTH Seeks long-term growth by investing mainly in stocks. (checkmark) EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell, or hold shares of a fund. See pages and - for an explanation of how and when these charges apply. Lower sales charges may be available for accounts over $250,000. Maximum sales charge on purchases (as a % of offering price) 3.00% Maximum sales charge on reinvested distributions None Deferred sales charge on redemptions None Exchange fee None Annual account maintenance fee (for accounts under $2500) $12.00 ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund pays a management fee that varies based on its performance. It also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. The fund's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see page ). The following are projections based on historical expenses , and are calculated as a percentage of average net assets. A portion of the brokerage commissions that the fund paid was used to reduce fund expenses. Without this reduction, the total fund operating expenses would have been 1.05 %. Management fee .69 % 12b-1 fee None Other expenses .33 % Total fund operating expenses 1.02 % EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5% and that its operating expenses are exactly as just described. For every $1,000 you invested, here's how much you would pay in total expenses if you close your account after the number of years indicated: After 1 year $ 40 After 3 years $ 61 After 5 years $ 85 After 10 years $ 15 1 These examples illustrate the effect of expenses, but are not meant to suggest actual or expected costs or returns, all of which may vary. UNDERSTANDING EXPENSES Operating a mutual fund involves a variety of expenses for portfolio management, shareholder statements, tax reporting, and other services. As an investor, you pay some of these costs directly (for example, the fund's 3% sales charge). Others are paid from the fund's assets; the effect of these other expenses is already factored into any quoted share price or return. (checkmark) FINANCIAL HIGHLIGHTS The table that follows is included in the fund's Annual Report and has been audited by Coopers & Lybrand L.L.P., independent accountants. Their report on the financial statements and financial highlights is included in the Annual Report. The financial statements and financial highlights are incorporated by reference into (are legally a part of) the fund's Statement of Additional Information. SELECTED PER-SHARE DATA
20.Years ended July 31 1988 A 1989 1990 1991 1992 1993 1994 H 1995 21.Net asset value, $ 10.00 $ 10.47 $ 13.56 $ 15.33 $ 18.94 $ 22.02 $ 25.72 $ 25.14 beginning of period 22.Income from Investment Operations 23. Net investment .01 .10 .12 .12 .09 .10 .12 .07 G income 24. Net realized and .46 3.02 1.94 3.64 3.07 4.36 3.43 7.96 unrealized gain (loss) on investments 25. Total from investment .47 3.12 2.06 3.76 3.16 4.46 3.55 8.03 operations 26.Less Distributions 27. From net investment -- (.03) (.12) (.15) (.08) (.14) (.01) -- income 28. From net realized -- -- (.17) -- -- (.62) (4.12) (.58) gain 29. Total distributions -- (.03) (.29) (.15) (.08) (.76) (4.13) (.58) 30.Net asset value, end $ 10.47 $ 13.56 $ 15.33 $ 18.94 $ 22.02 $ 25.72 $ 25.14 $ 32.59 of period 31.Total return B,C 4.70% 29.89 15.43 24.86 16.73 20.86 14.95% 32.64% % % % % % 32.RATIOS AND SUPPLEMENTAL DATA 33.Net assets, end of $ 41 $ 54 $ 131 $ 219 $ 476 $ 788 $ 2,229 $ 6,421 period (In millions) 34.Ratio of expenses to 2.74% 1.56% 1.26% 1.26% 1.27% 1.25% 1.22% F 1.02% F average net assets D,E 35.Ratio of expenses to 2.74% 1.56% 1.26% 1.26% 1.27% 1.25% 1.27% F 1.05% F average net assets D,E before expense reductions 36.Ratio of net .14% D .97% 1.14% .80% .55% .46% .21% .25% investment income to average net assets 37.Portfolio turnover rate 40% D 83% 68% 99% 71% 319% 271% 182%
A FROM DECEMBER 31, 1987 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1988. B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D ANNUALIZED E DURING THE PERIOD ENDED JULY 31, 1988, EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN ACCORDANCE WITH A STATE EXPENSE LIMITATION REGULATION. EXPENSES BORNE BY THE INVESTMENT ADVISER DURING THE PERIOD AMOUNTED TO $.02 PER SHARE. F FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES. G NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. H EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES. PERFORMANCE Mutual fund performance is commonly measured as TOTAL RETURN. The total returns that follow are based on historical fund results and do not reflect the effect of taxes. The fund's fiscal year runs from August 1 through July 31. The tables below show the fund's performance over past fiscal years compared to two measures: investing in a broad selection of stocks (S&P 500), and not investing at all (inflation, or CPI). To help you compare this fund to other funds, the chart on page displays calendar-year performance. AVERAGE ANNUAL TOTAL RETURNS Fiscal periods Pas Past Life ended t 1 5 of July 31, 1995 yea year fund r s A Blue Chip 32.64 21.85 20.88 Growth % % % Blue Chip 28.66 21.11 20.39 Growth % % % (load adj.B) S&P 500 26.11 12.90 14.99 % % % Consumer 2.76 3.18 3.74 Price % % % Index CUMULATIVE TOTAL RETURNS Fiscal periods Pas Past Life ended t 1 5 of July 31, 1995 yea year fund r s A Blue Chip 32.64 168.5 321.59 Growth % 6 % % Blue Chip 28.66 160.5 308.94 Growth % 1 % % (load adj.B) S&P 500 26.11 83.44 188.56 % % % Consumer 2.76 16.95 32.15 Price % % % Index A FROM DECEMBER 31, 1987 B LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING THE FUND'S 3% SALES CH ARGE. UNDERSTANDING PERFORMANCE Because this fund invests in stocks, its performance is related to that of the overall stock market. Historically, stock market performance has been characterized by volatility in the short run and growth in the long run. You can see these two characteristics reflected in the fund's performance; the year-by-year total returns on page show that short-term returns can vary widely, while the returns at left show long-term growth. (checkmark) EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the fund on December 31, 1987. From that date through July 31, 1995, the fund's total return, including the effect of paying the 3% sales charge, was 308.94%. That $10,000 would have grown to $ 40,894 (the initial investment plus 308.94 % of $10,000). $10,000 OVER LIFE OF FUND Fiscal years 1987 1991 1995 Row: 1, Col: 1, Value: 9700.0 Row: 2, Col: 1, Value: 9767.9 Row: 3, Col: 1, Value: 10185.0 Row: 4, Col: 1, Value: 9816.4 Row: 5, Col: 1, Value: 9797.0 Row: 6, Col: 1, Value: 9797.0 Row: 7, Col: 1, Value: 10359.6 Row: 8, Col: 1, Value: 10155.9 Row: 9, Col: 1, Value: 9729.1 Row: 10, Col: 1, Value: 10165.6 Row: 11, Col: 1, Value: 10146.2 Row: 12, Col: 1, Value: 9961.9 Row: 13, Col: 1, Value: 10272.95 Row: 14, Col: 1, Value: 11031.75 Row: 15, Col: 1, Value: 10700.99 Row: 16, Col: 1, Value: 10953.92 Row: 17, Col: 1, Value: 11702.99 Row: 18, Col: 1, Value: 12461.79 Row: 19, Col: 1, Value: 12024.02 Row: 20, Col: 1, Value: 13191.4 Row: 21, Col: 1, Value: 13512.43 Row: 22, Col: 1, Value: 13846.77 Row: 23, Col: 1, Value: 13640.69 Row: 24, Col: 1, Value: 13876.21 Row: 25, Col: 1, Value: 13995.4 Row: 26, Col: 1, Value: 12823.32 Row: 27, Col: 1, Value: 13170.98 Row: 28, Col: 1, Value: 13826.54 Row: 29, Col: 1, Value: 13697.42 Row: 30, Col: 1, Value: 15246.94 Row: 31, Col: 1, Value: 15594.59 Row: 32, Col: 1, Value: 15227.08 Row: 33, Col: 1, Value: 13915.94 Row: 34, Col: 1, Value: 13258.58 Row: 35, Col: 1, Value: 13178.88 Row: 36, Col: 1, Value: 14015.64 Row: 37, Col: 1, Value: 14485.44 Row: 38, Col: 1, Value: 15619.78 Row: 39, Col: 1, Value: 16824.39 Row: 40, Col: 1, Value: 17667.62 Row: 41, Col: 1, Value: 17476.89 Row: 42, Col: 1, Value: 18400.43 Row: 43, Col: 1, Value: 17476.89 Row: 44, Col: 1, Value: 19012.77 Row: 45, Col: 1, Value: 19845.96 Row: 46, Col: 1, Value: 19534.98 Row: 47, Col: 1, Value: 19926.88 Row: 48, Col: 1, Value: 19504.83 Row: 49, Col: 1, Value: 22424.76 Row: 50, Col: 1, Value: 21719.26 Row: 51, Col: 1, Value: 21820.04 Row: 52, Col: 1, Value: 21225.41 Row: 53, Col: 1, Value: 21507.61 Row: 54, Col: 1, Value: 21951.06 Row: 55, Col: 1, Value: 21316.12 Row: 56, Col: 1, Value: 22192.95 Row: 57, Col: 1, Value: 21961.14 Row: 58, Col: 1, Value: 22252.76 Row: 59, Col: 1, Value: 22561.69 Row: 60, Col: 1, Value: 23745.89 Row: 61, Col: 1, Value: 23808.73 Row: 62, Col: 1, Value: 23860.87 Row: 63, Col: 1, Value: 23704.44 Row: 64, Col: 1, Value: 24851.6 Row: 65, Col: 1, Value: 25247.89 Row: 66, Col: 1, Value: 26572.33 Row: 67, Col: 1, Value: 26822.62 Row: 68, Col: 1, Value: 26822.62 Row: 69, Col: 1, Value: 28491.21 Row: 70, Col: 1, Value: 29084.11 Row: 71, Col: 1, Value: 29409.21 Row: 72, Col: 1, Value: 28515.2 Row: 73, Col: 1, Value: 29642.54 Row: 74, Col: 1, Value: 30819.9 Row: 75, Col: 1, Value: 30844.43 Row: 76, Col: 1, Value: 29875.56 Row: 77, Col: 1, Value: 30758.58 Row: 78, Col: 1, Value: 31151.04 Row: 79, Col: 1, Value: 30071.79 Row: 80, Col: 1, Value: 30832.17 Row: 81, Col: 1, Value: 32500.1 Row: 82, Col: 1, Value: 32403.56 Row: 83, Col: 1, Value: 33899.49 Row: 84, Col: 1, Value: 32131.58 Row: 85, Col: 1, Value: 32562.32 Row: 86, Col: 1, Value: 31746.69 Row: 87, Col: 1, Value: 32800.73 Row: 88, Col: 1, Value: 34181.02 Row: 89, Col: 1, Value: 35448.38 Row: 90, Col: 1, Value: 36238.91 Row: 91, Col: 1, Value: 38246.61 Row: 92, Col: 1, Value: 40894.25999999999 $ $40,894 EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in the fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. S&P 500(registered trademark) is the Standard & Poor's Composite Index of 500 S tock s, a widely recognized, unmanaged index of common stock prices. The S&P 500 figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated by the U.S. government. THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average, which currently reflects the performance of over 481 mutual funds with similar objectives. This average, which assumes reinvestment of distributions, is published by Lipper Analytical Services, Inc. YEAR-BY-YEAR TOTAL RETURNS Calendar years 1988 1989 1990 1991 1992 1993 1994 Blue Chip Growth 5.91 % 36.24 % 3.50 % 54.81 % 6.17 % 24.50 % 9.85 % Competitive funds average 14.68% 26.80% -4.53% 36.60% 7.96 % 10.57% -2.17% Percentage (%) Row: 1, Col: 1, Value: 0.0 Row: 1, Col: 2, Value: 0.0 Row: 2, Col: 1, Value: 0.0 Row: 2, Col: 2, Value: 0.0 Row: 3, Col: 1, Value: 0.0 Row: 3, Col: 2, Value: 0.0 Row: 4, Col: 1, Value: 5.91 Row: 4, Col: 2, Value: 14.68 Row: 5, Col: 1, Value: 36.24 Row: 5, Col: 2, Value: 26.8 Row: 6, Col: 1, Value: 3.5 Row: 6, Col: 2, Value: -4.53 Row: 7, Col: 1, Value: 54.81 Row: 7, Col: 2, Value: 36.6 Row: 8, Col: 1, Value: 6.17 Row: 8, Col: 2, Value: 7.96 Row: 9, Col: 1, Value: 24.5 Row: 9, Col: 2, Value: 10.57 Row: 10, Col: 1, Value: 9.850000000000001 Row: 10, Col: 2, Value: -2.17 (large solid box) Blue Chip Growth (large hollow box) Competitive funds average Other illustrations of fund performance may show moving averages over specified periods. The fund's recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance or a free annual report, call 1-800-544-8888. TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. THE FUND IN DETAIL CHARTER BLUE CHIP GROWTH IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. In technical terms, the fund is currently a diversified fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. Fidelity will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. The number of votes you are entitled to is based upon the dollar value of your investment. FMR AND ITS AFFILIATES The fund is managed by FMR, which chooses the fund's investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London, England, and Fidelity Management & Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign investments. Michael Gordon is manager and Vice President of Blue Chip Growth, which he has managed since January 1993. Previously, he managed Select Chemicals and Select Biotechnology and assisted on Magellan. Mr. Gordon joined Fidelity in 1987. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Service Co. (FSC) performs transfer agent servicing functions for the fund. FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far East. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company; therefore, the Johnson family may be deemed under the 1940 Act to form a controlling group with respect to FMR Corp. F MR may use its broker-dealer affiliates and other firms that sell fund shares to carry out the fund's transactions, provided that the fund receives brokerage services and commission rates comparable to those of other broker-dealers. INVESTMENT PRINCIPLES AND RISKS THE FUND SEEKS GROWTH OF CAPITAL over the long term by investing primarily in a diversified portfolio of common stocks of well-known and established companies. FMR normally invests at least 65% of the fund's total assets in the common stock of blue chip companies. F MR defines blue chip compani es to in clude those with a market capitalization of at least $200 million, if the company's stock is included in the S&P 500 index or the Dow Jones Industrial Average, or $1 billion if not included in either index. Blue chip companies typically have a large number of publicly held shares and a high trading volume, resulting in a high degree of liquidity. These tend to be quality companies with strong management organizations. Companies that demonstrate the potential to become blue chip companies in the future may also be selected by FMR for the fund's investments. When choosing the fund's domestic or foreign investments, FMR seeks companies that it expects will demonstrate greater long-term earnings growth than the average company included in the S&P 500. This method of selecting stocks is based on the belief that growth in a company's earnings will eventually translate into growth in the price of its stock. FMR looks at strong market sectors and then identifies those companies that offer the most attractive values based on earnings prospects. The fund's sector emphasis may shift based on changes in the sectors' earnings outlook . The value of the fund's domestic and foreign investments varies in response to many factors. Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. Investments in foreign securities may involve risks in addition to those of U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. F MR may use various investment techniques to hedge a portion of the fund's risks, but there is no guarantee that these strategies will work as FMR intends. Also, as a mutual fund, the fund seeks to spread investment risk by diversifying its holdings among many companies and industries. Of course, when you sell your shares of the fund, they may be worth more or less than what you paid for them. FMR normally invests the fund's assets according to its investment strategy. The fund also reserves the right to invest without limitation in preferred stocks and investment-grade debt instruments for temporary, defensive purposes. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which the fund may invest, strategies FMR may employ in pursuit of the fund's investment objective, and a summary of related risks. Any restrictions listed supplement those discussed earlier in this section. A complete listing of the fund's limitations and more detailed information about the fund's investments are contained in the fund's SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with the fund's investment objective and policies and that doing so will help the fund achieve its goal. Current holdings and recent investment strategies are described in the fund's financial reports which are sent to shareholders twice a year. For a free SAI or financial report, call 1-800-544-8888. EQUITY SECURITIES may include common stocks, preferred stocks, convertible securities, and warrants. Common stocks, the most familiar type, represent an equity (ownership) interest in a corporation. Although equity securities have a history of long-term growth in value, their prices fluctuate based on changes in a company's financial condition and on overall market and economic conditions. Smaller companies are especially sensitive to these factors. RESTRICTIONS: With respect to 75% of total assets, the fund may not own more than 10% of the outstanding voting securities of a single issuer. DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest, and must repay the amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values. I n general, bond prices rise when interest rates fall, and vice versa. Debt securities, loans, and other direct debt have varying degrees of quality and varying levels of sensitivity to changes in interest rates. Longer-term bonds are generally more sensitive to interest rate changes than short-term bonds. Investment-grade debt securities are medium- and high-quality securities. Some, however, may possess speculative characteristics and may be more sensitive to economic changes and to changes in the financial condition of issuers. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may in volve additional risks and considerati ons. These include risks relating to political or economic conditions in fo re ign countries, fluctuations in foreign currencies, withholding or other taxes, operational risks, increased regulatory burdens, and the potentially less stringent investor protection and disclosure standards of foreign markets. Additio nally, governmental issuers of foreign securities may be unwilling to repay principal and interest when due, and may require that the conditions for payment be renegotiated. All of these factors can ma ke foreign investments, especially those in developing countries, more volatile. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to increase or decrease its exposure to changing security prices, interest rates, currency exchange rates, commodity prices, or other factors that affect security values. These techniques may involve derivative transactions such as buying and selling options and futures contracts, entering into currency exchange contracts or swap agreements , and purchasing indexed securities. FMR can use these practices to adjust the risk and return characteristics of the fund's portfolio of investments. If FMR judges market conditions incorrectly or employs a strategy that does not correlate well with the fund's investments, these techniques could result in a loss, regardless of whether the intent was to reduce risk or increase return. These techniques may increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risk assumed. In addition, these techniques could result in a loss if the counterparty to the transaction does not perform as promised. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale o f some illiquid securities and some other securities may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to the fund. RESTRICTIONS: The fund may not purchase a security if, as a result, more than 10% of its assets would be invested in illiquid securities. OTHER INSTRUMENTS may include securities of closed-end investment companies and real estate-related investments. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry. A fund that is not diversified may be more sensitive to changes in the market value of a single issuer or industry. RESTRICTIONS: With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer. The fund may not invest more than 25% of its total assets in any one industry. These limitations do not apply to U.S. government securities. BORROWING. The fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements. If the fund borrows money, its share price may be subject to greater fluctuation until the borrowing is paid off. If the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage. RESTRICTIONS: The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. LENDING. Lending securities to broker-dealers and institutions, including Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning income. This practice could result in a loss or a delay in recovering the fund's securities. The fund may also lend money to other funds advised by FMR. RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraph restates all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraph, can be changed without shareholder approval. The fund seeks growth of capital over the long term by investing primarily in a diversified portfolio of common stocks of well-known and established companies. With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer and may not own more than 10% of the outstanding voting securities of a single issuer. The fund may not invest more than 25% of its total assets in any one industry. The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. Loans, in the aggregate, may not exceed 33 of the fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the fund pays fees related to its daily operations. Expenses paid out of the fund's assets are reflected in its share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. The fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to affiliates who provide assistance with these services. The fund also pays OTHER EXPENSES, which are explained on page . FMR may, from time to time, agree to reimburse the fund for management fees and other expenses above a specified limit. FMR retains the ability to be repaid by the fund if expenses fall below the specified limit prior to the end of the fiscal year. Reimbursement arrangements, which may be terminated at any time without notice, can decrease the fund's expenses and boost its performance. MANAGEMENT FEE The management fee is calculated and paid to FMR every month. The amount of the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE ADJUSTMENT. The performance adjustment either increases or decreases the management fee, depending on how well the fund has performed relative to the S&P 500. Manage = Ba +/- Performa ment sic nce fee fee adjustme nt THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate to an individual fund fee rate, and multiplying the result by the fund's average net assets. The group fee rate is based on the average net assets of all the mutual funds advised by FMR. This rate cannot rise above .52%, and it drops as total assets under management increase. For July 1995 , the group fee rate was .31 %. The individual fund fee rate is .30%. The basic fee rate for fiscal 1995 was .62%. THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing the fund's performance to that of the S&P 500 over the most recent 36-month period. The difference is translated into a dollar amount that is added to or subtracted from the basic fee. The maximum annualized performance adjustment rate is ".20%. The total management fee rate for fiscal 1 995 was .69% . UNDERSTANDING THE MANAGEMENT FEE The basic fee FMR receives is designed to be responsive to changes in FMR's total assets under management. Building this variable into the fee calculation assures shareholders that they will pay a lower rate as FMR's assets under management increase. Another variable, the performance adjustment, rewards FMR when the fund outperforms the S&P 500 (an established index of stock market performance) and reduces FMR's fee when the fund underperforms this index. (checkmark) FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These sub-advisers provide FMR with investment research and advice on issuers based outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of the costs of providing these services. The sub-advisers may also provide investment management services. In return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its management fee rate with respect to the fund's investments that the sub-adviser manages on a discretionary basis. OTHER EXPENSES While the management fee is a significant component of the fund's annual operating costs, the fund has other expenses as well. The fund contracts with FSC to perform many transaction and accounting functions. These services include processing shareholder transactions, valuing the fund's investments, and handling securities loans. In fiscal 1995, th e fund paid FSC fees equal to .32% of its average net assets. The fund also pays other expenses, such as legal, audit, and custodian fees; proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. A broker-dealer may use a portion of the commissions paid by the fund to reduce the fund's custodian or transfer agent fees. The fund's portfolio turnover rate for fiscal 1 995 was 182%. This rate varies from year to year. High turnover rates increase transaction costs and may increase taxable capital gains. FMR considers these effects when evaluating the anticipated benefits of short-term investing. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY Fidelity Investments was established in 1946 to manage one of America's first mutual funds. Today, Fidelity is the largest mutual fund company in the country, and is known as an innovative provider of high-quality financial services to individuals and institutions. In addition to its mutual fund business, the company operates one of America's leading discount brokerage firms, FBSI . Fidelity is also a leader in providing tax-sheltered retirement plans for individuals investing on their own or through their employer. Fidelity is committed to providing investors with practical information to make investment decisions. Based in Boston, Fidelity provides customers with complete service 24 hours a day, 365 days a year, through a network of telephone service centers around the country. To reach Fidelity for general information, call these numbers: (small solid bullet) For mutual funds, 1-800-544-8888 (small solid bullet) For brokerage, 1-800-544-7272 If you would prefer to speak with a representative in person, Fidelity has over 80 walk-in Investor Centers across the country. TYPES OF ACCOUNTS You may set up an account directly in the fund or, if you own or intend to purchase individual securities as part of your total investment portfolio, you may consider investing in the fund through a brokerage account. If you are investing through FBSI or another financial institution or investment professional, refer to its program materials for any special provisions regarding your investment in the fund. The different ways to set up (register) your account with Fidelity are listed at right. The account guidelines that follow may not apply to certain retirement accounts. If your employer offers the fund through a retirement program, contact your employer for more information. Otherwise, call Fidelity directly. FIDELITY FACTS Fidelity offers the broadest selection of mutual funds in the world. (solid bullet) Number of Fidelity mutual funds: over 210 (solid bullet) Assets in Fidelity mutual funds: over $320 billion (solid bullet) Number of shareholder accounts: over 21 million (solid bullet) Number of investment analysts and portfolio managers: over 200 (checkmark) WAYS TO SET UP YOUR ACCOUNT INDIVIDUAL OR JOINT TENANT FOR YOUR GENERAL INVESTMENT NEEDS Individual accounts are owned by one person. Joint accounts can have two or more owners (tenants). RETIREMENT TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES Retirement plans allow individuals to shelter investment income and capital gains from current taxes. In addition, contributions to these accounts may be tax deductible. Retirement accounts require special applications and typically have lower minimums. (solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under 70 with earned income to invest up to $2,000 per tax year. Individuals can also invest in a spouse's IRA if the spouse has earned income of less than $250. (solid bullet) ROLLOVER IRAS retain special tax advantages for certain distributions from employer-sponsored retirement plans. (solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow self-employed individuals or small business owners (and their employees) to make tax-deductible contributions for themselves and any eligible employees up to $30,000 per year. (solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or those with self-employed income (and their eligible employees) with many of the same advantages as a Keogh, but with fewer administrative requirements. (solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt institutions, including schools, hospitals, and other charitable organizations. (solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to contribute a percentage of their wages on a tax-deferred basis. These accounts need to be established by the trustee of the plan. GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS These custodial accounts provide a way to give money to a child and obtain tax benefits. An individual can give up to $10,000 a year per child without paying federal gift tax. Depending on state laws, you can set up a custodial account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). TRUST FOR MONEY BEING INVESTED BY A TRUST The trust must be established before an account can be opened. BUSINESS OR ORGANIZATION FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER GROUPS Requires a special application. HOW TO BUY SHARES ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR THE FUND: the offering price and the net asset value (NAV). The offering price includes the 3% sales charge, which you pay when you buy shares, unless you qualify for a reduction or waiver as described on page . When you buy shares at the offering price, Fidelity deducts 3% and invests the rest at the NAV. Shares are purchased at the next share price calculated after your investment is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. IF YOU ARE NEW TO FIDELITY, complete and sign an account application and mail it along with your check. You may also open your account in person or by wire as described on page . If there is no application accompanying this prospectus, call 1-800-544-8888. IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can: (small solid bullet) Mail in an application with a check, or (small solid bullet) Open your account by exchanging from another Fidelity fund. IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an IRA, for the first time, you will need a special application. Retirement investing also involves its own investment procedures. Call 1-800-544-8888 for more information and a retirement application. If you buy shares by check or Fidelity Money Line(registered trademark), and then sell those shares by any method other than by exchange to another Fidelity fund, the payment may be delayed for up to seven business days to ensure that your previous investment has cleared. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $2,500 For Fidelity retirement accounts $500 TO ADD TO AN ACCOUNT $250 For Fidelity retirement accounts $250 Through automatic investment plans $100 MINIMUM BALANCE $1,000 For Fidelity retirement accounts $500 These minimums may vary for investments through Fidelity Portfolio Advisory Services or a Fidelity College Savings Plan account in the fund. Refer to the product materials for details. UNDERSTANDING SHARE PRICE Let's say you invest $2,500 at an offering price of $10. Of the $10 offering price, 3% ($.30) is the sales charge, and 97% ($9.70) represents the NAV. The value of your initial investment will be $2,425 (250 shares worth $9.70 each), and you will have paid a sales charge of $75. (checkmark) Row: 1, Col: 1, Value: 25.0 Row: 1, Col: 2, Value: 75.0 Row: 1, Col: 3, Value: 75.0 Row: 1, Col: 4, Value: 75.0 Row: 1, Col: 5, Value: 75.0 Row: 1, Col: 6, Value: 75.0 Row: 1, Col: 7, Value: 75.0 Row: 1, Col: 8, Value: 75.0 Row: 1, Col: 9, Value: 75.0 Row: 1, Col: 10, Value: 75.0 Row: 1, Col: 11, Value: 75.0 Row: 1, Col: 12, Value: 75.0 Row: 1, Col: 13, Value: 75.0 Row: 1, Col: 14, Value: 75.0 Row: 1, Col: 15, Value: 75.0 Row: 1, Col: 16, Value: 75.0 Row: 1, Col: 17, Value: 75.0 Row: 1, Col: 18, Value: 75.0 Row: 1, Col: 19, Value: 75.0 Row: 1, Col: 20, Value: 75.0 Row: 1, Col: 21, Value: 75.0 Row: 1, Col: 22, Value: 75.0 Row: 1, Col: 23, Value: 75.0 Row: 1, Col: 24, Value: 75.0 Row: 1, Col: 25, Value: 75.0 Row: 1, Col: 26, Value: 75.0 Row: 1, Col: 27, Value: 75.0 Row: 1, Col: 28, Value: 75.0 Row: 1, Col: 29, Value: 75.0 Row: 1, Col: 30, Value: 75.0 Row: 1, Col: 31, Value: 75.0 Row: 1, Col: 32, Value: 75.0 Row: 1, Col: 33, Value: 75.0 Row: 1, Col: 34, Value: 75.0 $2,500 Investment 3% sales charge = $75 Value of Investment = $2,425
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another Fidelity fund account Fidelity fund account with the same with the same registration, including registration, including name, address, and name, address, and taxpayer ID number. taxpayer ID number. (small solid bullet) Use Fidelity Money Line to transfer from your bank account. Call before your first use to verify that this service is in place on your account. Maximum Money Line: $50,000.
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check application. Make your payable to "Fidelity Blue check payable to Chip Growth Fund." "Fidelity Blue Chip Indicate your fund Growth Fund." Mail to account number on the address indicated your check and mail to on the application. the address printed on your account statement. (small solid bullet) Exchange by mail: call 1-800-544-6666 for instructions.
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a and check to a Fidelity Fidelity Investor Center. Investor Center. Call Call 1-800-544-9797 for 1-800-544-9797 for the the center nearest you. center nearest you.
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for set up your account retirement accounts. and to arrange a wire (small solid bullet) Wire to: transaction. Not Bankers Trust available for retirement Company, accounts. Bank Routing (small solid bullet) Wire within 24 hours to: #021001033, Bankers Trust Account #00163053. Company, Specify "Fidelity Blue Bank Routing Chip Growth Fund" and #021001033, include your account Account #00163053. number and your Specify "Fidelity Blue name. Chip Growth Fund" and include your new account number and your name.
Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic Account Builder. Sign up for this service when opening your account, or call 1-800-544-6666 to add it.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next share price calculated after your order is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods described on these two pages. TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made in writing, except for exchanges to other Fidelity funds, which can be requested by phone or in writing. Call 1-800-544-6666 for a retirement distribution form. IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth of shares in the account to keep it open ($500 for retirement accounts). TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign up for these services in advance. CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect you and Fidelity from fraud. Your request must be made in writing and include a signature guarantee if any of the following situations apply: (small solid bullet) You wish to redeem more than $100,000 worth of shares, (small solid bullet) Your account registration has changed within the last 30 days, (small solid bullet) The check is being mailed to a different address than the one on your account (record address), (small solid bullet) The check is being made payable to someone other than the account owner, or (small solid bullet) The redemption proceeds are being transferred to a Fidelity account with a different registration. You should be able to obtain a signature guarantee from a bank, broker (including Fidelity Investor Centers), dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. SELLING SHARES IN WRITING Write a "letter of instruction" with: (small solid bullet) Your name, (small solid bullet) The fund's name, (small solid bullet) Your fund account number, (small solid bullet) The dollar amount or number of shares to be redeemed, and (small solid bullet) Any other applicable requirements listed in the table at right. Unless otherwise instructed, Fidelity will send a check to the record address. Deliver your letter to a Fidelity Investor Center, or mail it to: Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 ACCOUNT TYPE SPECIAL REQUIREMENTS
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request: except retirement $100,000. (small solid bullet) For Money Line transfers to All account types your bank account; minimum: $10; maximum: $100,000. (small solid bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s), address, and taxpayer ID number. Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must Tenant, be signed by all persons Sole Proprietorship required to sign for , UGMA, UTMA transactions, exactly as their Retirement account names appear on the account. (small solid bullet) The account owner should Trust complete a retirement distribution form. Call 1-800-544-6666 to request one. Business or (small solid bullet) The trustee must sign the Organization letter indicating capacity as trustee. If the trustee's name is not in the account registration, provide a copy of the trust document certified Executor, within the last 60 days. Administrator, (small solid bullet) At least one person Conservator, authorized by corporate Guardian resolution to act on the account must sign the letter. (small solid bullet) Include a corporate resolution with corporate seal or a signature guarantee. (small solid bullet) Call 1-800-544-6666 for instructions. Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire except retirement feature before using it. To verify that it is in place, call 1-800-544-6666. Minimum wire: $5,000. (small solid bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be wired on the next business day.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days a year. Whenever you call, you can speak with someone equipped to provide the information or service you need. 24-HOUR SERVICE ACCOUNT ASSISTANCE 1-800-544-6666 ACCOUNT BALANCES 1-800-544-7544 ACCOUNT TRANSACTIONS 1-800-544-7777 PRODUCT INFORMATION 1-800-544-8888 QUOTES 1-800-544-8544 RETIREMENT ACCOUNT ASSISTANCE 1-800-544-4774 AUTOMATED SERVICE (checkmark) STATEMENTS AND REPORTS that Fidelity sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except reinvestments, that affects your account balance or your account registration) (small solid bullet) Account statements (quarterly) (small solid bullet) Financial reports (every six months) To reduce expenses, only one copy of most financial reports will be mailed to your household, even if you have more than one account in the fund. Call 1-800-544-6666 if you need copies of financial reports or historical account information. TRANSACTION SERVICES EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other Fidelity funds by telephone or in writing. The shares you exchange will carry credit for any sales charge you previously paid in connection with their purchase. Note that exchanges out of the fund are limited to four per calendar year, and that they may have tax consequences for you. For details on policies and restrictions governing exchanges, including circumstances under which a shareholder's exchange privilege may be sus pended or revoked, see page . SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your account. Because of the fund's sales charge, you may not want to set up a systematic withdrawal plan during a period when you are buying shares on a regular basis. FIDELITY MONEY LINE(registered trademark) enables you to transfer money by phone between your bank account and your fund account. Most transfers are complete within three business days of your call. REGULAR INVESTMENT PLANS One easy way to pursue your financial goals is to invest money regularly. Fidelity offers convenient services that let you transfer money into your fund account, or between fund accounts, automatically. While regular investment plans do not guarantee a profit and will not protect you against loss in a declining market, they can be an excellent way to invest for retirement, a home, educational expenses, and other long-term financial goals. Certain restrictions apply for retirement accounts. Call 1-800-544-6666 for more information. REGULAR INVESTMENT PLANS FIDELITY AUTOMATIC ACCOUNT BUILDERSM TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly or (small solid bullet) For a new account, complete the quarterly appropriate section on the fund application. (small solid bullet) For existing accounts, call 1-800-544-6666 for an application. (small solid bullet) To change the amount or frequency of your investment, call 1-800-544-6666 at least three business days prior to your next scheduled investment date.
DIRECT DEPOSIT TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Every pay (small solid bullet) Check the appropriate box on the fund period application, or call 1-800-544-6666 for an authorization form. (small solid bullet) Changes require a new authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after bimonthly, both accounts are opened. quarterly, or (small solid bullet) To change the amount or frequency of annually your investment, call 1-800-544-6666.
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES The fund distributes substantially all of its net income and capital gains to shareholders each year. Normally, dividends and capital gains are distributed in September and December . DISTRIBUTION OPTIONS When you open an account, specify on your application how you want to receive your distributions. If the option you prefer is not listed on the application, call 1-800-544-6666 for instructions. The fund offers four options: 5. REINVESTMENT OPTION. Your dividend and capital gain distributions will be automatically reinvested in additional shares of the fund. If you do not indicate a choice on your application, you will be assigned this option. 6. INCOME-EARNED OPTION. Your capital gain distributions will be automatically reinvested, but you will be sent a check for each dividend distribution. 7. CASH OPTION. You will be sent a check for your dividend and capital gain distributions. 8. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and capital gain distributions will be automatically invested in another identically registered Fidelity fund. FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested. When you are over 59 years old, you can receive distributions in cash. SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain distributions are not subject to the fund's 3% sales charge. Likewise, if you direct distributions to a fund with a 3% sales charge, you will not pay a sales charge on those purchases. When the fund deducts a distribution from its NAV, the reinvestment price is the fund's NAV at the close of business that day. Cash distribution checks will be mailed within seven days. UNDERSTANDING DISTRIBUTIONS As a fund shareholder, you are entitled to your share of the fund's net income and gains on its investments. The fund passes its earnings along to its investors as DISTRIBUTIONS. The fund earns dividends from stocks and interest from bond, money market, and other investments. These are passed along as DIVIDEND DISTRIBUTIONS. The fund realizes capital gains whenever it sells securities for a higher price than it paid for them. These are passed along as CAPITAL GAIN DISTRIBUTIONS. (checkmark) TAXES As with any investment, you should consider how your investment in the fund will be taxed. If your account is not a tax-deferred retirement account, you should be aware of these tax implications. TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may also be subject to state or local taxes. If you live outside the United States, your distributions could also be taxed by the country in which you reside. Your distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. For federal tax purposes, the fund's income and short-term capital gain distributions are taxed as dividends; long-term capital gain distributions are taxed as long-term capital gains. Every January, Fidelity will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other Fidelity funds - are subject to capital gains tax. A capital gain or loss is the difference between the cost of your shares and the price you receive when you sell them. Whenever you sell shares of the fund, Fidelity will send you a confirmation statement showing how many shares you sold and at what price. You will also receive a consolidated transaction statement every January. However, it is up to you or your tax preparer to determine whether this sale resulted in a capital gain and, if so, the amount of tax to be paid. Be sure to keep your regular account statements; the information they contain will be essential in calculating the amount of your capital gains. "BUYING A DIVIDEND." If you buy shares just before the fund deducts a distribution from its NAV, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable distribution. EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the fund and its investments and these taxes generally will reduce the fund's distributions. However, an offsetting tax credit or deduction may be available to you. If so, your tax statement will show more taxable income or capital gains than were actually distributed by the fund, but will also show the amount of the available offsetting credit or deduction. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, the fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is open. Fidelity normally calculates the fund's NAV and offering price as of the close of business of the NYSE, normally 4 p.m. Eastern time. THE FUND'S NAV is the value of a single share. The NAV is computed by adding the value of the fund's investments, cash, and other assets, subtracting its liabilities, and then dividing the result by the number of shares outstanding. The fund's assets are valued primarily on the basis of market quotations. Foreign securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. If quotations are not readily available or if the values have been materially affected by events occurring after the closing of a foreign market, assets are valued by a method that the Board of Trustees believes accurately reflects fair value. THE OFFERING PRICE (price to buy one share) is the fund's NAV plus a sales charge. The sales charge is 3% of the offering price, or 3.09% of the net amount invested. The REDEMPTION PRICE (price to sell one share) is the fund's NAV. Because of a change in the sales charge policy of the fund, any shares purchased prior to October 12, 1990 and not otherwise subject to a sales charge reduction or waiver will be charged a 1% deferred sales charge upon redemption. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your Social Security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require the fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be liable for losses resulting from unauthorized transactions if it does not follow reasonable procedures designed to verify the identity of the caller. Fidelity will request personalized security codes or other information, and may also record calls. You should verify the accuracy of your confirmation statements immediately after you receive them. If you do not want the ability to redeem and exchange by telephone, call Fidelity for instructions. IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of unusual market activity), consider placing your order by mail or by visiting a Fidelity Investor Center. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. The fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they would disrupt management of the fund. WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the next offering price calculated after your order is received and accepted. Note the following: (small solid bullet) All of your purchases must be made in U.S. dollars and checks must be drawn on U.S. banks. (small solid bullet) Fidelity does not accept cash. (small solid bullet) When making a purchase with more than one check, each check must have a value of at least $50. (small solid bullet) The fund reserves the right to limit the number of checks processed at one time. (small solid bullet) If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees the fund or its transfer agent has incurred. TO AVOID THE COLLECTION PERIOD associated with check and Money Line purchases, consider buying shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal Reserve check, or direct deposit instead. YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING PRICE) OR SELL THEM THROUGH A BROKER, who may charge you a fee for this service. If you invest through a broker or other institution, read its program materials for any additional service features or fees that may apply. CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with FDC may enter confirmed purchase orders on behalf of customers by phone, with payment to follow no later than the time when the fund is priced on the following business day. If payment is not received by that time, the financial institution could be held liable for resulting fees or losses. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your request is received and accepted. Note the following: (small solid bullet) Normally, redemption proceeds will be mailed to you on the next business day, but if making immediate payment could adversely affect the fund, it may take up to seven days to pay you. (small solid bullet) Fidelity Money Line redemptions generally will be credited to your bank account on the second or third business day after your phone call. (small solid bullet) The fund may hold payment on redemptions until it is reasonably satisfied that investments made by check or Fidelity Money Line have been collected, which can take up to seven business days. (small solid bullet) Redemptions may be suspended or payment dates postponed when the NYSE is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC. FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from accounts with a value of less than $2,500 (including any amount paid as a sales charge), subject to an annual maximum charge of $60.00 per shareholder. It is expected that accounts will be valued on the second Friday in November of each year. Accounts opened after September 30 will not be subject to the fee for that year. The fee, which is payable to the transfer agent, is designed to offset in part the relatively higher costs of servicing smaller accounts. The fee will not be deducted from retirement accounts (except non-prototype retirement accounts), accounts using regular investment plans, or if total assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is determined by aggregating Fidelity mutual fund accounts maintained by FSC or FBSI which are registered under the same social security number or which list the same social security number for the custodian of a Uniform Gifts/Transfers to Minors Act account. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days' notice to reestablish the minimum balance. If you do not increase your balance, Fidelity reserves the right to close your account and send the proceeds to you. Your shares will be redeemed at the NAV on the day your account is closed. FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. FDC collects the proceeds from the fund's 3% sales charge and may pay a portion of them to securities dealers who have sold the fund's shares, or to others, including banks and other financial institutions (qualified recipients), under special arrangements in connection with FDC's sales activities. The sales charge paid to qualified recipients is 2.25% of the fund's offering price. FDC may, at its own expense, provide promotional incentives to qualified recipients who support the sale of shares of the fund without reimbursement from the fund. In some instances, these incentives may be offered only to certain institutions whose representatives provide services in connection with the sale or expected sale of significant amounts of shares. EXCHANGE RESTRICTIONS As a shareholder, you have the privilege of exchanging shares of the fund for shares of other Fidelity funds. However, you should note the following: (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) If you exchange into a fund with a sales charge, you pay the percentage-point difference between that fund's sales charge and any sales charge you have previously paid in connection with the shares you are exchanging. For example, if you had already paid a sales charge of 2% on your shares and you exchange them into a fund with a 3% sales charge, you would pay an additional 1% sales charge. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Because excessive trading can hurt fund performance and shareholders, the fund reserves the right to temporarily or permanently terminate the exchange privilege of any investor who makes more than four exchanges out of the fund per calendar year. Accounts under common ownership or control, including accounts with the same taxpayer identification number, will be counted together for purposes of the four exchange limit. (small solid bullet) The exchange limit may be modified for accounts in certain institutional retirement plans to conform to plan exchange limits and Department of Labor regulations. See your plan materials for further information. (small solid bullet) The fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if the fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to the fund. Although the fund will attempt to give you prior notice whenever it is reasonably able to do so, it may impose these restrictions at any time. The fund reserves the right to terminate or modify the exchange privilege in the future. OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose administrative fees of up to $7.50 and redemption fees of up to 1.50% on exchanges. Check each fund's prospectus for details. SALES CHARGE REDUCTIONS AND WAIVERS REDUCTIONS. The fund's sales charge may be reduced if you invest directly with Fidelity or through prototype or prototype-like retirement plans sponsored by FMR or FMR Corp. The amount you invest, plus the value of your account, must fall within the ranges shown below. However, purchases made with assistance or intervention from a financial intermediary are not eligible. Call Fidelity to see if your purchase qualifies. Ranges Sales charge Net amount invested $0 - 249,999 3% 3.09% $250,000 - 499,999 2% 2.04% $500,000 - 999,999 1% 1.01% $1,000,000 or more none none The sales charge will also be reduced by the percentage of any sales charge you previously paid on investments in other Fidelity funds (not including Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for any sales charge you would have paid if the reductions in the table above had not existed. These sales charge credits only apply to purchases made in one of the ways listed below, and only if you continuously owned Fidelity fund shares or a Fidelity brokerage core account, or participated in The CORPORATEplan for Retirement Program. 1. By exchange from another Fidelity fund. 2. With proceeds of a transaction within a Fidelity brokerage core account, including any free credit balance, core money market fund, or margin availability, to the extent such proceeds were derived from redemption proceeds from another Fidelity fund. 3. With redemption proceeds from one of Fidelity's Foreign Currency Funds, if the Foreign Currency Fund shares were originally purchased with redemption proceeds from a Fidelity fund. 4. Through the Directed Dividends Option (see page ). 5. By participants in The CORPORATEplan for Retirement Program when shares are purchased through plan-qualified loan repayments, and for exchanges into and out of the Managed Income Portfolio. WAIVERS. The fund's sales charge will not apply: 1. If you buy shares as part of an employee benefit plan having more than 200 eligible employees or a minimum of $3 million in plan assets invested in Fidelity mutual funds. 2. To shares in a Fidelity Rollover IRA account purchased with the proceeds of a distribution from an employee benefit plan, provided that at the time of the distribution, the employer or its affiliate maintained a plan that both qualified for waiver (1) above and had at least some of its assets invested in Fidelity-managed products. 3. If you are a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more. 4. If you purchase shares for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code). 5. If you are an investor participating in the Fidelity Trust Portfolios program. 6. To shares purchased through Portfolio Advisory Services. 7. If you are a current or former trustee or officer of a Fidelity fund or a current or retired officer, director, or regular employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity trustee or employee, a Fidelity trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity trustee or employee. 8. If you are a bank trust officer, registered representative, or other employee of a qualified recipient, as defined on page . 9. To new and subsequent purchases of shares in UGMA/UTMA accounts, including exchanges from identically registered UGMA/UTMA accounts in other Fidelity funds. 10. To contributions and exchanges to a prototype or prototype-like retirement plan sponsored by FMR Corp. or FMR and which is marketed and distributed directly to plan sponsors or participants without any assistance or intervention from any intermediary distribution channel. 11. If you invest through a non-prototype pension or profit-sharing plan that maintains all of its mutual fund assets in Fidelity mutual funds, provided the plan executes a Fidelity non-prototype sales charge waiver request form confirming its qualification. 12. If you are a registered investment adviser (RIA) purchasing for your discretionary accounts, provided you execute a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. Except for correspondents of National Financial Services Corporation, this waiver is available only for shares purchased directly from Fidelity, and is unavailable if the RIA is part of an organization principally engaged in the brokerage business. 13. If you are a trust institution or bank trust department purchasing for your non-discretionary, non-retirement fiduciary accounts, provided you execute a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is unavailable if the trust department or institution is part of an organization not principally engaged in banking or trust activities. These waivers must be qualified through FDC in advance. More detailed information about waivers (1), (2), (5), (10), and (12) is contained in the Statement of Additional Information. A representative of your plan or organization should call Fidelity for more information. This prospectus is printed on recycled paper using soy-based inks. FIDELITY BLUE CHIP GROWTH FUND A FUND OF FIDELITY SECURITIES FUND STATEMENT OF ADDITIONAL INFORMATION SEPTEMBER 19, 1995 This Statement is not a prospectus but should be read in conjunction with the fund's current Prospectus (dated September 19, 1995 ). Plea se retain this document for future reference. The fund's financial statements and financial highlights, included in the Annual Report for the fiscal year ended July 31 , 1995 , are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation of Portfolio Securities Performance Additional Purchase and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contract Contracts With FMR Affiliates Description of the Trust Financial Statements INVESTMENT ADVISER Fidelity Management & Research Company (FMR) INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc. (FMR U.K.) Fidelity Management & Research (Far East) Inc. (FMR Far East) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT Fidelity Service Company (FSC) BCF-ptb-995 INVESTMENT POLICIES AND LIMITATIONS The following policies and limitations supplement those set forth in the Prospectus. Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of the fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitation will be determined immediately after and as a result of the fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the fund's investment policies and limitations. The fund's fundamental investment policies and limitations cannot be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940) of the fund. However, except for the fundamental investment limitations listed below, the investment policies and limitations described in this Statement of Additional Information are not fundamental and may be changed without shareholder approval. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) with respect to 75% of the fund's total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, (a) more than 5% of the fund's total assets would be invested in the securities of that issuer, or (b) the fund would hold more than 10% of the outstanding voting securities of that issuer; (2) issue senior securities, except as permitted under the Investment Company Act of 1940; (3) borrow money, except that the fund may borrow money for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount will be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation; (4) underwrite securities issued by others (except to the extent that the fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in the disposition of restricted securities); (5) purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry; (6) purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); (7) purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities); or (8) lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (9) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short, and provided that transactions in futures contracts and options are not deemed to constitute selling securities short. (ii) The fund does not currently intend to purchase securities on margin, except that the fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin. (iii) The fund may borrow only (a) from a bank or from a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party (reverse repurchase agreements are treated as borrowings for purposes of fundamental investment limitation (3)). The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase any security if, as a result, more than 10% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. (v) The fund does not currently intend to purchase interests in real estate investment trusts that are not readily marketable, or interests in real estate limited partnerships that are not listed on an exchange or traded on the NASDAQ National Market System if, as a result, the sum of such interests and other investments considered illiquid under limitation (iv) would exceed 10% of the fund's net assets. (vi) The fund does not currently intend to lend assets other than securities to other parties, except by (a) lending money (up to 5% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as an investment advisor or (b) acquiring loans, loan participations, or other forms of direct debt instruments and, in connection therewith, assuming any associated unfunded commitments of the sellers. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of business enterprises that, including predecessors, have a record of less than three years of continuous operation. (ix) The fund does not currently intend to purchase warrants, valued at the lower of cost or market, in excess of 5% of the fund's net assets. Included in that amount, but not to exceed 2% of the fund's net assets, may be warrants that are not listed on the New York Stock Exchange or the American Stock Exchange. Warrants acquired by the fund in units or attached to securities are not subject to these restrictions. (x) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xi) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's limitations on futures and options transactions, see the section entitled "Limitations on Futures and Options Transactions" on page . AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with financial institutions that are, or may be considered to be, "affiliated persons" of the fund under the Investment Company Act of 1940. These transactions may include repurchase agreements with custodian banks; short-term obligations of, and repurchase agreements with, the 50 largest U.S. banks (measured by deposits); municipal securities; U.S. government securities with affiliated financial institutions that are primary dealers in these securities; short-term currency transactions; and short-term borrowings. In accordance with exemptive orders issued by the Securities and Exchange Commission (SEC), the Board of Trustees has established and periodically reviews procedures applicable to transactions involving affiliated financial institutions. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve significant risks in addition to the risks inherent in U.S. investments. The value of securities denominated in foreign currencies and of dividends and interest paid with respect to such securities will fluctuate based on the relative strength of the U.S. dollar. Foreign investments involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments, and may be affected by actions of foreign governments adverse to the interests of U.S. investors. Such actions may include the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or convert currency into U.S. dollars, or other government intervention. There is no assurance that FMR will be able to anticipate these potential events or counter their effects. These risks are magnified for investments in developing countries, which may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities. Economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Foreign markets may offer less protection to investors than U.S. markets. It is anticipated that in most cases the best available market for foreign securities will be on an exchange or in over-the-counter markets located outside of the United States. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. issuers. Foreign security trading practices, including those involving securities settlement where fund assets may be released prior to receipt of payment, may result in increased risk in the event of a failed trade or the insolvency of a foreign broker-dealer, and may involve substantial delays. In addition, the costs of foreign investing, including withholding taxes, brokerage commissions and custodial costs, are generally higher than for U.S. investors. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers, and listed companies than in the United States. It may also be difficult to enforce legal rights in foreign countries. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to U.S. issuers. Some foreign securities impose restrictions on transfer within the United States or to U.S. persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. American Depository Receipts (ADR's) as well as other "hybrid" forms of ADRs including European Depository Receipts (EDRs) and Global Depository Receipts (GDRs), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are an alternative to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. These risks include foreign exchange risk as well as the political and economic risks of the underlying issuer's country. FOREIGN CURRENCY TRANSACTIONS. The fund may conduct foreign currency transactions on a spot (i.e., cash) basis or by entering into forward contracts to purchase or sell foreign currencies at a future date and price. The fund will convert currency on a spot basis from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers generally do not charge a fee for conversion, they do realize a profit based on the difference between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Forward contracts are generally traded in an interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The parties to a forward contract may agree to offset or terminate the contract before its maturity, or may hold the contract to maturity and complete the contemplated currency exchange. The fund may use currency forward contracts for any purpose consistent with its investment objective. The following discussion summarizes the principal currency management strategies involving forward contracts that could be used by the fund. The fund may also use swap agreements, indexed securities, and options and futures contracts relating to foreign currencies for the same purposes. When the fund agrees to buy or sell a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction, the fund will be able to protect itself against an adverse change in foreign currency values between the date the security is purchased or sold and the date on which payment is made or received. This technique is sometimes referred to as a "settlement hedge" or "transaction hedge." The fund may also enter into forward contracts to purchase or sell a foreign currency in anticipation of future purchases or sales of securities denominated in foreign currency, even if the specific investments have not yet been selected by FMR. The fund may also use forward contracts to hedge against a decline in the value of existing investments denominated in foreign currency. For example, if the fund owned securities denominated in pounds sterling, it could enter into a forward contract to sell pounds sterling in return for U.S. dollars to hedge against possible declines in the pound's value. Such a hedge, sometimes referred to as a "position hedge," would tend to offset both positive and negative currency fluctuations, but would not offset changes in security values caused by other factors. The fund could also hedge the position by selling another currency expected to perform similarly to the pound sterling - for example, by entering into a forward contract to sell Deutschemarks or European Currency Units in return for U.S. dollars. This type of hedge, sometimes referred to as a "proxy hedge," could offer advantages in terms of cost, yield, or efficiency, but generally would not hedge currency exposure as effectively as a simple hedge into U.S. dollars. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the hedged securities are denominated. The fund may enter into forward contracts to shift its investment exposure from one currency into another. This may include shifting exposure from U.S. dollars to a foreign currency, or from one foreign currency to another foreign currency. For example, if the fund held investments denominated in Deutschemarks, the fund could enter into forward contracts to sell Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes known as a "cross-hedge," will tend to reduce or eliminate exposure to the currency that is sold, and increase exposure to the currency that is purchased, much as if the fund had sold a security denominated in one currency and purchased an equivalent security denominated in another. Cross-hedges protect against losses resulting from a decline in the hedged currency, but will cause the fund to assume the risk of fluctuations in the value of the currency it purchases. Under certain conditions, SEC guidelines require mutual funds to set aside appropriate liquid assets in a segregated custodial account to cover currency forward contracts. As required by SEC guidelines, the fund will segregate assets to cover currency forward contracts, if any, whose purpose is essentially speculative. The fund will not segregate assets to cover forward contracts entered into for hedging purposes, including settlement hedges, position hedges, and proxy hedges. Successful use of currency management strategies will depend on FMR's skill in analyzing and predicting currency values. Currency management strategies may substantially change the fund's investment exposure to changes in currency exchange rates, and could result in losses to the fund if currencies do not perform as FMR anticipates. For example, if a currency's value rose at a time when FMR had hedged the fund by selling that currency in exchange for dollars, the fund would be unable to participate in the currency's appreciation. If FMR hedges currency exposure through proxy hedges, the fund could realize currency losses from the hedge and the security position at the same time if the two currencies do not move in tandem. Similarly, if FMR increases the fund's exposure to a foreign currency, and that currency's value declines, the fund will realize a loss. There is no assurance that FMR's use of currency management strategies will be advantageous to the fund or that it will hedge at an appropriate time. FUND'S RIGHTS AS A SHAREHOLDE R. The fund does not intend to direct or administer the day-to-day operations of any company. The fund, however, may exercise its rights as a shareholder and may communicate its views on important matters of policy to management, the Board of Directors, and shareholders of a company when FMR determines that such matters could have a significant effect on the value of the fund's investment in the company. The activities that the fund may engage in, either individually or in conjunction with others, may include, among others, supporting or opposing proposed changes in a company's corporate structure or business activities; seeking changes in a company's directors or management; seeking changes in a company's direction or policies; seeking the sale or reorganization of the company or a portion of its assets; or supporting or opposing third party takeover efforts. This area of corporate activity is increasingly prone to litigation and it is possible that the fund could be involved in lawsuits related to such activities. FMR will monitor such activities with a view to mitigating, to the extent possible, the risk of litigation against the fund and the risk of actual liability if the fund is involved in litigation. No guarantee can be made, however, that litigation against the fund will not be undertaken or liabilities incurred. FUTURES AND OPTIONS. The following sections pertain to futures and options: Asset Coverage for Futures and Options Positions, Combined Positions, Correlation of Price Changes, Futures Contracts, Futures Margin Payments, Limitations on Futures and Options Transactions, Liquidity of Options and Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put and Call Options. ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with guidelines established by the Securities and Exchange Commission with respect to coverage of options and futures strategies by mutual funds, and if the guidelines so require will set aside appropriate liquid assets in a segregated custodial account in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or option strategy is outstanding, unless they are replaced with other suitable assets. As a result, there is a possibility that segregation of a large percentage of the fund's assets could impede portfolio management or the fund's ability to meet redemption requests or other current obligations. COMBINED POSITIONS. The fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, to adjust the risk and return characteristics of the overall position. For example, the fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. CORRELATION OF PRICE CHANGES. Because there are a limited number of types of exchange-traded options and futures contracts, it is likely that the standardized contracts available will not match the fund's current or anticipated investments exactly. The fund may invest in options and futures contracts based on securities with different issuers, maturities, or other characteristics from the securities in which it typically invests, which involves a risk that the options or futures position will not track the performance of the fund's other investments. Options and futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments match the fund's investments well. Options and futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect correlation may also result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, or from imposition of daily price fluctuation limits or trading halts. The fund may purchase or sell options and futures contracts with a greater or lesser value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. If price changes in the fund's options or futures positions are poorly correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments. FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When the fund sells a futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when the fund enters into the contract. Some currently available futures contracts are based on specific securities, such as U.S. Treasury bonds or notes, and some are based on indices of securities prices, such as the Standard & Poor's Composite Index of 500 Stocks (S&P 500(registered trademark)). Futures can be held until their delivery dates, or can be closed out before then if a liquid secondary market is available. The value of a futures contract tends to increase and decrease in tandem with the value of its underlying instrument. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying instrument, much as if it had purchased the underlying instrument directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying instrument had been sold. FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the purchaser and seller are required to deposit "initial margin" with a futures broker, known as a futures commission merchant (FCM), when the contract is entered into. Initial margin deposits are typically equal to a percentage of the contract's value. If the value of either party's position declines, that party will be required to make additional "variation margin" payments to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. Initial and variation margin payments do not constitute purchasing securities on margin for purposes of the fund's investment limitations. In the event of the bankruptcy of an FCM that holds margin on behalf of the fund, the fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM's other customers, potentially resulting in losses to the fund. LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the Commodity Futures Trading Commission (CFTC) and the National Futures Association, which regulate trading in the futures markets. The fund intends to comply with Rule 4.5 under the Commodity Exchange Act, which limits the extent to which the fund can commit assets to initial margin deposits and option premiums. In addition, the fund will not: (a) sell futures contracts, purchase put options, or write call options if, as a result, more than 25% of the fund's total assets would be hedged with futures and options under normal conditions; (b) purchase futures contracts or write put options if, as a result, the fund's total obligations upon settlement or exercise of purchased futures contracts and written put options would exceed 25% of its total assets; or (c) purchase call options if, as a result, the current value of option premiums for call options purchased by the fund would exceed 5% of the fund's total assets. These limitations do not apply to options attached to or acquired or traded together with their underlying securities, and do not apply to securities that incorporate features similar to options. The above limitations on the fund's investments in futures contracts and options, and the fund's policies regarding futures contracts and options discussed elsewhere in this Statement of Additional Information, may be changed as regulatory agencies permit. LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid secondary market will exist for any particular options or futures contract at any particular time. Options may have relatively low trading volume and liquidity if their strike prices are not close to the underlying instrument's current price. In addition, exchanges may establish daily price fluctuation limits for options and futures contracts, and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible for the fund to enter into new positions or close out existing positions. If the secondary market for a contract is not liquid because of price fluctuation limits or otherwise, it could prevent prompt liquidation of unfavorable positions, and potentially could require the fund to continue to hold a position until delivery or expiration regardless of changes in its value. As a result, the fund's access to other assets held to cover its options or futures positions could also be impaired. OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures contracts are similar to forward currency exchange contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures contracts call for payment or delivery in U.S. dollars. The underlying instrument of a currency option may be a foreign currency, which generally is purchased or delivered in exchange for U.S. dollars, or may be a futures contract. The purchaser of a currency call obtains the right to purchase the underlying currency, and the purchaser of a currency put obtains the right to sell the underlying currency. The uses and risks of currency options and futures are similar to options and futures relating to securities or indices, as discussed above. The fund may purchase and sell currency futures and may purchase and write currency options to increase or decrease its exposure to different foreign currencies. The fund may also purchase and write currency options in conjunction with each other or with currency futures or forward contracts. Currency futures and options values can be expected to correlate with exchange rates, but may not reflect other factors that affect the value of the fund's investments. A currency hedge, for example, should protect a Yen-denominated security from a decline in the Yen, but will not protect the fund against a price decline resulting from deterioration in the issuer's creditworthiness. Because the value of the fund's foreign-denominated investments changes in response to many factors other than exchange rates, it may not be possible to match the amount of currency options and futures to the value of the fund's investments exactly over time. OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of over-the-counter (OTC) options (options not traded on exchanges) generally are established through negotiation with the other party to the option contract. While this type of arrangement allows the fund greater flexibility to tailor an option to its needs, OTC options generally involve greater credit risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded. PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the fund pays the current market price for the option (known as the option premium). Options have various types of underlying instruments, including specific securities, indices of securities prices, and futures contracts. The fund may terminate its position in a put option it has purchased by allowing it to expire or by exercising the option. If the option is allowed to expire, the fund will lose the entire premium it paid. If the fund exercises the option, it completes the sale of the underlying instrument at the strike price. The fund may also terminate a put option position by closing it out in the secondary market at its current price, if a liquid secondary market exists. The buyer of a typical put option can expect to realize a gain if security prices fall substantially. However, if the underlying instrument's price does not fall enough to offset the cost of purchasing the option, a put buyer can expect to suffer a loss (limited to the amount of the premium paid, plus related transaction costs). The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option's strike price. A call buyer typically attempts to participate in potential price increases of the underlying instrument with risk limited to the cost of the option if security prices fall. At the same time, the buyer can expect to suffer a loss if security prices do not rise sufficiently to offset the cost of the option. WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes the opposite side of the transaction from the option's purchaser. In return for receipt of the premium, the fund assumes the obligation to pay the strike price for the option's underlying instrument if the other party to the option chooses to exercise it. When writing an option on a futures contract, the fund will be required to make margin payments to an FCM as described above for futures contracts. The fund may seek to terminate its position in a put option it writes before exercise by closing out the option in the secondary market at its current price. If the secondary market is not liquid for a put option the fund has written, however, the fund must continue to be prepared to pay the strike price while the option is outstanding, regardless of price changes, and must continue to set aside assets to cover its position. If security prices rise, a put writer would generally expect to profit, although its gain would be limited to the amount of the premium it received. If security prices remain the same over time, it is likely that the writer will also profit, because it should be able to close out the option at a lower price. If security prices fall, the put writer would expect to suffer a loss. This loss should be less than the loss from purchasing the underlying instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline. Writing a call option obligates the fund to sell or deliver the option's underlying instrument, in return for the strike price, upon exercise of the option. The characteristics of writing call options are similar to those of writing put options, except that writing calls generally is a profitable strategy if prices remain the same or fall. Through receipt of the option premium, a call writer mitigates the effects of a price decline. At the same time, because a call writer must be prepared to deliver the underlying instrument in return for the strike price, even if its current value is greater, a call writer gives up some ability to participate in security price increases. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. Under the supervision of the Board of Trustees, FMR determines the liquidity of the fund's investments and, through reports from FMR, the Board monitors investments in illiquid instruments. In determining the liquidity of the fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the fund to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days, over-the-counter options, and non-government stripped fixed-rate mortgage-backed securities. Also, FMR may determine some restricted securities, government-stripped fixed-rate mortgage-backed securities, loans and other direct debt instruments, emerging market securities, and swap agreements to be illiquid. However, with respect to over-the-counter options the fund writes, all or a portion of the value of the underlying instrument may be illiquid depending on the assets held to cover the option and the nature and terms of any agreement the fund may have to close out the option before expiration. In the absence of market quotations, illiquid investments are priced at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, the fund were in a position where more than 10% of its net assets was invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INDEXED SECURITIES. The fund may purchase securities whose prices are indexed to the prices of other securities, securities indices, currencies, precious metals or other commodities, or other financial indicators. Indexed securities typically, but not always, are debt securities or deposits whose value at maturity or coupon rate is determined by reference to a specific instrument or statistic. Gold-indexed securities, for example, typically provide for a maturity value that depends on the price of gold, resulting in a security whose price tends to rise and fall together with gold prices. Currency-indexed securities typically are short-term to intermediate-term debt securities whose maturity values or interest rates are determined by reference to the values of one or more specified foreign currencies, and may offer higher yields than U.S. dollar-denominated securities of equivalent issuers. Currency-indexed securities may be positively or negatively indexed; that is, their maturity value may increase when the specified currency value increases, resulting in a security that performs similarly to a foreign-denominated instrument, or their maturity value may decline when foreign currencies increase, resulting in a security whose price characteristics are similar to a put on the underlying currency. Currency-indexed securities may also have prices that depend on the values of a number of different foreign currencies relative to each other. The performance of indexed securities depends to a great extent on the performance of the security, currency, or other instrument to which they are indexed, and may also be influenced by interest rate changes in the U nited States a nd abroad. At the same time, indexed securities are subject to the credit risks associated with the issuer of the security, and their values may decline substantially if the issuer's creditworthiness deteriorates. Recent issuers of indexed securities have included banks, corporations, and certain U.S. government agencies. Indexed securities may be more volatile than the underlying instruments. INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order issued by the SEC , the fund has received permission to lend money to, and borrow money from, o ther funds advised by FMR or its affiliates. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. A fund will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements), and will borrow through the program only when the costs are equal to or lower than the cost of bank loans. A fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs. LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a corporate, governmental, or other borrower to another party. They may represent amounts owed to lenders or lending syndicates (loans and loan participations), to suppliers of goods or services (trade claims or other receivables), or to other parties. Direct debt instruments involve a risk of loss in case of default or insolvency of the borrower and may offer less legal protection to the fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Direct debt instruments may also include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts, commercial and residential mortgage-backed securities, and real estate financings. Real estate-related instruments are sensitive to factors such as real estate values and property taxes, interest rates, cash flow of underlying real estate assets, overbuilding, and the management skill and creditworthiness of the issuer. Real estate-related instruments may also be affected by tax and regulatory requirements, such as those relating to the environment. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a security and simultaneously commits to sell t hat security back to the original seller at an agreed-upon price. The resale price reflects the purchase price plus an agreed-upon incremental amount which is unrelated to the coupon rate or maturity of the purchased security. To protect the fund from the risk that the original seller will not fulfill its obligation, the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to the fund in connection with bankruptcy proceedings), it is the fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. RESTRICTED SECURITIES generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933, or in a registered public offering. Where registration is required, the fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. The fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SECURITIES LENDING. The fund may lend securities to parties such as broker-dealers or institutional investors, including Fidelity Brokerage Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and a subsidiary of FMR Corp. Securities lending allows the fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans will be made only to parties deemed by FMR to be of good standing. Furthermore, they will only be made if, in FMR's judgment, the consideration to be earned from such loans would justify the risk. FMR understands that it is the current view of the SEC Staff that a fund may engage in loan transactions only under the following conditions: (1) the fund must receive 100% collateral in the form of cash or cash equivalents ( e.g., U.S. Treasury bills or notes) from the borrower; (2) the borrower must increase the collateral whenever the market value of the securities loaned (determined on a daily basis) rises above the value of the collateral; (3) after giving notice, the fund must be able to terminate the loan at any time; (4) the fund must receive reasonable interest on the loan or a flat fee from the borrower, as well as amounts equivalent to any dividends, interes t, or other distributions on the securities loaned and to any increase in market value; (5) the fund may pay only reasonable custodian fees in connection with the loan; and (6) the Board of Trustees must be able to vote proxies on the securities loaned, either by terminating the loan or by entering into an alternative arrangement with the borrower. Cash received through loan transactions may be invested in any security in which the fund is authorized to invest. Investing this cash subjects that investment, as well as the security loaned, to market forces (i.e., capital appreciation or depreciation). SHORT SALES "AGAINST THE BOX" . If the fund enters into a short sale against the box, it will be required to set aside securities equivalent in kind and amount to the securities sold short (or securities convertible or exchangeable into such securities) and will be required to hold such securities while the short sale is outstanding. The fund will incur transaction costs, including interest expenses, in connection with opening, maintaining, and closing short sales against the box. SWAP AGREEMENTS. Swap agreements can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. Swap agreements can take many different forms and are known by a variety of names. The fund is not limited to any particular form of swap agreement if FMR determines it is consistent with the fund's investment objective and policies. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements will tend to shift the fund's investment exposure from one type of investment to another. For example, if the fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factors that determine the amounts of payments due to and from the fund. If a swap agreement calls for payments by the fund, the fund must be prepared to make such payments when due. In addition, if the counterparty's creditworthiness declined, the value of a swap agreement would be likely to decline, potentially resulting in losses. The fund expects to be able to eliminate its exposure under swap agreements either by assignment or other disposition, or by entering into an offsetting swap agreement with the same party or a similarly creditworthy party. The fund will maintain appropriate liquid assets in a segregated custodial account to cover its current obligations under swap agreements. If the fund enters into a swap agreement on a net basis, it will segregate assets with a daily value at least equal to the excess, if any, of the fund's accrued obligations under the swap agreement over the accrued amount the fund is entitled to receive under the agreement. If the fund enters into a swap agreement on other than a net basis, it will segregate assets with a value equal to the full amount of the fund's accrued obligations under the agreement. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by FMR pursuant to authority contained in the management contract. If FMR grants investment management authority to the sub-advisers (see the section entitled "Management Contract"), the sub-advisers are authorized to place orders for the purchase and sale of portfolio securities, and will do so in accordance with the policies described below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. In selecting broker-dealers, subject to applicable limitations of the federal securities laws, FMR considers various relevant factors, including, but not limited to: the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability, and financial condition of the broker-dealer firm; the broker-dealer's execution services rendered on a continuing basis; the reasonableness of any commissions; and arrangements for payment of fund expenses. Generally, commissions for foreign investments traded on foreign exchanges will be higher than for investments traded on U.S. exchanges and may not be subject to negotiation. The fund may execute portfolio transactions with broker-dealers who provide research and execution services to the fund or other accounts over which FMR or its affiliates exercise investment discretion. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing, or selling securities; and the availability of securities or the purchasers or sellers of securities. In addition, such broker-dealers may furnish analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) in accordance with a ranking of broker-dealers determined periodically by FMR's investment staff based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the fund may be useful to FMR in rendering investment management services to the fund or its other clients, and conversely, such research provided by broker-dealers who have executed transaction orders on behalf of other FMR clients may be useful to FMR in carrying out its obligations to the fund. The receipt of such research has not reduced FMR's normal independent research activities; however, it enables FMR to avoid the additional expenses that could be incurred if FMR tried to develop comparable information through its own efforts. Subject to applicable limitations of the federal securities laws, broker-dealers may receive commissions for agency transactions that are in excess of the amount of commissions charged by other broker-dealers in recognition of their research and execution services. In order to cause the fund to pay such higher commissions, FMR must determine in good faith that such commissions are reasonable in relation to the value of the brokerage and research services provided by such executing broker-dealers, viewed in terms of a particular transaction or FMR's overall responsibilities to the fund and its other clients. In reaching this determination, FMR will not attempt to place a specific dollar value on the brokerage and research services provided, or to determine what portion of the compensation should be related to those services. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the fund or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage Services (FBS) , subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by non-affiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the benefit of the Johnson family own, directly or indirectly, more than 25% of the voting common stock of FIL. FMR may allocate brokerage transactions to broker-dealers who have entered into arrangements with FMR under which the broker-dealer allocates a portion of the commissions paid by the fund toward payment of the fund's expenses, such as transfer agent fees or custodian fees. The transaction quality must, however, be comparable to those of other qualified broker-dealers. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute portfolio transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. The Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund and review the commissions paid by the fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For the fiscal years ended July 31, 1995 and 1994, the fund's portfolio turnover rates were 182% and 271%, respectively. Because a high turnover rate increases transaction costs and may increase taxable gains, FMR carefully weighs the anticipated benefits of short-term investing against these consequences. For fiscal 1995, 1994, and 1993, the fund paid brokerage commissions of $ 14,758,000, $8,532,000, and $3,674,000, r espectively. The fund pays both commissions and spreads in connection with the placement of portfolio transactions . FBSI is paid on a commission basis. During fiscal 1 995, 1994, and 1993 , the fund paid brokerage commissions of $4,465,000, $2,220,000, and $1,178,000, respectively, to FBSI. During fiscal 1995 , this amounted to approximately 30 % of the aggregate brokerage commissions paid by the fund for transactions involving approximately 43% of the aggregate dollar amount of transactions fo r which the fund paid brokerage commissions. The difference between the percentage of brokerage commissions paid to and the percentage of the dollar amount of transactions effected through FBSI is a result of the low commission rates charged by FBSI. During fiscal 1995, the fund paid brokerage commissions of $33,000 to FBS. FBS is paid on a commission basis. During fiscal 1995, this amounted to approximately 0.22% of the aggregate brokerage commissions paid by the fund involving approximately 0.16% of the aggregate dollar amount of transactions for which the fund paid brokerage commissions. For fiscal 1995 and 1994 the fund paid no brokerage commissions to FBSL. During fiscal 1995, the fund paid $14,080,000 in commissions to brokerage firms that provided research services involving approximately $9,900,315,000 of transactions. The provision of research services was not necessarily a factor in the placement of all this business with such firms. From time to time the Trustees will review whether the recapture for the benefit of the fund of some portion of the brokerage commissions or similar fees paid by the fund on portfolio transactions is legally permissible and advisable. The fund seeks to recapture soliciting broker-dealer fees on the tender of portfolio securities, but at present no other recapture arrangements are in effect. The Trustees intend to continue to review whether recapture opportunities are available and are legally permissible and, if so, to determine in the exercise of their business judgment whether it would be advisable for the fund to seek such recapture. Although the Trustees and officers of the fund are substantially the same as those of other funds managed by FMR, investment decisions for the fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and accounts are managed by the same investment adviser, particularly when the same security is suitable for the investment objective of more than one fund or account. When two or more funds are simultaneously engaged in the purchase or sale of the same security, the prices and amounts are allocated in accordance with procedures believed to be appropriate and equitable for each fund. In some cases this system could have a detrimental effect on the price or value of the security as far as the fund is concerned. In other cases, however, the ability of the fund to participate in volume transactions will produce better executions and prices for the fund. It is the current opinion of the Trustees that the desirability of retaining FMR as investment adviser to the fund outweighs any disadvantages that may be said to exist from exposure to simultaneous transactions. VALUATION OF PORTFOLIO SECURITIES Portfolio securities are valued by various methods depending on the primary market or exchange on which they trade. Most equity securities for which the primary market is the U.S. are valued at last sale price or, if no sale has occurred, at the closing bid price. Most equity securities for which the primary market is outside the U.S. are valued using the official closing price or the last sale price in the principal market where they are traded. If the last sale price (on the local exchange) is unavailable, the last evaluated quote or last bid price is normally used. Short-term securities are valued either at amortized cost or at original cost plus accrued interest, both of which approximate current value. Convertible securities and fixed-income securities are valued primarily by a pricing service that uses a vendor security valuation matrix which incorporates both dealer-supplied valuations and electronic data processing techniques. This two-fold approach is believed to more accurately reflect fair value because it takes into account appropriate factors such as institutional trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data, without exclusive reliance upon quoted, exchange, or over-the counter prices. Use of pricing services has been approved by the Board of Trustees. Securities and other assets for which there is no readily available market are valued in good faith by a committee appointed by the Board of Trustees. The procedures set forth above need not be used to determine the value of the securities owned by the fund if, in the opinion of a committee appointed by the Board of Trustees, some other method (e.g., closing over-the-counter bid prices in the case of debt instruments traded on an exchange) would more accurately reflect the fair market value of such securities. Generally, the valuation of foreign and domestic equity securities, as well as corporate bonds, U.S. government securities, money market instruments, and repurchase agreements, is substantially completed each day at the close of the NYSE . The values of any such securities held by the fund are determined as of such time for the purpose of computing the fund's net asset value. Foreign security prices are furnished by independent brokers or quotation services which express the value of securities in their local currency. FSC gathers all exchange rates daily at the close of the NYSE using the last quoted price on the local currency and then translates the value of foreign securities from their local currency into U.S. dollars. Any changes in the value of forward contracts due to exchange rate fluctuations and days to maturity are included in the calculation of net asset value. If an extraordinary event that is expected to materially affect the value of a portfolio security occurs after the close of an exchange on which that security is traded, then the security will be valued as determined in good faith by a committee appointed by the Board of Trustees. PERFORMANCE The fund may quote performance in various ways. All performance information supplied by the fund in advertising is historical and is not intended to indicate future returns. The fund's share price, yield, and total return fluctuate in response to market conditions and other factors, and the value of fund shares when redeemed may be more or less than their original cost. TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all aspects of the fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the fund's net asset value (NAV) over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment in the fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. For example, a cumulative total return of 100% over ten years would produce an average annual total return of 7.18%, which is the steady annual rate of return that would equal 100% growth on a compounded basis in ten years. While average annual total returns are a convenient means of comparing investment alternatives, investors should realize that the fund's performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of the fund. In addition to average annual total returns, the fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis and may be quoted with or without taking the fund's 3% maximum sales charge into account. Excluding the fund's sales charge from a total return calculation produces a higher total return figure. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. NET ASSET VALUE. Charts and graphs using the fund's net asset values, adjusted net asset values, and benchmark indices may be used to exhibit performance. An adjusted NAV includes any distributions paid by the fund and reflects all elements of its return. Unless otherwise indicated, the fund's adjusted NAVs are not adjusted for sales charges, if any. MOVING AVERAGES. The fund may illustrate performance using moving averages. A long-term moving average is the average of each week's adjusted closing NAV for a specified period. A short-term moving average is the average of each day's adjusted closing NAV for a specified period. Moving Average Activity Indicators combine adjusted closing NAVs from the last business day of each week with moving averages for a specified period to produce indicators showing when an NAV has crossed, stayed above, or stayed below its moving average. On July 28 , 1995 , the 13-week and 39-week long-term moving averages were $30.27 and $27.62, respectively. HISTORICAL FUND RESULTS. The following table shows the fund's total returns for periods ended July 31, 1995. Total return figures include the effect of the fund's 3% sales charge.
Average Annual Total Returns Cumulative Total Returns
One Five Life of One Five Life of Year Years Fund* Year Years Fund* 28.66 % 21.11 % 20.39 % 28.66 % 160.51 % 308.94 %
* From December 31, 1987 (commencement of operations). The following table shows the income and capital elements of the fund's cumulative total return. The table compares the fund's return to the record of the Standard and Poor's Composite Index of 500 Stock s (S&P 500(registered trademark)), t he Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for eac h fund. The S&P 500 and the DJIA comparisons are provided to show how the fund's total return compared to the record of a broad average of common stock prices and a narrower set of stocks of major industrial companies, respectively, over the same period. The fund has the ability to invest in securities not included in either index, and its investment portfolio may or may not be similar in composition to the indices. Figures for the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks and, unlike the fund's returns, do not include the effect of paying brokerage commissions and other costs of investing. During the period from December 31, 1987 (commencement of operations) to July 31, 1995 , a hypothetical $10,000 investment in Blue Chip Growth w ould have grown to $ 40,894 , after deducting the fund's 3% sales charge and assuming all distributions were reinvested. This was a period of fluctuating stock prices and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in the fund today. FIDELITY BLUE CHIP GROWTH FUND INDICES
Year Ended Value of Value of Value of Total S&P 500 DJIA Cost of July 31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1995 $ 31,612 $ 1,065 $ 8,217 $ 40,894 $ 28,856 $ 30,838 $ 13,215 1994 $ 24,386 $ 821 $ 5,625 $ 30,832 $ 22,882 $ 24,023 $ 12,860 1993 $ 24,948 $ 829 $ 1,046 $ 26,823 $ 21,760 $ 21,979 $ 12,513 1992 $ 21,359 $ 570 $ 264 $ 22,193 $ 20,010 $ 20,459 $ 12,175 1991 $ 18,372 $ 414 $ 227 $ 19,013 $ 17,739 $ 17,700 $ 11,802 1990 $ 14,870 $ 173 $ 184 $ 15,227 $ 15,731 $ 16,387 $ 11,300 1989 $ 13,153 $ 38 $ 0 $ 13,191 $ 14,771 $ 14,451 $ 10,780 1988* $ 10,156 $ 0 $ 0 $ 10,156 $ 11,198 $ 11,145 $ 10,269
* From December 31, 1987 (commencement of operations) . Explanatory Notes: With an initial investment of $10,000 made on December 31, 1987, assuming the 3% load had been in effect , the net amount invested in fund shares was $9,700. The cost of the initial investment ($10,000), together with the aggregate cost of reinvested dividends and capital gain distributions for the period covered (their cash value at the time they were reinvested), amounted to $ 16,494. If distributions had not been reinvested, the amount of distributions earned from the fund over time would have been smaller, and cash payments for the period would have amounted to $ 514 for dividends and $ 5,325 for capital gains distributions. Tax consequences of different investments have not been factored into the above figures. The figures shown above do not reflect the fund's 1% deferred sales charge which applies to shares purchased prior to October 12, 1990. PERFORMANCE COMPARISONS. The fund's performance may be compared to the performance of other mutual funds in general, or to the performance of particular types of mutual funds. These comparisons may be expressed as mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. In addition to the mutual fund rankings, the fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, it is important to remember the risk and return characteristics of each type of investment. For example, while stock mutual funds may offer higher potential returns, they also carry the highest degree of share price volatility. Likewise, money market funds may offer greater stability of principal, but generally do not offer the higher potential returns available from stock mutual funds. From time to time, the fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund may quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the basis of risk-adjusted performance. Rankings that compare the performance of Fidelity funds to one another in appropriate categories over specific periods of time may also be quoted in advertising. The fund may be compared in advertising to Certificates of Deposit (CDs) or other investments issued by banks or other depository institutions. Mutual funds differ from bank investments in several respects. For example, the fund may offer greater liquidity or higher potential returns than CDs, the fund does not guarantee your principal or your return, and fund shares are not FDIC insured. Fidelity may provide information designed to help individuals understand their investment goals and explore various financial strategies. Such information may include information about current economic, market, and political conditions; materials that describe general principles of investing, such as asset allocation, diversification, risk tolerance, and goal setting; questionnaires designed to help create a personal financial profile; worksheets used to project savings needs based on assumed rates of inflation and hypothetical rates of return; and action plans offering investment alternatives. Materials may also include discussions of Fidelity's asset allocation funds and other Fidelity funds, products, and services. Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns of the capital markets in the United States, including common stocks, small capitalization stocks, long-term corporate bonds, intermediate-term government bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation (based on the CPI), and combinations of various capital markets. The performance of these capital markets is based on the returns of different indices. Fidelity funds may use the performance of these capital markets in order to demonstrate general risk-versus-reward investment scenarios. Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. The risks associated with the security types in any capital market may or may not correspond directly to those of the funds. Ibbotson calculates total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. In advertising materials, Fidelity may reference or discuss its products and services, which may include: other Fidelity funds; retirement investing; brokerage products and services; model portfolios or allocations ; saving for college or other goals; charitable giving; and the Fidelity credit card. In addition, Fidelity may quote or reprint financial or business publications and periodicals, as they relate to current economic and political conditions, fund management, portfolio composition, investment philosophy, investment techniques, the desirability of owning a particular mutual fund, and Fidelity services and products. Fidelity may also reprint, and use as advertising and sales literature, articles from Fidelity Focus (registered trademark) , a quarterly magazine provided free of charge to Fidelity fund shareholders. The fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. VOLATILITY. The fund may quote various measures of volatility and benchmark correlation in advertising. In addition, the fund may compare these measures to those of other funds. Measures of volatility seek to compare the fund's historical share price fluctuations or total returns to those of a benchmark. Measures of benchmark correlation indicate how valid a comparative benchmark may be. All measures of volatility and correlation are calculated using averages of historical data. MOMENTUM INDICATORS indicate the fund's price movements over specific periods of time. Each point on the momentum indicator represents the fund's percentage change in price movements over that period. The fund may advertise examples of the effects of periodic investment plans, including the principle of dollar cost averaging. In such a program, an investor invests a fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer shares when prices are high and more shares when prices are low. While such a strategy does not assure a profit or guard against loss in a declining market, the investor's average cost per share can be lower than if fixed numbers of shares are purchased at the same intervals. In evaluating such a plan, investors should consider their ability to continue purchasing shares during periods of low price levels. The fund may be available for purchase through retirement plans or other programs offering deferral of, or exemption from, income taxes, which may produce superior after-tax returns over time. For example, a $1,000 investment earning a taxable return of 10% annually would have an after-tax value of $1,949 after ten years, assuming tax was deducted from the return each year at a 31% rate. An equivalent tax-deferred investment would have an after-tax value of $2,100 after ten years, assuming tax was deducted at a 31% rate from the tax-deferred earnings at the end of the ten-year period. As of July 31, 1995 , FMR advised over $ 25 billion in tax-free fund assets, $ 77 billion in money market fund assets, $ 214 billion in equity fund assets, $52 billion in international fund assets, and $ 22 billion in Spartan fund assets. The fund may reference the growth and variety of money market mutual funds and the adviser's innovation and participation in the industry. The equity funds under management figure represents the largest amount of equity fund assets under management by a mutual fund investment adviser in the United States, making FMR America's leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide information and communications network for the purpose of researching and managing investments abroad. The fund may be advertised as an investment choice under the Fidelity College Savings Plan or the Fidelity Investor Card mutual fund option. Advertising may contain illustrations of projected future college costs based on assumed rates of inflation and examples of hypothetical performance. Advertising for the Fidelity College Savings Plan mutual fund option may be used in conjunction with advertising for the Fidelity College Savings Plan brokerage option, a product offered through Fidelity Brokerage Services, Inc. The Fidelity Investor Card is a product offered through Fidelity Trust Company. For illustrative purposes only, the fund may use the names of companies in its advertising as examples of blue chip companies. Such companies will only be mentioned if they meet the criteria for "blue chip" as set forth in the fund's investment objectives and policies. These companies will not necessarily reflect the portfolio composition of Fidelity Blue Chip Growth Fund, nor does the mention of these companies indicate a recommendation to purchase their stock. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION Pursuant to Rule 22d-1 under the Investment Company Act of 1940 (the 1940 Act), FDC exercises its right to waive the fund's front-end sales charge on shares acquired through reinvestment of dividends and capital gain distributions or in connection with the fund's merger with or acquisition of any investment company or trust. In addition, FDC has chosen to waive the fund's sales charge in certain instances because of efficiencies involved in those sales of shares. The sales charge will not apply: 1. to shares purchased in connection with an employee benefit plan (including the Fidelity-sponsored 403(b) and corporate IRA programs but otherwise as defined in the Employee Retirement Income Security Act) maintained by a U.S. employer and having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a U.S. employer that is a member of a parent-subsidiary group of corporations (within the meaning of Section 1563(a)(1) of the Internal Revenue Code, with "50%" substituted for "80%") any member of which maintains an employee benefit plan having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a non-U.S. employer having 200 or more eligible employees, or a minimum of $3,000,000 in assets invested in Fidelity mutual funds, the assets of which are held in a bona fide trust for the exclusive benefit of employees participating therein; 2. to shares purchased by an insurance company separate account used to fund annuity contracts purchased by employee benefit plans (including 403(b) programs, but otherwise as defined in the Employee Retirement Income Security Act), which, in the aggregate, have either more than 200 eligible employees or a minimum of $3,000,000 in assets invested in Fidelity funds; 3. to shares in a Fidelity IRA account purchased (including purchases by exchange) with the proceeds of a distribution from an employee benefit plan provided that: (i) at the time of the distribution, the employer, or an affiliate (as described in exemption above) of such employer, maintained at least one employee benefit plan that qualified for exemption and that had at least some portion of its assets invested in one or more mutual funds advised by FMR, or in one or more accounts or pools advised by Fidelity Management Trust Company; and (ii) the distribution is transferred from the plan to a Fidelity Rollover IRA account within 60 days from the date of the distribution; 4. to shares purchased by a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more; 5. to shares purchased for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code); 6. to shares purchased by an investor participating in the Fidelity Trust Portfolios program (these investors must make initial investments of $100,000 or more in the Trust Portfolios funds and must, during the initial six-month period, reach and maintain an aggregate balance of at least $500,000 in all accounts and subaccounts purchased through the Trust Portfolios program); 7. to shares purchased through Portfolio Advisory Services; 8. to shares purchased by a current or former Trustee or officer of a Fidelity fund or a current or retired officer, director, or regular employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity Trustee or employee, a Fidelity Trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity Trustee or employee; 9. to shares purchased by a bank trust officer, registered representative, or other employee of a qualified recipient. Qualified recipients are securities dealers or other entities, including banks and other financial institutions, who have sold the fund's shares under special arrangements in connection with FDC's sales activities; 10. to shares purchased in a Uniform Gifts to Minors/Uniform Transfers to Minors account; 11. to shares purchased by contributions and exchanges to the following prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR and that are marketed and distributed directly to plan sponsors or participants without any intervention or assistance from any intermediary distribution channel: The Fidelity IRA, T he Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers, and The CORPORATEplan for Retirement (Profit Sharing and Money Purchase Plan); 12. to shares purchased as part of a pension or profit-sharing plan as defined in Section 401(a) of the Internal Revenue Code that maintains all of its mutual fund assets in Fidelity mutual funds, provided the plan executes a Fidelity non-prototype sales charge waiver request form confirming its qualification; 13. to shares purchased by a registered investment adviser (RIA) for his or her discretionary accounts, provided he or she executes a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased directly from Fidelity, without a broker, unless purchased through a brokerage firm which is a correspondent of National Financial Services Corporation (NFSC). The waiver is unavailable, however, if the RIA is part of an organization principally engaged in the brokerage business, unless the brokerage firm in the organization is an NFSC correspondent; or 14. to shares purchased by a trust institution or bank trust department for its non-discretionary, non-retirement fiduciary accounts, provided it executes a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is unavailable if the trust department or institution is part of an organization not principally engaged in banking or trust activities. The fund's sales charge may be reduced to reflect sales charges previously paid, or that would have been paid absent a reduction for some purchases made directly with Fidelity as noted in the prospectus, in connection with investments in other Fidelity funds. This includes reductions for investments in prototype-like retirement plans sponsored by FMR or FMR Corp., which are listed above. On October 12, 1990, the fund changed its sales charge policy from a 2% sales charge upon purchase and 1% deferred sales charge upon redemption, to a 3% sales charge upon purchase. If your shares were purchased prior to that date and you do not qualify for a front-end sales charge reduction under applicable conditions noted above, then, when you redeem those shares, a deferred sales charge amounting to 1% of the net asset value of shares redeemed will be withheld from your redemption proceeds and paid to FDC. The fund is open for business and its net asset value per share (NAV) is calculated each day the New York Stock Exchange (NYSE) is open for trading. The NYSE has designated the following holiday closings for 1 995 : New Year's Day (observed ), President's Day (observed) , Good Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday schedul e to be observed in the future, the NYSE may modify its holiday schedule at any time. In addition, the fund will not process wire purchases and redemptions on days when the Federal Reserve Wire System is closed. FSC normally determines the fund's NAV as of the close of the NYSE (normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if trading on the NYSE is restricted or as permitted by the Securities and Exchange Commission (SEC). To the extent that portfolio securities are traded in other markets on days when the NYSE is closed , the fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. In addition, trading in some of the fund's portfolio securities may not occur on days when the fund is open for business. If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing the fund's NAV. Shareholders receiving securities or other property on redemption may realize a gain or loss for tax purposes, and will incur any costs of sale, as well as the associated inconveniences. Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940 Act), the fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) the fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or the fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the Prospectus , the fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DISTRIBUTIONS. If you request to have distributions mailed to you and the U.S. Postal Service cannot deliver your checks, or if your checks remain uncashed for six months, Fidelity may reinvest your distributions at the then-current NAV. All subsequent distributions will then be reinvested until you provide Fidelity with alternate instructions. DIVIDENDS. A portion of the fund's income may qualify for the dividends-received deduction available to corporate shareholders to the extent that the fund's income is derived from qualifying dividends. Because the fund may earn other types of income, such as interest, income from securities loans, non-qualifying dividends, and short-term capital gains, the percentage of dividends from the fund that qualifies for the deduction generally will be less than 100%. The fund will notify corporate shareholders annually of the percentage of fund dividends that qualifies for the dividends-received deduction. A portion of the fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. Gains (losses) attributable to foreign currency fluctuations are generally taxable as ordinary income, and therefore will increase (decrease) dividend distributions. Short-term capital gains are distributed as dividend income. The fund will send each shareholder a notice in January describing the tax status of dividends and capital gain distributions for the prior year. CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on the sale of securities and distributed to shareholders are federally taxable as long-term capital g ains, r egardless of the length of time shareholders have held their shares. If a shareholder receives a long-term capital gain distribution on shares of the fund , and such shares are held six months or less and are sold at a loss, the portion of the loss equal to the amount of the long-term capital gain distribution will be considered a long-term loss for tax purposes. Short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. A s of July 31, 1995, the fund hereby designates approximately $10,106,000 as a capital gain dividend for the purpose of the div idend paid deduction. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid with respect to foreign securities. Foreign governments may also impose taxes on other payments or gains with respect to foreign securities. If, at the close of its fiscal year, more than 50% of the fund's total assets are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns. TAX STATUS OF THE FUND. The fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company and avoid being subject to federal income or excise taxes at the fund level, the fund intends to distribute substantially all of its net investment income and net realized capital gains within each calendar year as well as on a fiscal year basis. The fund intends to comply with other tax rules applicable to regulated investment companies, including a requirement that capital gains from the sale of securities held less than three months constitute less than 30% of the fund's gross income for each fiscal year. Gains from some forward currency contracts, futures contracts, and options are included in this 30% calculation, which may limit the fund's investments in such instruments. If the fund purchases shares in certain foreign investment entities, defined as passive foreign investment companies (PFICs) in the Internal Revenue Code, it may be subject to U.S. federal income tax on a portion of any excess distribution or gain from the disposition of such shares. Interest charges may also be imposed on the fund with respect to deferred taxes arising from such distributions or gains. Generally, the fund will elect to mark-to-market any PFIC shares. Unrealized gains will be recognized as income for tax purposes and must be distributed to shareholders as dividends. The fund is treated as a separate entity from the other funds of Fidelity Securities Fund for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting the fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether the fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent organized in 1972. The voting common stock of FMR Corp. is divided into two classes. Class B is held predominantly by members of the Edward C. Johnson 3rd family and is entitled to 49% of the vote on any matter acted upon by the voting common stock. Class A is held predominantly by non-Johnson family member employees of FMR Corp. and its affiliates and is entitled to 51% of the vote on any such matter. The Johnson family group and all other Class B shareholders have entered into a shareholders' voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Under the Investment Company Act of 1940 (1940 Act), control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company. Therefore, through their ownership of voting common stock and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the 1940 Act, to form a controlling group with respect to FMR Corp. At present, the principal operating activities of FMR Corp. are those conducted by three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR ; Fidelity Investments Institutional Operations Company, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. T he business address of each Trustee and officer who is an "interested person" (as defined in the Investment Company Act of 1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also the address of FMR. The business address of all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are "interested persons" by virtue of their affiliation with either the trust or F MR are indicated by an asterisk (*). *EDWARD C. JOHNSON 3 d (65), Trustee and President, is Chairman, Chief Executive Officer and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71) , Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (6 7), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence ( 1995) at Columbia University Graduate School of Business and a financial consultant. From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation (reinsurance ), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995) . In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) , is Vice Chairman of FMR (1992). Prior to his retirement on May 31, 1990, he was a Director of FMR (1989) and Executive Vice President of FMR (a position he held until March 31, 1991); Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services (1991-1992). He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and construction). In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for the Preservation of New England Antiquities, and as an Overseer of the Museum of Fine Arts of Boston (1990). GERALD C. McDONOUGH (66), Trustee (1989), is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration, 1989), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70) , Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (62), Trustee (1993) , is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). Prior to 1991, he held the positions of Vice President of International Business Machines Corporation ("IBM") and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS ( 66), Trustee, is President of The Wales Group, Inc. (management and financial advisory services). Prior to retiring in 1987, Mr. Williams served as Chairman of the Board of First Wachovia Corporation (bank holding company), and Chairman and Chief Executive Officer of The First National Bank of Atlanta and First Atlanta Corporation (bank holding company). He is currently a Director of BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc. (restaurants, 1992). WILLIAM J. HAYES (61), Vice President (1994), is Vice President of Fidelity's equity funds; Senior Vice President of FMR; and Managing Director of FMR Corp. ROBERT H. MORRISON (55) , Manager of Security Transactions of Fidelity's equity funds is Vice President of FMR. MICHAEL GORDON (31 ) is manager and Vice President of Blue Chip Growth, which he has managed since January 1993. Previously, he managed Select Chemicals, Select Biotechnology, and assisted on Magellan. Mr. Gordon joined Fidelity in 1987. ARTHUR S. LORING (47) , Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity Funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LCC (1994-1995). JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (49 ), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity Funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current Trustee of the fund for his or her services as trustee for the fiscal year ended July 31, 1995. COMPENSATION TABLE
Trustees Aggregate Pension or Estimated Annual Total Compensation Retirement Benefits Upon Compensation from Benefits Accrued Retirement from from the Fund the Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Complex* J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0 Ralph F. Cox 1,482 5,200 52,000 125,000 Phyllis Burke Davis 1,419 5,200 52,000 122,000 Richard J. Flynn 1,821 0 52,000 154,500 Edward C. Johnson 3d ** 0 0 0 0 E. Bradley Jones 1,469 5,200 49,400 123,500 Donald J. Kirk 1,483 5,200 52,000 125,000 Peter S. Lynch ** 0 0 0 0 Gerald C. McDonough 1,471 5,200 52,000 125,000 Edward H. Malone 1,469 5,200 44,200 128,000 Marvin L. Mann 1,468 5,200 52,000 125,000 Thomas R. Williams 1,443 5,200 52,000 126,500
* Inform ation i s as of December 31, 1994 for 206 funds in the complex. ** Intereste d trustees of the fund are compensated by FMR. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. As of July 31, 1995, the Trustees and officers of the fund owned, in the aggregate, less than 1% of the fund's total outstanding shares. MANAGEMENT CONTRACT The fund employs FMR to furnish investment advisory and other services. Under its management contract with the fund, FMR acts as investment adviser and, subject to the supervision of the Board of Trustees, directs the investments of the fund in accordance with its investment objective, policies, and limitations. FMR also provides the fund with all necessary office facilities and personnel for servicing the fund's investments, c ompensates all officers of the f und and all Trustees who are "interested persons" of the trust or of FMR, and all personnel of the fund or FMR performing services relating to research, statistical, and investment activities. In addition, FMR or its affiliates, subject to the supervision of the Board of Trustees, provide the management and administrative services necessary for the operation of the fund. These services include providing facilities for maintaining the fund's organization; supervising relations with custodians, transfer and pricing agents, accountants, underwriters, and other persons dealing with the fund; preparing all general shareholder communications and conducting shareholder relations; maintaining the fund's records and the registration of the fund's shares under federal and state laws ; developing management and shareholder services for the fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to FSC, the fund pays all of its expenses, without limitation, that are not assumed by those parties. The fund pays for the typesetting, printing, and mailing of its proxy materials to shareholders, legal expenses, and the fees of the custodian, audito r and non-interested Trustees. Although the fund's current management contract provides that the fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices, and reports to shareholders , the trust, on behalf of the fund has entered into a revised transfer agent agreement with FSC, pursuant to which FSC bears the c osts of providing these services to existing shareholders. Other expenses paid by the fund include interest, taxes, brokerage commissions, and t he fund's proportionate share of insurance premiums and Investment Company Institute due s. The fund is also liable for such non -recurring expenses as may arise, including costs of any litigation to which the fund may be a p arty, and any obligation it may have to indemnify its officers and Trustees with respect to litigation. FMR is the fund's manager pursuant to a management contract dated August 1, 1994, which was approved by shareholders on July 13, 1994. For the services of FMR under the contract, the fund pays FMR a monthly management fee composed of the sum of two elements: a basic fee and a performance adjustment based on a comparison of the fund's performance to that of the Standard & Poor's Composite Index of 500 Stocks (S&P 500). COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two elements: a group fee rate and an individual fund fee rate. The group fee rate is based on the monthly average net assets of all of the registered investment companies with which FMR has management contracts and is calculated on a cumulative basis pursuant to the graduated fee rate s chedule shown belo w on the left. The schedule below on the right shows the effective annual group fee rate at various asset levels, which is the result of cumulatively applying the annualized rates on the left. For example, the effective annu al fee rate at $333 b illion of group net assets - the approximate level for July 1995 - w as .3129%, wh ich is the weighted average of the respective fee rates for each level of group net assets up to $ 333 billion. GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate $ 0 - 3 billion .5200% $ 0.5 billion .5200% 3 - 6 .4900 25 .4238 6 - 9 .4600 50 .3823 9 - 12 .4300 75 .3626 12 - 15 .4000 100 .3512 15 - 18 .3850 125 .3430 18 - 21 .3700 150 .3371 21 - 24 .3600 175 .3325 24 - 30 .3500 200 .3284 30 - 36 .3450 225 .3253 36 - 42 .3400 250 .3223 42 - 48 .3350 275 .3198 48 - 66 .3250 300 .3175 66 - 84 .3200 325 .3153 84 - 102 .3150 350 .3133 102 - 138 .3100 138 - 174 .3050 174 - 228 .3000 228 - 282 .2950 282 - 336 .2900 Over 336 .2850 Prior to August 1, 1994, the group fee rate was based on a schedule with breakpoints ending at .3100% for average group assets in excess of $102 billion. The group fee rate breakpoints shown above for average group assets in excess of $138 billion and under $228 billion were voluntarily adopted by FMR on January 1, 1992. The additional breakpoints shown above for average group assets in excess of $228 billion were voluntarily adopted by FMR on November 1, 1993. The fund's current management contract reflects these extensions of the group fee rate schedule. On August 1, 1994, FMR voluntarily revised the prior extensions to the group fee rate schedule, and added new breakpoints. The revised group fee rate schedule provides for lower management fee rates as FMR's assets under management increase. The revised group fee rate schedule is identical to the above schedule for average group assets under $210 billion. For average group assets in excess of $210 billion, the group fee rate schedule voluntarily adopted by FMR is as follows: GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate 138 - $174 billion .3050% $150 billion .3371% 174 - 210 .3000 175 .3325 210 - 246 .2950 200 .3284 246 - 282 .2900 225 .3249 282 - 318 .2850 250 .3219 318 - 354 .2800 275 .3190 354 - 390 .2750 300 .3163 Over 390 .2700 325 .3137 350 .3113 375 .3090 400 .3067 The individual fund fee rate is .30%. Based on the average group net assets of the funds advised by FMR for July 1995, the annual basic fee rate would be calculated as follows: Group Fee Rate Individual Fund Fee Rate Basic Fee Rate . 3129% + .30% = . 6129 % One-twelfth of this annual basic fee rate is applied to the fund's net assets averaged for the most recent month, giving a dollar amoun t, which is the fee for that month. COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward or downward adjustment, depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, the record of the S&P 500 (the Index ) over the same period. The performance period consists of the most recent month plus the previous 35 months. Each percentage point of difference, calculated to the nearest 1.0% (up to a maximum difference of (plus/minus)10.00 ) is multiplied by a performance adjustment rate of .02%. Thus, the maximum annualized adjustment rate is (plus/minus).20%. This performance comparison is made at the end of each month. One twelfth (1/12) of this rate is then applied to the fund's average net assets for the entire performance period, giving a dollar amount which will be added to (or subtracted from) the basic fee. The fund's performance is calculated based on chang e in net asset value. For purposes of calculating the performance adjustment, any dividends or capital gain distributions paid by the fund are treated as if reinvested in fund shares at the net asset value as of the record date for payment. The record of the I ndex is based on change in value and is adjusted for any cash distributions from the companies whose securities compose th e Index. Because the adjustment to the basic fee is based on the fund's performance compared to the investment record of the Index, the controlling factor is not whether the fund's performance is up or down per se, but whether it is up or down more or less than the record of the Index. Moreover, the comparative investment performance of the is based solely on the relevant performance period without regard to the cumulative performance over a longer or shorter period of time. During the fiscal years ended July 31, 1995, 1994, and 1993, FMR received $26,386,000, $9,579,000 and $4,266,000, respectively, for its services as investment adviser to the fund. These fees, which include both the basic fee and the performance adjustment, were equivalent to .69%, .70%, and .72% , respectively, of the average net assets of the fund for each of those years. For fiscal 1 995, 1994, and 1993, the upward performance adjustments amounted to $2,593,000, $1,080,000, and $547,000, respectively. F MR may, from time to time, voluntarily reimburse all or a portion of the fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). FMR retains the ability to be repaid for these expense reimbursements in the amount that expenses fall below the limit prior to the end of the fiscal year. Expense reimbursements by FMR will increase the fund's total returns and repayment of the reimbursement by the fund will lower its total returns. To comply with the California Code of Regulations, FMR will reimburse the fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating the fund's expenses for purposes of this regulation, the fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its custodian fees attributable to investments in foreign securities. SUB-ADVISERS. FMR has entered into sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to the sub-advisory agreements, FMR may receive investment advice and research services outside the United States from the sub-advisers. FMR may also grant the sub-advisers investment management authority as well as the authority to buy and sell securities if FMR believes it would be beneficial to the fund. Currently, FMR U.K. and FMR Far East each focus on issuers in countries other than the United States such as those in Europe, Asia, and the Pacific Basin. FMR U.K. and FMR Far East, which were organized in 1986, a re wholly owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of FMR U.K. and FMR Far East. For providing non-discretionary investment advice and research services, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection with providing investment advice and research services. For providing discretionary investment management and executing portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its monthly management fee rate (including any performance adjustment) with respect to the fund's average net assets managed by the sub-adviser on a discretionary basis. For providing investment advice and research services in fiscal 1995, FMR U.K. received $235,880 and FMR Far East received $215,906. The sub-advisors received no fees in fiscal 1994 and 1993. For fiscal 1995, there were no fees paid to FMR U.K. and FMR Far East for discretionary investment management and the execution of portfolio transactions. CONTRACTS WITH FMR AFFILIATES FSC is transfer, dividend disbursing, and shareholder servicing agent for the fund. FSC receives annual account fees and asset-based fees for each retail account and certain institutional accounts based on account size. In addition, the fees for retail accounts are subject to increase based on postal rate changes. With respect to certain institutional retirement accounts, FSC receives asset-based fees only. The asset-based fees are subject to adjustment if the year-to-date total return of the Standard & Poor's Composite Index of 500 Stocks is greater than positive or negative 15%. FSC also collects small account fees from certain accounts with balances of less than $2,500. F SC pays out-of-pocket expenses associated with providing transfer agent services. In addition, FSC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. FSC also performs the calculations necessary to determine the fund's net asset value per share and dividends, and maintains the fund's accounting records. The annual fee rates for these pricing and bookkeeping services are based on the fund's average net assets, specifically, .06% for the first $500 million of average net assets and .03% for average net assets in excess of $500 million. The fee is limited to a minimum of $45,000 and a maximum of $750,000 per year. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC fo r fiscal 1995, 1994, and 1993 were $757,000, $560,000, and $330,000, respectively . The fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls for FDC to use all reasonable efforts, consistent with its other business, to secure purchasers for shares of the fund, which are continuously offered. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FDC. Sales charge revenue paid to FDC for fiscal 1995, 1994, and 1993 amounted to $10,174,000, $6,514,000, and $1,319,000, respectively. FDC collected deferred sales charge revenue of $17,000, $26,000, and $92,000, respectively, during fiscal 1995, 1994, and 1993. DESCRIPTION OF THE TRUST TRUST ORGANIZATION. Fidelity Blue Chip Growth Fund is a fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. Currently, there are four funds of the trust: Fidelity Blue Chip Growth Fund, Fidelity OTC Portfolio, Fidelity Dividend Growth Fund, and Fidelity Growth & Income Portfolio. The Declaration of Trust permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to the trust or a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. The assets of the trust received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fun d. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trust are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trust, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of the trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable for the obligations of the trust. The Declaration of Trust provides that the trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the trust or the Trustees include a provision limiting the obligations created thereby to the trust and its assets. The Declaration of Trust provides for indemnification out of each fund's property of any shareholder held personally liable for the obligations of the fund. The Declaration of Trust also provides that each fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the fund and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which a fund itself would be unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is remote. The Declaration of Trust further provides that the Trustees, if they have exercised reasonable care, will not be liable for any neglect or wrongdoing, but nothing in the Declaration of Trust protects Trustees against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. VOTING RIGHTS. Each fund's capital consists of shares of beneficial interest. As a shareholder, you receive one vote for each dollar value of net asset value yo u own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and nonassessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of the trust or a fund may, as set forth in the Declaration of Trust, call meetings of the trust or a fund for any purpose related to the trust or fund, as the case may be, including, in the case of a meeting of the entire trust, the purpose of voting on removal of one or more Trustees. The trust or any fund may be terminated upon the sale of its assets to another open-end management investment company, or upon liquidation and distribution of its assets, if approved by v ote of the holders of a majority of the trust or the fund, as determined by the current value of each shareholder's investment in the fund or trust. If not so terminated, the trust and its funds will continue indefinitely. Each fu nd may invest all of its assets in another investment company. CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts, is custodian of the assets of the fund. The custodian is responsible for the safekeeping of a fund's assets and the appointment of the subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies o f a fun d or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Morgan Guaranty Trust Company of New York, The Bank of New York, and Chemical Bank, each headquartered in New York, also may serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the Board of Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds ad vised by FMR. The Boston branch of the fund's custodian leases its office space from an affiliate of FMR at a lease payment which, when entered into, was consistent with prevailing market rates. Transactions that have occurred to date include mortgages and personal and general business loans. In the judgment of FMR, the terms and conditions of those transactions were not influenced by existing or potential custodial or other fund relationships. AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, serves as the trust's independent accountant. The auditor examines financial statements for the fund and provides other audit, tax, and related services. FINANCIAL STATEMENTS The fund's financial statements and financial highlights for the fiscal year ended July 31, 1 995 are included in the fund's Annual Report, which is a separate report supplied with this Statement of Additional Information. The fund's financial statements and financial highlights are incorporated herein by reference. FIDELITY OTC PORTFOLIO CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1................................... Cover Page ... 2a.................................. Expenses .. b, Contents; The Fund at a Glance; Who May Want to c............................... Invest 3a.................................. Financial Highlights .. * b................................... c, d............................. Performance 4a i.............................. Charter The Fund at a Glance; Investment Principles and ii............................... Risks Investment Principles and Risks b................................... Who May Want to Invest; Investment Principles and c................................... Risks 5a.................................. Charter .. b Cover Page; The Fund at a Glance; Charter; Doing i.............................. Business with Fidelity Charter ii.............................. Expenses; Breakdown of Expenses iii............................. c................................ Charter d................................ Charter; Breakdown of Expenses, Cover Page; Charter e.................................... Expenses f.................................... g i.............................. Charter * ii............................... 5A................................. Performance . 6a Charter i................................. How to Buy Shares; How to Sell Shares; Transaction ii................................ Details; Exchange Restrictions Charter iii................................ * b.................................. Transaction Details; Exchange Restrictions c.................................. * d.................................. Doing Business with Fidelity; How to Buy Shares; e.................................. How to Sell Shares; Investor Services f, Dividends, Capital Gains, and Taxes g.............................. 7 Cover Page; Charter a.................................. Expenses; How to Buy Shares; Transaction Details b................................. Sales Charge Reductions and Waivers c.................................. How to Buy Shares d.................................. * e.................................. f................................ Breakdown of Expenses 8................................... How to Sell Shares; Investor Services; Transaction ... Details; Exchange Restrictions 9................................... * ...
* Not Applicable FIDELITY OTC PORTFOLIO CROSS REFERENCE SHEET (continued) FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10, Cover Page 11............................. 12.................................. Description of the Trust .. 13a - Investment Policies and Limitations c............................ Portfolio Transactions d.................................. 14a - Trustees and Officers c............................ 15a , * b............................. Trustees and Officers c................................ 16a FMR, Portfolio Transactions i................................ Trustees and Officers ii.............................. Management Contract iii.............................. Management Contract b................................. c, Contracts with FMR Affiliates d............................. e........................... * f........................... * g........................... * Description of the Trust h................................. Contracts with FMR Affiliates i................................. 17a - Portfolio Transactions c............................ * d,e.............................. 18a................................ Description of the Trust .. * b................................. 19a................................ Additional Purchase and Redemption Information .. Additional Purchase and Redemption Information; b................................ Valuation of Portfolio Securities * c................................. 20.................................. Distributions and Taxes .. 21a, b............................ Contracts with Companies Affiliated with FMR * c................................. 22a b...................... Performance . 23.................................. Financial Statements ..
* Not Applicable Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how the fund invests and the services available to shareholders. To learn more about the fund and its investments, you can obtain a copy of the fund's most recent financial report and portfolio listing, or a copy of the Statement of Additional Information (SAI) dated September 19,1995 . The SAI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, call Fidelity at 1-800-544-8888. Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, the Federal Reserve Board, or any other agency, and are subject to investment risk, including the possible loss of principal. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. OTC-pro-995 OTC is a growth fund. It seeks to increase the value of your investment over the long term by investing mainly in equity securities traded on the over-the-counter market. FIDELITY OTC PORTFOLIO PROSPECTUS SEPTEMBER 19, 1995 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS KEY FACTS THE FUND AT A GLANCE WHO MAY WANT TO INVEST EXPENSES The fund's sales charge (load) and its yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of the fund's financial data. PERFORMANCE How the fund has done over time. THE FUND IN DETAIL CHARTER How the fund is organized. INVESTMENT PRINCIPLES AND RISKS The fund's overall approach to investing. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY TYPES OF ACCOUNTS Different ways to set up your account, including tax-sheltered retirement plans. HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, ACCOUNT POLICIES AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS SALES CHARGE REDUCTIONS AND WAIVERS KEY FACTS THE FUND AT A GLANCE GOAL: Capital appreciation (increase in the value of the fund's shares) . As with any mutual fund, there is no assurance that the fund will achieve its goal. STRATEGY: Invests mainly in equity securities traded on the over-the-counter market . MANAGEMENT: Fidelity Management & Research Company (FMR) is the management arm of Fidelity Investments, which was established in 1946 and is now America's largest mutual fund manager. Foreign affiliates of FMR may help choose investments for the fund. SIZE: As of July 31, 199 5 , the fund had over $ 2.1 b illion in assets. WHO MAY WANT TO INVEST The fund may be appropriate for investors who are willing to ride out stock market fluctuations in pursuit of potentially high long-term returns. The fund is designed for those who are looking for an investment that focuses on the over-the-counter market. This strategy often leads to investments in smaller, less well-known companies. The value of the fund's investments will vary from day to day, and generally reflect market conditions, interest rates, and other company, political, or economic news. In the short-term, stock prices can fluctuate dramatically in response to these factors. The securities of small, less well-known companies may be more volatile than those of larger companies. Over time, however, stocks have shown greater growth potential than other types of securities. When you sell your shares, they may be worth more or less than what you paid for them. By itself, the fund does not constitute a balanced investment plan. THE SPECTRUM OF FIDELITY FUNDS Broad categories of Fidelity funds are presented here in order of ascending risk. Generally, investors seeking to maximize return must assume greater risk. OTC is in the GROWTH category. (solid bullet) MONEY MARKET Seeks income and stability by investing in high-quality, short-term investments. (solid bullet) INCOME Seeks income by investing in bonds. (solid bullet) GROWTH AND INCOME Seeks long-term growth and income by investing in stocks and bonds. (right arrow) GROWTH Seeks long-term growth by investing mainly in stocks. (checkmark) EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell, or hold shares of a fund. See pages and - for an explanation of how and when these charges apply. Lower sales charges may be available for accounts over $250,000. Maximum sales charge on purchases (as a % of offering price) 3.00% Maximum sales charge on reinvested distributions None Deferred sales charge on redemptions None Exchange fee None Annual account maintenance fee (for accounts under $2500) $12.00 ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund pays a management fee that varies based on its performance. It also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. The fund's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see page ). The following are projections based on historical expenses , and are calculated as a percentage of average net assets. Management fee .51% 12b-1 fee None Other expenses .30% Total fund operating expenses .81% EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5% and that its operating expenses are exactly as just described. For every $1,000 you invested, here's how much you would pay in total expenses if you close your account after the number of years indicated: After 1 year $ 38 After 3 years $ 55 After 5 years $ 74 After 10 years $ 12 7 These examples illustrate the effect of expenses, but are not meant to suggest actual or expected costs or returns, all of which may vary. UNDERSTANDING EXPENSES Operating a mutual fund involves a variety of expenses for portfolio management, shareholder statements, tax reporting, and other services. As an investor, you pay some of these costs directly (for example, the fund's 3% sales charge). Others are paid from the fund's assets; the effect of these other expenses is already factored into any quoted share price or return. (checkmark) FINANCIAL HIGHLIGHTS The table that follows is included in the fund's Annual Report and has been audited by Coopers & Lybrand L.L.P., independent accountants. Their report on the financial statements and financial highlights is included in the Annual Report. The financial statements and financial highlights are incorporated by reference into (are legally a part of) the fund's Statement of Additional Information. SELECTED PER-SHARE DATA
38.Years ended July 31 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 D 39.Net asset value, $ 14.7 $ 18.5 $ 21.7 $ 17.9 $ 22.3 $ 20.4 $ 24.2 $ 24.6 $ 25.9 $ 22.4 beginning of period 6 5 9 5 6 2 8 5 0 2 40.Income from Investment Operations 41. Net investment .04 .02 .17 .50 .51 .19 .08 .06 .12 .09 income 42. Net realized and 4.21 4.51 (2.06 4.21 .47 4.30 2.92 3.68 (.08) 8.79 unrealized gain (loss) ) on investments 43. Total from 4.25 4.53 (1.89 4.71 .98 4.49 3.00 3.74 .04 8.88 investment ) operations 44.Less Distributions 45. From net (.01) (.02) (.02) (.30) (.51) (.05) (.12) (.25) (.12) (.09) investment income 46. From net realized (.45) (1.27 (1.93 -- (2.41 (.58) (2.51 (2.24 (3.40 (.12) gain ) ) ) ) ) ) 47. Total distributions (.46) (1.29 (1.95 (.30) (2.92 (.63) (2.63 (2.49 (3.52 (.21) ) ) ) ) ) ) 48.Net asset value, $ 18.5 $ 21.7 $ 17.9 $ 22.3 $ 20.4 $ 24.2 $ 24.6 $ 25.9 $ 22.4 $ 31.0 end of period 5 9 5 6 2 8 5 0 2 9 49.Total return B,C 29.99 26.56 (5.85) 26.72 4.53 23.03 13.30 16.67 (.36) 39.98 % % % % % % % % % % 50.RATIOS AND SUPPLEMENTAL DATA 51.Net assets, end of $ 784 $ 1,27 $ 933 $ 772 $ 697 $ 864 $ 1,03 $ 1,32 $ 1,23 $ 2,11 period (In millions) 4 7 7 0 0 52.Ratio of expenses 1.31 1.36 1.42 1.32 1.35 1.29 1.17 1.08 .88% .81% to average net assets % % % % % % % % A A 53.Ratio of expenses 1.31 1.36 1.42 l.32% 1.35 1.29 1.17 1.08 .89% .82% to average net assets % % % % % % % A A before expense reductions 54.Ratio of net .57% .12% .90% 2.02 2.30 1.00 .59% .53% .48% .35% investment income to average net assets 55.Portfolio turnover 132% 191% 193% 118% 212% 198% 245% 213% 222% 62% rate
A FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES. B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C TOTAL REUTURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE. D EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT PER SHARE MAY REFLECT CERTAIN RECLASSIFICAITONS RELATED TO BOOK TAX DIFFERENCES. PERFORMANCE Mutual fund performance is commonly measured as TOTAL RETURN. The total returns that follow are based on historical fund results and do not reflect the effect of taxes. The fund's fiscal year runs from August 1 through July 31. The tables below show the fund's performance over past fiscal years compared to two measures: investing in a broad selection of stocks (NASDAQ Index), and not investing at all (inflation, or CPI). To help you compare this fund to other funds, the chart on page displays calendar-year performance. AVERAGE ANNUAL TOTAL RETURNS Fiscal years Pas Past Past ended t 1 5 10 July 31, 199 5 yea year year r s s OTC 39.98 17.80 16.62 % % % OTC 35.78 17.08 16.27 (load adj. A ) % % % NASDAQ 38.64 17.97 12.76 Index % % % Consumer 2.76 3.18 3.53 Price % % % Index CUMULATIVE TOTAL RETURNS Fiscal years Pas Past Past ended t 1 5 10 July 31, 199 5 yea year year r s s OTC 39.98 126.8 365.43 % 3% % OTC 35.78 120.0 351.47 (load adj A ) % 3% % NASDAQ 38.64 128. 4 232.31 Index % 6 % % Consumer 2.76 16.95 41.47 Price % % % Index A LOAD -ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING THE FUND'S 3% SALES CHARGE. EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the fund on July 31, 198 5 . From that date through July 31, 199 5 , the fund's total return, including the effect of paying the 3% sales charge, was 351.47%. That $10,000 would have grown to $45,147 (the initial investment plus 351.47% of $10,000). UNDERSTANDING PERFORMANCE Because this fund invests in stocks, its performance is related to that of the overall stock market. Historically, stock market performance has been characterized by volatility in the short run and growth in the long run. You can see these two characteristics reflected in the fund's performance; the year-by-year total returns on page show that short-term returns can vary widely, while the returns at left show long-term growth. (checkmark) $10,000 OVER TEN YEARS Fiscal years 19 85 19 90 199 5 Row: 1, Col: 1, Value: 9700.0 Row: 2, Col: 1, Value: 9772.290000000001 Row: 3, Col: 1, Value: 9121.68 Row: 4, Col: 1, Value: 9679.040000000001 Row: 5, Col: 1, Value: 10290.78 Row: 6, Col: 1, Value: 10827.75 Row: 7, Col: 1, Value: 11595.82 Row: 8, Col: 1, Value: 12438.65 Row: 9, Col: 1, Value: 13063.99 Row: 10, Col: 1, Value: 13356.26 Row: 11, Col: 1, Value: 13682.52 Row: 12, Col: 1, Value: 13798.07 Row: 13, Col: 1, Value: 12608.58 Row: 14, Col: 1, Value: 13233.91 Row: 15, Col: 1, Value: 11881.29 Row: 16, Col: 1, Value: 12464.4 Row: 17, Col: 1, Value: 12273.99 Row: 18, Col: 1, Value: 12061.61 Row: 19, Col: 1, Value: 13548.26 Row: 20, Col: 1, Value: 14998.29 Row: 21, Col: 1, Value: 14961.67 Row: 22, Col: 1, Value: 14793.23 Row: 23, Col: 1, Value: 14925.06 Row: 24, Col: 1, Value: 15225.31 Row: 25, Col: 1, Value: 15957.65 Row: 26, Col: 1, Value: 16704.64 Row: 27, Col: 1, Value: 16602.11 Row: 28, Col: 1, Value: 11600.24 Row: 29, Col: 1, Value: 10897.19 Row: 30, Col: 1, Value: 12254.19 Row: 31, Col: 1, Value: 12689.45 Row: 32, Col: 1, Value: 13534.85 Row: 33, Col: 1, Value: 13844.56 Row: 34, Col: 1, Value: 14263.07 Row: 35, Col: 1, Value: 14137.52 Row: 36, Col: 1, Value: 15075.0 Row: 37, Col: 1, Value: 15024.78 Row: 38, Col: 1, Value: 14664.85 Row: 39, Col: 1, Value: 15225.66 Row: 40, Col: 1, Value: 15217.29 Row: 41, Col: 1, Value: 14723.44 Row: 42, Col: 1, Value: 15054.81 Row: 43, Col: 1, Value: 16025.54 Row: 44, Col: 1, Value: 15982.96 Row: 45, Col: 1, Value: 16681.21 Row: 46, Col: 1, Value: 17498.66 Row: 47, Col: 1, Value: 18282.06 Row: 48, Col: 1, Value: 18239.48 Row: 49, Col: 1, Value: 19039.91 Row: 50, Col: 1, Value: 19891.42 Row: 51, Col: 1, Value: 20005.0 Row: 52, Col: 1, Value: 19330.48 Row: 53, Col: 1, Value: 19507.98 Row: 54, Col: 1, Value: 19630.34 Row: 55, Col: 1, Value: 18236.52 Row: 56, Col: 1, Value: 18743.36 Row: 57, Col: 1, Value: 19454.89 Row: 58, Col: 1, Value: 18889.57 Row: 59, Col: 1, Value: 20127.43 Row: 60, Col: 1, Value: 20166.42 Row: 61, Col: 1, Value: 19903.25 Row: 62, Col: 1, Value: 18187.79 Row: 63, Col: 1, Value: 17186.83 Row: 64, Col: 1, Value: 16824.37 Row: 65, Col: 1, Value: 17992.31 Row: 66, Col: 1, Value: 18697.66 Row: 67, Col: 1, Value: 20170.08 Row: 68, Col: 1, Value: 21733.26 Row: 69, Col: 1, Value: 22953.55 Row: 70, Col: 1, Value: 22913.21 Row: 71, Col: 1, Value: 24032.65 Row: 72, Col: 1, Value: 22872.87 Row: 73, Col: 1, Value: 24486.48 Row: 74, Col: 1, Value: 25777.36 Row: 75, Col: 1, Value: 25550.84 Row: 76, Col: 1, Value: 26661.74 Row: 77, Col: 1, Value: 25401.29 Row: 78, Col: 1, Value: 27889.33 Row: 79, Col: 1, Value: 29093.59 Row: 80, Col: 1, Value: 29149.87 Row: 81, Col: 1, Value: 28215.72 Row: 82, Col: 1, Value: 27382.87 Row: 83, Col: 1, Value: 27776.78 Row: 84, Col: 1, Value: 27169.03 Row: 85, Col: 1, Value: 27743.02 Row: 86, Col: 1, Value: 27056.48 Row: 87, Col: 1, Value: 27891.57 Row: 88, Col: 1, Value: 28930.93 Row: 89, Col: 1, Value: 30972.97 Row: 90, Col: 1, Value: 32055.93 Row: 91, Col: 1, Value: 32268.39 Row: 92, Col: 1, Value: 31006.15 Row: 93, Col: 1, Value: 32080.93 Row: 94, Col: 1, Value: 31143.62 Row: 95, Col: 1, Value: 31980.95 Row: 96, Col: 1, Value: 32018.44 Row: 97, Col: 1, Value: 32368.37 Row: 98, Col: 1, Value: 32968.25 Row: 99, Col: 1, Value: 33874.31 Row: 100, Col: 1, Value: 34321.09 Row: 101, Col: 1, Value: 33413.99 Row: 102, Col: 1, Value: 34727.31 Row: 103, Col: 1, Value: 35662.38 Row: 104, Col: 1, Value: 35288.35000000001 Row: 105, Col: 1, Value: 33878.54 Row: 106, Col: 1, Value: 32943.47 Row: 107, Col: 1, Value: 32770.84 Row: 108, Col: 1, Value: 31562.43 Row: 109, Col: 1, Value: 32252.95 Row: 110, Col: 1, Value: 33864.16 Row: 111, Col: 1, Value: 33950.47 Row: 112, Col: 1, Value: 34727.31 Row: 113, Col: 1, Value: 33590.83 Row: 114, Col: 1, Value: 33791.27 Row: 115, Col: 1, Value: 33718.66 Row: 116, Col: 1, Value: 35490.27 Row: 117, Col: 1, Value: 36681.02 Row: 118, Col: 1, Value: 38220.28999999999 Row: 119, Col: 1, Value: 39309.39 Row: 120, Col: 1, Value: 42358.89 Row: 121, Col: 1, Value: 45146.99 $ $45,147 EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in the fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. NASDAQ INDEX(registered trademark) is the NASDAQ Composite Index , an unmanaged index which assume s reinvestment of all dividends and quotes more than 5,000 over-the-counter stock prices. NASDAQ figures do not include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated by the U.S. government. THE COMPETITIVE FUNDS AVERAGE is the Lipper Mid-Cap Objective, which currently reflects the performance of over 75 mutual funds with similar objectives. This average, which assumes reinvestment of distributions, is published by Lipper Analytical Services, Inc. YEAR-BY-YEAR TOTAL RETURNS Calendar years 19 85 19 86 19 87 19 88 1 989 19 90 19 91 19 92 19 93 19 94 OTC 68.64% 11.40% 1.60% 22.85% 30.39% -4.75% 49.16% 14.94% 8.33% -2.70% Competitive funds average 30.66% 11.07% 0.06% 15.53% 26.53% -3.95% 50.41% 9.7 0% 14.71% -2.05% Percentage (%) Row: 1, Col: 1, Value: 68.64 Row: 1, Col: 2, Value: 30.66 Row: 2, Col: 1, Value: 11.4 Row: 2, Col: 2, Value: 11.07 Row: 3, Col: 1, Value: 1.6 Row: 3, Col: 2, Value: 0.06 Row: 4, Col: 1, Value: 22.85 Row: 4, Col: 2, Value: 15.53 Row: 5, Col: 1, Value: 30.39 Row: 5, Col: 2, Value: 26.53 Row: 6, Col: 1, Value: -4.75 Row: 6, Col: 2, Value: -3.95 Row: 7, Col: 1, Value: 49.16 Row: 7, Col: 2, Value: 50.41 Row: 8, Col: 1, Value: 14.94 Row: 8, Col: 2, Value: 9.699999999999999 Row: 9, Col: 1, Value: 8.33 Row: 9, Col: 2, Value: 14.71 Row: 10, Col: 1, Value: -2.7 Row: 10, Col: 2, Value: -2.05 (large solid box) OTC (large hollow box) Competitive funds average Other illustrations of fund performance may show moving averages over specified periods. The fund's recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance or a free annual report, call 1-800-544-8888. TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. THE FUND IN DETAIL CHARTER OTC IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. In technical terms, the fund is currently a diversified fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. Fidelity will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. The number of votes you are entitled to is based upon the dollar value of your investment. FMR AND ITS AFFILIATES The fund is managed by FMR, which chooses the fund's investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London, England, and Fidelity Management & Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign investments. Abigail Johnson is manager and Vice President of OTC, which she has managed since April 1994. Previously, she managed Dividend Growth and the Select Industrial Equipment, Developing Communications, and Telecommunications Portfolios. Ms. Johnson joined Fidelity in 1988. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Service Co. (FSC) performs transfer agent servicing functions for the fund. FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far East. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company; therefore, the Johnson family may be deemed under the 1940 act to form a controlling group with respect to FMR Corp. FMR may use its broker-dealer affiliates and other firms that sell fund shares to carry out the fund's transactions, provided that the fund receives brokerage services and commission rates comparable to those of other broker-dealers. INVESTMENT PRINCIPLES AND RISKS THE FUND SEEKS CAPITAL APPRECIATION by investing primarily in securities traded on the over-the-counter (OTC) market. FMR normally invests at least 65% of the funds total assets in securities principally traded on the OTC market. The fund focuses on common stock but may invest in securities of all types. In the OTC market, securities are traded through a telephone or computer network that connects securities dealers. A security that trades solely on the OTC market is not traded on the floor of an organized exchange. Securities that begin to trade principally on an exchange after purchase continue to be considered OTC securities for the purposes of the 65% policy. The fund does not place any emphasis on income, except when FMR believes income will have a favorable influence on the security's market value. Securities traded on the OTC market tend to be those of smaller companies, which carry more risk than investing in larger companies. Their reliance on limited product lines and markets, financial resources, or other factors may make small companies more susceptible to set-backs or downturns. As a result their stock prices may be particularly volatile. The value of the funds domestic and foreign securities varies in response to many factors. Stock values fluctuate in response to the activities of individual companies, and general market conditions. Investments in foreign securities may involve risks in addition to those of U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. FMR may use various investment techniques to hedge the fund's risks, but there is no guarantee that these strate gies will work as FMR intends. Also, as a mutual fund, the fund seeks to spread investment risk by diversifying its holdings among many companies and industries. Of course, when you sell your shares of the fund, they may be worth more or less than what you paid for them. FMR normally invests the fund's assets according to its investment strategy. The fund also reserves the right to invest without limitation in preferred stocks and investment-grade debt instruments for temporary, defensive purposes. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which the fund may invest, strategies FMR may employ in pursuit of the fund's investment objective, and a summary of related risks. Any restrictions listed supplement those discussed earlier in this section. A complete listing of the fund's limitations and more detailed information about the fund's investments are contained in the fund's SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with the fund's investment objective and policies and that doing so will help the fund achieve its goal. Current holdings and recent investment strategies are described in the fund's financial reports which are sent to shareholders twice a year. For a free SAI or financial report, call 1-800-544-8888. EQUITY SECURITIES may include common stocks, preferred stocks, convertible securities, and warrants. Common stocks, the most familiar type, represent an equity (ownership) interest in a corporation. Although equity securities have a history of long-term growth in value, their prices fluctuate based on changes in a company's financial condition and on overall market and economic conditions. Smaller companies are especially sensitive to these factors. RESTRICTIONS: With respect to 75% of total assets, the fund may not own more than 10% of the outstanding voting securities of a single issuer. DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest, and must repay the amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values. In general, bond prices rise when interest rates fall, and vice versa. Debt securities, loans, and other direct debt have varying degrees of quality and varying levels of sensitivity to changes in interest rates. Lower-quality debt securities are sometimes called "junk bonds." Longer-term bonds are generally more sensitive to interest rate changes than short-term bonds. Investment-grade debt securities are medium- and high-quality securities. Some, however, may possess speculative characteristics and may be more sensitive to economic changes and to changes in the financial condition of issuers. RESTRICTIONS: Purchase of a debt security is consistent with the fund's debt quality policy if it is rated at or above the stated level by Moody's or rated in the equivalent categories by S&P, or is unrated but judged to be of equivalent quality by FMR. The fund currently intends to limit its investments in lower than Baa-quality debt securities to 5% of its assets. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve additional risks and considerations. These include risks relating to political or economic conditions in foreign countries, fluctuations in foreign currencies, withholding or other taxes, operational risks, increased regulatory burdens, and the potentially less stringent investor protection and disclosure standards of foreign markets. Addition ally, governmental issuers of foreign s ecurities may be unwilling to repay principal and interest when due, and may require that the conditions for payment be renegotiated. All of these factors can make foreign investments, especially those in developing countries, more volatile. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to increase or decrease its exposure to changing security prices, interest rates, currency exchange rates, commodity prices, or other factors that affect security values. These techniques may involve derivative transactions such as buying and selling options and futures contracts, entering into currency exchange contracts or swap agreements, and purchasing indexed securities. FMR can use these practices to adjust the risk and return characteristics of the fund's portfolio of investments. If FMR judges market conditions incorrectly or employs a strategy that does not correlate well with the fund's investments, these techniques could result in a loss, regardless of whether the intent was to reduce risk or increase return. These techniques may increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risk assumed. In addition, these techniques could result in a loss if the counterparty to the transaction does not perform as promised. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of some illiquid securities and some other securities may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to the fund. RESTRICTIONS: The fund may not purchase a security if, as a result, more than 10% of its assets would be invested in illiquid securities. OTHER INSTRUMENTS may include securities of closed-end investment companies and real estate-related investments. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry. RESTRICTIONS: With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer. The fund may not invest more than 25% of its total assets in any one industry. These limitations do not apply to U.S. government securities. BORROWING. The fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements. If the fund borrows money, its share price may be subject to greater fluctuation until the borrowing is paid off. If the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage. RESTRICTIONS: The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. LENDING. Lending securities to broker-dealers and institutions, including Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning income. This practice could result in a loss or a delay in recovering the fund's securities. The fund may also lend money to other funds advised by FMR. RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraph restates all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraph, can be changed without shareholder approval. The fund seeks capital appreciation by investing primarily in securities traded on the over-the-counter securities market. OTC securities mean securities principally traded on the over-the-counter market which may be listed for trading on the New York or American Stock Exchange, or a foreign exchange, and may include American Depositary Receipts and securities eligible for unlisted trading privileges on such exchanges. No emphasis is placed on dividend income except when FMR believes this income will have a favorable influence on the market value of the security. The fund may also make substantial temporary investments in debt obligations for defensive purposes when FMR believes market conditions warrant. With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer and may not own more than 10% of the outstanding voting securities of a single issuer. The fund may not invest more than 25% of its total assets in any one industry. The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. Loans, in the aggregate, may not exceed 33% of the fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the fund pays fees related to its daily operations. Expenses paid out of the fund's assets are reflected in its share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. The fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to affiliates who provide assistance with these services. The fund also pays OTHER EXPENSES, which are explained on page . FMR may, from time to time, agree to reimburse the fund for management fees and other expenses above a specified limit. FMR retains the ability to be repaid by the fund if expenses fall below the specified limit prior to the end of the fiscal year. Reimbursement arrangements, which may be terminated at any time without notice, can decrease the fund's expenses and boost its performance. MANAGEMENT FEE The management fee is calculated and paid to FMR every month. The amount of the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE ADJUSTMENT. The performance adjustment either increases or decreases the management fee, depending on how well the fund has performed relative to the NASDAQ Index. Manage = Ba +/- Performa ment sic nce fee fee adjustme nt THE BASIC FEE (calculated monthly) is calculated by adding a group fee rate to an individual fund fee rate, and multiplying the result by the fund's average net assets. The group fee rate is based on the average net assets of all the mutual funds advised by FMR. This rate cannot rise above .52%, and it drops as total assets under management increase. For July 19 95 , the group fee rate was .31 %. The individual fund fee rate is .35%. The basic fee rate for fiscal 19 95 was .67 %. THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing the fund's performance to that of the NASDAQ Index over the most recent 36-month period. The difference is translated into a dollar amount that is added to or subtracted from the basic fee. The maximum annualized performance adjustment rate is " .20%. The total management fee rate for fiscal 19 95 was .51 %. UNDERSTANDING THE MANAGEMENT FEE The basic fee FMR receives is designed to be responsive to changes in FMR's total assets under management. Building this variable into the fee calculation assures shareholders that they will pay a lower rate as FMR's assets under management increase. Another variable, the performance adjustment, rewards FMR when the fund outperforms the NASDAQ Index (an established index of stock market performance) and reduces FMR's fee when the fund underperforms this index. (checkmark) FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These sub-advisers provide FMR with investment research and advice on issuers based outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of the costs of providing these services. The sub-advisers may also provide investment management services. In return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its management fee rate with respect to the fund's investments that the sub-adviser manages on a discretionary basis. OTHER EXPENSES While the management fee is a significant component of the fund's annual operating costs, the fund has other expenses as well. The fund contracts with FSC to perform many transaction and accounting functions. These services include processing shareholder transactions, valuing the fund's investments, and handling securities loans. In fiscal 19 95 , the fund paid FSC fees equal to .29 % of its average net assets. The fund also pays other expenses, such as legal, audit, and custodian fees; proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. A broker-dealer may use a por tion of the commissions paid by the fund to reduce the fund's custodian or transfer agent fees. The fund's portfolio turnover rate for fiscal 1995 was 62 %. This rate varies from year to year. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY Fidelity Investments was established in 1946 to manage one of America's first mutual funds. Today, Fidelity is the largest mutual fund company in the country, and is known as an innovative provider of high-quality financial services to individuals and institutions. In addition to its mutual fund business, the company operates one of America's leading discount brokerage firms, FBSI. Fidelity is also a leader in providing tax-sheltered retirement plans for individuals investing on their own or through their employer. Fidelity is committed to providing investors with practical information to make investment decisions. Based in Boston, Fidelity provides customers with complete service 24 hours a day, 365 days a year, through a network of telephone service centers around the country. To reach Fidelity for general information, call these numbers: (small solid bullet) For mutual funds, 1-800-544-8888 (small solid bullet) For brokerage, 1-800-544-7272 If you would prefer to speak with a representative in person, Fidelity has over 80 walk-in Investor Centers across the country. TYPES OF ACCOUNTS You may set up an account directly in the fund or, if you own or intend to purchase individual securities as part of your total investment portfolio, you may consider investing in the fund through a brokerage account. If you are investing through FBSI or another financial institution or investment professional, refer to its program materials for any special provisions regarding your investment in the fund. The different ways to set up (register) your account with Fidelity are listed at right. The account guidelines that follow may not apply to certain retirement accounts. If your employer offers the fund through a retirement program, contact your employer for more information. Otherwise, call Fidelity directly. FIDELITY FACTS Fidelity offers the broadest selection of mutual funds in the world. (solid bullet) Number of Fidelity mutual funds: over 210 (solid bullet) Assets in Fidelity mutual funds: over $ 320 billion (solid bullet) Number of shareholder accounts: over 21 million (solid bullet) Number of investment analysts and portfolio managers: over 200 (checkmark) WAYS TO SET UP YOUR ACCOUNT INDIVIDUAL OR JOINT TENANT FOR YOUR GENERAL INVESTMENT NEEDS Individual accounts are owned by one person. Joint accounts can have two or more owners (tenants). RETIREMENT TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES Retirement plans allow individuals to shelter investment income and capital gains from current taxes. In addition, contributions to these accounts may be tax deductible. Retirement accounts require special applications and typically have lower minimums. (solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under 70 with earned income to invest up to $2,000 per tax year. Individuals can also invest in a spouse's IRA if the spouse has earned income of less than $250. (solid bullet) ROLLOVER IRAS retain special tax advantages for certain distributions from employer-sponsored retirement plans. (solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow self-employed individuals or small business owners (and their employees) to make tax-deductible contributions for themselves and any eligible employees up to $30,000 per year. (solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or those with self-employed income (and their eligible employees) with many of the same advantages as a Keogh, but with fewer administrative requirements. (solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt institutions, including schools, hospitals, and other charitable organizations. (solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to contribute a percentage of their wages on a tax-deferred basis. These accounts need to be established by the trustee of the plan. GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS These custodial accounts provide a way to give money to a child and obtain tax benefits. An individual can give up to $10,000 a year per child without paying federal gift tax. Depending on state laws, you can set up a custodial account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). TRUST FOR MONEY BEING INVESTED BY A TRUST The trust must be established before an account can be opened. BUSINESS OR ORGANIZATION FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER GROUPS Requires a special application. HOW TO BUY SHARES ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR THE FUND: the offering price and the net asset value (NAV). The offering price includes the 3% sales charge, which you pay when you buy shares, unless you qualify for a reduction or waiver as described on page . When you buy shares at the offering price, Fidelity deducts 3% and invests the rest at the NAV. Shares are purchased at the next share price calculated after your investment is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. IF YOU ARE NEW TO FIDELITY, complete and sign an account application and mail it along with your check. You may also open your account in person or by wire as described on page . If there is no application accompanying this prospectus, call 1-800-544-8888. IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can: (small solid bullet) Mail in an application with a check, or (small solid bullet) Open your account by exchanging from another Fidelity fund. IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an IRA, for the first time, you will need a special application. Retirement investing also involves its own investment procedures. Call 1-800-544-8888 for more information and a retirement application. If you buy shares by check or Fidelity Money Line(registered trademark), and then sell those shares by any method other than by exchange to another Fidelity fund, the payment may be delayed for up to seven business days to ensure that your previous investment has cleared. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $2,500 For Fidelity retirement accounts $500 TO ADD TO AN ACCOUNT $250 For Fidelity retirement accounts $250 Through automatic investment plans $100 MINIMUM BALANCE $1,000 For Fidelity retirement accounts $500 These minimums may vary for investments through Fidelity Portfolio Advisory Services. Refer to the product materials for details . UNDERSTANDING SHARE PRICE Let's say you invest $2,500 at an offering price of $10. Of the $10 offering price, 3% ($.30) is the sales charge, and 97% ($9.70) represents the NAV. The value of your initial investment will be $2,425 (250 shares worth $9.70 each), and you will have paid a sales charge of $75. (checkmark) Row: 1, Col: 1, Value: 25.0 Row: 1, Col: 2, Value: 75.0 Row: 1, Col: 3, Value: 75.0 Row: 1, Col: 4, Value: 75.0 Row: 1, Col: 5, Value: 75.0 Row: 1, Col: 6, Value: 75.0 Row: 1, Col: 7, Value: 75.0 Row: 1, Col: 8, Value: 75.0 Row: 1, Col: 9, Value: 75.0 Row: 1, Col: 10, Value: 75.0 Row: 1, Col: 11, Value: 75.0 Row: 1, Col: 12, Value: 75.0 Row: 1, Col: 13, Value: 75.0 Row: 1, Col: 14, Value: 75.0 Row: 1, Col: 15, Value: 75.0 Row: 1, Col: 16, Value: 75.0 Row: 1, Col: 17, Value: 75.0 Row: 1, Col: 18, Value: 75.0 Row: 1, Col: 19, Value: 75.0 Row: 1, Col: 20, Value: 75.0 Row: 1, Col: 21, Value: 75.0 Row: 1, Col: 22, Value: 75.0 Row: 1, Col: 23, Value: 75.0 Row: 1, Col: 24, Value: 75.0 Row: 1, Col: 25, Value: 75.0 Row: 1, Col: 26, Value: 75.0 Row: 1, Col: 27, Value: 75.0 Row: 1, Col: 28, Value: 75.0 Row: 1, Col: 29, Value: 75.0 Row: 1, Col: 30, Value: 75.0 Row: 1, Col: 31, Value: 75.0 Row: 1, Col: 32, Value: 75.0 Row: 1, Col: 33, Value: 75.0 Row: 1, Col: 34, Value: 75.0 $2,500 Investment 3% sales charge = $75 Value of Investment = $2,425
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another Fidelity fund account Fidelity fund account with the same with the same registration, including registration, including name, address, and name, address, and taxpayer ID number. taxpayer ID number. (small solid bullet) Use Fidelity Money Line to transfer from your bank account. Call before your first use to verify that this service is in place on your account. Maximum Money Line: $50,000.
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check application. Make your payable to "Fidelity check payable to OTC Portfolio." Indicate "Fidelity OTC Portfolio." your fund account Mail to the address number on your check indicated on the and mail to the address application. printed on your account statement. (small solid bullet) Exchange by mail: call 1-800-544-6666 for instructions.
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a and check to a Fidelity Fidelity Investor Center. Investor Center. Call Call 1-800-544-9797 for 1-800-544-9797 for the the center nearest you. center nearest you.
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for set up your account retirement accounts. and to arrange a wire (small solid bullet) Wire to: transaction. Not Bankers Trust available for retirement Company, accounts. Bank Routing (small solid bullet) Wire within 24 hours to: #021001033, Bankers Trust Account #00163053. Company, Specify "Fidelity OTC Bank Routing Portfolio" and include #021001033, your account number Account #00163053. and your name. Specify "Fidelity OTC Portfolio"and include your new account number and your name.
Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic Account Builder. Sign up for this service when opening your account, or call 1-800-544-6666 to add it.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next share price calculated after your order is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods described on these two pages. TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made in writing, except for exchanges to other Fidelity funds, which can be requested by phone or in writing. Call 1-800-544-6666 for a retirement distribution form. IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth of shares in the account to keep it open ($500 for retirement accounts). TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign up for these services in advance. CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect you and Fidelity from fraud. Your request must be made in writing and include a signature guarantee if any of the following situations apply: (small solid bullet) You wish to redeem more than $100,000 worth of shares, (small solid bullet) Your account registration has changed within the last 30 days, (small solid bullet) The check is being mailed to a different address than the one on your account (record address), (small solid bullet) The check is being made payable to someone other than the account owner, or (small solid bullet) The redemption proceeds are being transferred to a Fidelity account with a different registration. You should be able to obtain a signature guarantee from a bank, broker (including Fidelity Investor Centers), dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. SELLING SHARES IN WRITING Write a "letter of instruction" with: (small solid bullet) Your name, (small solid bullet) The fund's name, (small solid bullet) Your fund account number, (small solid bullet) The dollar amount or number of shares to be redeemed, and (small solid bullet) Any other applicable requirements listed in the table at right. Unless otherwise instructed, Fidelity will send a check to the record address. Deliver your letter to a Fidelity Investor Center, or mail it to: Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 ACCOUNT TYPE SPECIAL REQUIREMENTS
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request: except retirement $100,000. (small solid bullet) For Money Line transfers to All account types your bank account; minimum: $10; maximum: $100,000. (small solid bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s), address, and taxpayer ID number. Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must Tenant, be signed by all persons Sole Proprietorship required to sign for , UGMA, UTMA transactions, exactly as their Retirement account names appear on the account. (small solid bullet) The account owner should Trust complete a retirement distribution form. Call 1-800-544-6666 to request one. Business or (small solid bullet) The trustee must sign the Organization letter indicating capacity as trustee. If the trustee's name is not in the account registration, provide a copy of the trust document certified Executor, within the last 60 days. Administrator, (small solid bullet) At least one person Conservator, authorized by corporate Guardian resolution to act on the account must sign the letter. (small solid bullet) Include a corporate resolution with corporate seal or a signature guarantee. (small solid bullet) Call 1-800-544-6666 for instructions. Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire except retirement feature before using it. To verify that it is in place, call 1-800-544-6666. Minimum wire: $5,000. (small solid bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be wired on the next business day.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days a year. Whenever you call, you can speak with someone equipped to provide the information or service you need. STATEMENTS AND REPORTS that Fidelity sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except reinvestments, that affects your account balance or your account registration) (small solid bullet) Account statements (quarterly) (small solid bullet) Financial reports (every six months) 24-HOUR SERVICE ACCOUNT ASSISTANCE 1-800-544-6666 ACCOUNT BALANCES 1-800-544-7544 ACCOUNT TRANSACTIONS 1-800-544-7777 PRODUCT INFORMATION 1-800-544-8888 QUOTES 1-800-544-8544 RETIREMENT ACCOUNT ASSISTANCE 1-800-544-4774 AUTOMATED SERVICE (checkmark) To reduce expenses, only one copy of most financial reports will be mailed to your household, even if you have more than one account in the fund. Call 1-800-544-6666 if you need copies of financial reports or historical account information. TRANSACTION SERVICES EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other Fidelity funds by telephone or in writing. The shares you exchange will carry credit for any sales charge you previously paid in connection with their purchase. Note that exchanges out of the fund are limited to four per calendar year, and that they may have tax consequences for you. For details on policies and restrictions governing exchanges, including circumstances under which a shareholder's exchange privilege may be sus pended or revoked, see page . SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your account. Because of the fund's sales charge, you may not want to set up a systematic withdrawal plan during a period when you are buying shares on a regular basis. FIDELITY MONEY LINE(registered trademark) enables you to transfer money by phone between your bank account and your fund account. Most transfers are complete within three business days of your call. REGULAR INVESTMENT PLANS One easy way to pursue your financial goals is to invest money regularly. Fidelity offers convenient services that let you transfer money into your fund account, or between fund accounts, automatically. While regular investment plans do not guarantee a profit and will not protect you against loss in a declining market, they can be an excellent way to invest for retirement, a home, educational expenses, and other long-term financial goals. Certain restrictions apply for retirement accounts. Call 1-800-544-6666 for more information. REGULAR INVESTMENT PLANS FIDELITY AUTOMATIC ACCOUNT BUILDERSM TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly or (small solid bullet) For a new account, complete the quarterly appropriate section on the fund application. (small solid bullet) For existing accounts, call 1-800-544-6666 for an application. (small solid bullet) To change the amount or frequency of your investment, call 1-800-544-6666 at least three business days prior to your next scheduled investment date.
DIRECT DEPOSIT TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Every pay (small solid bullet) Check the appropriate box on the fund period application, or call 1-800-544-6666 for an authorization form. (small solid bullet) Changes require a new authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after bimonthly, both accounts are opened. quarterly, or (small solid bullet) To change the amount or frequency of annually your investment, call 1-800-544-6666.
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES The fund distributes substantially all of its net income and capital gains to shareholders each year. Normally, dividends and capital gains are distributed in September. DISTRIBUTION OPTIONS When you open an account, specify on your application how you want to receive your distributions. If the option you prefer is not listed on the application, call 1-800-544-6666 for instructions. The fund offers four options: 9. REINVESTMENT OPTION. Your dividend and capital gain distributions will be automatically reinvested in additional shares of the fund. If you do not indicate a choice on your application, you will be assigned this option. 10. INCOME-EARNED OPTION. Your capital gain distributions will be automatically reinvested, but you will be sent a check for each dividend distribution. 11. CASH OPTION. You will be sent a check for your dividend and capital gain distributions. 12. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and capital gain distributions will be automatically invested in another identically registered Fidelity fund. FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested. When you are over 59 years old, you can receive distributions in cash. SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain distributions are not subject to the fund's 3% sales charge. Likewise, if you direct distributions to a fund with a 3% sales charge, you will not pay a sales charge on those purchases. When the fund deducts a distribution from its NAV, the reinvestment price is the fund's NAV at the close of business that day. Cash distribution checks will be mailed within seven days. UNDERSTANDING DISTRIBUTIONS As a fund shareholder, you are entitled to your share of the fund's net income and gains on its investments. The fund passes its earnings along to its investors as DISTRIBUTIONS. The fund earns dividends from stocks and interest from bond, money market, and other investments. These are passed along as DIVIDEND DISTRIBUTIONS. The fund realizes capital gains whenever it sells securities for a higher price than it paid for them. These are passed along as CAPITAL GAIN DISTRIBUTIONS. (checkmark) TAXES As with any investment, you should consider how your investment in the fund will be taxed. If your account is not a tax-deferred retirement account, you should be aware of these tax implications. TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may also be subject to state or local taxes. If you live outside the United States, your distributions could also be taxed by the country in which you reside. Your distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. For federal tax purposes, the fund's income and short-term capital gain distributions are taxed as dividends; long-term capital gain distributions are taxed as long-term capital gains. Every January, Fidelity will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other Fidelity funds - are subject to capital gains tax. A capital gain or loss is the difference between the cost of your shares and the price you receive when you sell them. Whenever you sell shares of the fund, Fidelity will send you a confirmation statement showing how many shares you sold and at what price. You will also receive a consolidated transaction statement every January. However, it is up to you or your tax preparer to determine whether this sale resulted in a capital gain and, if so, the amount of tax to be paid. Be sure to keep your regular account statements; the information they contain will be essential in calculating the amount of your capital gains. "BUYING A DIVIDEND." If you buy shares just before the fund deducts a distribution from its NAV, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable distribution. EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the fund and its investments and these taxes generally will reduce the fund's distributions. However, an offsetting tax credit or deduction may be available to you. If so, your tax statement will show more taxable income or capital gains than were actually distributed by the fund, but will also show the amount of the available offsetting credit or deduction. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, the fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is open. Fidelity normally calculates the fund's NAV and offering price as of the close of business of the NYSE, normally 4 p.m. Eastern time. THE FUND'S NAV is the value of a single share. The NAV is computed by adding the value of the fund's investments, cash, and other assets, subtracting its liabilities, and then dividing the result by the number of shares outstanding. The fund's assets are valued primarily on the basis of market quotations. Foreign securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. If quotations are not readily available, or if the values have been materially affected by events occurring after the closing of a foreign market, assets are valued by a method that the Board of Trustees believes accurately reflects fair value. THE OFFERING PRICE (price to buy one share) is the fund's NAV plus a sales charge. The sales charge is 3% of the offering price, or 3.09% of the net amount invested. The REDEMPTION PRICE (price to sell one share) is the fund's NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your Social Security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require the fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be liable for losses resulting from unauthorized transactions if it does not follow reasonable procedures designed to verify the identity of the caller. Fidelity will request personalized security codes or other information, and may also record calls. You should verify the accuracy of your confirmation statements immediately after you receive them. If you do not want the ability to redeem and exchange by telephone, call Fidelity for instructions. IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of unusual market activity), consider placing your order by mail or by visiting a Fidelity Investor Center. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. The fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be r efused if, in FMR's opinion, they would disrupt management of the fund. WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the next offering price calculated after your order is received and accepted. Note the following: (small solid bullet) All of your purchases must be made in U.S. dollars and checks must be drawn on U.S. banks. (small solid bullet) Fidelity does not accept cash. (small solid bullet) When making a purchase with more than one check, each check must have a value of at least $50. (small solid bullet) The fund reserves the right to limit the number of checks processed at one time. (small solid bullet) If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees the fund or its transfer agent has incurred. TO AVOID THE COLLECTION PERIOD associated with check and Money Line purchases, consider buying shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal Reserve check, or direct deposit instead. YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING PRICE) OR SELL THEM THROUGH A BROKER, who may charge you a fee for this service. If you invest through a broker or other institution, read its program materials for any additional service features or fees that may apply. CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with FDC may enter confirmed purchase orders on behalf of customers by phone, with payment to follow no later than the time when the fund is priced on the following business day. If payment is not received by that time, the financial institution could be held liable for resulting fees or losses. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your request is received and accepted. Note the following: (small solid bullet) Normally, redemption proceeds will be mailed to you on the next business day, but if making immediate payment could adversely affect the fund, it may take up to seven days to pay you. (small solid bullet) Fidelity Money Line redemptions generally will be credited to your bank account on the second or third business day after your phone call. (small solid bullet) The fund may hold payment on redemptions until it is reasonably satisfied that investments made by check or Fidelity Money Line have been collected, which can take up to seven business days. (small solid bullet) Redemptions may be suspended or payment dates postponed when the NYSE is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC. FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from accounts with a value of less than $2,500 (including any amount paid as a sales charge), subject to an annual maximum charge of $60.00 per shareholder. It is expected that accounts will be valued on the second Friday in November of each year. Accounts opened after September 30 will not be subject to the fee for that year. The fee, which is payable to the transfer agent, is designed to offset in part the relatively higher costs of servicing smaller accounts. The fee will not be deducted from retirement accounts (except non-prototype retirement accounts), accounts using regular investment plans, or if total assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is determined by aggregating Fidelity mutual fund accounts maintained by FSC or FBSI which are registered under the same social security number or which list the same social security number for the custodian of a Uniform Gifts/Transfers to Minors Act account. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days' notice to reestablish the minimum balance. If you do not increase your balance, Fidelity reserves the right to close your account and send the proceeds to you. Your shares will be redeemed at the NAV on the day your account is closed. FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. FDC collects the proceeds from the fund's 3% sales charge and may pay a portion of them to securities dealers who have sold the fund's shares, or to others, including banks and other financial institutions (qualified recipients), under special arrangements in connection with FDC's sales activities. The sales charge paid to qualified recipients is 2.25% of the fund's offering price. FDC may, at its own expense, provide promotional incentives to qualified recipients who support the sale of shares of the fund without reimbursement from the fund. In some instances, these incentives may be offered only to certain institutions whose representatives provide services in connection with the sale or expected sale of significant amounts of shares. EXCHANGE RESTRICTIONS As a shareholder, you have the privilege of exchanging shares of the fund for shares of other Fidelity funds. However, you should note the following: (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) If you exchange into a fund with a sales charge, you pay the percentage-point difference between that fund's sales charge and any sales charge you have previously paid in connection with the shares you are exchanging. For example, if you had already paid a sales charge of 2% on your shares and you exchange them into a fund with a 3% sales charge, you would pay an additional 1% sales charge. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Because excessive trading can hurt fund performance and shareholders, the fund reserves the right to temporarily or permanently terminate the exchange privilege of any investor who makes more than four exchanges out of the fund per calendar year. Accounts under common ownership or control, including accounts with the same taxpayer identification number, will be counted together for purposes of the four exchange limit. (small solid bullet) The exchange limit may be modified for accounts in certain institutional retirement plans to conform to plan exchange limits and Department of Labor regulations. See your plan materials for further information. (small solid bullet) The fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if the fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to the fund. Although the fund will attempt to give you prior notice whenever it is reasonably able to do so, it may impose these restrictions at any time. The fund reserves the right to terminate or modify the exchange privilege in the future. OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose administrative fees of up to $7.50 and redemption fees of up to 1.50% on exchanges. Check each fund's prospectus for details. SALES CHARGE REDUCTIONS AND WAIVERS REDUCTIONS. The fund's sales charge may be reduced if you invest directly with Fidelity or through prototype or prototype-like retirement plans sponsored by FMR or FMR Corp. The amount you invest, plus the value of your account, must fall within the ranges shown below. However, purchases made with assistance or intervention from a financial intermediary are not eligible. Call Fidelity to see if your purchase qualifies. Ranges Sales charge Net amount invested $0 - 249,999 3% 3.09% $250,000 - 499,999 2% 2.04% $500,000 - 999,999 1% 1.01% $1,000,000 or more none none The sales charge will also be reduced by the percentage of any sales charge you previously paid on investments in other Fidelity funds (not including Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for any sales charge you would have paid if the reductions in the table above had not existed. These sales charge credits only apply to purchases made in one of the ways listed below, and only if you continuously owned Fidelity fund shares or a Fidelity brokerage core account, or participated in The CORPORATEplan for Retirement Program. 1. By exchange from another Fidelity fund. 2. With proceeds of a transaction within a Fidelity brokerage core account, including any free credit balance, core money market fund, or margin availability, to the extent such proceeds were derived from redemption proceeds from another Fidelity fund. 3. With redemption proceeds from one of Fidelity's Foreign Currency Funds, if the Foreign Currency Fund shares were originally purchased with redemption proceeds from a Fidelity fund. 4. Through the Directed Dividends Option (see page ). 5. By participants in The CORPORATEplan for Retirement Program when shares are purchased through plan-qualified loan repayments, and for exchanges into and out of the Managed Income Portfolio. WAIVERS. The fund's sales charge will not apply: 1. If you buy shares as part of an employee benefit plan having more than 200 eligible employees or a minimum of $3 million in plan assets invested in Fidelity mutual funds. 2. To shares in a Fidelity Rollover IRA account purchased with the proceeds of a distribution from an employee benefit plan, provided that at the time of the distribution, the employer or its affiliate maintained a plan that both qualified for waiver (1) above and had at least some of its assets invested in Fidelity-managed products. 3. If you are a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more. 4. If you purchase shares for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code). 5. If you are an investor participating in the Fidelity Trust Portfolios program. 6. To shares purchased through Portfolio Advisory Services. 7. If you are a current or former trustee or officer of a Fidelity fund or a current or retired officer, director, or regular employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity trustee or employee, a Fidelity trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity trustee or employee. 8. If you are a bank trust officer, registered representative, or other employee of a qualified recipient, as defined on page . 9. To contributions and exchanges to a prototype or prototype-like retirement plan sponsored by FMR Corp. or FMR and which is marketed and distributed directly to plan sponsors or participants without any assistance or intervention from any intermediary distribution channel. 10. If you invest through a non-prototype pension or profit-sharing plan that maintains all of its mutual fund assets in Fidelity mutual funds, provided the plan executes a Fidelity non-prototype sales charge waiver request form confirming its qualification. 11. If you are a registered investment adviser (RIA) purchasing for your discretionary accounts, provided you execute a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. Except for correspondents of National Financial Services Corporation, this waiver is available only for shares purchased directly from Fidelity, and is unavailable if the RIA is part of an organization principally engaged in the brokerage business. 12. If you are a trust institution or bank trust department purchasing for your non-discretionary, non-retirement fiduciary accounts, provided you execute a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is unavailable if the trust department or institution is part of an organization not principally engaged in banking or trust activities. These waivers must be qualified through FDC in advance. More detailed information about waivers (1), (2), (5), (9), and (11) is contained in the Statement of Additional Information. A representative of your plan or organization should call Fidelity for more information. This prospectus is printed on recycled paper using soy-based inks. FIDELITY OTC PORTFOLIO A FUND OF FIDELITY SECURITIES FUND STATEMENT OF ADDITIONAL INFORMATION SEPTEMBER 19, 1995 This Statement is not a prospectus but should be read in conjunction with the fund's current Prospectus (dated September 19, 1995). Please retain this document for future reference. The fund's financial statements and financial highlights, included in the Annual Report for the fiscal year ended July 31, 1995 , are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation of Portfolio Securities Performance Additional Purchase and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contract Contracts With FMR Affiliates Description of the Trust Financial Statements INVESTMENT ADVISER Fidelity Management & Research Company (FMR) INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc. (FMR U.K.) Fidelity Management & Research (Far East) Inc. (FMR Far East) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT Fidelity Service Company (FSC) OTC-ptb-995 INVESTMENT POLICIES AND LIMITATIONS The following policies and limitations supplement those set forth in the Prospectus. Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of the fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitation will be determined immediately after and as a result of the fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the fund's investment policies and limitations. The fund's fundamental investment policies and limitations cannot be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940) of the fund. However, except for the fundamental investment limitations listed below, the investment policies and limitations described in this Statement of Additional Information are not fundamental and may be changed without shareholder approval. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) with respect to 75% of its total assets, purchase the securities of any one issuer (other than securities issued or guaranteed by the U. S. government or any of its agencies or instrumentalities) if, as a result, (a) more than 5% of the fund's total assets would be invested in the securities of that issuer, or (b) the fund would hold more than 10% of the outstanding voting securities of that issuer; (2) issue senior securities, except as permitted under the Investment Company Act of 1940; (3) borrow money, except that the fund may borrow money for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount will be reduced within 3 days (not including Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation; (4) underwrite any issue of securities (except to the extent that the fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in the disposition of restricted securities); (5) purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry; (6) purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); (7) purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities); or (8) lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (9) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short, and provided that transactions in futures contracts and options are not deemed to constitute selling securities short. (ii) The fund does not currently intend to purchase securities on margin, except that the fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin. (iii) The fund may borrow money only (a) from a bank or from a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party (reverse repurchase agreements are treated as borrowings for purposes of fundamental investment limitation (3)). The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase any security if, as a result, more than 10% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. (v) The fund does not currently intend to purchase interests of real estate investment trusts that are not readily marketable or interests of real estate limited partnerships that are not listed on an exchange or traded on the NASDAQ National Market System if as a result, the sum of such interests and other investments considered illiquid under limitation (iv) would exceed 10% of the fund's net assets. (vi) The fund does not currently intend to lend assets other than securities to other parties, except by (a) lending money (up to 5% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as an investment adviser or (b) acquiring loans, loan participations, or other forms of direct debt instruments and, in connection therewith, assuming any associated unfunded commitments of the sellers. (This limitation does not apply to purchases of debt securities or to repurchase agreements). (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of business enterprises that, including predecessors, have a record of less than three years of continuous operation. (ix) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's limitations on futures and options transactions, see the section entitled "Limitations on Futures and Options Transactions" on page . AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with financial institutions that are, or may be considered to be, "affiliated persons" of the fund under the Investment Company Act of 1940. These transactions may include repurchase agreements with custodian banks; short-term obligations of, and repurchase agreements with, the 50 largest U.S. banks (measured by deposits); municipal securities; U.S. government securities with affiliated financial institutions that are primary dealers in these securities; short-term currency transactions; and short-term borrowings. In accordance with exemptive orders issued by the Securities and Exchange Commission (SEC), the Board of Trustees has established and periodically reviews procedures applicable to transactions involving affiliated financial institutions. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve significant risks in addition to the risks inherent in U.S. investments. The value of securities denominated in foreign currencies and of dividends and interest paid with respect to such securities will fluctuate based on the relative strength of the U.S. dollar. Foreign investments involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments, and may be affected by actions of foreign governments adverse to the interests of U.S. investors. Such actions may include the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or convert currency into U.S. dollars, or other government intervention. There is no assurance that FMR will be able to anticipate these potential events or counter their effects. These risks are magnified for investments in developing countries, which may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities. Economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Foreign markets may offer less protection to investors than U.S. markets. It is anticipated that in most cases the best available market for foreign securities will be on an exchange or in over-the-counter markets located outside of the United States. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. issuers. Foreign security trading practices, including those involving securities settlement where fund assets may be released prior to receipt of payment, may result in increased risk in the event of a failed trade or the insolvency of a foreign broker-dealer, and may involve substantial delays. In addition, the costs of foreign investing, including withholding taxes, brokerage commissions and custodial costs, are generally higher than for U.S. investors. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers, and listed companies than in the United States. It may also be difficult to enforce legal rights in foreign countries. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to U.S. issuers. Some foreign securities impose restrictions on transfer within the United States or to U.S. persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. American Depository Receipts (ADR's) as well as other "hybrid" forms of ADRs including European Depository Receipts (EDRs) and Global Depository Receipts (GDRs), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are an alternative to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. These risks include foreign exchange risk as well as the political and economic risks of the underlying issuer's country. FOREIGN CURRENCY TRANSACTIONS. The fund may conduct foreign currency transactions on a spot (i.e., cash) basis or by entering into forward contracts to purchase or sell foreign currencies at a future date and price. The fund will convert currency on a spot basis from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers generally do not charge a fee for conversion, they do realize a profit based on the difference between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Forward contracts are generally traded in an interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The parties to a forward contract may agree to offset or terminate the contract before its maturity, or may hold the contract to maturity and complete the contemplated currency exchange. The fund may use currency forward contracts for any purpose consistent with its investment objective. The following discussion summarizes the principal currency management strategies involving forward contracts that could be used by the fund. The fund may also use swap agreements, indexed securities, and options and futures contracts relating to foreign currencies for the same purposes. When the fund agrees to buy or sell a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction, the fund will be able to protect itself against an adverse change in foreign currency values between the date the security is purchased or sold and the date on which payment is made or received. This technique is sometimes referred to as a "settlement hedge" or "transaction hedge." The fund may also enter into forward contracts to purchase or sell a foreign currency in anticipation of future purchases or sales of securities denominated in foreign currency, even if the specific investments have not yet been selected by FMR. The fund may also use forward contracts to hedge against a decline in the value of existing investments denominated in foreign currency. For example, if the fund owned securities denominated in pounds sterling, it could enter into a forward contract to sell pounds sterling in return for U.S. dollars to hedge against possible declines in the pound's value. Such a hedge, sometimes referred to as a "position hedge," would tend to offset both positive and negative currency fluctuations, but would not offset changes in security values caused by other factors. The fund could also hedge the position by selling another currency expected to perform similarly to the pound sterling - for example, by entering into a forward contract to sell Deutschemarks or European Currency Units in return for U.S. dollars. This type of hedge, sometimes referred to as a "proxy hedge," could offer advantages in terms of cost, yield, or efficiency, but generally would not hedge currency exposure as effectively as a simple hedge into U.S. dollars. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the hedged securities are denominated. The fund may enter into forward contracts to shift its investment exposure from one currency into another. This may include shifting exposure from U.S. dollars to a foreign currency, or from one foreign currency to another foreign currency. For example, if the fund held investments denominated in Deutschemarks, the fund could enter into forward contracts to sell Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes known as a "cross-hedge," will tend to reduce or eliminate exposure to the currency that is sold, and increase exposure to the currency that is purchased, much as if the fund had sold a security denominated in one currency and purchased an equivalent security denominated in another. Cross-hedges protect against losses resulting from a decline in the hedged currency, but will cause the fund to assume the risk of fluctuations in the value of the currency it purchases. Under certain conditions, SEC guidelines require mutual funds to set aside appropriate liquid assets in a segregated custodial account to cover currency forward contracts. As required by SEC guidelines, the fund will segregate assets to cover currency forward contracts, if any, whose purpose is essentially speculative. The fund will not segregate assets to cover forward contracts entered into for hedging purposes, including settlement hedges, position hedges, and proxy hedges. Successful use of currency management strategies will depend on FMR's skill in analyzing and predicting currency values. Currency management strategies may substantially change the fund's investment exposure to changes in currency exchange rates, and could result in losses to the fund if currencies do not perform as FMR anticipates. For example, if a currency's value rose at a time when FMR had hedged the fund by selling that currency in exchange for dollars, the fund would be unable to participate in the currency's appreciation. If FMR hedges currency exposure through proxy hedges, the fund could realize currency losses from the hedge and the security position at the same time if the two currencies do not move in tandem. Similarly, if FMR increases the fund's exposure to a foreign currency, and that currency's value declines, the fund will realize a loss. There is no assurance that FMR's use of currency management strategies will be advantageous to the fund or that it will hedge at an appropriate time. FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or administer the day-to-day operations of any company. The fund, however, may exercise its rights as a shareholder and may communicate its views on important matters of policy to management, the Board of Directors, and shareholders of a company when FMR determines that such matters could have a significant effect on the value of the fund's investment in the company. The activities that the fund may engage in, either individually or in conjunction with others, may include, among others, supporting or opposing proposed changes in a company's corporate structure or business activities; seeking changes in a company's directors or management; seeking changes in a company's direction or policies; seeking the sale or reorganization of the company or a portion of its assets; or supporting or opposing third party takeover efforts. This area of corporate activity is increasingly prone to litigation and it is possible that the fund could be involved in lawsuits related to such activities. FMR will monitor such activities with a view to mitigating, to the extent possible, the risk of litigation against the fund and the risk of actual liability if the fund is involved in litigation. No guarantee can be made, however, that litigation against the fund will not be undertaken or liabilities incurred. FUTURES AND OPTIONS. The following sections pertain to futures and options: Asset Coverage for Futures and Options Positions, Combined Positions, Correlation of Price Changes, Futures Contracts, Futures Margin Payments, Limitations on Futures and Options Transactions, Liquidity of Options and Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put and Call Options. ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with guidelines established by the SEC with respect to coverage of options and futures strategies by mutual funds, and if the guidelines so require will set aside appropriate liquid assets in a segregated custodial account in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or option strategy is outstanding, unless they are replaced with other suitable assets. As a result, there is a possibility that segregation of a large percentage of the fund's assets could impede portfolio management or the fund's ability to meet redemption requests or other current obligations. COMBINED POSITIONS. The fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, to adjust the risk and return characteristics of the overall position. For example, the fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. CORRELATION OF PRICE CHANGES. Because there are a limited number of types of exchange-traded options and futures contracts, it is likely that the standardized contracts available will not match the fund's current or anticipated investments exactly. The fund may invest in options and futures contracts based on securities with different issuers, maturities, or other characteristics from the securities in which it typically invests, which involves a risk that the options or futures position will not track the performance of the fund's other investments. Options and futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments match the fund's investments well. Options and futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect correlation may also result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, or from imposition of daily price fluctuation limits or trading halts. The fund may purchase or sell options and futures contracts with a greater or lesser value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. If price changes in the fund's options or futures positions are poorly correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments. FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When the fund sells a futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when the fund enters into the contract. Some currently available futures contracts are based on specific securities, such as U.S. Treasury bonds or notes, and some are based on indices of securities prices, such as the Standard & Poor's Composite Index of 500 Stocks (S&P 500(Registered trademark)). Futures can be held until their delivery dates, or can be closed out before then if a liquid secondary market is available. The value of a futures contract tends to increase and decrease in tandem with the value of its underlying instrument. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying instrument, much as if it had purchased the underlying instrument directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying instrument had been sold. FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the purchaser and seller are required to deposit "initial margin" with a futures broker, known as a futures commission merchant (FCM), when the contract is entered into. Initial margin deposits are typically equal to a percentage of the contract's value. If the value of either party's position declines, that party will be required to make additional "variation margin" payments to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. Initial and variation margin payments do not constitute purchasing securities on margin for purposes of the fund's investment limitations. In the event of the bankruptcy of an FCM that holds margin on behalf of the fund, the fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM's other customers, potentially resulting in losses to the fund. LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the Commodity Futures Trading Commission (CFTC) and the National Futures Association, which regulate trading in the futures markets. The fund intends to comply with Rule 4.5 under the Commodity Exchange Act, which limits the extent to which the fund can commit assets to initial margin deposits and option premiums. In addition, the fund will not: (a) sell futures contracts, purchase put options, or write call options if, as a result, more than 25% of the fund's total assets would be hedged with futures and options under normal conditions; (b) purchase futures contracts or write put options if, as a result, the fund's total obligations upon settlement or exercise of purchased futures contracts and written put options would exceed 25% of its total assets; or (c) purchase call options if, as a result, the current value of option premiums for call options purchased by the fund would exceed 5% of the fund's total assets. These limitations do not apply to options attached to or acquired or traded together with their underlying securities, and do not apply to securities that incorporate features similar to options. The above limitations on the fund's investments in futures contracts and options, and the fund's policies regarding futures contracts and options discussed elsewhere in this Statement of Additional Information, are not fundamental policies and may be changed as regulatory agencies permit. LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid secondary market will exist for any particular options or futures contract at any particular time. Options may have relatively low trading volume and liquidity if their strike prices are not close to the underlying instrument's current price. In addition, exchanges may establish daily price fluctuation limits for options and futures contracts, and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible for the fund to enter into new positions or close out existing positions. If the secondary market for a contract is not liquid because of price fluctuation limits or otherwise, it could prevent prompt liquidation of unfavorable positions, and potentially could require the fund to continue to hold a position until delivery or expiration regardless of changes in its value. As a result, the fund's access to other assets held to cover its options or futures positions could also be impaired. OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures contracts are similar to forward currency exchange contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures contracts call for payment or delivery in U.S. dollars. The underlying instrument of a currency option may be a foreign currency, which generally is purchased or delivered in exchange for U.S. dollars, or may be a futures contract. The purchaser of a currency call obtains the right to purchase the underlying currency, and the purchaser of a currency put obtains the right to sell the underlying currency. The uses and risks of currency options and futures are similar to options and futures relating to securities or indices, as discussed above. The fund may purchase and sell currency futures and may purchase and write currency options to increase or decrease its exposure to different foreign currencies. The fund may also purchase and write currency options in conjunction with each other or with currency futures or forward contracts. Currency futures and options values can be expected to correlate with exchange rates, but may not reflect other factors that affect the value of the fund's investments. A currency hedge, for example, should protect a Yen-denominated security from a decline in the Yen, but will not protect the fund against a price decline resulting from deterioration in the issuer's creditworthiness. Because the value of the fund's foreign-denominated investments changes in response to many factors other than exchange rates, it may not be possible to match the amount of currency options and futures to the value of the fund's investments exactly over time. OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of over-the-counter (OTC) options (options not traded on exchanges) generally are established through negotiation with the other party to the option contract. While this type of arrangement allows the fund greater flexibility to tailor an option to its needs, OTC options generally involve greater credit risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded. PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the fund pays the current market price for the option (known as the option premium). Options have various types of underlying instruments, including specific securities, indices of securities prices, and futures contracts. The fund may terminate its position in a put option it has purchased by allowing it to expire or by exercising the option. If the option is allowed to expire, the fund will lose the entire premium it paid. If the fund exercises the option, it completes the sale of the underlying instrument at the strike price. The fund may also terminate a put option position by closing it out in the secondary market at its current price, if a liquid secondary market exists. The buyer of a typical put option can expect to realize a gain if security prices fall substantially. However, if the underlying instrument's price does not fall enough to offset the cost of purchasing the option, a put buyer can expect to suffer a loss (limited to the amount of the premium paid, plus related transaction costs). The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option's strike price. A call buyer typically attempts to participate in potential price increases of the underlying instrument with risk limited to the cost of the option if security prices fall. At the same time, the buyer can expect to suffer a loss if security prices do not rise sufficiently to offset the cost of the option. WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes the opposite side of the transaction from the option's purchaser. In return for receipt of the premium, the fund assumes the obligation to pay the strike price for the option's underlying instrument if the other party to the option chooses to exercise it. When writing an option on a futures contract, the fund will be required to make margin payments to an FCM as described above for futures contracts. The fund may seek to terminate its position in a put option it writes before exercise by closing out the option in the secondary market at its current price. If the secondary market is not liquid for a put option the fund has written, however, the fund must continue to be prepared to pay the strike price while the option is outstanding, regardless of price changes, and must continue to set aside assets to cover its position. If security prices rise, a put writer would generally expect to profit, although its gain would be limited to the amount of the premium it received. If security prices remain the same over time, it is likely that the writer will also profit, because it should be able to close out the option at a lower price. If security prices fall, the put writer would expect to suffer a loss. This loss should be less than the loss from purchasing the underlying instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline. Writing a call option obligates the fund to sell or deliver the option's underlying instrument, in return for the strike price, upon exercise of the option. The characteristics of writing call options are similar to those of writing put options, except that writing calls generally is a profitable strategy if prices remain the same or fall. Through receipt of the option premium, a call writer mitigates the effects of a price decline. At the same time, because a call writer must be prepared to deliver the underlying instrument in return for the strike price, even if its current value is greater, a call writer gives up some ability to participate in security price increases. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. Under the supervision of the Board of Trustees, FMR determines the liquidity of the fund's investments and, through reports from FMR, the Board monitors investments in illiquid instruments. In determining the liquidity of the fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the fund to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days, over-the-counter options, and non-government stripped fixed-rate mortgage-backed securities. Also, FMR may determine some restricted securities, government-stripped fixed-rate mortgage-backed securities, loans and other direct debt instruments, emerging market securities, and swap agreements to be illiquid. However, with respect to over-the-counter options the fund writes, all or a portion of the value of the underlying instrument may be illiquid depending on the assets held to cover the option and the nature and terms of any agreement the fund may have to close out the option before expiration. In the absence of market quotations, illiquid investments are priced at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, the fund were in a position where more than 10% of its net assets was invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INDEXED SECURITIES. The fund may purchase securities whose prices are indexed to the prices of other securities, securities indices, currencies, precious metals or other commodities, or other financial indicators. Indexed securities typically, but not always, are debt securities or deposits whose value at maturity or coupon rate is determined by reference to a specific instrument or statistic. Gold-indexed securities, for example, typically provide for a maturity value that depends on the price of gold, resulting in a security whose price tends to rise and fall together with gold prices. Currency-indexed securities typically are short-term to intermediate-term debt securities whose maturity values or interest rates are determined by reference to the values of one or more specified foreign currencies, and may offer higher yields than U.S. dollar-denominated securities of equivalent issuers. Currency-indexed securities may be positively or negatively indexed; that is, their maturity value may increase when the specified currency value increases, resulting in a security that performs similarly to a foreign-denominated instrument, or their maturity value may decline when foreign currencies increase, resulting in a security whose price characteristics are similar to a put on the underlying currency. Currency-indexed securities may also have prices that depend on the values of a number of different foreign currencies relative to each other. The performance of indexed securities depends to a great extent on the performance of the security, currency, or other instrument to which they are indexed, and may also be influenced by interest rate changes in the United States and abroad. At the same time, indexed securities are subject to the credit risks associated with the issuer of the security, and their values may decline substantially if the issuer's creditworthiness deteriorates. Recent issuers of indexed securities have included banks, corporations, and certain U.S. government agencies. Indexed securities may be more volatile than the underlying instruments. INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order issued by the SEC, the fund has received permission to lend money to, and borrow money from, other funds advised by FMR or its affiliates. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. A fund will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements), and will borrow through the program only when the costs are equal to or lower than the cost of bank loans. A fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs. LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a corporate, governmental, or other borrower to another party. They may represent amounts owed to lenders or lending syndicates (loans and loan participations), to suppliers of goods or services (trade claims or other receivables), or to other parties. Direct debt instruments involve a risk of loss in case of default or insolvency of the borrower and may offer less legal protection to the fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Direct debt instruments may also include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. LOWER-QUALITY DEBT SECURITIES. The fund may purchase lower-quality debt securities (those rated below Baa by Moody's Investors Service, Inc. or BBB by Standard and Poor's Corporation, and unrated securities judged by FMR to be of equivalent quality) that have poor protection with respect to the payment of interest and repayment of principal , or may be in default . These securities are often considered to be speculative and involve greater risk of loss or price changes due to changes in the issuer's capacity to pay. The market prices of lower-quality debt securities may fluctuate more than those of higher-quality debt securities and may decline significantly in periods of general economic difficulty, which may follow periods of rising interest rates. While the market for high-yield corporate debt securities has been in existence for many years and has weathered previous economic downturns, the 1980s brought a dramatic increase in the use of such securities to fund highly leveraged corporate acquisitions and restructurings. Past experience may not provide an accurate indication of the future performance of the high-yield bond market, especially during periods of economic recession. In fact, from 1989 to 1991, the percentage of lower-quality securi ties that defaulted rose significantly above prior levels, although the default rate decreased in 1992, 1993, and 1994. The market for lower-quality debt securities may be thinner and less active than that for higher-quality debt securities, which can adversely affect the prices at which the former are sold. If market quotations are not available, lower-quality debt securities will be valued in accordance with procedures established by the Board of Trustees, including the use of outside pricing services. Judgment plays a greater role in valuing high-yield corporate debt securities than is the case for securities for which more external sources for quotations and last-sale information are available. Adverse publicity and changing investor perceptions may affect the ability of outside pricing services to value lower-quality debt securities and the fund's ability to sell these securities. Since the risk of default is higher for lower-quality debt securities, FMR's research and credit analysis are an especially important part of managing securities of this type held by the fund. In considering investments for the fund, FMR will attempt to identify those issuers of high-yielding securities whose financial condition is adequate to meet future obligations, has improved, or is expected to improve in the future. FMR's analysis focuses on relative values based on such factors as interest or dividend coverage, asset coverage, earnings prospects, and the experience and managerial strength of the issuer. The fund may choose, at its expense or in conjunction with others, to pursue litigation or otherwise to exercise its rights as a security holder to seek to protect the interests of security holders if it determines this to be in the best interest of the fund's shareholders. REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts, commercial and residential mortgage-backed securities, and real estate financings. Real estate-related instruments are sensitive to factors such as real estate values and property taxes, interest rates, cash flow of underlying real estate assets, overbuilding, and the management skill and creditworthiness of the issuer. Real estate-related instruments may also be affected by tax and regulatory requirements, such as those relating to the environment. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a security and simultaneously commits to sell that security back to the original seller at an agreed-upon price. The resale price reflects the purchase price plus an agreed-upon incremental amount which is unrelated to the coupon rate or maturity of the purchased security . To protect the fund from the risk that the original seller will not fulfill its obligation the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to the fund in connection with bankruptcy proceedings), it is the fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. RESTRICTED SECURITIES generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933, or in a registered public offering. Where registration is required, the fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. The fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SECURITIES LENDING. The fund may lend securities to parties such as broker-dealers or institutional investors, including Fidelity Brokerage Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and a subsidiary of FMR Corp. Securities lending allows the fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans will be made only to parties deemed by FMR to be of good standing. Furthermore, they will only be made if, in FMR's judgment, the consideration to be earned from such loans would justify the risk. FMR understands that it is the current view of the SEC Staff that a fund may engage in loan transactions only under the following conditions: (1) the fund must receive 100% collateral in the form of cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the borrower must increase the collateral whenever the market value of the securities loaned (determined on a daily basis) rises above the value of the collateral; (3) after giving notice, the fund must be able to terminate the loan at any time; (4) the fund must receive reasonable interest on the loan or a flat fee from the borrower, as well as amounts equivalent to any dividends, interest, or other distributions on the securities loaned and to any increase in market value; (5) the fund may pay only reasonable custodian fees in connection with the loan; and (6) the Board of Trustees must be able to vote proxies on the securities loaned, either by terminating the loan or by entering into an alternative arrangement with the borrower. Cash received through loan transactions may be invested in any security in which the fund is authorized to invest. Investing this cash subjects that investment, as well as the security loaned, to market forces (i.e., capital appreciation or depreciation). SHORT SALES "AGAINST THE BOX." If the fund enters into a short sale against the box, it will be required to set aside securities equivalent in kind and amount to the securities sold short (or securities convertible or exchangeable into such securities) and will be required to hold such securities while the short sale is outstanding. The fund will incur transaction costs, including interest expenses , in connection with opening, maintaining, and closing short sales against the box. SWAP AGREEMENTS. Swap agreements can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), foreign currency values , mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. Swap agreements can take many different forms and are known by a variety of names. The fund is not limited to any particular form of swap agreement if FMR determines it is consistent with the fund's investment objective and policies. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements will tend to shift the fund's investment exposure from one type of investment to another. For example, if the fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factors that determine the amounts of payments due to and from the fund. If a swap agreement calls for payments by the fund, the fund must be prepared to make such payments when due. In addition, if the counterparty's creditworthiness declined, the value of a swap agreement would be likely to decline, potentially resulting in losses. The fund expects to be able to eliminate its exposure under swap agreements either by assignment or other disposition, or by entering into an offsetting swap agreement with the same party or a similarly creditworthy party. The fund will maintain appropriate liquid assets in a segregated custodial account to cover its current obligations under swap agreements. If the fund enters into a swap agreement on a net basis, it will segregate assets with a daily value at least equal to the excess, if any, of the fund's accrued obligations under the swap agreement over the accrued amount the fund is entitled to receive under the agreement. If the fund enters into a swap agreement on other than a net basis, it will segregate assets with a value equal to the full amount of the fund's accrued obligations under the agreement. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by FMR pursuant to authority contained in the management contract. Because the market for most OTC securities is made by market or dealers, rather than on an exchange, FMR will place most of its orders with dealers. Ordinarily commissions are not charged on such orders. Thus, the fund should incur a relatively small amount of commissions expenses. When the fund places an order with a dealer, it pays a spread, which is included in the cost of the security, and is the difference between the dealer's cost and the cost to the fund. If FMR grants investment management authority to the sub-advisers (see the section entitled "Management Contract"), the sub-advisers are authorized to place orders for the purchase and sale of portfolio securities, and will do so in accordance with the policies described below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. In selecting broker-dealers, subject to applicable limitations of the federal securities laws, FMR considers various relevant factors, including, but not limited to: the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability, and financial condition of the broker-dealer firm; the broker-dealer's execution services rendered on a continuing basis; the reasonableness of any commissions; and arrangements for payment of fund expenses. Generally, commissions for investments traded on foreign exchanges will be higher than for investments traded on U.S. exchanges and may not be subject to negotiation. The fund may execute portfolio transactions with broker-dealers who provide research and execution services to the fund or other accounts over which FMR or its affiliates exercise investment discretion. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing, or selling securities; and the availability of securities or the purchasers or sellers of securities. In addition, such broker-dealers may furnish analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) in accordance with a ranking of broker-dealers determined periodically by FMR's investment staff based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the fund may be useful to FMR in rendering investment management services to the fund or its other clients, and conversely, such research provided by broker-dealers who have executed transaction orders on behalf of other FMR clients may be useful to FMR in carrying out its obligations to the fund. The receipt of such research has not reduced FMR's normal independent research activities; however, it enables FMR to avoid the additional expenses that could be incurred if FMR tried to develop comparable information through its own efforts. Subject to applicable limitations of the federal securities laws, broker-dealers may receive commissions for agency transactions that are in excess of the amount of commissions charged by other broker-dealers in recognition of their research and execution services. In order to cause the fund to pay such higher commissions, FMR must determine in good faith that such commissions are reasonable in relation to the value of the brokerage and research services provided by such executing broker-dealers, viewed in terms of a particular transaction or FMR's overall responsibilities to the fund and its other clients. In reaching this determination, FMR will not attempt to place a specific dollar value on the brokerage and research services provided, or to determine what portion of the compensation should be related to those services. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the fund or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by non-affiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the benefit of the Johnson family own, directly or indirectly, more than 25% of the voting common stock of FIL. FMR may allocate brokerage transactions to broker-dealers who have entered into arrangements with FMR under which the broker-dealer allocates a portion of the commissions paid by the fund toward payment of the fund's expenses, such as transfer agent fees or custodian fees. The transaction quality must, however, be comparable to those of other qualified broker-dealers. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute portfolio transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. The Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund and review the commissions paid by the fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For the fiscal years ended July 31 , 1995 and 1994, the fund's portfolio turnover rates were 62% and 222%, respectively. Because a high turnover rate increases transaction costs and may increase taxable gains, FMR carefully weighs the anticipated benefits of short-term investing against these consequences. For fiscal 1995, 1994, and 1993, the fund paid brokerage commissions of $ 491,000 , $2,511,000, and $1,524, 000 , respectively. The fund pays both commissions and spreads in connection with the placement of portfolio transactions. FBSI is paid on a commission basis. During fiscal 1995, 1994, and 1993, the fund paid brokerage commissions of $ 102,000 , $140,000, and $84,000, respectively, to FBSI. During fiscal 1995, this amounted to approximately 21 % of the aggregate brokerage commissions paid by the fund for transactions involving approximately 28 % of the aggregate dollar amount of transactions for which the fund paid brokerage commissions. The difference between the percentage of brokerage commissions paid to and the percentage of the dollar amount of transactions effected through FBSI is a result of the low commission rates charged by FBSI. During fiscal 1995, 1994 and 1993, the fund paid no brokerage commissions to FBSL. During fiscal 1995, the fund paid $ 466,000 in commissions to brokerage firms that provided research services involving approximately $ 302,375,000 of transactions. The provision of research services was not necessarily a factor in the placement of all this business with such firms. From time to time the Trustees will review whether the recapture for the benefit of the fund of some portion of the brokerage commissions or similar fees paid by the fund on portfolio transactions is legally permissible and advisable. The fund seeks to recapture soliciting broker-dealer fees on the tender of portfolio securities, but at present no other recapture arrangements are in effect. The Trustees intend to continue to review whether recapture opportunities are available and are legally permissible and, if so, to determine in the exercise of their business judgment whether it would be advisable for the fund to seek such recapture. Although the Trustees and officers of the fund are substantially the same as those of other funds managed by FMR, investment decisions for the fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and accounts are managed by the same investment adviser, particularly when the same security is suitable for the investment objective of more than one fund or account. When two or more funds are simultaneously engaged in the purchase or sale of the same security, the prices and amounts are allocated in accordance with procedures believed to be appropriate and equitable for each fund. In some cases this system could have a detrimental effect on the price or value of the security as far as the fund is concerned. In other cases, however, the ability of the fund to participate in volume transactions will produce better executions and prices for the fund. It is the current opinion of the Trustees that the desirability of retaining FMR as investment adviser to the fund outweighs any disadvantages that may be said to exist from exposure to simultaneous transactions. VALUATION OF PORTFOLIO SECURITIES Portfolio securities are valued by various methods depending on the primary market or exchange on which they trade. Most equity securities for which the primary market is the U.S. are valued at last sale price or, if no sale has occurred, at the closing bid price. Most equity securities for which the primary market is outside the U.S. are valued using the official closing price or the last sale price in the principal market where they are traded. If the last sale price (on the local exchange) is unavailable, the last evaluated quote or last bid price is normally used. Short-term securities are valued either at amortized cost or at original cost plus accrued interest, both of which approximate current value. Convertible securities and fixed-income securities are valued primarily by a pricing service that uses a vendor security valuation matrix which incorporates both dealer-supplied valuations and electronic data processing techniques. This two-fold approach is believed to more accurately reflect fair value because it takes into account appropriate factors such as institutional trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data, without exclusive reliance upon quoted, exchange, or over-the counter prices. Use of pricing services has been approved by the Board of Trustees. Securities and other assets for which there is no readily available market are valued in good faith by a committee appointed by the Board of Trustees. The procedures set forth above need not be used to determine the value of the securities owned by the fund if, in the opinion of a committee appointed by the Board of Trustees, some other method (e.g., closing over-the-counter bid prices in the case of debt instruments traded on an exchange) would more accurately reflect the fair market value of such securities. Generally, the valuation of foreign and domestic equity securities, as well as corporate bonds, U.S. government securities, money market instruments, and repurchase agreements, is substantially completed each day at the close of the NYSE. The values of any such securities held by the fund are determined as of such time for the purpose of computing the fund's net asset value. Foreign security prices are furnished by independent brokers or quotation services which express the value of securities in their local currency. FSC gathers all exchange rates daily at the close of the NYSE using the last quoted price on the local currency and then translates the value of foreign securities from their local currency into U.S. dollars. Any changes in the value of forward contracts due to exchange rate fluctuations and days to maturity are included in the calculation of net asset value. If an extraordinary event that is expected to materially affect the value of a portfolio security occurs after the close of an exchange on which that security is traded, then the security will be valued as determined in good faith by a committee appointed by the Board of Trustees. PERFORMANCE The fund may quote performance in various ways. All performance information supplied by the fund in advertising is historical and is not intended to indicate future returns. The fund's share price, yield, and total return fluctuate in response to market conditions and other factors, and the value of fund shares when redeemed may be more or less than their original cost. TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all aspects of the fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the fund's net asset value (NAV) over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment in the fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. For example, a cumulative total return of 100% over ten years would produce an average annual total return of 7.18%, which is the steady annual rate of return that would equal 100% growth on a compounded basis in ten years. While average annual total returns are a convenient means of comparing investment alternatives, investors should realize that the fund's performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of the fund. In addition to average annual total returns, the fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis and may be quoted with or without taking the fund's 3% maximum sales charge into account Excluding the fund's sales charge from a total return calculation produces a higher total return figure. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. NET ASSET VALUE. Charts and graphs using the fund's net asset values, adjusted net asset values, and benchmark indices may be used to exhibit performance. An adjusted NAV includes any distributions paid by the fund and reflects all elements of its return. Unless otherwise indicated, the fund's adjusted NAVs are not adjusted for sales charges, if any. MOVING AVERAGES. The fund may illustrate performance using moving averages. A long-term moving average is the average of each week's adjusted closing NAV for a specified period. A short-term moving average is the average of each day's adjusted closing NAV for a specified period. Moving Average Activity Indicators combine adjusted closing NAVs from the last business day of each week with moving averages for a specified period to produce indicators showing when an NAV has crossed, stayed above, or stayed below its moving average. On July 28 , 1995, the 13-week and 39-week long-term moving averages were $ 28.64 and $ 25.59 , respectively. HISTORICAL FUND RESULTS. The following table shows the fund's total returns for periods ended July 31, 1995. Total return figures include the effect of the fund's 3 % sales charge. Average Annual Total Returns Cumulative Total Returns
One Five Ten One Five Ten Year Years Years Year Years Years 35.78 % 17.08 % 16.27 % 35.78 % 120.03 % 351.47%
The following table shows the income and capital elements of the fund's cumulative total return. The table compares the fund's return to the record of the NASDAQ Composite Index (NASDAQ Index), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for each fund. The NASDAQ Index is provided to show how the fund's total return compared to the record of a broad average of over-the-counter stock prices over the same period. The fund has the ability to invest in securities not included in either index, and its investment portfolio may or may not be similar in composition to the indices. Figures for the NASDAQ Index are based on the prices of unmanaged groups of stocks and, unlike the fund's returns, do not include the effect of paying brokerage commissions and other costs of investing. During the ten year per iod ended July 31, 1995, a hypothetical $10,000 investment in OTC would have grown to $ 45,147 , after deducting the fund's 3% sales charge and assuming all distributions were reinvested. This was a period of fluctuating stock prices and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in the fund today. FIDELITY OTC PORTFOLIO INDICES Value of Value of Value of Year Initial Reinvested Reinvested Cost Ended $10,000 Dividend Capital Gain Total NASDAQ of 7/31 Investment Distributions Distributions Value Index Living
1995 $ 20,432 $ 2,443 $ 22,272 $ 45,147 $ 33,231 $ 14,147 1994 14,734 1,458 16,061 32,253 23,969 13,766 1993 17,021 1,535 13,812 32,368 23,389 13,395 1992 16,200 1,157 10,386 27,743 19,278 13,033 1991 15,956 1,008 7,522 24,486 16,663 12,635 1990 13,420 793 5,690 19,903 14,545 12,096 1989 14,695 377 3,968 19,040 15,063 11,540 1988 11,796 43 3,186 15,025 12,856 10,993 1987 14,320 29 1,609 15,958 14,436 10,557 1986 12,191 9 409 12,609 12,326 10,158
E xplanatory Notes: With an initial investment of $10,000 made on July 31, 1985 assuming the 3% load had been in effect the net amount invested in fund shares was $9,700. The cost of the initial investment ($10,000), together with the aggregate cost of reinvested dividends and capital gain distributions for the period covered (their cash value at the time they were reinvested), amounted to $ 26,467 . If distributions had not been reinvested, the amount of distributions earned from the fund over time would have been smaller, and cash payments for the period would have amounted to $ 1,045 for dividends and $ 9,733 for capital gains distributions. Tax consequences of different investments have not been factored into the above figures. PERFORMANCE COMPARISONS. The fund's performance may be compared to the performance of other mutual funds in general, or to the performance of particular types of mutual funds. These comparisons may be expressed as mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. In addition to the mutual fund rankings, the fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, it is important to remember the risk and return characteristics of each type of investment. For example, while stock mutual funds may offer higher potential returns, they also carry the highest degree of share price volatility. Likewise, money market funds may offer greater stability of principal, but generally do not offer the higher potential returns available from stock mutual funds. From time to time, the fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund may quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the basis of risk-adjusted performance. Rankings that compare the performance of Fidelity funds to one another in appropriate categories over specific periods of time may also be quoted in advertising. The fund may be compared in advertising to Certificates of Deposit (CDs) or other investments issued by banks or other depository institutions. Mutual funds differ from bank investments in several respects. For example, the fund may offer greater liquidity or higher potential returns than CDs, the fund does not guarantee your principal or your return, and fund shares are not FDIC insured. Fidelity may provide information designed to help individuals understand their investment goals and explore various financial strategies. Such information may include information about current economic, market, and political conditions; materials that describe general principles of investing, such as asset allocation, diversification, risk tolerance, and goal setting; questionnaires designed to help create a personal financial profile; worksheets used to project savings needs based on assumed rates of inflation and hypothetical rates of return; and action plans offering investment alternatives. Materials may also include discussions of Fidelity's asset allocation funds and other Fidelity funds, products, and services. Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns of the capital markets in the United States, including common stocks, small capitalization stocks, long-term corporate bonds, intermediate-term government bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation (based on the CPI), and combinations of various capital markets. The performance of these capital markets is based on the returns of different indices. Fidelity funds may use the performance of these capital markets in order to demonstrate general risk-versus-reward investment scenarios. Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. The risks associated with the security types in any capital market may or may not correspond directly to those of the funds. Ibbotson calculates total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. In advertising materials, Fidelity may reference or discuss its products and services, which may include other Fidelity funds; retirement investing; brokerage products and services; model portfolios or allocations; saving for college or other goals; charitable giving; and the Fidelity credit card. In addition, Fidelity may quote or reprint financial or business publications and periodicals as they relate to current economic and political conditions, fund management, portfolio composition, investment philosophy, investment techniques, the desirability of owning a particular mutual fund, and Fidelity services and products. Fidelity may also reprint, and use as advertising and sales literature, articles from Fidelity Focus, a quarterly magazine provided free of charge to Fidelity fund shareholders. The fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. VOLATILITY. The fund may quote various measures of volatility and benchmark correlation in advertising. In addition, the fund may compare these measures to those of other funds. Measures of volatility seek to compare the fund's historical share price fluctuations or total returns to those of a benchmark. Measures of benchmark correlation indicate how valid a comparative benchmark may be. All measures of volatility and correlation are calculated using averages of historical data. MOMENTUM INDICATORS indicate the fund's price movements over specific periods of time. Each point on the momentum indicator represents the fund's percentage change in price movements over that period. The fund may advertise examples of the effects of periodic investment plans, including the principle of dollar cost averaging. In such a program, an investor invests a fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer shares when prices are high and more shares when prices are low. While such a strategy does not assure a profit or guard against loss in a declining market, the investor's average cost per share can be lower than if fixed numbers of shares are purchased at the same intervals. In evaluating such a plan, investors should consider their ability to continue purchasing shares during periods of low price levels. The fund may be available for purchase through retirement plans or other programs offering deferral of, or exemption from, income taxes, which may produce superior after-tax returns over time. For example, a $1,000 investment earning a taxable return of 10% annually would have an after-tax value of $1,949 after ten years, assuming tax was deducted from the return each year at a 31% rate. An equivalent tax-deferred investment would have an after-tax value of $2,100 after ten years, assuming tax was deducted at a 31% rate from the tax-deferred earnings at the end of the ten-year period. As of July 31, 1995, FMR advised over $ 25 billion in tax-free fund assets, $ 77 billion in money market fund assets, $ 214 billion in equity fund assets, $ 52 billion in international fund assets, and $ 22 billion in Spartan fund assets. The fund may reference the growth and variety of money market mutual funds and the adviser's innovation and participation in the industry. The equity funds under management figure represents the largest amount of equity fund assets under management by a mutual fund investment adviser in the United States, making FMR America's leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide information and communications network for the purpose of researching and managing investments abroad. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION Pursuant to Rule 22d-1 under the Investment Company Act of 1940 (the 1940 Act), FDC exercises its right to waive the fund's front-end sales charge on shares acquired through reinvestment of dividends and capital gain distributions or in connection with the fund's merger with or acquisition of any investment company or trust. In addition, FDC has chosen to waive the fund's sales charge in certain instances because of efficiencies involved in those sales of shares. The sales charge will not apply: 15. to shares purchased in connection with an employee benefit plan (including the Fidelity-sponsored 403(b) and corporate IRA programs but otherwise as defined in the Employee Retirement Income Security Act) maintained by a U.S. employer and having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a U.S. employer that is a member of a parent-subsidiary group of corporations (within the meaning of Section 1563(a)(1) of the Internal Revenue Code, with "50%" substituted for "80%") any member of which maintains an employee benefit plan having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a non-U.S. employer having 200 or more eligible employees, or a minimum of $3,000,000 in assets invested in Fidelity mutual funds, the assets of which are held in a bona fide trust for the exclusive benefit of employees participating therein; 16. to shares purchased by an insurance company separate account used to fund annuity contracts purchased by employee benefit plans (including 403(b) programs, but otherwise as defined in the Employee Retirement Income Security Act), which, in the aggregate, have either more than 200 eligible employees or a minimum of $3,000,000 in assets invested in Fidelity funds; 17. to shares in a Fidelity IRA account purchased (including purchases by exchange) with the proceeds of a distribution from an employee benefit plan provided that: (i) at the time of the distribution, the employer, or an affiliate (as described in exemption (1) above) of such employer, maintained at least one employee benefit plan that qualified for exemption (1) and that had at least some portion of its assets invested in one or more mutual funds advised by FMR, or in one or more accounts or pools advised by Fidelity Management Trust Company; and (ii) the distribution is transferred from the plan to a Fidelity Rollover IRA account within 60 days from the date of the distribution; 18. to shares purchased by a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more; 19. to shares purchased for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code); 20. to shares purchased by an investor participating in the Fidelity Trust Portfolios program (these investors must make initial investments of $100,000 or more in the Trust Portfolios funds and must, during the initial six-month period, reach and maintain an aggregate balance of at least $500,000 in all accounts and subaccounts purchased through the Trust Portfolios program); 21. to shares purchased through Portfolio Advisory Services; 22. to shares purchased by a current or former Trustee or officer of a Fidelity fund or a current or retired officer, director, or regular employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity Trustee or employee, a Fidelity Trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity Trustee or employee; 23. to shares purchased by a bank trust officer, registered representative, or other employee of a qualified recipient. Qualified recipients are securities dealers or other entities, including banks and other financial institutions, who have sold the fund's shares under special arrangements in connection with FDC's sales activities; 24. to shares purchased by contributions and exchanges to the following prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR and that are marketed and distributed directly to plan sponsors or participants without any intervention or assistance from any intermediary distribution channel: The Fidelity IRA, the Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers, and The CORPORATEplan for Retirement (Profit Sharing and Money Purchase Plan); 25. to shares purchased as part of a pension or profit-sharing plan as defined in Section 401(a) of the Internal Revenue Code that maintains all of its mutual fund assets in Fidelity mutual funds, provided the plan executes a Fidelity non-prototype sales charge waiver request form confirming its qualification; 26. to shares purchased by a registered investment adviser (RIA) for his or her discretionary accounts, provided he or she executes a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased directly from Fidelity, without a broker, unless purchased through a brokerage firm which is a correspondent of National Financial Services Corporation (NFSC). The waiver is unavailable, however, if the RIA is part of an organization principally engaged in the brokerage business, unless the brokerage firm in the organization is an NFSC correspondent; or 27. to shares purchased by a trust institution or bank trust department for its non-discretionary, non-retirement fiduciary accounts, provided it executes a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is unavailable if the trust department or institution is part of an organization not principally engaged in banking or trust activities. The fund's sales charge may be reduced to reflect sales charges previously paid, or that would have been paid absent a reduction for some purchases made directly with Fidelity as noted in the prospectus, in connection with investments in other Fidelity funds. This includes reductions for investments in prototype-like retirement plans sponsored by FMR or FMR Corp., which are listed above. The fund is open for business and its net asset value per share (NAV) is calculated each day the New York Stock Exchange (NYSE) is open for trading. The NYSE has designated the following holiday closings for 1995: New Year's Day (observed), President's Day, Good Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas Day . Although FMR expects the same holiday schedule to be observed in the future, the NYSE may modify its holiday schedule at any time. In addition, the fund will not process wire purchases and redemptions on days when the Federal Reserve Wire System is closed . FSC normally determines the fund's NAV as of the close of the NYSE (normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if trading on the NYSE is restricted or as permitted by the Securities and Exchange Commission (SEC). To the extent that portfolio securities are traded in other markets on days when the NYSE is closed , the fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. In addition, trading in some of the fund's portfolio securities may not occur on days when the fund is open for business. If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing the fund's NAV. Shareholders receiving securities or other property on redemption may realize a gain or loss for tax purposes, and will incur any costs of sale, as well as the associated inconveniences. Pursuant to Rule 11a-3 under the 1940 Act, the fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) the fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or the fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the Prospectu s, the fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DISTRIBUTIONS. If you request to have distributions mailed to you and the U.S. Postal Service cannot deliver your checks, or if your checks remain uncashed for six months, Fidelity may reinvest your distributions at the then-current NAV. All subsequent distributions will then be reinvested until you provide Fidelity with alternate instructions. DIVIDENDS. A portion of the fund's income may qualify for the dividends-received deduction available to corporate shareholders to the extent that the fund's income is derived from qualifying dividends. Because the fund may earn other types of income, such as interest, income from securities loans, non-qualifying dividends, and short-term capital gains, the percentage of dividends from the fund that qualifies for the deduction generally will be less than 100%. The fund will notify corporate shareholders annually of the percentage of fund dividends that qualifies for the dividends-received deduction. A portion of the fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. Gains (losses) attributable to foreign currency fluctuations are generally taxable as ordinary income, and therefore will increase (decrease) dividend distributions. Short-term capital gains are distributed as dividend income. The fund will send each shareholder a notice in January describing the tax status of dividends and capital gain distributions for the prior year. CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on the sale of securities and distributed to shareholders are federally taxable as long-term capital gains, regardless of the length of time shareholders have held their shares. If a shareholder receives a long-term capital gain distribution on shares of the fund, and such shares are held six months or less and are sold at a loss, the portion of the loss equal to the amount of the long-term capital gain distribution will be considered a long-term loss for tax purposes. Short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. As of July 31, 1995, the fund hereby designates approximately $6,241,000 as a capital gain dividend for the purpose of the dividend-paid deduction. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid with respect to foreign securities. Foreign governments may also impose taxes on other payments or gains with respect to foreign securities. If. at the close of its fiscal year, more than 50% of the fund's total assets are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns . TAX STATUS OF THE FUND. The fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company and avoid being subject to federal income or excise taxes at the fund level, the fund intends to distribute substantially all of its net investment income and net realized capital gains within each calendar year as well as on a fiscal year basis. The fund intends to comply with other tax rules applicable to regulated investment companies, including a requirement that capital gains from the sale of securities held less than three months constitute less than 30% of the fund's gross income for each fiscal year. Gains from some forward currency contracts, futures contracts, and options are included in this 30% calculation, which may limit the fund's investments in such instruments. If the fund purchases shares in certain foreign investment entities, defined as passive foreign investment companies (PFICs) in the Internal Revenue Code, it may be subject to U.S. federal income tax on a portion of any excess distribution or gain from the disposition of such shares. Interest charges may also be imposed on the fund with respect to deferred taxes arising from such distributions or gains. Generally, the fund will elect to mark-to-market any PFIC shares. Unrealized gains will be recognized as income for tax purposes and must be distributed to shareholders as dividends. The fund is treated as a separate entity from the other funds of Fidelity Securities Fund for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting the fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether the fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent organized in 1972. The voting common stock of FMR Corp. is divided into two classes. Class B is held predominantly by members of the Edward C. Johnson 3d family and is entitled to 49% of the vote on any matter acted upon by the voting common stock. Class A is held predominantly by non-Johnson family member employees of FMR Corp. and its affiliates and is entitled to 51% of the vote on any such matter. The Johnson family group and all other Class B shareholders have entered into a shareholders voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Under the Investment Company Act of 1940 (1940 Act), control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company. Therefore, through their ownership of voting common stock and the execution of the shareholders' voting agreement, members of the Johnson family may be deeded, under the 1940 Act, to form a controlling group with respect to FMR Corp. At present, the principal operating activities of FMR Corp. are those conducted by three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; Fidelity Investments Institutional Operations Company, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. T he business address of each Trustee and officer who is an "interested person" (as defined in the Investment Company Act of 1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also the address of FMR. The business address of all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are "interested persons" by virtue of their affiliation with either the trust or FMR are indicated by an asterisk (*). *EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief Executive Officer and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia University Graduate School of Business and a financial consultant. From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation (reinsurance), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) is Vice Chairman of FMR (1992). Prior to his retirement on May 31, 1990, he was a Director of FMR (1989) and Executive Vice President of FMR (a position he held until March 31, 1991); Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services (1991-1992). He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and construction). In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for the Preservation of New England Antiquities, and as an Overseer of the Museum of Fine Arts of Boston (1990). GERALD C. McDONOUGH (66), Trustee (1989), is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration, 1989), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). Prior to 1991, he held the positions of Vice President of International Business Machines Corporation ("IBM") and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS (66), Trustee, is President of The Wales Group, Inc. (management and financial advisory services). Prior to retiring in 1987, Mr. Williams served as Chairman of the Board of First Wachovia Corporation (bank holding company), and Chairman and Chief Executive Officer of The First National Bank of Atlanta and First Atlanta Corporation (bank holding company). He is currently a Director of BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc. (restaurants, 1992). WILLIAM J. HAYES (61), Vice President (1994), is Vice President of Fidelity's equity funds; Senior Vice President of FMR; and Managing Director of FMR Corp. ROBERT H. MORRISON (55), Manager of Security Transactions of Fidelity's equity funds is Vice President of FMR. ABIGAIL JOHNSON is manager and Vice President of OTC, which she has managed since April 1994. Previously, she managed Dividend Growth and the Select Industrial Equipment, Developing Communications, and Telecommunications Portfolios. Ms. Johnson joined Fidelity in 1988. ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LLC (1994-1995). JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity Funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current Trustee of the fund for his or her services as trustee for the fiscal year ended July 31, 1995. COMPENSATION TABLE
Trustees Aggregate Pension or Estimated Annual Total Compensation Retirement Benefits Upon Compensation from the Benefits Accrued Retirement from from the Fund Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Comple x* J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0 Ralph F. Cox 640 5,200 52,000 125,000 Phyllis Burke Davis 611 5,200 52,000 122,000 Richard J. Flynn 787 0 52,000 154,500 Edward C. Johnson 3d ** 0 0 0 0 E. Bradley Jones 633 5,200 49,400 123,500 Donald J. Kirk 641 5,200 52,000 125,000 Peter S. Lynch ** 0 0 0 0 Gerald C. McDonough 633 5,200 52,000 125,000 Edward H. Malone 633 5,200 44,200 128,000 Marvin L. Mann 633 5,200 52,000 125,000 Thomas R. Williams 624 5,200 52,000 126,500
* Information is as of December 31, 1994 for 206 funds in the complex. ** Interested trustees of the fund are compensated by FMR. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. On July 31, 1995 the Trustees and officers of the fund owned, in the aggregate, less than 1 % of the fund's total outstanding shares. MANAGEMENT CONTRACT The fund employs FMR to furnish investment advisory and other services. Under its management contract with the fund, FMR acts as investment adviser and, subject to the supervision of the Board of Trustees, directs the investments of the fund in accordance with its investment objective, policies, and limitations. FMR also provides the fund with all necessary office facilities and personnel for servicing the fund's investments, compensates all officers of the fund and all Trustees who are "interested persons" of the trust or of FMR, and all personnel of the fund or FMR performing services relating to research, statistical, and investment activities. In addition, FMR or its affiliates, subject to the supervision of the Board of Trustees, provide the management and administrative services necessary for the operation of the fund. These services include providing facilities for maintaining the fund's organization; supervising relations with custodians, transfer and pricing agents, accountants, underwriters, and other persons dealing with the fund; preparing all general shareholder communications and conducting shareholder relations; maintaining the fund's records and the registration of the fund's shares under federal and state laws; developing management and shareholder services for the fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to FSC, the fund pays all of its expenses, without limitation , that are not assumed by those parties. The fund pays for the typesetting, printing, and mailing of its proxy materials to shareholders, legal expenses, and the fees of the custodian, auditor and non-interested Trustees. Although the fund's current management contract provides that the fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices, and reports to shareholders, the trust, on behalf of the fund has entered into a revised transfer agent agreement with FSC, pursuant to which FSC bears the costs of providing these services to existing shareholders. Other expenses paid by the fund include interest, taxes, brokerage commissions, and the fund's proportionate share of insurance premiums and Investment Company Institute dues. The fund is also liable for such non-recurring expenses as may arise, including costs of any litigation to which the fund may be a party, and any obligation it may have to indemnify its officers and Trustees with respect to litigation. FMR is the fund's manager pursuant to a management contract dated August 1,1994, which was approved by shareholders on July 13,1994 . For the services of FMR under the contract, the fund pays FMR a monthly management fee composed of the sum of two elements: a basic fee and a performance adjustment based on a comparison of the fund's performance to that of the NASDAQ Composite Index (NASDAQ Index) . COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two elements: a group fee rate and an individual fund fee rate. The group fee rate is based on the monthly average net assets of all of the registered investment companies with which FMR has management contracts and is calculated on a cumulative basis pursuant to the graduated fee rate schedule shown below on the left. The schedule below on the right shows the effective annual group fee rate at various asset levels, which is the result of cumulatively applying the annualized rates on the left. For example, the effective annual fee rate at $ 333 billion of group net assets - the approximate level for July 1995 - was .3129 %, which is the weighted average of the respective fee rates for each level of group net assets up to $ 333 billion. GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate $ 0 - 3 billion .5200% $ 0.5 billion .5200% 3 - 6 .4900 25 .4238 6 - 9 .4600 50 .3823 9 - 12 .4300 75 .3626 12 - 15 .4000 100 .3512 15 - 18 .3850 125 .3430 18 - 21 .3700 150 .3371 21 - 24 .3600 175 .3325 24 - 30 .3500 200 .3284 30 - 36 .3450 225 .3253 36 - 42 .3400 250 .3223 42 - 48 .3350 275 .3198 48 - 66 .3250 300 .3175 66 - 84 .3200 325 .3153 84 - 102 .3150 350 .3133 102 - 138 .3100 138 - 174 .3050 174 - 228 .3000 228 - 282 .2950 282 - 336 .2900 Over 336 .2850 Prior to August 1, 1994, the group fee rate was based on a schedule with breakpoints ending at .3100% for average group assets in excess of $102 billion. The group fee rate breakpoints shown above for average group assets in excess of $138 billion and under $228 billion were voluntarily adopted by FMR on January 1, 1992. The additional breakpoints shown above for average group assets in excess of $228 billion were voluntarily adopted by FMR on November 1, 1993. The fund's current management contract reflects this extension of the group fee rate schedule. On August 1, 1994, FMR voluntarily revised the prior extensions to the group fee rate schedule, and added new breakpoints. The revised group fee rate schedule provides for lower management fee rates as FMR's assets under management increase. The revised group fee rate schedule is identical to the above schedule for average group assets under $210 billion. For average group assets in excess of $210 billion, the group fee rate schedule voluntarily adopted by FMR is as follows: GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate $ 138 - 174 billion .3050% $150 billion .3371% 174 - 210 .3000 175 .3325 210 - 246 .2950 200 .3284 246 - 282 .2900 225 .3249 282 - 318 .2850 250 .3219 318 - 354 .2800 275 .3190 354 - 390 .2750 300 .3163 Over 390 .2700 325 .3137 350 .3113 375 .3090 400 .3067 The individual fund fee rate is .35%. Based on the average group net assets of the funds advised by FMR for July 1995, the annual basic fee rate would be calculated as follows: Group Fee Rate Individual Fund Fee Rate Basic Fee Rate .3129 % + .35% = . 6629 % One-twelfth of this annual basic fee rate is applied to the fund's net assets averaged for the most recent month, giving a dollar amount, which is the fee for that month. COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward or downward adjustment, depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, the record of the NASDAQ Index over the same period. The performance period consists of the most recent month plus the previous 35 months. Each percentage point of difference, calculated to the nearest 1.0% (up to a maximum difference of (plus/minus)10.00 ) is multiplied by a performance adjustment rate of .02%. Thus, the maximum annualized adjustment rate is (plus/minus).20%.This performance comparison is made at the end of each month. One twelfth (1/12) of this rate is then applied to the fund's average net assets for the entire performance period, giving a dollar amount which will be added to (or subtracted from) the basic fee. The fund's performance is calculated based on change in net asset value. For purposes of calculating the performance adjustment, any dividends or capital gain distributions paid by the fund are treated as if reinvested in fund shares at the net asset value as of the record date for payment. The record of the NASDAQ Index is based on change in value and is adjusted for any cash distributions from the companies whose securities compose the NASDAQ Index. Because the adjustment to the basic fee is based on the fund's performance compared to the investment record of the Index, the controlling factor is not whether the fund's performance is up or down per se, but whether it is up or down more or less than the record of the NASDAQ Index. Moreover, the comparative investment performance of the fund is based solely on the relevant performance period without regard to the cumulative performance over a longer or shorter period of time. During the fiscal years ended July 31, 1995, 1994, and 1993, FMR received $7,611,000, $6,543,000 and $8,864,000, respectively, for its services as investment adviser to the fund. These fees, which include both the basic fee and the performance adjustment, were equivalent to .51%, .50%, and .74%, respectively, of the average net assets of the fund for each of those years. For fiscal 1995 and 1994, the downward performance adjustment amounted to $2,430,000 and $2,190,000, respectively. For fiscal 1993 the upward performance adjustment amounted to $665,000. FMR may, from time to time, voluntarily reimburse all or a portion of the fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). FMR retains the ability to be repaid for these expense reimbursements in the amount that expenses fall below the limit prior to the end of the fiscal year. Expense reimbursements by FMR will increase the fund's total returns and repayment of the reimbursement by the fund will lower its total returns. To comply with the California Code of Regulations, FMR will reimburse the fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating the fund's expenses for purposes of this regulation, the fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its custodian fees attributable to investments in foreign securities. SUB-ADVISERS. FMR has entered into sub-advisory agreements with FMR U.K., and FMR Far East . Pursuant to the sub-advisory agreements, FMR may receive investment advice and research services outside the United States from the sub-advisers. FMR may also grant the sub-advisers investment management authority as well as the authority to buy and sell securities if FMR believes it would be beneficial to the fund. Currently, FMR U.K. and FMR Far East each focus on issuers in countries other than the United States such as those in Europe, Asia, and the Pacific Basin. FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of FMR U.K. and FMR Far East. For providing non-discretionary investment advice and research services, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection with providing investment advice and research services. For providing discretionary investment management and executing portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal to 50 % of its monthly management fee rate (including any performance adjustment) with respect to the fund's average net assets managed by the sub-adviser on a discretionary basis. For providing investment advice and research services , the fees paid to the sub-advisers for fiscal 19 95 , 199 4 , and 199 3 were as follows: Fiscal Year FMR U.K. FMR Far East 1995 $ 31,655 $ 29,213 1994 $ 10,624 $ 13,601 1993 $ 7,942 $ 12,505 For providing discretionary investment management and executing portfolio transactions, for the fiscal years 1995, 1994 and 1993, no fees were paid by FMR to FMR U.K. and FMR Far East on behalf of the fund. CONTRACTS WITH FMR AFFILIATES FSC is transfer, dividend disbursing, and shareholder servicing agent for the fund. FSC receives annual account fees and asset-based fees for each retail account and certain institutional accounts based on account size. In addition, the fees for retail accounts are subject to increase based on postal rate changes. With respect to certain institutional retirement accounts, FSC receives asset-based fees only. The asset-based fees are subject to adjustment if the year-to-date total return of the Standard & Poor's Composite Index of 500 Stocks is greater than positive or negative 15%. FSC also collects small account fees from certain accounts with balances of less than $2,500. FSC pays out-of-pocket expenses associated with providing transfer agent services. In addition, FSC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. FSC also performs the calculations necessary to determine the fund's net asset value per share and dividends, and maintains the fund's accounting records. The annual fee rates for these pricing and bookkeeping services are based on the fund's average net assets, specifically .06% for the first $500 million of average net assets and .03% for average net assets in excess of $500 million. The fee is limited to a minimum of $45,000 and a maximum of $750,000 per year. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC for fiscal 1995, 1994, and 1993 were $606,000, $545,000, and $517,000, respectively. For fiscal 1995, 1994, and 1993 there were no securities lending fees incurred by the fund. The fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls for FDC to use all reasonable efforts, consistent with its other business, to secure purchasers for shares of the fund, which are continuously offered. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FDC. Sales charge revenue paid to FDC for fiscal 1995, 1994, and 1993 amounted to $ 480,000 , $1,055,000, and $2,277,000, respectively. DESCRIPTION OF THE TRUST TRUST ORGANIZATION. Fidelity OTC Portfolio is a fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2,1984. Currently, there are four funds of the trust: Fidelity OTC Portfolio, Fidelity Growth & Income Fund, Fidelity Blue Chip Growth Fund, and Fidelity Dividend Growth Fund. The Declaration of Trust permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to the trust or a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. The assets of the trust received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fund. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trust are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trust, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of the trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable for the obligations of the trust. The Declaration of Trust provides that the trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the trust or the Trustees include a provision limiting the obligations created thereby to the trust and its assets. The Declaration of Trust provides for indemnification out of each fund's property of any shareholder held personally liable for the obligations of the fund. The Declaration of Trust also provides that each fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the fund and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which a fund itself would be unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is remote. The Declaration of Trust further provides that the Trustees, if they have exercised reasonable care, will not be liable for any neglect or wrongdoing, but nothing in the Declaration of Trust protects T rustees against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. VOTING RIGHTS. Each fund's capital consists of shares of beneficial interest. As a shareholder, you receive one vote for each dollar value of net asset value you own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and nonassessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of the trust or a fund may, as set forth in the Declaration of Trust, call meetings of the trust or a fund for any purpose related to the trust or fund, as the case may be, including, in the case of a meeting of the entire trust, the purpose of voting on removal of one or more Trustees. The trust or any fund may be terminated upon the sale of its assets to another open-end management investment company, or upon liquidation and distribution of its assets, if approved by vote of the holders of a majority of the trust or the fund, as determined by the current value of each shareholder's investment in the fund or trust. If not so terminated, the trust and its funds will continue indefinitely. Each fund may invest all of its assets in another investment company. CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts, is custodian of the assets of the fund. The custodian is responsible for the safekeeping of a fund's assets and the appointment of the subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies of a fund or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Morgan Guaranty Trust company of New York, The Bank of New York and Chemical Bank, each headquartered in New York, also may serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the Board of Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds advised by FMR. The Boston branch of the fund's custodian leases its office space from an affiliate of FMR at a lease payment which, when entered into, was consistent with prevailing market rates. Transactions that have occurred to date include mortgages and personal and general business loans. In the judgment of FMR, the terms and conditions of those transactions were not influenced by existing or potential custodial or other fund relationships. AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, serves as the Trust's independent accountant. The auditor examines financial statements for the fund and provides other audit, tax, and related services. FINANCIAL STATEMENTS The fund's financial statements and financial highlights for the fiscal year ended July 31, 199 5 are included in the fund's Annual Report, which is a separate report supplied with this Statement of Additional Information. The fund's financial statements and financial highlights are incorporated herein by reference. FIDELITY GROWTH & INCOME PORTFOLIO CROSS-REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS PROSPECTUS SECTION
1................................................. Cover Page ... 2a................................................ Expenses .. Contents; The Fund at a Glance; Who May Want to Invest b,c............................................... . 3a................................................ Financial Highlights .. * b................................................. .. Performance c,d............................................... . 4a(i)............................................ Charter ... The Fund at a Glance; Investment Principles and Risks a(ii)............................................. . Investment Principles and Risks b................................................. . Who May Want to Invest; Investment Principles and Risks c................................................. .. 5a................................................ Charter .. Cover Page; The Fund at a Glance; Charter; Doing Business b(i).............................................. with Fidelity . b(ii) Charter ............................................ Expenses; Breakdown of Expenses b(iii)........................................... . Charter c................................................. . Charter; Breakdown of Expenses d................................................. . Cover Page; Charter e................................................. . Expenses f.................................................. . Charter g(i).............................................. * g(ii)............................................. 5A Performance ................................................ 6a(i)............................................ Charter ... How to Buy Shares; How to Sell Shares; Transaction Details; a(ii)............................................. Exchange Restrictions Charter a(iii)........................................... * b................................................. Transaction Details; Exchange Restrictions c................................................ * d................................................. Doing Business with Fidelity; How to Buy Shares; How to Sell e................................................. Shares; Investor Services Dividends, Capital Gains, and Taxes f,g............................................... 7a................................................ Cover Page; Charter .. Expenses; How to Buy Shares; Transaction Details b................................................. .. Sales Charge Reductions and Waivers c................................................. .. How to Buy Shares d................................................. .. * e................................................. .. Breakdown of Expenses f.................................................. .. 8................................................. How to Sell Shares; Investor Services; Transaction Details; ... Exchange Restrictions 9................................................. * ..
* Not Applicable Part B Statement of Additional Information Section
10, Cover Page 11........................................ 12............................................. Description of the Trust . 13a-c....................................... Investment Policies and Limitations Portfolio Transactions d............................................ 14a-c....................................... Trustees and Officers .. 15a, * b......................................... Trustees and Officers c.............................................. 16a(i)....................................... FMR; Portfolio Transactions .. Trustees and Officers a(ii)......................................... a(iii), Management Contract b.................................... Contracts with FMR Affiliates c,d............................................ * e,f,g.......................................... Description of the Trust h.............................................. Contracts with FMR Affiliates i.............................................. 17a,b,c..................................... Portfolio Transactions .. * d,e............................................ 18a........................................... Description of the Trust .. * b.............................................. 19a........................................... Additional Purchase and Redemption Information .. Valuation of Portfolio Securities; Additional Purchase and b.............................................. Redemption Information * c.............................................. 20............................................. Distributions and Taxes .. 21a(i),(ii).................................. Contracts with FMR Affiliates .. * a(iii),....................................... b.............................................. Contracts with FMR Affiliates * c.............................................. 22a........................................... * .. Performance b.............................................. 23............................................. Financial Statements ..
* Not Applicable Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how the fund invests and the services available to shareholders. To learn more about the fund and its investments, you can obtain a copy of the fund's most recent financial report and portfolio listing, or a copy of the Statement of Additional Information (SAI) dated September 19, 1995. The SAI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, call Fidelity at 1-800-544-8888. Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, the Federal Reserve Board, or any other agency, and are subject to investment risk, including the possible loss of principal. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. GAI-pro-995 Growth & Income seeks high total return through a combination of current income and capital appreciation by investing mainly in equity securities. FIDELITY GROWTH & INCOME PORTFOLIO PROSPECTUS SEPTEMBER 19, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS KEY FACTS THE FUND AT A GLANCE WHO MAY WANT TO INVEST EXPENSES The fund's sales charge (load) and its yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of the fund's financial data. PERFORMANCE How the fund has done over time. THE FUND IN DETAIL CHARTER How the fund is organized. INVESTMENT PRINCIPLES AND RISKS The fund's overall approach to investing. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY TYPES OF ACCOUNTS Different ways to set up your account, including tax-sheltered retirement plans. HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, ACCOUNT POLICIES AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS SALES CHARGE REDUCTIONS AND WAIVERS KEY FACTS THE FUND AT A GLANCE GOAL: High total return through a combination of current income and capital appreciation. As with any mutual fund, there is no assurance that the fund will achieve its goal. STRATEGY: Invests mainly in equity s ecurities of companies that pay current dividends and offer potential growth of earnings. MANAGEMENT: Fidelity Management & Research Company (FMR) is the management arm of Fidelity Investments, which was established in 1946 and is now America's largest mutual fund manager. Foreign affiliates of FMR may help choose investments for the fund. SIZE: As of July 31, 1995, the fund had over $12.1 billion in assets. WHO MAY WANT TO INVEST The fund may be appropriate for investors who are willing to ride out stock market fluctuations in pursuit of potentially high long-term returns. The fund is designed for those who seek a combination of growth and income from equity and some bond investments. The value of the fund's investments and the income they generate will vary from day to day, and generally reflect market conditions, interest rates, and other company, political, or economic news both here and abroad. In the short-term, stock prices can fluctuate dramatically in response to these factors. Over time, however, stocks have shown greater growth potential than other types of securities. The prices of bonds generally move in the opposite direction from interest rates. Investments in foreign securities may involve risks in addition to those of U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. When you sell your shares, they may be worth more or less than what you paid for them. By itself, the fund does not constitute a balanced investment plan. THE SPECTRUM OF FIDELITY FUNDS Broad categories of Fidelity funds are presented here in order of ascending risk. Generally, investors seeking to maximize return must assume greater risk. Growth & Income is in the GROWTH AND INCOME category. (solid bullet) MONEY MARKET Seeks income and stability by investing in high-quality, short-term investments. (solid bullet) INCOME Seeks income by investing in bonds. (right arrow) GROWTH AND INCOME Seeks long-term growth and income by investing in stocks and bonds. (solid bullet) GROWTH Seeks long-term growth by investing mainly in stocks. (checkmark) EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell, or hold shares of a fund. See pages and 25 - for an explanation of how and when these charges apply. Lower sales charges may be available for accounts over $250,000. Maximum sales charge on purchases (as a % of offering price) 3.00% Maximum sales charge on reinvested distributions None Deferred sales charge on redemptions None Exchange fee None Annual account maintenance fee (for accounts under $2 , 500) $12.00 ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund pays a management fee to FMR. It also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. The fund's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see page ). The following are projections based on historical expenses, and are calculated as a percentage of average net assets. A portion of the brokerage commissions that the fund paid was used to reduce fund expenses. Without this reduction, the total fund operating expenses would have been .78%. Management fee .52% 12b-1 fee None Other expenses .25% Total fund operating expenses .77% EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5% and that its operating expenses are exactly as just described. For every $1,000 you invested, here's how much you would pay in total expenses if you close your account after the number of years indicated: After 1 year $ 38 After 3 years $ 54 After 5 years $ 72 After 10 years $ 12 3 These examples illustrate the effect of expenses, but are not meant to suggest actual or expected costs or returns, all of which may vary. UNDERSTANDING EXPENSES Operating a mutual fund involves a variety of expenses for portfolio management, shareholder statements, tax reporting, and other services. As an investor, you pay some of these costs directly (for example, the fund's 3% sales charge). Others are paid from the fund's assets; the effect of these other expenses is already factored into any quoted share price or return. (checkmark) FINANCIAL HIGHLIGHTS The table that follows is included in the fund's Annual Report and has been audited by Coopers & Lybrand L.L.P., independent accountants. Their report on the financial statements and financial highlights is included in the Annual Report. The financial statements and financial highlights are incorporated by reference into (are legally a part of) the fund's Statement of Additional Information. SELECTED PER-SHARE DATA
56.Year s e nded 1986 B 1987 1988 1989 1990 1991 1992 1993 1994 H 1995 July 31 57.Net asset $ 10.0 $ 13.2 $ 17.4 $ 14.5 $ 18.5 $ 17.1 $ 19.9 $ 21.3 $ 21.9 $ 22.1 value, beginning 0 1 4 6 6 0 2 4 0 7 of period 58.Income from Investment Operations 59. Net .07 .36 .55 .76 E .58 .46 .50 .53 .45 .4 3 investment income 60. Net realized 3.19 4.21 (1.58) 3.86 (.02) 3.10 1.94 3.02 1.07 4. 14 and unrealized gain (loss) on investments 61. Total from 3.26 4.57 (1.03) 4.62 .56 3.56 2.44 3.55 1.52 4.57 investment operations 62.Less Distributions 63. From net (.05) (.34) (.50) (.62) (.75) (.52) (.38) (.59) (.48) (.40) investment income 64. From net -- -- (1.35) -- (1.27) (.22) (.64) (2.40) (.77) (1.24) realized gain 65. Total (.05) (.34) (1.85) (.62) (2.02) (.74) (1.02) (2.99) (1.25) (1.64) distributions 66.Net asset $ 13.2 $ 17.4 $ 14.5 $ 18.5 $ 17.1 $ 19.9 $ 21.3 $ 21.9 $ 22.1 $ 25.1 value, end of 1 4 6 6 0 2 4 0 7 0 period 67.Total 32.59 34.97 (6.04) 32.66 3.22 21.89 12.75 19.10 7.08 21.95 return C,D % % % % % % % % % % 68.RATIOS AND SUPPLEMENTAL DATA 69.Net assets, $ 365 $ 1,62 $ 1,18 $ 1,42 $ 1,91 $ 2,68 $ 4,19 $ 6,64 $ 8,75 $ 12,1 end of period (in 9 8 8 0 6 9 6 7 06 millions) 70.Ratio of 1.21 1.09 1.02 .89% .87% .87% .86% .83% .82% .77% expenses to %A,F % % G G average net assets 71.Ratio of 1.21 1.09 1.02 .89% .87% .87% .86% .83% .83% .78% expenses to %A % % G G average net assets before expense reductions 72.Ratio of net 3.12 2.96 3.69 4.76 3.43 2.62 2.49 2.67 2.09 2.21 investment % A % % % % % % % % % income to average net assets 73.Portfolio 69% A 165% 135% 97% 108% 215% 221% 87% 92% 67% turnover rate
A ANNUALIZED B FROM DECEMBER 30, 1985 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1986. C TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND IS NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR. D THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN. E NET INVESTMENT INCOME PER SHARE CONTAINS A SPECIAL DIVIDEND FROM QUANTUM CHEMICAL CORP. OF $.09 PER SHARE. F EXPENSES HAVE BEEN LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN ACCORDANCE WITH CERTAIN STATE EXPENSE LIMITATION REGULATIONS. EXPENSES BORNE BY THE INVESTMENT ADVISER DURING THE PERIOD DECEMBER 30, 1985 TO JULY 31, 1986 AMOUNTED TO $.002 PER SHARE. G FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES. H EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES. PERFORMANCE Mutual fund performance is commonly measured as TOTAL RETURN. The total returns that follow are based on historical fund results and do not reflect the effect of taxes. The fund's fiscal year runs from August 1 through July 31. The tables below show the fund's performance over past fiscal years compared to two measures: investing in a broad selection of stocks (S&P 500), and not investing at all (inflation, or CPI). To help you compare this fund to other funds, the chart on page displays calendar-year performance. AVERAGE ANNUAL TOTAL RETURNS Fiscal periods Pas Past Life ended t 1 5 of July 31, 1995 yea year fund r s A Growth & 21.95 16.40 18.07 Income % % % Growth & 18.2 9 15.7 0 17.7 0 Income % % % (load adj.B) S&P 500 26.1 1 12.90 14.4 4 % % % Consumer 2.7 6 3.1 8 3.54 Price % % % Index CUMULATIVE TOTAL RETURNS Fiscal periods Pas Past Life ended t 1 5 of July 31, 1995 yea year fund r s A Growth & 21.9 5 113.7 3 392.1 1 Income % % % Growth & 18.2 9 107.3 377.3 5 Income % 1% % (load adj.B) S&P 500 26.1 1 83.4 4 264.5 5 % % % Consumer 2.7 6 16.9 5 39.5 2 Price % % % Index A FROM DECEMBER 30, 1985 B LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING THE FUND'S 3% SALES CHARGE. UNDERSTANDING PERFORMANCE Because this fund invests in stocks, its performance is related to that of the overall stock market. Historically, stock market performance has been characterized by volatility in the short run and growth in the long run. You can see these two characteristics reflected in the fund's performance; the year-by-year total returns on page show that short-term returns can vary widely, while the returns at left show long-term growth. (checkmark) EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the fund on December 30, 1985. From that date through July 31, 1995, the fund's total return, including the effect of paying the 3% sales charge, was 377.3 5 %. That $10,000 would have grown to $47,73 5 (the initial investment plus 377. 3 5% of $10,000). $10,000 OVER LIFE OF FUND Fiscal years 1986 1990 1995 Row: 1, Col: 1, Value: 9700.0 Row: 2, Col: 1, Value: 9700.0 Row: 3, Col: 1, Value: 10252.9 Row: 4, Col: 1, Value: 11232.6 Row: 5, Col: 1, Value: 12580.9 Row: 6, Col: 1, Value: 12697.3 Row: 7, Col: 1, Value: 13104.7 Row: 8, Col: 1, Value: 13444.2 Row: 9, Col: 1, Value: 12861.58 Row: 10, Col: 1, Value: 13552.86 Row: 11, Col: 1, Value: 12686.33 Row: 12, Col: 1, Value: 13301.34 Row: 13, Col: 1, Value: 13340.43 Row: 14, Col: 1, Value: 13086.07 Row: 15, Col: 1, Value: 14666.61 Row: 16, Col: 1, Value: 15363.61 Row: 17, Col: 1, Value: 15825.01 Row: 18, Col: 1, Value: 15805.99 Row: 19, Col: 1, Value: 15865.23 Row: 20, Col: 1, Value: 16447.71 Row: 21, Col: 1, Value: 17359.64 Row: 22, Col: 1, Value: 17708.03 Row: 23, Col: 1, Value: 17568.68 Row: 24, Col: 1, Value: 13908.04 Row: 25, Col: 1, Value: 13164.7 Row: 26, Col: 1, Value: 13841.7 Row: 27, Col: 1, Value: 14709.56 Row: 28, Col: 1, Value: 15489.52 Row: 29, Col: 1, Value: 15156.87 Row: 30, Col: 1, Value: 15400.98 Row: 31, Col: 1, Value: 15600.7 Row: 32, Col: 1, Value: 16321.82 Row: 33, Col: 1, Value: 16310.62 Row: 34, Col: 1, Value: 16120.18 Row: 35, Col: 1, Value: 16703.99 Row: 36, Col: 1, Value: 17031.96 Row: 37, Col: 1, Value: 16783.15 Row: 38, Col: 1, Value: 17022.19 Row: 39, Col: 1, Value: 18088.22 Row: 40, Col: 1, Value: 17893.35 Row: 41, Col: 1, Value: 18446.33 Row: 42, Col: 1, Value: 19232.76 Row: 43, Col: 1, Value: 20134.83 Row: 44, Col: 1, Value: 20273.24 Row: 45, Col: 1, Value: 21637.23 Row: 46, Col: 1, Value: 22103.55 Row: 47, Col: 1, Value: 21984.85 Row: 48, Col: 1, Value: 21290.21 Row: 49, Col: 1, Value: 21643.62 Row: 50, Col: 1, Value: 22061.01 Row: 51, Col: 1, Value: 20904.64 Row: 52, Col: 1, Value: 21225.85 Row: 53, Col: 1, Value: 21598.68 Row: 54, Col: 1, Value: 21041.54 Row: 55, Col: 1, Value: 22596.34 Row: 56, Col: 1, Value: 22491.32 Row: 57, Col: 1, Value: 22334.59 Row: 58, Col: 1, Value: 20427.66 Row: 59, Col: 1, Value: 19249.75 Row: 60, Col: 1, Value: 19209.65 Row: 61, Col: 1, Value: 20158.77 Row: 62, Col: 1, Value: 20561.65 Row: 63, Col: 1, Value: 22439.49 Row: 64, Col: 1, Value: 24330.83 Row: 65, Col: 1, Value: 25671.08 Row: 66, Col: 1, Value: 26024.6 Row: 67, Col: 1, Value: 27520.27 Row: 68, Col: 1, Value: 25651.13 Row: 69, Col: 1, Value: 27222.72 Row: 70, Col: 1, Value: 28015.35 Row: 71, Col: 1, Value: 27768.25 Row: 72, Col: 1, Value: 28264.88 Row: 73, Col: 1, Value: 26789.2 Row: 74, Col: 1, Value: 29164.99 Row: 75, Col: 1, Value: 29862.45 Row: 76, Col: 1, Value: 30517.2 Row: 77, Col: 1, Value: 29890.37 Row: 78, Col: 1, Value: 30562.55 Row: 79, Col: 1, Value: 30676.96 Row: 80, Col: 1, Value: 30074.1 Row: 81, Col: 1, Value: 30692.56 Row: 82, Col: 1, Value: 30376.14 Row: 83, Col: 1, Value: 30687.27 Row: 84, Col: 1, Value: 30930.31 Row: 85, Col: 1, Value: 31886.25 Row: 86, Col: 1, Value: 32529.61 Row: 87, Col: 1, Value: 33437.33 Row: 88, Col: 1, Value: 33816.93 Row: 89, Col: 1, Value: 35058.07 Row: 90, Col: 1, Value: 35008.28 Row: 91, Col: 1, Value: 35738.65 Row: 92, Col: 1, Value: 36288.94 Row: 93, Col: 1, Value: 36556.02 Row: 94, Col: 1, Value: 37991.55 Row: 95, Col: 1, Value: 38198.36 Row: 96, Col: 1, Value: 38625.82 Row: 97, Col: 1, Value: 37753.78999999999 Row: 98, Col: 1, Value: 38882.41 Row: 99, Col: 1, Value: 40352.32 Row: 100, Col: 1, Value: 39582.37 Row: 101, Col: 1, Value: 37841.11 Row: 102, Col: 1, Value: 38596.88 Row: 103, Col: 1, Value: 38719.91 Row: 104, Col: 1, Value: 38047.88 Row: 105, Col: 1, Value: 39142.53 Row: 106, Col: 1, Value: 40643.25999999999 Row: 107, Col: 1, Value: 40171.38 Row: 108, Col: 1, Value: 40650.05 Row: 109, Col: 1, Value: 39140.4 Row: 110, Col: 1, Value: 39763.93 Row: 111, Col: 1, Value: 40235.28999999999 Row: 112, Col: 1, Value: 41423.12 Row: 113, Col: 1, Value: 42726.7 Row: 114, Col: 1, Value: 43919.86 Row: 115, Col: 1, Value: 45169.84 Row: 116, Col: 1, Value: 45985.09 Row: 117, Col: 1, Value: 47734.73 $ $47,735 EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in the fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. YIELD refers to the income generated by an investment in the fund over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all stock and bond funds. Because this differs from other accounting methods, the quoted yield may not equal the income actually paid to shareholders. THE S&P 500(registered trademark) is the Standard & Poor's Composite Index of 500 Stocks, a widely recognized, unmanaged index of common stock prices. The S&P 500 figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated by the U.S. government. THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth and Income Funds Average, which currently reflects the performance of over 3 80 mutual funds with similar objectives. This average, which assumes reinvestment of distributions, is published by Lipper Analytical Services, Inc. YEAR-BY-YEAR TOTAL RETURNS Calendar years 1986 1987 1988 1989 1990 1991 1992 1993 1994 Growth & Income 34.91% 5.77% 22.98% 29.60% - 6.80% 41.84% 11.54% 19. 53% 2.2 7 % Competitive funds average 16.30% 1.82% 15.99% 23.62% - 4.34% 29.07% 8.93 % 11.58% - 0.9 4 % Percentage (%) Row: 1, Col: 1, Value: nil Row: 1, Col: 2, Value: nil Row: 2, Col: 1, Value: 34.91 Row: 2, Col: 2, Value: 16.3 Row: 3, Col: 1, Value: 5.77 Row: 3, Col: 2, Value: 1.82 Row: 4, Col: 1, Value: 22.98 Row: 4, Col: 2, Value: 15.99 Row: 5, Col: 1, Value: 29.6 Row: 5, Col: 2, Value: 23.62 Row: 6, Col: 1, Value: -6.8 Row: 6, Col: 2, Value: -4.34 Row: 7, Col: 1, Value: 41.84 Row: 7, Col: 2, Value: 29.07 Row: 8, Col: 1, Value: 11.54 Row: 8, Col: 2, Value: 8.93 Row: 9, Col: 1, Value: 19.53 Row: 9, Col: 2, Value: 11.58 Row: 10, Col: 1, Value: 2.27 Row: 10, Col: 2, Value: -0.9400000000000001 (large solid box) Growth & Income (large hollow box) Competitive funds average Other illustrations of fund performance may show moving averages over specified periods. The fund's recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance or a free annual report, call 1-800-544-8888. TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. THE FUND IN DETAIL CHARTER GROWTH & INCOME IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. In technical terms, the fund is currently a diversified fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. Fidelity will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. The number of votes you are entitled to is based upon the dollar value of your investment. FMR AND ITS AFFILIATES The fund is managed by FMR, which chooses the fund's investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London, England, and Fidelity Management & Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR with foreign investments. Steven Kaye is manager and Vice President of Growth & Income, which he has managed since January 1993. Previously, he managed Blue Chip Growth, Select Biotechnology, Select Energy Service, and Select Health Care. Mr. Kaye joined Fidelity in 1985. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Service Co. (FSC) performs transfer agent servicing functions for the fund. FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far East. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company; therefore, the Johnson family may be deemed under the 1940 Act to form a controlling group with respect to FMR Corp. FMR may use its broker-dealer affiliates and other firms that sell fund shares to carry out the fund's transactions, provided that the fund receives brokerage services and commission rates comparable to those of other broker-dealers. INVESTMENT PRINCIPLES AND RISKS THE FUND SEEKS HIGH TOTAL RETURN through a combination of current income and capital appreciation by investing mainly in equity securities. The fund expects to invest the majority of its assets in domestic and foreign equity securities, with a focus on those that pay current dividends and show potential earnings growth. However, the fund may buy debt securities as well as equity securities that are not currently paying dividends, but offer prospects for capital appreciation or future income. The value of the fund's domestic and foreign investments varies in response to many factors. Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. The value of bonds fluctuates based on changes in interest rates and in the credit quality of the issuer. Investments in foreign securities may involve risks in addition to those of U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. FMR may use various investment techniques to hedge a portion of the fund's risks, but there is no guarantee that these strategies will work as FMR intends. Also, as a mutual fund, the fund seeks to spread investment risk by diversifying its holdings among many companies and industries. Of course, when you sell your shares of the fund, they may be worth more or less than what you paid for them. FMR normally invests the fund's assets according to its investment strategy. The fund also reserves the right to invest without limitation in preferred stocks and investment-grade debt instruments for temporary, defensive purposes. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which the fund may invest, strategies FMR may employ in pursuit of the fund's investment objective, and a summary of related risks. Any restrictions listed supplement those discussed earlier in this section. A complete listing of the fund's limitations and more detailed information about the fund's investments are contained in the fund's SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with the fund's investment objective and policies and that doing so will help the fund achieve its goal. Current holdings and recent investment strategies are described in the fund's financial reports which are sent to shareholders twice a year. For a free SAI or financial report, call 1-800-544-8888. EQUITY SECURITIES may include common stocks, preferred stocks, convertible securities, and warrants. Common stocks, the most familiar type, represent an equity (ownership) interest in a corporation. Although equity securities have a history of long-term growth in value, their prices fluctuate based on changes in a company's financial condition and on overall market and economic conditions. Smaller companies are especially sensitive to these factors. RESTRICTIONS: With respect to 75% of total assets, the fund may not own more than 10% of the outstanding voting securities of a single issuer. DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest, and must repay the amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values. In general, bond prices rise when interest rates fall, and vice versa. Debt securities have varying degrees of quality and varying levels of sensitivity to changes in interest rates. Longer-term bonds are generally more sensitive to interest rate changes than short-term bonds. Lower-quality debt securities (sometimes called "junk bonds") are considered to have speculative characteristics and involve greater risk of default or price changes due to changes in the issuer's creditworthiness, or they may already be in default. The market prices of these securities may fluctuate more than higher-quality securities and may decline significantly in periods of general economic difficulty. The table on page provides a summary of ratings assigned to debt holdings (not including money market instruments) in the fund's portfolio. These figures are dollar-weighted averages of month-end portfolio holdings during fiscal 1995, and are presented as a percentage of total security investments. These percentages are historical and do not necessarily indicate the fund's current or future debt holdings. FISCAL 1995 DEBT HOLDINGS, BY RATING MOODY'S STANDARD & POOR'S INVESTORS SERVICE, INC. CORPORATION Rating Average A Rating Averag eA INVESTMENT GRADE Highest quality Aaa 0. 5 % AAA 0. 4 % High quality Aa 0. 1 % AA 0. 2 % Upper-medium grade A 0. 4 % A 0. 3 % Medium grade Baa 0. 0 % BBB 0.0% LOWER QUALITY Moderately speculative Ba 0. 1 % BB 0.2% Speculative B 0. 7 % B 0.7% Highly speculative Caa 0. 0 % CCC 0.0% Poor quality Ca 0. 0 % CC 0.0% Lowest quality, no interest C C In default, in arrears -- D 0.0% 1. 8 % 1. 8 % A FOR SOME FOREIGN GOVERNMENT OBLIGATIONS, FMR ASSIGNS THE RATINGS OF THE SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT. THE DOLLAR-WEIGHTED AVERAGE OF DEBT SECURITIES NOT RATED DIRECTLY OR INDIRECTLY BY MOODY'S OR S&P AMOUNTED TO 0.2%. THIS MAY INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED RATING SERVICES, AS WELL AS UNRATED SECURITIES. REFER TO THE FUND'S STATEMENT OF ADDITIONAL INFORMATION FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS. RESTRICTIONS: Purchase of a debt security is consistent with the fund's debt quality policy if it is rated at or above the stated level by Moody's or rated in the equivalent categories by S&P, or is unrated but judged to be of equivalent quality by FMR. The fund currently intends to limit its investments in lower than Baa-quality debt securities to less than 35% of its assets. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve additional risks and considerations. These include risks relating to political or economic conditions in foreign countries, fluctuations in foreign currencies, withholding or other taxes, operational risks, increased regulatory burdens, and the potentially less stringent investor protection and disclosure standards of foreign markets. Additionally, governmental issuers of foreign securities may be unwilling to repay principal and interest when due, and may require that the conditions for payment be renegotiated. All of these factors can make foreign investments, especially those in developing countries, more volatile. ASSET-BACKED AND MORTGAGE SECURITIES include interests in pools of lower-rated debt securities, or consumer loans or mortgages, or complex instruments such as collateralized mortgage obligations and stripped mortgage-backed securities. The value of these securities may be significantly affected by changes in interest rates, the market's perception of the issuers, and the creditworthiness of the parties involved. Some securities may have a structure that makes their reaction to interest rates and other factors difficult to predict, making their value highly volatile. These securities may also be subject to prepayment risk. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to increase or decrease its exposure to changing security prices, interest rates, currency exchange rates, commodity prices, or other factors that affect security values. These techniques may involve derivative transactions such as buying and selling options and futures contracts, entering into currency exchange contracts or swap agreements, purchasing indexed securities, and selling securities short. FMR can use these practices to adjust the risk and return characteristics of the fund's portfolio of investments. If FMR judges market conditions incorrectly or employs a strategy that does not correlate well with the fund's investments, these techniques could result in a loss, regardless of whether the intent was to reduce risk or increase return. These techniques may increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risk assumed. In addition, these techniques could result in a loss if the counterparty to the transaction does not perform as promised. DIRECT DEBT. Loans and other direct debt instruments are interests in amounts owed to another party by a company, government, or other borrower. They have additional risks beyond conventional debt securities because they may entail less legal protection for the fund, or there may be a requirement that the fund supply additional cash to a borrower on demand. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of some illiquid securities and some other securities may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to the fund. RESTRICTIONS: The fund may not purchase a security if, as a result, more than 10% of its assets would be invested in illiquid securities. OTHER INSTRUMENTS may include securities of closed-end investment companies and real estate-related investments. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry. RESTRICTIONS: With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer. The fund may not invest more than 25% of its total assets in any one industry. These limitations do not apply to U.S. government securities. BORROWING. The fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements. If the fund borrows money, its share price may be subject to greater fluctuation until the borrowing is paid off. If the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage. RESTRICTIONS: The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. LENDING. Lending securities to broker-dealers and institutions, including Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning income. This practice could result in a loss or a delay in recovering the fund's securities. The fund may also lend money to other funds advised by FMR. RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraph restates all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraph, can be changed without shareholder approval. The fund seeks high total return through a combination of current income and capital appreciation. With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer and may not own more than 10% of the outstanding voting securities of a single issuer. The fund may not invest more than 25% of its total assets in any one industry. The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. Loans, in the aggregate, may not exceed 33% of the fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the fund pays fees related to its daily operations. Expenses paid out of the fund's assets are reflected in its share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. The fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to affiliates who provide assistance with these services. The fund also pays OTHER EXPENSES, which are explained on page . FMR may, from time to time, agree to reimburse the fund for management fees and other expenses above a specified limit. FMR retains the ability to be repaid by the fund if expenses fall below the specified limit prior to the end of the fiscal year. Reimbursement arrangements, which may be terminated at any time without notice, can decrease the fund's expenses and boost its performance. MANAGEMENT FEE The management fee is calculated and paid to FMR every month. The fee is calculated by adding a group fee rate to an individual fund fee rate, and multiplying the result by the fund's average net assets. The group fee rate is based on the average net assets of all the mutual funds advised by FMR. This rate cannot rise above .52%, and it drops as total assets under management increase. For July 1995, the group fee rate was . 3 1 29 %. The individual fund fee rate is .20%. The total management fee rate for fiscal 1995 was .5 2 %. FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These sub-advisers provide FMR with investment research and advice on issuers based outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of the costs of providing these services. The sub-advisers may also provide investment management services. In return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its management fee rate with respect to the fund's investments that the sub-adviser manages on a discretionary basis. UNDERSTANDING THE MANAGEMENT FEE The management fee FMR receives is designed to be responsive to changes in FMR's total assets under management. Building this variable into the fee calculation assures shareholders that they will pay a lower rate as FMR's assets under management increase. (checkmark) OTHER EXPENSES While the management fee is a significant component of the fund's annual operating costs, the fund has other expenses as well. The fund contracts with FSC to perform many transaction and accounting functions. These services include processing shareholder transactions, valuing the fund's investments, and handling securities loans. In fiscal 1995, the fund paid FSC fees equal to . 2 5% of its average net assets. The fund also pays other expenses, such as legal, audit, and custodian fees; proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. A broker-dealer may use a portion of the commissions paid by the fund to reduce the fund's custodian or transfer agent fees. The fund's portfolio turnover rate for fiscal 1995 was 6 7 %. This rate varies from year to year. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY Fidelity Investments was established in 1946 to manage one of America's first mutual funds. Today, Fidelity is the largest mutual fund company in the country, and is known as an innovative provider of high-quality financial services to individuals and institutions. In addition to its mutual fund business, the company operates one of America's leading discount brokerage firms, FBSI. Fidelity is also a leader in providing tax-sheltered retirement plans for individuals investing on their own or through their employer. Fidelity is committed to providing investors with practical information to make investment decisions. Based in Boston, Fidelity provides customers with complete service 24 hours a day, 365 days a year, through a network of telephone service centers around the country. To reach Fidelity for general information, call these numbers: (small solid bullet) For mutual funds, 1-800-544-8888 (small solid bullet) For brokerage, 1-800-544-7272 If you would prefer to speak with a representative in person, Fidelity has over 80 walk-in Investor Centers across the country. TYPES OF ACCOUNTS You may set up an account directly in the fund or, if you own or intend to purchase individual securities as part of your total investment portfolio, you may consider investing in the fund through a brokerage account. If you are investing through FBSI or another financial institution or investment professional, refer to its program materials for any special provisions regarding your investment in the fund. The different ways to set up (register) your account with Fidelity are listed at right. The account guidelines that follow may not apply to certain retirement accounts. If your employer offers the fund through a retirement program, contact your employer for more information. Otherwise, call Fidelity directly. FIDELITY FACTS Fidelity offers the broadest selection of mutual funds in the world. (solid bullet) Number of Fidelity mutual funds: over 21 0 (solid bullet) Assets in Fidelity mutual funds: over $ 320 billion (solid bullet) Number of shareholder accounts: over 2 1 million (solid bullet) Number of investment analysts and portfolio managers: over 20 0 (checkmark) WAYS TO SET UP YOUR ACCOUNT INDIVIDUAL OR JOINT TENANT FOR YOUR GENERAL INVESTMENT NEEDS Individual accounts are owned by one person. Joint accounts can have two or more owners (tenants). RETIREMENT TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES Retirement plans allow individuals to shelter investment income and capital gains from current taxes. In addition, contributions to these accounts may be tax deductible. Retirement accounts require special applications and typically have lower minimums. (solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under 70 with earned income to invest up to $2,000 per tax year. Individuals can also invest in a spouse's IRA if the spouse has earned income of less than $250. (solid bullet) ROLLOVER IRAS retain special tax advantages for certain distributions from employer-sponsored retirement plans. (solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow self-employed individuals or small business owners (and their employees) to make tax-deductible contributions for themselves and any eligible employees up to $30,000 per year. (solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or those with self-employed income (and their eligible employees) with many of the same advantages as a Keogh, but with fewer administrative requirements. (solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt institutions, including schools, hospitals, and other charitable organizations. (solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to contribute a percentage of their wages on a tax-deferred basis. These accounts need to be established by the trustee of the plan. GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS These custodial accounts provide a way to give money to a child and obtain tax benefits. An individual can give up to $10,000 a year per child without paying federal gift tax. Depending on state laws, you can set up a custodial account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). TRUST FOR MONEY BEING INVESTED BY A TRUST The trust must be established before an account can be opened. BUSINESS OR ORGANIZATION FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER GROUPS Requires a special application. HOW TO BUY SHARES ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR THE FUND: the offering price and the net asset value (NAV). The offering price includes the 3% sales charge, which you pay when you buy shares, unless you qualify for a reduction or waiver as described on page . When you buy shares at the offering price, Fidelity deducts 3% and invests the rest at the NAV. Shares are purchased at the next share price calculated after your investment is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. IF YOU ARE NEW TO FIDELITY, complete and sign an account application and mail it along with your check. You may also open your account in person or by wire as described on page . If there is no application accompanying this prospectus, call 1-800-544-8888. IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can: (small solid bullet) Mail in an application with a check, o r (small solid bullet) Open your account by exchanging from another Fidelity fund. IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an IRA, for the first time, you will need a special application. Retirement investing also involves its own investment procedures. Call 1-800-544-8888 for more information and a retirement application. If you buy shares by check or Fidelity Money Line(registered trademark), and then sell those shares by any method other than by exchange to another Fidelity fund, the payment may be delayed for up to seven business days to ensure that your previous investment has cleared. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $2,500 For Fidelity retirement accounts $500 TO ADD TO AN ACCOUNT $250 For Fidelity retirement accounts $250 Through automatic investment plans $100 MINIMUM BALANCE $1,000 For Fidelity retirement accounts $500 These minimums may vary for investments through Fidelity Portfolio Advisory Services , a Fidelity College Savings Plan account, or a Fidelity Payroll Deduction Program account in the fund. Refer to the appropriate program materials for details. UNDERSTANDING SHARE PRICE Let's say you invest $2,500 at an offering price of $10. Of the $10 offering price, 3% ($.30) is the sales charge, and 97% ($9.70) represents the NAV. The value of your initial investment will be $2,425 (250 shares worth $9.70 each), and you will have paid a sales charge of $75. (checkmark) Row: 1, Col: 1, Value: 25.0 Row: 1, Col: 2, Value: 75.0 Row: 1, Col: 3, Value: 75.0 Row: 1, Col: 4, Value: 75.0 Row: 1, Col: 5, Value: 75.0 Row: 1, Col: 6, Value: 75.0 Row: 1, Col: 7, Value: 75.0 Row: 1, Col: 8, Value: 75.0 Row: 1, Col: 9, Value: 75.0 Row: 1, Col: 10, Value: 75.0 Row: 1, Col: 11, Value: 75.0 Row: 1, Col: 12, Value: 75.0 Row: 1, Col: 13, Value: 75.0 Row: 1, Col: 14, Value: 75.0 Row: 1, Col: 15, Value: 75.0 Row: 1, Col: 16, Value: 75.0 Row: 1, Col: 17, Value: 75.0 Row: 1, Col: 18, Value: 75.0 Row: 1, Col: 19, Value: 75.0 Row: 1, Col: 20, Value: 75.0 Row: 1, Col: 21, Value: 75.0 Row: 1, Col: 22, Value: 75.0 Row: 1, Col: 23, Value: 75.0 Row: 1, Col: 24, Value: 75.0 Row: 1, Col: 25, Value: 75.0 Row: 1, Col: 26, Value: 75.0 Row: 1, Col: 27, Value: 75.0 Row: 1, Col: 28, Value: 75.0 Row: 1, Col: 29, Value: 75.0 Row: 1, Col: 30, Value: 75.0 Row: 1, Col: 31, Value: 75.0 Row: 1, Col: 32, Value: 75.0 Row: 1, Col: 33, Value: 75.0 Row: 1, Col: 34, Value: 75.0 $2,500 Investment 3% sales charge = $75 Value of Investment = $2,425
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another Fidelity fund account Fidelity fund account with the same with the same registration, including registration, including name, address, and name, address, and taxpayer ID number. taxpayer ID number. (small solid bullet) Use Fidelity Money Line to transfer from your bank account. Call before your first use to verify that this service is in place on your account. Maximum Money Line: $50,000.
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check application. Make your payable to "Fidelity check payable to Growth & Income "Fidelity Growth & Portfolio." Indicate your Income Portfolio." Mail fund account number to the address on your check and mail indicated to the address printed on the application. on your account statement. (small solid bullet) Exchange by mail: call 1-800-544-6666 for instructions.
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a and check to a Fidelity Fidelity Investor Center. Investor Center. Call Call 1-800-544-9797 for 1-800-544-9797 for the the center nearest you. center nearest you.
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for set up your account retirement accounts. and to arrange a wire (small solid bullet) Wire to: transaction. Not Bankers Trust available for retirement Company, accounts. Bank Routing (small solid bullet) Wire within 24 hours to: #021001033, Bankers Trust Account #00163053. Company, Specify "Fidelity Growth Bank Routing & Income Portfolio" and #021001033, include your account Account #00163053. number and your Specify "Fidelity name. Growth & Income Portfolio" and include your new account number and your name.
Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic Account Builder. Sign up for this service when opening your account, or call 1-800-544-6666 to add it.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next share price calculated after your order is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods described on these two pages. TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made in writing, except for exchanges to other Fidelity funds, which can be requested by phone or in writing. Call 1-800-544-6666 for a retirement distribution form. IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth of shares in the account to keep it open ($500 for retirement accounts). TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign up for these services in advance. CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect you and Fidelity from fraud. Your request must be made in writing and include a signature guarantee if any of the following situations apply: (small solid bullet) You wish to redeem more than $100,000 worth of shares, (small solid bullet) Your account registration has changed within the last 30 days, (small solid bullet) The check is being mailed to a different address than the one on your account (record address), (small solid bullet) The check is being made payable to someone other than the account owner, or (small solid bullet) The redemption proceeds are being transferred to a Fidelity account with a different registration. You should be able to obtain a signature guarantee from a bank, broker (including Fidelity Investor Centers), dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. SELLING SHARES IN WRITING Write a "letter of instruction" with: (small solid bullet) Your name, (small solid bullet) The fund's name, (small solid bullet) Your fund account number, (small solid bullet) The dollar amount or number of shares to be redeemed, and (small solid bullet) Any other applicable requirements listed in the table at right. Unless otherwise instructed, Fidelity will send a check to the record address. Deliver your letter to a Fidelity Investor Center, or mail it to: Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 ACCOUNT TYPE SPECIAL REQUIREMENTS
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request: except retirement $100,000. (small solid bullet) For Money Line transfers to All account types your bank account; minimum: $10; maximum: $100,000. (small solid bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s), address, and taxpayer ID number. Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must Tenant, be signed by all persons Sole Proprietorship required to sign for , UGMA, UTMA transactions, exactly as their Retirement account names appear on the account. (small solid bullet) The account owner should Trust complete a retirement distribution form. Call 1-800-544-6666 to request one. Business or (small solid bullet) The trustee must sign the Organization letter indicating capacity as trustee. If the trustee's name is not in the account registration, provide a copy of the trust document certified Executor, within the last 60 days. Administrator, (small solid bullet) At least one person Conservator, authorized by corporate Guardian resolution to act on the account must sign the letter. (small solid bullet) Include a corporate resolution with corporate seal or a signature guarantee. (small solid bullet) Call 1-800-544-6666 for instructions. Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire except retirement feature before using it. To verify that it is in place, call 1-800-544-6666. Minimum wire: $5,000. (small solid bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be wired on the next business day.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days a year. Whenever you call, you can speak with someone equipped to provide the information or service you need. STATEMENTS AND REPORTS that Fidelity sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except reinvestments, that affects your account balance or your account registration) (small solid bullet) Account statements (quarterly) (small solid bullet) Financial reports (every six months) 24-HOUR SERVICE ACCOUNT ASSISTANCE 1-800-544-6666 ACCOUNT BALANCES 1-800-544-7544 ACCOUNT TRANSACTIONS 1-800-544-7777 PRODUCT INFORMATION 1-800-544-8888 QUOTES 1-800-544-8544 RETIREMENT ACCOUNT ASSISTANCE 1-800-544-4774 AUTOMATED SERVICE (checkmark) To reduce expenses, only one copy of most financial reports will be mailed to your household, even if you have more than one account in the fund. Call 1-800-544-6666 if you need copies of financial reports or historical account information. TRANSACTION SERVICES EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other Fidelity funds by telephone or in writing. The shares you exchange will carry credit for any sales charge you previously paid in connection with their purchase. Note that exchanges out of the fund are limited to four per calendar year, and that they may have tax consequences for you. For details on policies and restrictions governing exchanges, including circumstances under which a shareholder's exchange privilege may be suspended or revoked, see page . SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your account. Because of the fund's sales charge, you may not want to set up a systematic withdrawal plan during a period when you are buying shares on a regular basis. FIDELITY MONEY LINE(registered trademark) enables you to transfer money by phone between your bank account and your fund account. Most transfers are complete within three business days of your call. REGULAR INVESTMENT PLANS One easy way to pursue your financial goals is to invest money regularly. Fidelity offers convenient services that let you transfer money into your fund account, or between fund accounts, automatically. While regular investment plans do not guarantee a profit and will not protect you against loss in a declining market, they can be an excellent way to invest for retirement, a home, educational expenses, and other long-term financial goals. Certain restrictions apply for retirement accounts. Call 1-800-544-6666 for more information. REGULAR INVESTMENT PLANS FIDELITY AUTOMATIC ACCOUNT BUILDERSM TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly or (small solid bullet) For a new account, complete the quarterly appropriate section on the fund application. (small solid bullet) For existing accounts, call 1-800-544-6666 for an application. (small solid bullet) To change the amount or frequency of your investment, call 1-800-544-6666 at least three business days prior to your next scheduled investment date.
DIRECT DEPOSIT TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Every pay (small solid bullet) Check the appropriate box on the fund period application, or call 1-800-544-6666 for an authorization form. (small solid bullet) Changes require a new authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after bimonthly, both accounts are opened. quarterly, or (small solid bullet) To change the amount or frequency of annually your investment, call 1-800-544-6666.
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES The fund distributes substantially all of its net income and capital gains to shareholders each year. Normally, dividends are distributed in March, June, September, and December. Capital gains are distributed in September and December. DISTRIBUTION OPTIONS When you open an account, specify on your application how you want to receive your distributions. If the option you prefer is not listed on the application, call 1-800-544-6666 for instructions. The fund offers four options: 13. REINVESTMENT OPTION. Your dividend and capital gain distributions will be automatically reinvested in additional shares of the fund. If you do not indicate a choice on your application, you will be assigned this option. 14. INCOME-EARNED OPTION. Your capital gain distributions will be automatically reinvested, but you will be sent a check for each dividend distribution. 15. CASH OPTION. You will be sent a check for your dividend and capital gain distributions. 16. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and capital gain distributions will be automatically invested in another identically registered Fidelity fund. FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested. When you are over 59 years old, you can receive distributions in cash. SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain distributions are not subject to the fund's 3% sales charge. Likewise, if you direct distributions to a fund with a 3% sales charge, you will not pay a sales charge on those purchases. When the fund deducts a distribution from its NAV, the reinvestment price is the fund's NAV at the close of business that day. Cash distribution checks will be mailed within seven days. UNDERSTANDING DISTRIBUTIONS As a fund shareholder, you are entitled to your share of the fund's net income and gains on its investments. The fund passes its earnings along to its investors as DISTRIBUTIONS. The fund earns dividends from stocks and interest from bond, money market, and other investments. These are passed along as DIVIDEND DISTRIBUTIONS. The fund realizes capital gains whenever it sells securities for a higher price than it paid for them. These are passed along as CAPITAL GAIN DISTRIBUTIONS. (checkmark) TAXES As with any investment, you should consider how your investment in the fund will be taxed. If your account is not a tax-deferred retirement account, you should be aware of these tax implications. TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may also be subject to state or local taxes. If you live outside the United States, your distributions could also be taxed by the country in which you reside. Your distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. For federal tax purposes, the fund's income and short-term capital gain distributions are taxed as dividends; long-term capital gain distributions are taxed as long-term capital gains. Every January, Fidelity will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other Fidelity funds - are subject to capital gains tax. A capital gain or loss is the difference between the cost of your shares and the price you receive when you sell them. Whenever you sell shares of the fund, Fidelity will send you a confirmation statement showing how many shares you sold and at what price. You will also receive a consolidated transaction statement every January. However, it is up to you or your tax preparer to determine whether this sale resulted in a capital gain and, if so, the amount of tax to be paid. Be sure to keep your regular account statements; the information they contain will be essential in calculating the amount of your capital gains. "BUYING A DIVIDEND." If you buy shares just before the fund deducts a distribution from its NAV, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable distribution. EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the fund and its investments and these taxes generally will reduce the fund's distributions. However, an offsetting tax credit or deduction may be available to you. If so, your tax statement will show more taxable income or capital gains than were actually distributed by the fund, but will also show the amount of the available offsetting credit or deduction. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, the fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is open. Fidelity normally calculates the fund's NAV and offering price as of the close of business of the NYSE, normally 4 p.m. Eastern time. THE FUND'S NAV is the value of a single share. The NAV is computed by adding the value of the fund's investments, cash, and other assets, subtracting its liabilities, and then dividing the result by the number of shares outstanding. The fund's assets are valued primarily on the basis of market quotations. Foreign securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. If quotations are not readily available, or if the values have been materially affected by events occurring after the closing of a foreign market, assets are valued by a method that the Board of Trustees believes accurately reflects fair value. THE OFFERING PRICE (price to buy one share) is the fund's NAV plus a sales charge. The sales charge is 3% of the offering price, or 3.09% of the net amount invested. The REDEMPTION PRICE (price to sell one share) is the fund's NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your Social Security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require the fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be liable for losses resulting from unauthorized transactions if it does not follow reasonable procedures designed to verify the identity of the caller. Fidelity will request personalized security codes or other information, and may also record calls. You should verify the accuracy of your confirmation statements immediately after you receive them. If you do not want the ability to redeem and exchange by telephone, call Fidelity for instructions. IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of unusual market activity), consider placing your order by mail or by visiting a Fidelity Investor Center. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. The fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they would disrupt management of the fund. WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the next offering price calculated after your order is received and accepted. Note the following: (small solid bullet) All of your purchases must be made in U.S. dollars and checks must be drawn on U.S. banks. (small solid bullet) Fidelity does not accept cash. (small solid bullet) When making a purchase with more than one check, each check must have a value of at least $50. (small solid bullet) The fund reserves the right to limit the number of checks processed at one time. (small solid bullet) If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees the fund or its transfer agent has incurred. TO AVOID THE COLLECTION PERIOD associated with check and Money Line purchases, consider buying shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal Reserve check, or direct deposit instead. YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING PRICE) OR SELL THEM THROUGH A BROKER, who may charge you a fee for this service. If you invest through a broker or other institution, read its program materials for any additional service features or fees that may apply. CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with FDC may enter confirmed purchase orders on behalf of customers by phone, with payment to follow no later than the time when the fund is priced on the following business day. If payment is not received by that time, the financial institution could be held liable for resulting fees or losses. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your request is received and accepted. Note the following: (small solid bullet) Normally, redemption proceeds will be mailed to you on the next business day, but if making immediate payment could adversely affect the fund, it may take up to seven days to pay you. (small solid bullet) Fidelity Money Line redemptions generally will be credited to your bank account on the second or third business day after your phone call. (small solid bullet) The fund may hold payment on redemptions until it is reasonably satisfied that investments made by check or Fidelity Money Line have been collected, which can take up to seven business days. (small solid bullet) Redemptions may be suspended or payment dates postponed when the NYSE is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC. FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from accounts with a value of less than $2,500 (including any amount paid as a sales charge), subject to an annual maximum charge of $60.00 per shareholder. It is expected that accounts will be valued on the second Friday in November of each year. Accounts opened after September 30 will not be subject to the fee for that year. The fee, which is payable to the transfer agent, is designed to offset in part the relatively higher costs of servicing smaller accounts. The fee will not be deducted from retirement accounts (except non-prototype retirement accounts), accounts using regular investment plans, or if total assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver is determined by aggregating Fidelity mutual fund accounts maintained by FSC or FBSI which are registered under the same social security number or which list the same social security number for the custodian of a Uniform Gifts/Transfers to Minors Act account. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days' notice to reestablish the minimum balance. If you do not increase your balance, Fidelity reserves the right to close your account and send the proceeds to you. Your shares will be redeemed at the NAV on the day your account is closed. FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. FDC collects the proceeds from the fund's 3% sales charge and may pay a portion of them to securities dealers who have sold the fund's shares, or to others, including banks and other financial institutions (qualified recipients), under special arrangements in connection with FDC's sales activities. The sales charge paid to qualified recipients is 2.25% of the fund's offering price. FDC may, at its own expense, provide promotional incentives to qualified recipients who support the sale of shares of the fund without reimbursement from the fund. In some instances, these incentives may be offered only to certain institutions whose representatives provide services in connection with the sale or expected sale of significant amounts of shares. EXCHANGE RESTRICTIONS As a shareholder, you have the privilege of exchanging shares of the fund for shares of other Fidelity funds. However, you should note the following: (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) If you exchange into a fund with a sales charge, you pay the percentage-point difference between that fund's sales charge and any sales charge you have previously paid in connection with the shares you are exchanging. For example, if you had already paid a sales charge of 2% on your shares and you exchange them into a fund with a 3% sales charge, you would pay an additional 1% sales charge. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Because excessive trading can hurt fund performance and shareholders, the fund reserves the right to temporarily or permanently terminate the exchange privilege of any investor who makes more than four exchanges out of the fund per calendar year. Accounts under common ownership or control, including accounts with the same taxpayer identification number, will be counted together for purposes of the four exchange limit. (small solid bullet) The exchange limit may be modified for accounts in certain institutional retirement plans to conform to plan exchange limits and Department of Labor regulations. See your plan materials for further information. (small solid bullet) The fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if the fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to the fund. Although the fund will attempt to give you prior notice whenever it is reasonably able to do so, it may impose these restrictions at any time. The fund reserves the right to terminate or modify the exchange privilege in the future. OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose administrative fees of up to $7.50 and redemption fees of up to 1.50% on exchanges. Check each fund's prospectus for details. SALES CHARGE REDUCTIONS AND WAIVERS REDUCTIONS. The fund's sales charge may be reduced if you invest directly with Fidelity or through prototype or prototype-like retirement plans sponsored by FMR or FMR Corp. The amount you invest, plus the value of your account, must fall within the ranges shown below. However, purchases made with assistance or intervention from a financial intermediary are not eligible. Call Fidelity to see if your purchase qualifies. Ranges Sales charge Net amount invested $0 - 249,999 3% 3.09% $250,000 - 499,999 2% 2.04% $500,000 - 999,999 1% 1.01% $1,000,000 or more none none The sales charge will also be reduced by the percentage of any sales charge you previously paid on investments in other Fidelity funds (not including Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for any sales charge you would have paid if the reductions in the table above had not existed. These sales charge credits only apply to purchases made in one of the ways listed below, and only if you continuously owned Fidelity fund shares or a Fidelity brokerage core account, or participated in The CORPORATEplan for Retirement Program. 1. By exchange from another Fidelity fund. 2. With proceeds of a transaction within a Fidelity brokerage core account, including any free credit balance, core money market fund, or margin availability, to the extent such proceeds were derived from redemption proceeds from another Fidelity fund. 3. With redemption proceeds from one of Fidelity's Foreign Currency Funds, if the Foreign Currency Fund shares were originally purchased with redemption proceeds from a Fidelity fund. 4. Through the Directed Dividends Option (see page ). 5. By participants in The CORPORATEplan for Retirement Program when shares are purchased through plan-qualified loan repayments, and for exchanges into and out of the Managed Income Portfolio. WAIVERS. The fund's sales charge will not apply: 1. If you buy shares as part of an employee benefit plan having more than 200 eligible employees or a minimum of $3 million in plan assets invested in Fidelity mutual funds. 2. To shares in a Fidelity Rollover IRA account purchased with the proceeds of a distribution from an employee benefit plan, provided that at the time of the distribution, the employer or its affiliate maintained a plan that both qualified for waiver (1) above and had at least some of its assets invested in Fidelity-managed products. 3. If you are a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more. 4. If you purchase shares for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code). 5. If you are an investor participating in the Fidelity Trust Portfolios program. 6. To shares purchased through Portfolio Advisory Services. 7. If you are a current or former trustee or officer of a Fidelity fund or a current or retired officer, director, or regular employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity trustee or employee, a Fidelity trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity trustee or employee. 8. If you are a bank trust officer, registered representative, or other employee of a qualified recipient, as defined on page . 9. To new and subsequent purchases of shares in UGMA/UTMA accounts, including exchanges from identically registered UGMA/UTMA accounts in other Fidelity funds. 10. If you invest as part of a payroll deduction program through an employer who is a member of the Fidelity Retirement Client Advisory Group or the Fidelity Retail Advisory Group, provided the employer enters into a Fidelity payroll deduction load waiver agreement which specifies certain qualifying restrictions and operating provisions. 11. To contributions and exchanges to a prototype or prototype-like retirement plan sponsored by FMR Corp. or FMR and which is marketed and distributed directly to plan sponsors or participants without any assistance or intervention from any intermediary distribution channel. 12. If you invest through a non-prototype pension or profit-sharing plan that maintains all of its mutual fund assets in Fidelity mutual funds, provided the plan executes a Fidelity non-prototype sales charge waiver request form confirming its qualification. 13. If you are a registered investment adviser (RIA) purchasing for your discretionary accounts, provided you execute a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. Except for correspondents of National Financial Services Corporation, this waiver is available only for shares purchased directly from Fidelity, and is unavailable if the RIA is part of an organization principally engaged in the brokerage business. 14. If you are a trust institution or bank trust department purchasing for your non-discretionary, non-retirement fiduciary accounts, provided you execute a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is unavailable if the trust department or institution is part of an organization not principally engaged in banking or trust activities. These waivers must be qualified through FDC in advance. More detailed information about waivers (1), (2), (5), (10), (11), and (13) is contained in the Statement of Additional Information. A representative of your plan or organization should call Fidelity for more information. This prospectus is printed on recycled paper using soy-based inks. FIDELITY GROWTH & INCOME PORTFOLIO A FUND OF FIDELITY SECURITIES FUND STATEMENT OF ADDITIONAL INFORMATION SEPTEMBER 19, 1995 This Statement is not a prospectus but should be read in conjunction with the fund's current Prospectus (dated September 19, 1995). Please retain this document for future reference. The fund's financial statements and financial highlights, included in the Annual Report for the fiscal year ended July 31, 1995, are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation of Portfolio Securities Performance Additional Purchase and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contract Contracts With FMR Affiliates Description of the Trust Financial Statements Appendix INVESTMENT ADVISER Fidelity Management & Research Company (FMR) INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc. (FMR U.K.) Fidelity Management & Research (Far East) Inc. (FMR Far East) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT Fidelity Service Company (FSC) GAI-ptb-995 INVESTMENT POLICIES AND LIMITATIONS The following policies and limitations supplement those set forth in the Prospectus. Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of the fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitation will be determined immediately after and as a result of the fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the fund's investment policies and limitations. The fund's fundamental investment policies and limitations cannot be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940) of the fund. However, except for the fundamental investment limitations listed below, the investment policies and limitations described in this Statement of Additional Information are not fundamental and may be changed without shareholder approval. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) with respect to 75% of the fund's total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, (a) more than 5% of the fund's total assets would be invested in the securities of that issuer, or (b) the fund would hold more than 10% of the outstanding voting securities of that issuer; (2) issue senior securities, except as permitted under the Investment Company Act of 1940; (3) borrow money, except that the fund may borrow money for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed this amount will be reduced within three days (not including Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation; (4) underwrite any issue of securities (except to the extent that the fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in the disposition of restricted securities); (5) not purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry; (6) purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); (7) purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities); or (8) lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (9) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund does not currently intend to sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short, and provided that transactions in futures contracts and options are not deemed to constitute selling securities short. (ii) The fund does not currently intend to purchase securities on margin, except that the fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin. (iii) The fund may borrow money only (a) from a bank or from a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party (reverse repurchase agreements are treated as borrowings for purposes of fundamental investment limitation (3)). The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase any security if, as a result, more than 10% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. (v) The fund does not currently intend to purchase interests in real estate investment trusts that are not readily marketable or interests in real estate limited partnerships that are not listed on an exchange or traded on the NASDAQ National Market System if, as a result, the sum of such interests and other investments considered illiquid under limitation (iv) would exceed 10% of the fund's net assets. (vi) The fund does not currently intend to lend assets other than securities to other parties, except by (a) lending money (up to 5% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) acquiring loans, loan participations, or other forms of direct debt instruments and, in connection therewith, assuming any associated unfunded commitments of the sellers. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of business enterprises that, including predecessors, have a record of less than three years of continuous operation. (ix) The fund does not currently intend to purchase warrants, valued at the lower of cost or market, in excess of 5% of the fund's net assets. Included in that amount, but not to exceed 2% of the fund's net assets, may be warrants that are not listed on the New York Stock Exchange or the American Stock Exchange. Warrants acquired by the fund in units or attached to securities are not subject to these restrictions. (x) The fund does not currently intend to invest in oil, gas or other mineral exploration or development programs or leases. (xi) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by Fidelity Management & Research Company or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's limitations on futures and options transactions, see the section entitled "Limitations on Futures and Options Transactions" on page . AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with financial institutions that are, or may be considered to be, "affiliated persons" of the fund under the Investment Company Act of 1940. These transactions may include repurchase agreements with custodian banks; short-term obligations of, and repurchase agreements with, the 50 largest U.S. banks (measured by deposits); municipal securities; U.S. government securities with affiliated financial institutions that are primary dealers in these securities; short-term currency transactions; and short-term borrowings. In accordance with exemptive orders issued by the Securities and Exchange Commission (SEC), the Board of Trustees has established and periodically reviews procedures applicable to transactions involving affiliated financial institutions. ASSET-BACKED SECURITIES. Asset-backed securities represent interests in pools of consumer loans (generally unrelated to mortgage loans) and most often are structured as pass-through securities. Interest and principal payments ultimately depend upon payment of the underlying loans by individuals, although the securities may be supported by letters of credit or other credit enhancements. The value of asset-backed securities may also depend on the creditworthiness of the servicing agent for the loan pool, the originator of the loans, or the financial institution providing the credit enhancement. EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations may involve significant risks in addition to the risks inherent in U.S. investments. The value of securities denominated in foreign currencies and of dividends and interest paid with respect to such securities will fluctuate based on the relative strength of the U.S. dollar. Foreign investments involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments, and may be affected by actions of foreign governments adverse to the interests of U.S. investors. Such actions may include the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or convert currency into U.S. dollars, or other government intervention. There is no assurance that FMR will be able to anticipate these potential events or counter their effects. These risks are magnified for investments in developing countries, which may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities. Economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the United States. Foreign markets may offer less protection to investors than U.S. markets. It is anticipated that in most cases the best available market for foreign securities will be on an exchange or in over-the-counter markets located outside of the United States. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. issuers. Foreign security trading practices, including those involving securities settlement where fund assets may be released prior to receipt of payment, may result in increased risk in the event of a failed trade or the insolvency of a foreign broker-dealer, and may involve substantial delays. In addition, the costs of foreign investing, including withholding taxes, brokerage commissions and custodial costs, are generally higher than for U.S. investors. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers, and listed companies than in the United States. It may also be difficult to enforce legal rights in foreign countries. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to U.S. issuers. Some foreign securities impose restrictions on transfer within the United States or to U.S. persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. American Depository Receipts (ADR's) as well as other "hybrid" forms of ADRs including European Depository Receipts (EDRs) and Global Depository Receipts (GDRs), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are an alternative to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. These risks include foreign exchange risk as well as the political and economic risks of the underlying issuer's country. FOREIGN CURRENCY TRANSACTIONS. The fund may conduct foreign currency transactions on a spot (i.e., cash) basis or by entering into forward contracts to purchase or sell foreign currencies at a future date and price. The fund will convert currency on a spot basis from time to time, and investors should be aware of the costs of currency conversion. Although foreign exchange dealers generally do not charge a fee for conversion, they do realize a profit based on the difference between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Forward contracts are generally traded in an interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The parties to a forward contract may agree to offset or terminate the contract before its maturity, or may hold the contract to maturity and complete the contemplated currency exchange. The fund may use currency forward contracts for any purpose consistent with its investment objective. The following discussion summarizes the principal currency management strategies involving forward contracts that could be used by the fund. The fund may also use swap agreements, indexed securities, and options and futures contracts relating to foreign currencies for the same purposes. When the fund agrees to buy or sell a security denominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. By entering into a forward contract for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction, the fund will be able to protect itself against an adverse change in foreign currency values between the date the security is purchased or sold and the date on which payment is made or received. This technique is sometimes referred to as a "settlement hedge" or "transaction hedge." The fund may also enter into forward contracts to purchase or sell a foreign currency in anticipation of future purchases or sales of securities denominated in foreign currency, even if the specific investments have not yet been selected by FMR. The fund may also use forward contracts to hedge against a decline in the value of existing investments denominated in foreign currency. For example, if the fund owned securities denominated in pounds sterling, it could enter into a forward contract to sell pounds sterling in return for U.S. dollars to hedge against possible declines in the pound's value. Such a hedge, sometimes referred to as a "position hedge," would tend to offset both positive and negative currency fluctuations, but would not offset changes in security values caused by other factors. The fund could also hedge the position by selling another currency expected to perform similarly to the pound sterling - for example, by entering into a forward contract to sell Deutschemarks or European Currency Units in return for U.S. dollars. This type of hedge, sometimes referred to as a "proxy hedge," could offer advantages in terms of cost, yield, or efficiency, but generally would not hedge currency exposure as effectively as a simple hedge into U.S. dollars. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the hedged securities are denominated. The fund may enter into forward contracts to shift its investment exposure from one currency into another. This may include shifting exposure from U.S. dollars to a foreign currency, or from one foreign currency to another foreign currency. For example, if the fund held investments denominated in Deutschemarks, the fund could enter into forward contracts to sell Deutschemarks and purchase Swiss Francs. This type of strategy, sometimes known as a "cross-hedge," will tend to reduce or eliminate exposure to the currency that is sold, and increase exposure to the currency that is purchased, much as if the fund had sold a security denominated in one currency and purchased an equivalent security denominated in another. Cross-hedges protect against losses resulting from a decline in the hedged currency, but will cause the fund to assume the risk of fluctuations in the value of the currency it purchases. Under certain conditions, SEC guidelines require mutual funds to set aside appropriate liquid assets in a segregated custodial account to cover currency forward contracts. As required by SEC guidelines, the fund will segregate assets to cover currency forward contracts, if any, whose purpose is essentially speculative. The fund will not segregate assets to cover forward contracts entered into for hedging purposes, including settlement hedges, position hedges, and proxy hedges. Successful use of currency management strategies will depend on FMR's skill in analyzing and predicting currency values. Currency management strategies may substantially change the fund's investment exposure to changes in currency exchange rates, and could result in losses to the fund if currencies do not perform as FMR anticipates. For example, if a currency's value rose at a time when FMR had hedged the fund by selling that currency in exchange for dollars, the fund would be unable to participate in the currency's appreciation. If FMR hedges currency exposure through proxy hedges, the fund could realize currency losses from the hedge and the security position at the same time if the two currencies do not move in tandem. Similarly, if FMR increases the fund's exposure to a foreign currency, and that currency's value declines, the fund will realize a loss. There is no assurance that FMR's use of currency management strategies will be advantageous to the fund or that it will hedge at an appropriate time. FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or administer the day-to-day operations of any company. The fund, however, may exercise its rights as a shareholder and may communicate its views on important matters of policy to management, the Board of Directors, and shareholders of a company when FMR determines that such matters could have a significant effect on the value of the fund's investment in the company. The activities that the fund may engage in, either individually or in conjunction with others, may include, among others, supporting or opposing proposed changes in a company's corporate structure or business activities; seeking changes in a company's directors or management; seeking changes in a company's direction or policies; seeking the sale or reorganization of the company or a portion of its assets; or supporting or opposing third party takeover efforts. This area of corporate activity is increasingly prone to litigation and it is possible that the fund could be involved in lawsuits related to such activities. FMR will monitor such activities with a view to mitigating, to the extent possible, the risk of litigation against the fund and the risk of actual liability if the fund is involved in litigation. No guarantee can be made, however, that litigation against the fund will not be undertaken or liabilities incurred. FUTURES AND OPTIONS. The following sections pertain to futures and options: Asset Coverage for Futures and Options Positions, Combined Positions, Correlation of Price Changes, Futures Contracts, Futures Margin Payments, Limitations on Futures and Options Transactions, Liquidity of Options and Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC Options, Purchasing Put and Call Options, and Writing Put and Call Options. ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with guidelines established by the Securities and Exchange Commission with respect to coverage of options and futures strategies by mutual funds, and if the guidelines so require will set aside appropriate liquid assets in a segregated custodial account in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or option strategy is outstanding, unless they are replaced with other suitable assets. As a result, there is a possibility that segregation of a large percentage of the fund's assets could impede portfolio management or the fund's ability to meet redemption requests or other current obligations. COMBINED POSITIONS. The fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, to adjust the risk and return characteristics of the overall position. For example, the fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. CORRELATION OF PRICE CHANGES. Because there are a limited number of types of exchange-traded options and futures contracts, it is likely that the standardized contracts available will not match the fund's current or anticipated investments exactly. The fund may invest in options and futures contracts based on securities with different issuers, maturities, or other characteristics from the securities in which it typically invests, which involves a risk that the options or futures position will not track the performance of the fund's other investments. Options and futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments match the fund's investments well. Options and futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect correlation may also result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, or from imposition of daily price fluctuation limits or trading halts. The fund may purchase or sell options and futures contracts with a greater or lesser value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. If price changes in the fund's options or futures positions are poorly correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments. FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When the fund sells a futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when the fund enters into the contract. Some currently available futures contracts are based on specific securities, such as U.S. Treasury bonds or notes, and some are based on indices of securities prices, such as the Standard & Poor's Composite Index of 500 Stocks (S&P 500). Futures can be held until their delivery dates, or can be closed out before then if a liquid secondary market is available. The value of a futures contract tends to increase and decrease in tandem with the value of its underlying instrument. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying instrument, much as if it had purchased the underlying instrument directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying instrument had been sold. FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the purchaser and seller are required to deposit "initial margin" with a futures broker, known as a futures commission merchant (FCM), when the contract is entered into. Initial margin deposits are typically equal to a percentage of the contract's value. If the value of either party's position declines, that party will be required to make additional "variation margin" payments to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. Initial and variation margin payments do not constitute purchasing securities on margin for purposes of the fund's investment limitations. In the event of the bankruptcy of an FCM that holds margin on behalf of the fund, the fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM's other customers, potentially resulting in losses to the fund. LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the Commodity Futures Trading Commission (CFTC) and the National Futures Association, which regulate trading in the futures markets. The fund intends to comply with Rule 4.5 under the Commodity Exchange Act, which limits the extent to which the fund can commit assets to initial margin deposits and option premiums. In addition, the fund will not: (a) sell futures contracts, purchase put options, or write call options if, as a result, more than 25% of the fund's total assets would be hedged with futures and options under normal conditions; (b) purchase futures contracts or write put options if, as a result, the fund's total obligations upon settlement or exercise of purchased futures contracts and written put options would exceed 25% of its total assets; or (c) purchase call options if, as a result, the current value of option premiums for call options purchased by the fund would exceed 5% of the fund's total assets. These limitations do not apply to options attached to or acquired or traded together with their underlying securities, and do not apply to securities that incorporate features similar to options. The above limitations on the fund's investments in futures contracts and options, and the fund's policies regarding futures contracts and options discussed elsewhere in this Statement of Additional Information may be changed as regulatory agencies permit. LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid secondary market will exist for any particular options or futures contract at any particular time. Options may have relatively low trading volume and liquidity if their strike prices are not close to the underlying instrument's current price. In addition, exchanges may establish daily price fluctuation limits for options and futures contracts, and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible for the fund to enter into new positions or close out existing positions. If the secondary market for a contract is not liquid because of price fluctuation limits or otherwise, it could prevent prompt liquidation of unfavorable positions, and potentially could require the fund to continue to hold a position until delivery or expiration regardless of changes in its value. As a result, the fund's access to other assets held to cover its options or futures positions could also be impaired. OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures contracts are similar to forward currency exchange contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures contracts call for payment or delivery in U.S. dollars. The underlying instrument of a currency option may be a foreign currency, which generally is purchased or delivered in exchange for U.S. dollars, or may be a futures contract. The purchaser of a currency call obtains the right to purchase the underlying currency, and the purchaser of a currency put obtains the right to sell the underlying currency. The uses and risks of currency options and futures are similar to options and futures relating to securities or indices, as discussed above. The fund may purchase and sell currency futures and may purchase and write currency options to increase or decrease its exposure to different foreign currencies. The fund may also purchase and write currency options in conjunction with each other or with currency futures or forward contracts. Currency futures and options values can be expected to correlate with exchange rates, but may not reflect other factors that affect the value of the fund's investments. A currency hedge, for example, should protect a Yen-denominated security from a decline in the Yen, but will not protect the fund against a price decline resulting from deterioration in the issuer's creditworthiness. Because the value of the fund's foreign-denominated investments changes in response to many factors other than exchange rates, it may not be possible to match the amount of currency options and futures to the value of the fund's investments exactly over time. OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of over-the-counter (OTC) options (options not traded on exchanges) generally are established through negotiation with the other party to the option contract. While this type of arrangement allows the fund greater flexibility to tailor an option to its needs, OTC options generally involve greater credit risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded. PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the fund pays the current market price for the option (known as the option premium). Options have various types of underlying instruments, including specific securities, indices of securities prices, and futures contracts. The fund may terminate its position in a put option it has purchased by allowing it to expire or by exercising the option. If the option is allowed to expire, the fund will lose the entire premium it paid. If the fund exercises the option, it completes the sale of the underlying instrument at the strike price. The fund may also terminate a put option position by closing it out in the secondary market at its current price, if a liquid secondary market exists. The buyer of a typical put option can expect to realize a gain if security prices fall substantially. However, if the underlying instrument's price does not fall enough to offset the cost of purchasing the option, a put buyer can expect to suffer a loss (limited to the amount of the premium paid, plus related transaction costs). The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option's strike price. A call buyer typically attempts to participate in potential price increases of the underlying instrument with risk limited to the cost of the option if security prices fall. At the same time, the buyer can expect to suffer a loss if security prices do not rise sufficiently to offset the cost of the option. WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes the opposite side of the transaction from the option's purchaser. In return for receipt of the premium, the fund assumes the obligation to pay the strike price for the option's underlying instrument if the other party to the option chooses to exercise it. When writing an option on a futures contract, the fund will be required to make margin payments to an FCM as described above for futures contracts. The fund may seek to terminate its position in a put option it writes before exercise by closing out the option in the secondary market at its current price. If the secondary market is not liquid for a put option the fund has written, however, the fund must continue to be prepared to pay the strike price while the option is outstanding, regardless of price changes, and must continue to set aside assets to cover its position. If security prices rise, a put writer would generally expect to profit, although its gain would be limited to the amount of the premium it received. If security prices remain the same over time, it is likely that the writer will also profit, because it should be able to close out the option at a lower price. If security prices fall, the put writer would expect to suffer a loss. This loss should be less than the loss from purchasing the underlying instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline. Writing a call option obligates the fund to sell or deliver the option's underlying instrument, in return for the strike price, upon exercise of the option. The characteristics of writing call options are similar to those of writing put options, except that writing calls generally is a profitable strategy if prices remain the same or fall. Through receipt of the option premium, a call writer mitigates the effects of a price decline. At the same time, because a call writer must be prepared to deliver the underlying instrument in return for the strike price, even if its current value is greater, a call writer gives up some ability to participate in security price increases. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. Under the supervision of the Board of Trustees, FMR determines the liquidity of the fund's investments and, through reports from FMR, the Board monitors investments in illiquid instruments. In determining the liquidity of the fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the fund to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days, over-the-counter options, and non-government stripped fixed-rate mortgage-backed securities. Also, FMR may determine some restricted securities, government-stripped fixed-rate mortgage-backed securities, loans and other direct debt instruments, emerging market securities, and swap agreements to be illiquid. However, with respect to over-the-counter options the fund writes, all or a portion of the value of the underlying instrument may be illiquid depending on the assets held to cover the option and the nature and terms of any agreement the fund may have to close out the option before expiration. In the absence of market quotations, illiquid investments are priced at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, the fund were in a position where more than 10% of its net assets was invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INDEXED SECURITIES. The fund may purchase securities whose prices are indexed to the prices of other securities, securities indices, currencies, precious metals or other commodities, or other financial indicators. Indexed securities typically, but not always, are debt securities or deposits whose value at maturity or coupon rate is determined by reference to a specific instrument or statistic. Gold-indexed securities, for example, typically provide for a maturity value that depends on the price of gold, resulting in a security whose price tends to rise and fall together with gold prices. Currency-indexed securities typically are short-term to intermediate-term debt securities whose maturity values or interest rates are determined by reference to the values of one or more specified foreign currencies, and may offer higher yields than U.S. dollar-denominated securities of equivalent issuers. Currency-indexed securities may be positively or negatively indexed; that is, their maturity value may increase when the specified currency value increases, resulting in a security that performs similarly to a foreign-denominated instrument, or their maturity value may decline when foreign currencies increase, resulting in a security whose price characteristics are similar to a put on the underlying currency. Currency-indexed securities may also have prices that depend on the values of a number of different foreign currencies relative to each other. The performance of indexed securities depends to a great extent on the performance of the security, currency, or other instrument to which they are indexed, and may also be influenced by interest rate changes in the United States and abroad. At the same time, indexed securities are subject to the credit risks associated with the issuer of the security, and their values may decline substantially if the issuer's creditworthiness deteriorates. Recent issuers of indexed securities have included banks, corporations, and certain U.S. government agencies. Indexed securities may be more volatile than the underlying instruments. INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order issued by the SEC, the fund has received permission to lend money to, and borrow money from, other funds advised by FMR or its affiliates. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. A fund will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements), and will borrow through the program only when the costs are equal to or lower than the cost of bank loans. A fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs. LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are interests in amounts owed by a corporate, governmental, or other borrower to lenders or lending syndicates (loans and loan participations), to suppliers of goods or services (trade claims or other receivables), or to other parties. Direct debt instruments are subject to the fund's policies regarding the quality of debt securities. Purchasers of loans and other forms of direct indebtedness depend primarily upon the creditworthiness of the borrower for payment of principal and interest. Direct debt instruments may not be rated by any nationally recognized rating service. If the fund does not receive scheduled interest or principal payments on such indebtedness, the fund's share price and yield could be adversely affected. Loans that are fully secured offer the fund more protections than an unsecured loan in the event of non-payment of scheduled interest or principal. However, there is no assurance that the liquidation of collateral from a secured loan would satisfy the borrower's obligation, or that the collateral could be liquidated. Indebtedness of borrowers whose creditworthiness is poor involves substantially greater risks and may be highly speculative. Borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or may pay only a small fraction of the amount owed. Direct indebtedness of developing countries also involves a risk that the governmental entities responsible for the repayment of the debt may be unable, or unwilling, to pay interest and repay principal when due. Investments in loans through direct assignment of a financial institution's interests with respect to a loan may involve additional risks to the fund. For example, if a loan is foreclosed, the fund could become part owner of any collateral, and would bear the costs and liabilities associated with owning and disposing of the collateral. In addition, it is conceivable that under emerging legal theories of lender liability, the fund could be held liable as a co-lender. Direct debt instruments may also involve a risk of insolvency of the lending bank or other intermediary. Direct debt instruments that are not in the form of securities may offer less legal protection to the fund in the event of fraud or misrepresentation. In the absence of definitive regulatory guidance, the fund relies on FMR's research in an attempt to avoid situations where fraud or misrepresentation could adversely affect the fund. A loan is often administered by a bank or other financial institution that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. Unless, under the terms of the loan or other indebtedness, the fund has direct recourse against the borrower, it may have to rely on the agent to apply appropriate credit remedies against a borrower. If assets held by the agent for the benefit of the fund were determined to be subject to the claims of the agent's general creditors, the fund might incur certain costs and delays in realizing payment on the loan or loan participation and could suffer a loss of principal or interest. Direct indebtedness purchased by the fund may include letters of credit, revolving credit facilities, or other standby financing commitments obligating the fund to pay additional cash on demand. These commitments may have the effect of requiring the fund to increase its investment in a borrower at a time when it would not otherwise have done so, even if the borrower's condition makes it unlikely that the amount will ever be repaid. The fund will set aside appropriate liquid assets in a segregated custodial account to cover its potential obligations under standby financing commitments. The fund limits the amount of total assets that it will invest in any one issuer or in issuers within the same industry (see limitations 1 and 5). For purposes of these limitations, the fund generally will treat the borrower as the "issuer" of indebtedness held by the fund. In the case of loan participations where a bank or other lending institution serves as financial intermediary between the fund and the borrower, if the participation does not shift to the fund the direct debtor-creditor relationship with the borrower, SEC interpretations require the fund, in appropriate circumstances, to treat both the lending bank or other lending institution and the borrower as "issuers" for these purposes. Treating a financial intermediary as an issuer of indebtedness may restrict the fund's ability to invest in indebtedness related to a single financial intermediary, or a group of intermediaries engaged in the same industry, even if the underlying borrowers represent many different companies and industries. LOWER-QUALITY DEBT SECURITIES. While the market for high-yield corporate debt securities has been in existence for many years and has weathered previous economic downturns, the 1980s brought a dramatic increase in the use of such securities to fund highly leveraged corporate acquisitions and restructurings. Past experience may not provide an accurate indication of the future performance of the high-yield bond market, especially during periods of economic recession. In fact, from 1989 to 1991, the percentage of lower-quality securities that defaulted rose significantly above prior levels, although the default rate decreased in 1992, 1993, and 1994. The market for lower-quality debt securities may be thinner and less active than that for higher-quality debt securities, which can adversely affect the prices at which the former are sold. If market quotations are not available, lower-quality debt securities will be valued in accordance with procedures established by the Board of Trustees, including the use of outside pricing services. Judgment plays a greater role in valuing high-yield corporate debt securities than is the case for securities for which more external sources for quotations and last-sale information are available. Adverse publicity and changing investor perceptions may affect the ability of outside pricing services to value lower-quality debt securities and the fund's ability to dispose of these securities. Since the risk of default is higher for lower-quality debt securities, FMR's research and credit analysis are an especially important part of managing securities of this type held by the fund. In considering investments for the fund, FMR will attempt to identify those issuers of high-yielding securities whose financial condition is adequate to meet future obligations, has improved, or is expected to improve in the future. FMR's analysis focuses on relative values based on such factors as interest or dividend coverage, asset coverage, earnings prospects, and the experience and managerial strength of the issuer. The fund may choose, at its expense or in conjunction with others, to pursue litigation or otherwise to exercise its rights as a security holder to seek to protect the interests of security holders if it determines this to be in the best interest of the fund's shareholders. REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts, commercial and residential mortgage-backed securities, and real estate financings. Real estate-related instruments are sensitive to factors such as real estate values and property taxes, interest rates, cash flow of underlying real estate assets, overbuilding, and the management skill and creditworthiness of the issuer. Real estate-related instruments may also be affected by tax and regulatory requirements, such as those relating to the environment. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a security and simultaneously commits to sell that security back to the original seller at an agreed-upon price. The resale price reflects the purchase price plus an agreed-upon incremental amount which is unrelated to the coupon rate or maturity of the purchased security. To protect the fund from the risk that the original seller will not fulfill its obligation the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to the fund in connection with bankruptcy proceedings), it is the fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. RESTRICTED SECURITIES generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933, or in a registered public offering. Where registration is required, the fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. The fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SECURITIES LENDING. The fund may lend securities to parties such as broker-dealers or institutional investors, including Fidelity Brokerage Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and a subsidiary of FMR Corp. Securities lending allows the fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans will be made only to parties deemed by FMR to be of good standing. Furthermore, they will only be made if, in FMR's judgment, the consideration to be earned from such loans would justify the risk. FMR understands that it is the current view of the SEC Staff that a fund may engage in loan transactions only under the following conditions: (1) the fund must receive 100% collateral in the form of cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the borrower must increase the collateral whenever the market value of the securities loaned (determined on a daily basis) rises above the value of the collateral; (3) after giving notice, the fund must be able to terminate the loan at any time; (4) the fund must receive reasonable interest on the loan or a flat fee from the borrower, as well as amounts equivalent to any dividends, interest, or other distributions on the securities loaned and to any increase in market value; (5) the fund may pay only reasonable custodian fees in connection with the loan; and (6) the Board of Trustees must be able to vote proxies on the securities loaned, either by terminating the loan or by entering into an alternative arrangement with the borrower. Cash received through loan transactions may be invested in any security in which the fund is authorized to invest. Investing this cash subjects that investment, as well as the security loaned, to market forces (i.e., capital appreciation or depreciation). SHORT SALES. The fund may enter into short sales with respect to stocks underlying its convertible security holdings. For example, if FMR anticipates a decline in the price of the stock underlying a convertible security a fund holds, it may sell the stock short. If the stock price subsequently declines, the proceeds of the short sale could be expected to offset all or a portion of the effect of the stock's decline on the value of the convertible security. The fund currently intends to hedge no more than 15% of its total assets with short sales on equity securities underlying its convertible security holdings under normal circumstances. When the fund enters into a short sale, it will be required to set aside securities equivalent in kind and amount to those sold short (or securities convertible or exchangeable into such securities) and will be required to hold them aside while the short sale is outstanding. The fund will incur transaction costs, including interest expense, in connection with opening, maintaining, and closing short sales. SWAP AGREEMENTS. Swap agreements can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), foreign currency values , mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. Swap agreements can take many different forms and are known by a variety of names. The fund is not limited to any particular form of swap agreement if FMR determines it is consistent with the fund's investment objective and policies. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements will tend to shift the fund's investment exposure from one type of investment to another. For example, if the fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price and yield. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factors that determine the amounts of payments due to and from the fund. If a swap agreement calls for payments by the fund, the fund must be prepared to make such payments when due. In addition, if the counterparty's creditworthiness declined, the value of a swap agreement would be likely to decline, potentially resulting in losses. The fund expects to be able to eliminate its exposure under swap agreements either by assignment or other disposition, or by entering into an offsetting swap agreement with the same party or a similarly creditworthy party. The fund will maintain appropriate liquid assets in a segregated custodial account to cover its current obligations under swap agreements. If the fund enters into a swap agreement on a net basis, it will segregate assets with a daily value at least equal to the excess, if any, of the fund's accrued obligations under the swap agreement over the accrued amount the fund is entitled to receive under the agreement. If the fund enters into a swap agreement on other than a net basis, it will segregate assets with a value equal to the full amount of the fund's accrued obligations under the agreement. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by FMR pursuant to authority contained in the management contract. FMR has granted investment management authority to the sub-advisers (see the section entitled "Management Contract"), the sub-advisers are authorized to place orders for the purchase and sale of portfolio securities, and will do so in accordance with the policies described below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. In selecting broker-dealers, subject to applicable limitations of the federal securities laws, FMR considers various relevant factors, including, but not limited to: the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability, and financial condition of the broker-dealer firm; the broker-dealer's execution services rendered on a continuing basis; the reasonableness of any commissions; and arrangements for payment of fund expenses. Generally, commissions for investments traded on foreign exchanges will be higher than for investments traded on U.S. exchanges and may not be subject to negotiation. The fund may execute portfolio transactions with broker-dealers who provide research and execution services to the fund or other accounts over which FMR or its affiliates exercise investment discretion. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing, or selling securities; and the availability of securities or the purchasers or sellers of securities. In addition, such broker-dealers may furnish analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) in accordance with a ranking of broker-dealers determined periodically by FMR's investment staff based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the fund may be useful to FMR in rendering investment management services to the fund or its other clients, and conversely, such research provided by broker-dealers who have executed transaction orders on behalf of other FMR clients may be useful to FMR in carrying out its obligations to the fund. The receipt of such research has not reduced FMR's normal independent research activities; however, it enables FMR to avoid the additional expenses that could be incurred if FMR tried to develop comparable information through its own efforts. Subject to applicable limitations of the federal securities laws, broker-dealers may receive commissions for agency transactions that are in excess of the amount of commissions charged by other broker-dealers in recognition of their research and execution services. In order to cause the fund to pay such higher commissions, FMR must determine in good faith that such commissions are reasonable in relation to the value of the brokerage and research services provided by such executing broker-dealers, viewed in terms of a particular transaction or FMR's overall responsibilities to the fund and its other clients. In reaching this determination, FMR will not attempt to place a specific dollar value on the brokerage and research services provided, or to determine what portion of the compensation should be related to those services. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the fund or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by non-affiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the benefit of the Johnson family own, directly or indirectly, more than 25% of the voting common stock of FIL. FMR may allocate brokerage transactions to broker-dealers who have entered into arrangements with FMR under which the broker-dealer allocates a portion of the commissions paid by the fund toward payment of the fund's expenses, such as transfer agent fees or custodian fees. The transaction quality must, however, be comparable to those of other qualified broker-dealers. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute portfolio transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. The Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund and review the commissions paid by the fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For the fiscal periods ended July 31, 1995 and 1994, the fund's portfolio turnover rates were 67 % and 92%, respectively. For fiscal 1995, 1994, and 1993, the fund paid brokerage commissions of $ 13,167,000, $12,329,000, and $9,025,000, respectively. The fund pays both commissions and spreads in connection with the placement of portfolio transactions. FBSI is paid on a commission basis. During fiscal 1995, 1994, and 1993, the fund paid brokerage commissions of $ 4,181,000 , $3,869,000, and $2,772,000, respectively, to FBSI. During fiscal 1995, this amounted to approximately 31.75 % of the aggregate brokerage commissions paid by the fund for transactions involving approximately 45.77 % of the aggregate dollar amount of transactions for which the fund paid brokerage commissions. The difference between the percentage of brokerage commissions paid to and the percentage of the dollar amount of transactions effected through FBSI is a result of the low commission rates charged by FBSI. During fiscal 1995, the fund paid brokerage commissions of $ 164,000 to FBS. FBS is paid on a commission basis. During fiscal 1994 and 1993, the fund paid no brokerage commissions to FBSL. During fiscal 1995, this amounted to approximately 1.24 % of the aggregate brokerage commissions paid by the fund involving approximately 0.78 % of the aggregate dollar amount of transactions for which the fund paid brokerage commissions. The difference between the percentage of brokerage commissions paid to and the percentage of the dollar amount of transactions effected through FBS is a result of the low commission rates charged by FBS. During fiscal 1995, the fund paid $ 12,568,000 in commissions to brokerage firms that provided research services involving approximately $ 9,869,673,000 of transactions. The provision of research services was not necessarily a factor in the placement of all this business with such firms. From time to time the Trustees will review whether the recapture for the benefit of the fund of some portion of the brokerage commissions or similar fees paid by the fund on portfolio transactions is legally permissible and advisable. The fund seeks to recapture soliciting broker-dealer fees on the tender of portfolio securities, but at present no other recapture arrangements are in effect. The Trustees intend to continue to review whether recapture opportunities are available and are legally permissible and, if so, to determine in the exercise of their business judgment whether it would be advisable for the fund to seek such recapture. Although the Trustees and officers of the fund are substantially the same as those of other funds managed by FMR, investment decisions for the fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and accounts are managed by the same investment adviser, particularly when the same security is suitable for the investment objective of more than one fund or account. When two or more funds are simultaneously engaged in the purchase or sale of the same security, the prices and amounts are allocated in accordance with procedures believed to be appropriate and equitable for each fund. In some cases this system could have a detrimental effect on the price or value of the security as far as the fund is concerned. In other cases, however, the ability of the fund to participate in volume transactions will produce better executions and prices for the fund. It is the current opinion of the Trustees that the desirability of retaining FMR as investment adviser to the fund outweighs any disadvantages that may be said to exist from exposure to simultaneous transactions. VALUATION OF PORTFOLIO SECURITIES Portfolio securities are valued by various methods depending on the primary market or exchange on which they trade. Most equity securities for which the primary market is the U.S. are valued at last sale price or, if no sale has occurred, at the closing bid price. Most equity securities for which the primary market is outside the U.S. are valued using the official closing price or the last sale price in the principal market where they are traded. If the last sale price (on the local exchange) is unavailable, the last evaluated quote or last bid price is normally used. Short-term securities are valued either at amortized cost or at original cost plus accrued interest, both of which approximate current value. Convertible securities and fixed-income securities are valued primarily by a pricing service that uses a vendor security valuation matrix which incorporates both dealer-supplied valuations and electronic data processing techniques. This two-fold approach is believed to more accurately reflect fair value because it takes into account appropriate factors such as institutional trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data, without exclusive reliance upon quoted, exchange, or over-the counter prices. Use of pricing services has been approved by the Board of Trustees. Securities and other assets for which there is no readily available market are valued in good faith by a committee appointed by the Board of Trustees. The procedures set forth above need not be used to determine the value of the securities owned by the fund if, in the opinion of a committee appointed by the Board of Trustees, some other method (e.g., closing over-the-counter bid prices in the case of debt instruments traded on an exchange) would more accurately reflect the fair market value of such securities. Generally, the valuation of foreign and domestic equity securities, as well as corporate bonds, U.S. government securities, money market instruments, and repurchase agreements, is substantially completed each day at the close of the NYSE. The values of any such securities held by the fund are determined as of such time for the purpose of computing the fund's net asset value. Foreign security prices are furnished by independent brokers or quotation services which express the value of securities in their local currency. FSC gathers all exchange rates daily at the close of the NYSE using the last quoted price on the local currency and then translates the value of foreign securities from their local currency into U.S. dollars. Any changes in the value of forward contracts due to exchange rate fluctuations and days to maturity are included in the calculation of net asset value. If an extraordinary event that is expected to materially affect the value of a portfolio security occurs after the close of an exchange on which that security is traded, then the security will be valued as determined in good faith by a committee appointed by the Board of Trustees. PERFORMANCE The fund may quote performance in various ways. All performance information supplied by the fund in advertising is historical and is not intended to indicate future returns. The fund's share price, yield, and total return fluctuate in response to market conditions and other factors, and the value of fund shares when redeemed may be more or less than their original cost. YIELD CALCULATIONS. Yields for the fund are computed by dividing the fund's interest and dividend income for a given 30-day or one-month period, net of expenses, by the average number of shares entitled to receive distributions during the period, dividing this figure by the fund's offering price at the end of the period, and annualizing the result (assuming compounding of income) in order to arrive at an annual percentage rate. Income is calculated for purposes of yield quotations in accordance with standardized methods applicable to all stock and bond funds. Dividends from equity investments are treated as if they were accrued on a daily basis, solely for the purposes of yield calculations. In general, interest income is reduced with respect to bonds trading at a premium over their par value by subtracting a portion of the premium from income on a daily basis, and is increased with respect to bonds trading at a discount by adding a portion of the discount to daily income. For the fund's investments denominated in foreign currencies, income and expenses are calculated first in their respective currencies, and are then converted to U.S. dollars, either when they are actually converted or at the end of the 30-day or one month period, whichever is earlier. Capital gains and losses generally are excluded from the calculation as are gains and losses from currency exchange rate fluctuations. Income calculated for the purposes of calculating the fund's yield differs from income as determined for other accounting purposes. Because of the different accounting methods used, and because of the compounding of income assumed in yield calculations, the fund's yield may not equal its distribution rate, the income paid to your account, or the income reported in the fund's financial statements. In calculating the fund's yield, a fund may from time to time use a portfolio security's coupon rate instead of its yield to maturity in order to reflect the risk premium on that security. This practice will have the effect of reducing the fund's yield. Yield information may be useful in reviewing the fund's performance and in providing a basis for comparison with other investment alternatives. However, the fund's yield fluctuates, unlike investments that pay a fixed interest rate over a stated period of time. When comparing investment alternatives, investors should also note the quality and maturity of the portfolio securities of respective investment companies they have chosen to consider. Investors should recognize that in periods of declining interest rates the fund's yield will tend to be somewhat higher than prevailing market rates, and in periods of rising interest rates the fund's yield will tend to be somewhat lower. Also, when interest rates are falling, the inflow of net new money to the fund from the continuous sale of its shares will likely be invested in instruments producing lower yields than the balance of the fund's holdings, thereby reducing the fund's current yield. In periods of rising interest rates, the opposite can be expected to occur. TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all aspects of the fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the fund's net asset value (NAV) over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment in the fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. For example, a cumulative total return of 100% over ten years would produce an average annual total return of 7.18%, which is the steady annual rate of return that would equal 100% growth on a compounded basis in ten years. While average annual total returns are a convenient means of comparing investment alternatives, investors should realize that the fund's performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of the fund. In addition to average annual total returns, the fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis and may be quoted with or without taking the fund's 3% maximum sales charge into account. Excluding the fund's sales charge from a total return calculation produces a higher total return figure. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. NET ASSET VALUE. Charts and graphs using the fund's net asset values, adjusted net asset values, and benchmark indices may be used to exhibit performance. An adjusted NAV includes any distributions paid by the fund and reflects all elements of its return. Unless otherwise indicated, the fund's adjusted NAVs are not adjusted for sales charges, if any. MOVING AVERAGES. The fund may illustrate performance using moving averages. A long-term moving average is the average of each week's adjusted closing NAV for a specified period. A short-term moving average is the average of each day's adjusted closing NAV for a specified period. Moving Average Activity Indicators combine adjusted closing NAVs from the last business day of each week with moving averages for a specified period to produce indicators showing when an NAV has crossed, stayed above, or stayed below its moving average. On July 28 , 1995, the 13-week and 39-week long-term moving averages were $ 24.08 and $ 22.37 , respectively. HISTORICAL FUND RESULTS. The following table shows the fund's total returns for periods ended July 31, 1995. Total return figures include the effect of the fund's 3% sales charge.
Average Annual Total Returns Cumulative Total Returns
One Five Life of One Five Life of Year Years Fund* Year Years Fund* Growth & Income 18.29 % 15.70 % 17.70 % 18.29 % 107.31 % 377.35 %
* From December 30, 1985 (commencement of operations). The following table shows the income and capital elements of the fund's cumulative total return. The table compares the fund's return to the record of the Standard and Poor's Composite Index of 500 Stocks (S&P 500(registered trademark)), the Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for each fund. The S&P 500 and the DJIA comparisons are provided to show how the fund's total return compared to the record of a broad average of common stock prices and a narrower set of stocks of major industrial companies, respectively, over the same period. The fund has the ability to invest in securities not included in either index, and its investment portfolio may or may not be similar in composition to the indices. Figures for the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks and, unlike the fund's returns, do not include the effect of paying brokerage commissions and other costs of investing. During the period from December 30, 1985 (commencement of operations) to July 31, 1995, a hypothetical $10,000 investment in Growth & Income would have grown to $ 47,735 , after deducting the fund's 3% sales charge and assuming all distributions were reinvested. This was a period of fluctuating interest rates, bond prices, and stock prices and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in the fund today.
FIDELITY GROWTH & INCOME PORTFOLIO INDICES
Period Value of Value of Value of Total S&P 500 DJIA Cost of Ended Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1995 $ 24,347 $ 8,736 $ 14,652 $ 47,735 $ 36,455 $ 41,647 $ 13,952 1994 $ 21,505 $ 6,979 $ 10,659 $ 39,143 $ 28,908 $ 32,444 $ 13,577 1993 $ 21,243 $ 6,078 $ 9,235 $ 36,556 $ 27,490 $ 29,682 $ 13,211 1992 $ 20,700 $ 4,915 $ 5,078 $ 30,693 $ 25,279 $ 27,630 $ 12,855 1991 $ 19,322 $ 4,062 $ 3,839 $ 27,223 $ 22,410 $ 23,904 $ 12,461 1990 $ 16,587 $ 2,773 $ 2,975 $ 22,335 $ 19,873 $ 22,131 $ 11,930 1989 $ 18,003 $ 2,007 $ 1,627 $ 21,637 $ 18,661 $ 19,517 $ 11,382 1988 $ 14,123 $ 912 $ 1,276 $ 16,311 $ 14,146 $ 15,051 $ 10,842 1987 $ 16,917 $ 443 $ 0 $ 17,360 $ 16,023 $ 17,569 $ 10,412 1986* $ 12,814 $ 48 $ 0 $ 12,862 $ 11,501 $ 11,745 $ 10,018
* From December 30, 1985 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on December 30, 1985, assuming the 3% load had been in effect the net amount invested in fund shares was $9,700. The cost of the initial investment ($10,000), together with the aggregate cost of reinvested dividends and capital gain distributions for the period covered (their cash value at the time they were reinvested), amounted to $ 27,311 . If distributions had not been reinvested, the amount of distributions earned from the fund over time would have been smaller, and cash payments for the period would have amounted to $ 4,491 for dividends and $ 7,653 for capital gains distributions. Tax consequences of different investments have not been factored into the above figures. PERFORMANCE COMPARISONS. The fund's performance may be compared to the performance of other mutual funds in general, or to the performance of particular types of mutual funds. These comparisons may be expressed as mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. In addition to the mutual fund rankings, the fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, it is important to remember the risk and return characteristics of each type of investment. For example, while stock mutual funds may offer higher potential returns, they also carry the highest degree of share price volatility. Likewise, money market funds may offer greater stability of principal, but generally do not offer the higher potential returns available from stock mutual funds. From time to time, the fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund may quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the basis of risk-adjusted performance. Rankings that compare the performance of Fidelity funds to one another in appropriate categories over specific periods of time may also be quoted in advertising. The fund may be compared in advertising to Certificates of Deposit (CDs) or other investments issued by banks or other depository institutions. Mutual funds differ from bank investments in several respects. For example, the fund may offer greater liquidity or higher potential returns than CDs, the fund does not guarantee your principal or your return, and fund shares are not FDIC insured. Fidelity may provide information designed to help individuals understand their investment goals and explore various financial strategies. Such information may include information about current economic, market, and political conditions; materials that describe general principles of investing, such as asset allocation, diversification, risk tolerance, and goal setting; questionnaires designed to help create a personal financial profile; worksheets used to project savings needs based on assumed rates of inflation and hypothetical rates of return; and action plans offering investment alternatives. Materials may also include discussions of Fidelity's asset allocation funds and other Fidelity funds, products, and services. Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns of the capital markets in the United States, including common stocks, small capitalization stocks, long-term corporate bonds, intermediate-term government bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation (based on the CPI), and combinations of various capital markets. The performance of these capital markets is based on the returns of different indices. Fidelity funds may use the performance of these capital markets in order to demonstrate general risk-versus-reward investment scenarios. Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. The risks associated with the security types in any capital market may or may not correspond directly to those of the funds. Ibbotson calculates total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. In advertising materials, Fidelity may reference or discuss its products and services, which may include other Fidelity funds; retirement investing; brokerage products and services; model portfolios or allocations ; saving for college or other goals; charitable giving; and the Fidelity credit card. In addition, Fidelity may quote or reprint financial or business publications and periodicals as they relate to current economic and political conditions, fund management, portfolio composition, investment philosophy, investment techniques, the desirability of owning a particular mutual fund, and Fidelity services and products. Fidelity may also reprint, and use as advertising and sales literature, articles from Fidelity Focus, a quarterly magazine provided free of charge to Fidelity fund shareholders. The fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. VOLATILITY. The fund may quote various measures of volatility and benchmark correlation in advertising. In addition, the fund may compare these measures to those of other funds. Measures of volatility seek to compare the fund's historical share price fluctuations or total returns to those of a benchmark. Measures of benchmark correlation indicate how valid a comparative benchmark may be. All measures of volatility and correlation are calculated using averages of historical data. In advertising, the fund may also discuss or illustrate examples of interest rate sensitivity. MOMENTUM INDICATORS indicate the fund's price movements over specific periods of time. Each point on the momentum indicator represents the fund's percentage change in price movements over that period. The fund may advertise examples of the effects of periodic investment plans, including the principle of dollar cost averaging. In such a program, an investor invests a fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer shares when prices are high and more shares when prices are low. While such a strategy does not assure a profit or guard against loss in a declining market, the investor's average cost per share can be lower than if fixed numbers of shares are purchased at the same intervals. In evaluating such a plan, investors should consider their ability to continue purchasing shares during periods of low price levels. The fund may be available for purchase through retirement plans or other programs offering deferral of, or exemption from, income taxes, which may produce superior after-tax returns over time. For example, a $1,000 investment earning a taxable return of 10% annually would have an after-tax value of $1,949 after ten years, assuming tax was deducted from the return each year at a 31% rate. An equivalent tax-deferred investment would have an after-tax value of $2,100 after ten years, assuming tax was deducted at a 31% rate from the tax-deferred earnings at the end of the ten-year period. As of July 31, 1995, FMR advised over $ 25 billion in tax-free fund assets, $ 77 billion in money market fund assets, $ 214 billion in equity fund assets, $ 52 billion in international fund assets, and $ 22 billion in Spartan fund assets. The fund may reference the growth and variety of money market mutual funds and the adviser's innovation and participation in the industry. The equity funds under management figure represents the largest amount of equity fund assets under management by a mutual fund investment adviser in the United States, making FMR America's leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide information and communications network for the purpose of researching and managing investments abroad. The fund may be advertised as an investment choice under the Fidelity College Savings Plan or the Fidelity Investor Card mutual fund option. Advertising may contain illustrations of projected future college costs based on assumed rates of inflation and examples of hypothetical performance. Advertising for the Fidelity College Savings Plan mutual fund option may be used in conjunction with advertising for the Fidelity College Savings Plan brokerage option, a product offered through Fidelity Brokerage Services, Inc. The Fidelity Investor Card is a product offered through Fidelity Trust Company. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION Pursuant to Rule 22d-1 under the Investment Company Act of 1940 (the 1940 Act), FDC exercises its right to waive the fund's front-end sales charge on shares acquired through reinvestment of dividends and capital gain distributions or in connection with the fund's merger with or acquisition of any investment company or trust. In addition, FDC has chosen to waive the fund's sales charge in certain instances because of efficiencies involved in those sales of shares. The sales charge will not apply: 28. to shares purchased in connection with an employee benefit plan (including the Fidelity-sponsored 403(b) and corporate IRA programs but otherwise as defined in the Employee Retirement Income Security Act) maintained by a U.S. employer and having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a U.S. employer that is a member of a parent-subsidiary group of corporations (within the meaning of Section 1563(a)(1) of the Internal Revenue Code, with "50%" substituted for "80%") any member of which maintains an employee benefit plan having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a non-U.S. employer having 200 or more eligible employees, or a minimum of $3,000,000 in assets invested in Fidelity mutual funds, the assets of which are held in a bona fide trust for the exclusive benefit of employees participating therein; 29. to shares purchased by an insurance company separate account used to fund annuity contracts purchased by employee benefit plans (including 403(b) programs, but otherwise as defined in the Employee Retirement Income Security Act), which, in the aggregate, have either more than 200 eligible employees or a minimum of $3,000,000 in assets invested in Fidelity funds; 30. to shares in a Fidelity IRA account purchased (including purchases by exchange) with the proceeds of a distribution from an employee benefit plan provided that: (i) at the time of the distribution, the employer, or an affiliate (as described in exemption (1) above) of such employer, maintained at least one employee benefit plan that qualified for exemption (1) and that had at least some portion of its assets invested in one or more mutual funds advised by FMR, or in one or more accounts or pools advised by Fidelity Management Trust Company; and (ii) the distribution is transferred from the plan to a Fidelity Rollover IRA account within 60 days from the date of the distribution; 31. to shares purchased by a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more; 32. to shares purchased for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code); 33. to shares purchased by an investor participating in the Fidelity Trust Portfolios program (these investors must make initial investments of $100,000 or more in the Trust Portfolios funds and must, during the initial six-month period, reach and maintain an aggregate balance of at least $500,000 in all accounts and subaccounts purchased through the Trust Portfolios program); 34. to shares purchased through Portfolio Advisory Services; 35. to shares purchased by a current or former Trustee or officer of a Fidelity fund or a current or retired officer, director, or regular employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity Trustee or employee, a Fidelity Trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity Trustee or employee; 36. to shares purchased by a bank trust officer, registered representative, or other employee of a qualified recipient. Qualified recipients are securities dealers or other entities, including banks and other financial institutions, who have sold the fund's shares under special arrangements in connection with FDC's sales activities; 37. to shares purchased in a Uniform Gifts to Minors/Uniform Transfers to Minors account; 38. to shares purchased as part of a payroll deduction program (including shares purchased in an amount greater than $5,000 by participants in the program within three months of the commencement of their participation in the program from sources other than payroll deduction) through an employer who has entered into a Fidelity payroll deduction load waiver agreement and who (i) is a member of the Fidelity Retirement Client Advisory Group and maintains an employee benefit plan that either qualifies for exemption (1) above or is in the CORPORATEplan for Retirement Program and has at least some of its plan assets in Fidelity-managed products, or (ii) is a member of the Fidelity Retail Advisory Group and has more than 500 employees; 39. to shares purchased by contributions and exchanges to the following prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR and that are marketed and distributed directly to plan sponsors or participants without any intervention or assistance from any intermediary distribution channel: The Fidelity IRA, the Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers, and The CORPORATEplan for Retirement (Profit Sharing and Money Purchase Plan); 40. to shares purchased as part of a pension or profit-sharing plan as defined in Section 401(a) of the Internal Revenue Code that maintains all of its mutual fund assets in Fidelity mutual funds, provided the plan executes a Fidelity non-prototype sales charge waiver request form confirming its qualification; 41. to shares purchased by a registered investment adviser (RIA) for his or her discretionary accounts, provided he or she executes a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased directly from Fidelity, without a broker, unless purchased through a brokerage firm which is a correspondent of National Financial Services Corporation (NFSC). The waiver is unavailable, however, if the RIA is part of an organization principally engaged in the brokerage business, unless the brokerage firm in the organization is an NFSC correspondent; or 42. to shares purchased by a trust institution or bank trust department for its non-discretionary, non-retirement fiduciary accounts, provided it executes a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is unavailable if the trust department or institution is part of an organization not principally engaged in banking or trust activities. The fund's sales charge may be reduced to reflect sales charges previously paid, or that would have been paid absent a reduction for some purchases made directly with Fidelity as noted in the prospectus, in connection with investments in other Fidelity funds. This includes reductions for investments in prototype-like retirement plans sponsored by FMR or FMR Corp., which are listed above. The fund is open for business and its net asset value per share (NAV) is calculated each day the New York Stock Exchange (NYSE) is open for trading. The NYSE has designated the following holiday closings for 1995: New Year's Day (observed), President's Day (observed), Good Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday schedule to be observed in the future, the NYSE may modify its holiday schedule at any time. In addition, the fund will not process wire purchases and redemptions on days when the Federal Reserve Wire System is closed. FSC normally determines the fund's NAV as of the close of the NYSE (normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if trading on the NYSE is restricted or as permitted by the Securities and Exchange Commission (SEC). To the extent that portfolio securities are traded in other markets on days when the NYSE is closed , the fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. In addition, trading in some of the fund's portfolio securities may not occur on days when the fund is open for business. If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing the fund's NAV. Shareholders receiving securities or other property on redemption may realize a gain or loss for tax purposes, and will incur any costs of sale, as well as the associated inconveniences. Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940 Act), the fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) the fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or the fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the Prospectus, the fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DISTRIBUTIONS. If you request to have distributions mailed to you and the U.S. Postal Service cannot deliver your checks, or if your checks remain uncashed for six months, Fidelity may reinvest your distributions at the then-current NAV. All subsequent distributions will then be reinvested until you provide Fidelity with alternate instructions. DIVIDENDS. A portion of the fund's income may qualify for the dividends-received deduction available to corporate shareholders to the extent that the fund's income is derived from qualifying dividends. Because the fund may earn other types of income, such as interest, income from securities loans, non-qualifying dividends, and short-term capital gains, the percentage of dividends from the fund that qualifies for the deduction generally will be less than 100%. The fund will notify corporate shareholders annually of the percentage of fund dividends that qualifies for the dividends-received deduction. A portion of the fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. Gains (losses) attributable to foreign currency fluctuations are generally taxable as ordinary income, and therefore will increase (decrease) dividend distributions. Short-term capital gains are distributed as dividend income. The fund will send each shareholder a notice in January describing the tax status of dividends and capital gain distributions for the prior year. CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on the sale of securities and distributed to shareholders are federally taxable as long-term capital gains, regardless of the length of time shareholders have held their shares. If a shareholder receives a long-term capital gain distribution on shares of the fund, and such shares are held six months or less and are sold at a loss, the portion of the loss equal to the amount of the long-term capital gain distribution will be considered a long-term loss for tax purposes. Short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. As of July 31, 1995, the fund hereby designates approximately $ 29,937,000 as a capital gain dividend for the purpose of the dividend-paid deduction. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid with respect to foreign securities. Foreign governments may also impose taxes on other payments or gains with respect to foreign securities. If, at the close of its fiscal year, more than 50% of the fund's total assets are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns. TAX STATUS OF THE FUND. The fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company and avoid being subject to federal income or excise taxes at the fund level, the fund intends to distribute substantially all of its net investment income and net realized capital gains within each calendar year as well as on a fiscal year basis. The fund intends to comply with other tax rules applicable to regulated investment companies, including a requirement that capital gains from the sale of securities held less than three months constitute less than 30% of the fund's gross income for each fiscal year. Gains from some forward currency contracts, futures contracts, and options are included in this 30% calculation, which may limit the fund's investments in such instruments. If the fund purchases shares in certain foreign investment entities, defined as passive foreign investment companies (PFICs) in the Internal Revenue Code, it may be subject to U.S. federal income tax on a portion of any excess distribution or gain from the disposition of such shares. Interest charges may also be imposed on the fund with respect to deferred taxes arising from such distributions or gains. Generally, the fund will elect to mark-to-market any PFIC shares. Unrealized gains will be recognized as income for tax purposes and must be distributed to shareholders as dividends. The fund is treated as a separate entity from the other funds of Fidelity Securities Fund for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting the fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether the fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent organized in 1972. The voting common stock of FMR Corp. is divided into two classes. Class B is held predominantly by members of the Edward C. Johnson 3d family and is entitled to 49% of the vote on any matter acted upon by the voting common stock. Class A is held predominantly by non-Johnson family member employees of FMR Corp. and its affiliates and is entitled to 51% of the vote on any such matter. The Johnson family group and all other Class B shareholders have entered into a shareholders' voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Under the 1940 Act, control of a company is presumed where one individual or group of individuals owns more than 25% of the voting stock of that company. Therefore, through their ownership of voting common stock and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the 1940 Act, to form a controlling group with respect to FMR Corp. At present, the principal operating activities of FMR Corp. are those conducted by three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; Fidelity Investments Institutional Operations Company, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. T he business address of each Trustee and officer who is an "interested person" (as defined by the Investment Company Act of 1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also the address of FMR. The business address of all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are "interested persons" by virtue of their affiliation with either the trust or FMR are indicated by an asterisk (*). *EDWARD C. JOHNSON 3d (65), Trustee and President, is Chairman, Chief Executive Officer and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc. (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia University Graduate School of Business and a financial consultant. From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation (reinsurance), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) is Vice Chairman of FMR (1992). Prior to his retirement on May 31, 1990, he was a Director of FMR (1989) and Executive Vice President of FMR (a position he held until March 31, 1991); Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services (1991-1992). He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and construction). In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for the Preservation of New England Antiquities, and as an Overseer of the Museum of Fine Arts of Boston (1990). GERALD C. McDONOUGH (66), Trustee (1989), is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration, 1989), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (62), Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). Prior to 1991, he held the positions of Vice President of International Business Machines Corporation ("IBM") and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS (66), Trustee, is President of The Wales Group, Inc. (management and financial advisory services). Prior to retiring in 1987, Mr. Williams served as Chairman of the Board of First Wachovia Corporation (bank holding company), and Chairman and Chief Executive Officer of The First National Bank of Atlanta and First Atlanta Corporation (bank holding company). He is currently a Director of BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc. (restaurants, 1992). WILLIAM J. HAYES (61), Vice President (1994), is Vice President of Fidelity's equity funds; Senior Vice President of FMR; and Managing Director of FMR Corp. ROBERT H. MORRISON (55), Manager of Security Transactions of Fidelity's equity funds is Vice President of FMR. STEVEN KAYE (36), is manager and Vice President of Growth & Income, which he has managed since January 1993. Previously, he managed Blue Chip Growth and the Select Biotechnology, Energy Service, and Health Care Portfolios. Mr. Kaye joined Fidelity in 1985. ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LLC (1994-1995). JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity Funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current Trustee of the fund for his or her services as trustee for the fiscal year ended July 31, 1995. COMPENSATION TABLE
Trustees Aggregate Pension or Estimated Annual Total Compensation Retirement Benefits Upon Compensation from Benefits Accrued Retirement from from the Fund the Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Complex* J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0 Ralph F. Cox 4,372 5,200 52,000 125,000 Phyllis Burke Davis 4,169 5,200 52,000 122,000 Richard J. Flynn 5,378 0 52,000 154,500 Edward C. Johnson 3d ** 0 0 0 0 E. Bradley Jones 4,321 5,200 49,400 123,500 Donald J. Kirk 4,372 5,200 52,000 125,000 Peter S. Lynch ** 0 0 0 0 Gerald C. McDonough 4,322 5,200 52,000 125,000 Edward H. Malone 4,321 5,200 44,200 128,000 Marvin L. Mann 4,321 5,200 52,000 125,000 Thomas R. Williams 4,267 5,200 52,000 126,500
* Information is as of December 31, 1994 for 206 funds in the complex. ** Interested trustees of the fund are compensated by FMR. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. On July 31, the Trustees and officers of the fund owned, in the aggregate, less than 1 % of the fund's total outstanding shares. MANAGEMENT CONTRACT The fund employs FMR to furnish investment advisory and other services. Under its management contract with the fund, FMR acts as investment adviser and, subject to the supervision of the Board of Trustees, directs the investments of the fund in accordance with its investment objective, policies, and limitations. FMR also provides the fund with all necessary office facilities and personnel for servicing the fund's investments, compensates all officers of the fund and all Trustees who are "interested persons" of the trust or of FMR, and all personnel of the fund or FMR performing services relating to research, statistical, and investment activities. In addition, FMR or its affiliates, subject to the supervision of the Board of Trustees, provide the management and administrative services necessary for the operation of the fund. These services include providing facilities for maintaining the fund's organization; supervising relations with custodians, transfer and pricing agents, accountants, underwriters, and other persons dealing with the fund; preparing all general shareholder communications and conducting shareholder relations; maintaining the fund's records and the registration of the fund's shares under federal and state laws; developing management and shareholder services for the fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to FSC, the fund pays all of its expenses, without limitation, that are not assumed by those parties. The fund pays for the typesetting, printing, and mailing of its proxy materials to shareholders, legal expenses, and the fees of the custodian, auditor and non-interested Trustees. Although the fund's current management contract provides that the fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices, and reports to shareholders, the trust, on behalf of the fund has entered into a revised transfer agent agreement with FSC, pursuant to which FSC bears the costs of providing these services to existing shareholders. Other expenses paid by the fund include interest, taxes, brokerage commissions, and the fund's proportionate share of insurance premiums and Investment Company Institute dues. The fund is also liable for such non-recurring expenses as may arise, including costs of any litigation to which the fund may be a party, and any obligation it may have to indemnify its officers and Trustees with respect to litigation. FMR is the fund's manager pursuant to a management contract dated August 1, 1994, which was approved by shareholders on July 13, 1994. For the services of FMR under the contract, the fund pays FMR a monthly management fee composed of the sum of two elements: a group fee rate and an individual fund fee rate. The group fee rate is based on the monthly average net assets of all of the registered investment companies with which FMR has management contracts and is calculated on a cumulative basis pursuant to the graduated fee rate schedule shown below on the left. The schedule below on the right shows the effective annual group fee rate at various asset levels, which is the result of cumulatively applying the annualized rates on the left. For example, the effective annual fee rate at $ 333 billion of group net assets - the approximate level for July 1995 - was .3129 %, which is the weighted average of the respective fee rates for each level of group net assets up to $ 333 billion. GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate 0 - $ 3 billion .5200% $ 0.5 billion .5200% 3 - 6 .4900 25 .4238 6 - 9 .4600 50 .3823 9 - 12 .4300 75 .3626 12 - 15 .4000 100 .3512 15 - 18 .3850 125 .3430 18 - 21 .3700 150 .3371 21 - 24 .3600 175 .3325 24 - 30 .3500 200 .3284 30 - 36 .3450 225 .3253 36 - 42 .3400 250 .3223 42 - 48 .3350 275 .3198 48 - 66 .3250 300 .3175 66 - 84 .3200 325 .3153 84 - 102 .3150 350 .3133 102 - 138 .3100 138 - 174 .3050 174 - 228 .3000 228 - 282 .2950 282 - 336 .2900 Over 336 .2850 Prior to August 1, 1994, the group fee rate was based on a schedule with breakpoints ending at .3100% for average group assets in excess of $102 billion. The group fee rate breakpoints shown above for average group assets in excess of $138 billion and under $228 billion were voluntarily adopted by FMR on January 1, 1992. The additional breakpoints shown above for average group assets in excess of $228 billion were voluntarily adopted by FMR on November 1, 1993. The fund's current management contract reflects these extensions of the group fee rate schedule. On August 1, 1994, FMR voluntarily revised the prior extensions to the group fee rate schedule, and added new breakpoints. The revised group fee rate schedule provides for lower management fee rates as FMR's assets under management increase. The revised group fee rate schedule is identical to the above schedule for average group assets under $210 billion. For average group assets in excess of $210 billion, the group fee rate schedule voluntarily adopted by FMR is as follows: GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate 138 - $174 billion .3050% $150 billion .3371% 174 - 210 .3000 175 .3325 210 - 246 .2950 200 .3284 246 - 282 .2900 225 .3249 282 - 318 .2850 250 .3219 318 - 354 .2800 275 .3190 354 - 390 .2750 300 .3163 Over 390 .2700 325 .3137 350 .3113 375 .3090 400 .3067 The individual fund fee rate is .20%. Based on the average group net assets of the funds advised by FMR for July 1995, the annual management fee rate would be calculated as follows: Group Fee Rate Individual Fund Fee Rate Management Fee Rate . 3129 % + .20% = . 5129 % One-twelfth of this annual management fee rate is applied to the fund's net assets averaged for the most recent month, giving a dollar amount, which is the fee for that month. During the fiscal years ended July 31, 1995, 1994, and 1993, FMR received $ 51,730,000 , $40,956,000 and $27,608,000, respectively, for its services as investment adviser to the fund. These fees were equivalent to .52 %, .52%, and .53%, respectively, of the average net assets of the fund for each of those years. FMR may, from time to time, voluntarily reimburse all or a portion of the fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). FMR retains the ability to be repaid for these expense reimbursements in the amount that expenses fall below the limit prior to the end of the fiscal year. Expense reimbursements by FMR will increase the fund's total returns and yield and repayment of the reimbursement by the fund will lower its total returns and yield. To comply with the California Code of Regulations, FMR will reimburse the fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating the fund's expenses for purposes of this regulation, the fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its custodian fees attributable to investments in foreign securities. SUB-ADVISERS. FMR has entered into sub-advisory agreements with FMR U.K., and FMR Far East. Pursuant to the sub-advisory agreements, FMR may receive investment advice and research services outside the United States from the sub-advisers. FMR may also grant the sub-advisers investment management authority as well as the authority to buy and sell securities if FMR believes it would be beneficial to the fund. Currently, FMR U.K. and FMR Far East each focus on issuers in countries other than the United States such as those in Europe, Asia, and the Pacific Basin. FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays the fees of FMR U.K. and FMR Far East. For providing non-discretionary investment advice and research services, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection with providing investment advice and research services. For providing discretionary investment management and executing portfolio transactions, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its monthly management fee rate with respect to the fund's average net assets managed by the sub-adviser on a discretionary basis. For providing investment advice and research services, the fees paid to FMR U.K. and FMR Far East for fiscal 1995 were $ 427,000 , and $ 392,000 , respectively. No fees were paid to either sub-adviser for such services during fiscal 1994 or 1993. No fees were paid to FMR U.K. and FMR Far East for providing discretionary investment management and executing portfolio transactions for fiscal 1995, 1994, or 1993. CONTRACTS WITH FMR AFFILIATES FSC is transfer, dividend disbursing, and shareholder servicing agent for the fund. FSC receives annual account fees and asset-based fees for each retail account and certain institutional accounts based on account size. In addition, the fees for retail accounts are subject to increase based on postal rate changes. With respect to certain institutional retirement accounts, FSC receives asset-based fees only. The asset-based fees are subject to adjustment if the year-to-date total return of the Standard & Poor's Composite Index of 500 Stocks is greater than positive or negative 15%. FSC also collects small account fees from certain accounts with balances of less than $2,500. FSC pays out-of-pocket expenses associated with providing transfer agent services. In addition, FSC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. FSC also performs the calculations necessary to determine the fund's net asset value per share and dividends, and maintains the fund's accounting records. The annual fee rates for these pricing and bookkeeping services are based on the fund's average net assets, specifically, .06% for the first $500 million of average net assets and .03% for average net assets in excess of $500 million. The fee is limited to a minimum of $45,000 and a maximum of $750,000 per year. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC for fiscal 1995, 1994, and 1993 were $ 773,000 , $775,000, and $773,000, respectively. FSC also receives fees for administering the funds securities lending program. Securities lending fees are based on the number and duration of individual securities loans. Securities lending fees for fiscal 1995, 1994, and 1993 were $150, $240, and $505 respectively. The fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls for FDC to use all reasonable efforts, consistent with its other business, to secure purchasers for shares of the fund, which are continuously offered. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FDC. Sales charge revenue paid to FDC for fiscal 1995, 1994, and 1993 amounted to $ 3,637,000 , $ 7,670,000 , and $ 6,510,000 , respectively. DESCRIPTION OF THE TRUST TRUST ORGANIZATION. Fidelity Growth & Income Portfolio is a fund of Fidelity Securities Fund, an open-end management investment company organized as a Massachusetts business trust on October 2, 1984. Currently, there are four funds of the trust: Fidelity Growth & Income Portfolio, Fidelity OTC Portfolio, Fidelity Blue Chip Growth Fund, and Fidelity Dividend Growth Fund. The Declaration of Trust permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to the trust or a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. The assets of the trust received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fund. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trust are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trust, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of the trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable for the obligations of the trust. The Declaration of Trust provides that the trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the trust or the Trustees include a provision limiting the obligations created thereby to the trust and its assets. The Declaration of Trust provides for indemnification out of each fund's property of any shareholder held personally liable for the obligations of the fund. The Declaration of Trust also provides that each fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the fund and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which a fund itself would be unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is remote. The Declaration of Trust further provides that the Trustees, if they have exercised reasonable care, will not be liable for any neglect or wrongdoing, but nothing in the Declaration of Trust protects Trustees against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. VOTING RIGHTS. Each fund's capital consists of shares of beneficial interest. As a shareholder, you receive one vote for each dollar value of net asset value you own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and nonassessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of the trust or a fund may, as set forth in the Declaration of Trust, call meetings of the trust or a fund for any purpose related to the trust or fund, as the case may be, including, in the case of a meeting of the entire trust, the purpose of voting on removal of one or more Trustees. The trust or any fund may be terminated upon the sale of its assets to another open-end management investment company, or upon liquidation and distribution of its assets, if approved by vote of the holders of a majority of the trust or the fund, as determined by the current value of each shareholder's investment in the fund or trust. If not so terminated, the trust and its funds will continue indefinitely. Each fund may invest all of its assets in another investment company. CUSTODIAN. The Chase Manhattan Bank, N.A. 1211 Avenue of the Americas, New York, New York 10036, is custodian of the assets of the fund. The custodian is responsible for the safekeeping of a fund's assets and the appointment of the subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies of a fund or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Morgan Guaranty Trust Company of New York, The Bank of New York, and Chemical Bank, each headquartered in New York, also may serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the Board of Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds advised by FMR. Transactions that have occurred to date include mortgages and personal and general business loans. In the judgment of FMR, the terms and conditions of those transactions were not influenced by existing or potential custodial or other fund relationships. AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, serves as the trust's independent accountant. The auditor examines financial statements for the fund and provides other audit, tax, and related services. FINANCIAL STATEMENTS The fund's financial statements and financial highlights for the fiscal year ended July 31, 1995 are included in the fund's Annual Report, which is a separate report supplied with this Statement of Additional Information. The fund's financial statements and financial highlights are incorporated herein by reference. APPENDIX DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS: AAA - Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge d ." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. AA - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in the Aaa securities. A - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations . Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. BAA - Bonds which are rated Baa are considered as medium-grade obligations, ( i.e., they are neither highly protected nor poorly secured ) . Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. BA - Bonds which are rated Ba are judged to have speculative elements ; Their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B - Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. CAA - Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. CA - Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings. C - Bonds which are rated C are the lowest-rated class of bonds , and issue s so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating classification from Aa through B in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category. DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS: AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's to a debt obligation. Capacity to pay interest and repay principal is extremely strong. AA - Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the higher-rated issues only in small degree. A - Debt rated A has a strong capacity to pay interest and repay principal, although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories . BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher-rated categories. BB - Debt rate BB has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB- rating. B - Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB- rating. CCC - Debt rated CCC has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating. CC - Debt rated CC is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC debt rating. C - The rating C is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC- debt rating. The C rating may be used to cover a situation where a bankruptcy petition has been filed but debt service payments are continued. CI - The rating CI is reserved for income bonds on which no interest is being paid. D - Debt rated D is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating will also be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. PART C. OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) (1) Financial Statements and Financial Highlights included in the Annual Report, for Fidelity Growth & Income Portfolio for the fiscal year ended July 31, 1995 are incorporated by reference into the fund's Statement of Additional Information and were filed on September 11, 1995 for Fidelity Securities Fund (File No. 2-93601) pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated herein by reference. (a) (2) Financial Statements and Financial Highlights included in the Annual Report, for Fidelity OTC Portfolio for the fiscal year ended July 31, 1995 are incorporated by reference into the fund's Statement of Additional Information and were filed on September 11, 1995 for Fidelity Securities Fund (File No. 2-93601) pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated herein by reference. (a) (3) Financial Statements and Financial Highlights included in the Annual Report, for Fidelity Blue Chip Growth Fund for the fiscal year ended July 31, 1995 are incorporated by reference into the fund's Statement of Additional Information and were filed on September 11, 1995 for Fidelity Securities Fund (File No. 2-93601) pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated herein by reference. (a) (4) Financial Statements and Financial Highlights included in the Annual Report, for Fidelity Dividend Growth Fund for the fiscal year ended July 31, 1995 are incorporated by reference into the fund's Statement of Additional Information and were filed on September 11, 1995 for Fidelity Securities Fund (File No. 2-93601) pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated herein by reference. (b) Exhibits (1) Amended and Restated Declaration of Trust, dated July 14, 1994, is incorporated herein by reference to Exhibit 1 of Post-Effective Amendment No. 30. (2) Bylaws of the Trust, as amended, are incorporated herein by reference to Exhibit 2(a) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (3) Not applicable. (4) Not applicable. (5) (a) Management Contract, dated August 1, 1994, between Fidelity Growth & Income Portfolio and Fidelity Management & Research Company is incorporated herein by reference to Exhibit 5(a) of Post-Effective Amendment No. 30. (b) Management Contract, dated August 1, 1994, between Fidelity OTC Portfolio and Fidelity Management & Research Company is incorporated herein by reference to Exhibit 5(b) of Post-Effective Amendment No. 30. (c) Management Contract, dated August 1, 1994, between Fidelity Blue Chip Growth Fund and Fidelity Management & Research Company is incorporated herein by reference to Exhibit 5(c) of Post-Effective Amendment No. 30. (d) Management Contract, dated August 1, 1994, between Fidelity Dividend Growth Fund and Fidelity Management & Research Company is incorporated herein by reference to Exhibit 5(d) of Post-Effective Amendment No. 30. (e) Sub-Advisory Agreement, dated April 15, 1993, between Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research Company on behalf of Fidelity Dividend Growth Fund is incorporated herein by reference to Exhibit 5(e) to Post-Effective Amendment No. 29. (f) Sub-Advisory Agreement, dated April 15, 1993, between Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research Company on behalf of Fidelity Dividend Growth Fund is incorporated herein by reference to Exhibit 5(f) to Post-Effective Amendment No. 29. (g) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research Company on behalf of Fidelity OTC Portfolio is incorporated herein by reference to Exhibit 5(g) of Post-Effective Amendment No. 30. (h) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research Company on behalf of Fidelity OTC Portfolio is incorporated herein by reference to Exhibit 5(h) of Post-Effective Amendment No. 30. (i) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research Company on behalf of Fidelity Blue Chip Growth Fund is incorporated herein by reference to Exhibit 5(i) of Post-Effective Amendment No. 30. (j) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research Company on behalf of Fidelity Blue Chip Growth Fund is incorporated herein by reference to Exhibit 5(j) of Post-Effective Amendment No. 30. (k) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research Company on behalf of Fidelity Growth & Income Portfolio is incorporated herein by reference to Exhibit 5(k) of Post-Effective Amendment No. 30. (l) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research Company on behalf of Fidelity Growth & Income Portfolio is incorporated herein by reference to Exhibit 5(l) of Post-Effective Amendment No. 30. (6) (a) General Distribution Agreement, dated April 1, 1987, between Fidelity Growth & Income Portfolio and Fidelity Distributors Corporation is incorporated herein by reference to Exhibit 6(a) to Post-Effective Amendment No. 32. (b) General Distribution Agreement, dated April 1, 1987, between Fidelity OTC Portfolio and Fidelity Distributors Corporation is incorporated herein by reference to Exhibit 6(b) to Post-Effective Amendment No. 32. (c) General Distribution Agreement, dated December 17, 1987, between Fidelity Blue Chip Growth Fund and Fidelity Distributors Corporation is filed herein as Exhibit 6(c). (d) Amendment to General Distribution Agreement, dated January 1, 1988, between Fidelity Blue Chip Growth Fund, Fidelity Growth & Income Portfolio and Fidelity OTC Portfolio and Fidelity Distributors Corporation is incorporated herein by reference to Exhibit 6(d) to Post-Effective Amendment No. 32. (e) General Distribution Agreement, dated April 15, 1993, between Fidelity Dividend Growth Fund and Fidelity Distributors Corporation is incorporated herein by reference to Exhibit 6(g) to Post-Effective Amendment No. 29. (7) Retirement Plan for Non-Interested Trustees, Directors or General Partners, is incorporated herein by reference to Exhibit 7 to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (8) (a) Custodian Agreement, Appendix A, and Appendix C, dated August 1, 1994, between The Chase Manhattan Bank, N.A. and Fidelity Securities Fund on behalf of Fidelity Growth & Income Portfolio is incorporated herein by reference to Exhibit 8(a) to Fidelity Investment Trust's (File No. 2-90649) Post-Effective Amendment No. 59. (b) Appendix B, dated April 20, 1995, to the Custodian Agreement, dated August 1, 1994, between The Chase Manhattan Bank, N.A. and Fidelity Securities Fund on behalf of Fidelity Growth & Income Portfolio is incorporated herein by reference to Exhibit 8(b) to Fidelity Investment Trust's (File No. 2-90649) Post-Effective Amendment No. 59. (c) Custodian Agreement, Appendix A, and Appendix C, dated September 1, 1994, between Brown Brothers Harriman & Company and Fidelity Securities Fund on behalf of Fidelity Blue Chip Growth Fund, Fidelity Dividend Growth Fund and Fidelity OTC Portfolio is incorporated herein by reference to Exhibit 8(a) to Fidelity Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No. 56. (d) Appendix B, dated December 15, 1994, to the Custodian Agreement, dated September 1, 1994, between Brown Brothers Harriman & Company and Fidelity Securities Fund on behalf of Fidelity Blue Chip Growth Fund, Fidelity Dividend Growth Fund and Fidelity OTC Portfolio is incorporated herein by reference to Exhibit 8(b) to Fidelity Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No. 56. (9) Not applicable. (10) Not applicable. (11) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit 11. (12) Not applicable. (13) Not applicable. (14) (a) Fidelity Individual Retirement Account Custodial Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(a) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (b) Fidelity 403(b)(7) Custodial Account Agreement, as currently in effect, is incorporated herein by reference to Exhibit 14(e) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (c) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as currently in effect, is filed herein as Exhibit 14(c). (d) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic Plan Document and Adoption Agreement, as currently in effect, is filed herein as Exhibit 14(d). (e) Fidelity Institutional Individual Retirement Account Custodial Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(d) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (f) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic Plan Document, Standardized Adoption Agreement, and Non-Standardized Adoption Agreement, as currently in effect, is filed herein as Exhibit 14(f). (g) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption Agreement, Non-Standardized Discretionary Contribution Plan No. 002 Adoption Agreement, and Non-Standardized Discretionary Contribution Plan No. 003 Adoption Agreement, as currently in effect, is filed herein as Exhibit 14(g). (h) National Financial Services Corporation Individual Retirement Account Custodial Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(h) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (i) Fidelity Portfolio Advisory Services Individual Retirement Account Custodial Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(i) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (j) Fidelity Investments Section 403(b)(7) Individual Custodial Account Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(f) to Fidelity Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No. 57. (k) National Financial Services Corporation Defined Contribution Retirement Plan and Trust Agreement, as currently in effect, is incorporated herein by reference to Exhibit 14(k) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (l) The CORPORATEplan for Retirement Profit Sharing/401k Plan, as currently in effect, is incorporated herein by reference to Exhibit 14(l) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (m) The CORPORATEplan for Retirement Money Purchase Pension Plan, as currently in effect, is incorporated herein by reference to Exhibit 14(m) to Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87. (n) Plymouth Investments Defined Contribution Retirement Plan and Trust Agreement, as currently in effect, is incorporated herein by reference to Exhibit 14(o) to Fidelity Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No. 57. (o) The Institutional Prototype Plan Basic Plan Document, Standardized Adoption Agreement, and Non-Standardized Adoption Agreement, as currently in effect, is filed herein as Exhibit 14(o). (p) Fidelity Investments 403(b) Sample Plan Basic Plan Document and Adoption Agreement, as currently in effect, is filed herein as Exhibit 14(p). (15) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity Dividend Growth Fund is filed herein as Exhibit 15. (16) (a) A schedule for the computation of moving average calculations on behalf of the funds of Fidelity Securities Fund is incorporated herein by reference to Exhibit 16(c) of Post-Effective Amendment No. 28. (b) A schedule for the computation of total return calculations on behalf of the funds of Fidelity Securities Fund is filed herein as Exhibit 16(b). (17) Financial Data Schedules are filed herein as Exhibit 27. (18) Not applicable. Item 25. Persons Controlled by or Under Common Control with Registrant The Board of Trustees of Registrant is the same as the boards of the other Fidelity funds, each of which has Fidelity Management & Research Company as its investment adviser. In addition, the officers of these funds are substantially identical. Nonetheless, Registrant takes the position that it is not under common control with these other funds since the power residing in the respective Boards and officers arises as the result of an official position with the respective funds. Item 26. Number of Holders of Securities July 31, 1995 - Shares of Beneficial Interest: Title of Class Number of Record Holders Fidelity Growth & Income Portfolio 1,261,050 Fidelity OTC Portfolio 225,625 Fidelity Blue Chip Growth Fund 734,472 Fidelity Dividend Growth Fund 29,342 Item 27. Indemnification Article XI, Section 2 of the Declaration of Trust sets forth the reasonable and fair means for determining whether indemnification shall be provided to any past or present trustee or officer. It states that the Registrant shall indemnify any present or past trustee or officer to the fullest extent permitted by law against liability and all expenses reasonably incurred by him in connection with any claim, action, suit or proceeding in which he is involved by virtue of his service as a trustee, an officer, or both. Additionally, amounts paid or incurred in settlement of such matters are covered by this indemnification. Indemnification will not be provided in certain circumstances, however. These include instances of willful misfeasance, bad faith, gross negligence, and reckless disregard of the duties involved in the conduct of the particular office involved. Item 28. Business and Other Connections of Investment Adviser (1) FIDELITY MANAGEMENT & RESEARCH COMPANY FMR serves as investment adviser to a number of other investment companies. The directors and officers of the Adviser have held, during the past two fiscal years, the following positions of a substantial nature.
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President and Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.; Senior Vice President and Trustee of funds advised by FMR. Peter S. Lynch Vice Chairman and Director of FMR. Robert Beckwitt Vice President of FMR and of funds advised by FMR. David Breazzano Vice President of FMR (1993) and of a fund advised by FMR. Stephan Campbell Vice President of FMR (1993). Dwight Churchill Vice President of FMR (1993). William Danoff Vice President of FMR (1993) and of a fund advised by FMR. Scott DeSano Vice President of FMR (1993). Penelope Dobkin Vice President of FMR and of a fund advised by FMR. Larry Domash Vice President of FMR (1993). George Domolky Vice President of FMR (1993) and of a fund advised by FMR. Robert K. Duby Vice President of FMR. Margaret L. Eagle Vice President of FMR and of a fund advised by FMR. Kathryn L. Eklund Vice President of FMR. Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised by FMR. Daniel R. Frank Vice President of FMR and of funds advised by FMR. Michael S. Gray Vice President of FMR and of funds advised by FMR. Lawrence Greenberg Vice President of FMR (1993). Barry A. Greenfield Vice President of FMR and of a fund advised by FMR. William J. Hayes Senior Vice President of FMR; Equity Division Leader. Robert Haber Vice President of FMR and of funds advised by FMR. Richard Haberman Senior Vice President of FMR (1993). Daniel Harmetz Vice President of FMR and of a fund advised by FMR. Ellen S. Heller Vice President of FMR.
John Hickling Vice President of FMR (1993) and of funds advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical Research. Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of FMR Texas Inc. (1993), Fidelity Management & Research (U.K.) Inc. (1993), and Fidelity Management & Research (Far East) Inc. (1993). David B. Jones Vice President of FMR (1993). Steven Kaye Vice President of FMR (1993) and of a fund advised by FMR. Frank Knox Vice President of FMR (1993). Robert A. Lawrence Senior Vice President of FMR (1993); High Income Division Leader. Alan Leifer Vice President of FMR and of a fund advised by FMR. Harris Leviton Vice President of FMR (1993) and of a fund advised by FMR. Bradford E. Lewis Vice President of FMR and of funds advised by FMR. Malcolm W. MacNaught III Vice President of FMR (1993). Robert H. Morrison Vice President of FMR; Director of Equity Trading. David Murphy Vice President of FMR and of funds advised by FMR. Andrew Offit Vice President of FMR (1993). Judy Pagliuca Vice President of FMR (1993). Jacques Perold Vice President of FMR. Anne Punzak Vice President of FMR and of funds advised by FMR. Lee Sandwen Vice President of FMR (1993). Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by FMR. Thomas T. Soviero Vice President of FMR (1993). Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised by FMR. Gary L. Swayze Vice President of FMR and of funds advised by FMR; Tax-Free Fixed-Income Group Leader. Thomas Sweeney Vice President of FMR (1993). Donald Taylor Vice President of FMR (1993) and of funds advised by FMR. Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised by FMR. Joel Tillinghast Vice President of FMR (1993) and of a fund advised by FMR. Robert Tucket Vice President of FMR (1993). George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by FMR; Growth Group Leader. Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised by FMR. Guy E. Wickwire Vice President of FMR and of a fund advised by FMR. Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel of FMR; Vice President, Legal of FMR Corp.; Secretary of funds advised by FMR.
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.) FMR U.K. provides investment advisory services to Fidelity Management & Research Company and Fidelity Management Trust Company. The directors and officers of the Sub-Adviser have held the following positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the Executive Committee of FMR; Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc., and Fidelity Management & Research (Far East) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President and Director of FMR U.K.; President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc. and Fidelity Management & Research (Far East) Inc.; Senior Vice President and Trustee of funds advised by FMR. Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of Fidelity Management & Research (Far East) Inc.; Director of Worldwide Research of FMR. Rick Spillane Senior Vice President and Director of Operations and Compliance of FMR U.K. (1993). Stephen P. Jonas Treasurer of FMR U.K. (1993), Fidelity Management & Research (Far East) Inc. (1993), and FMR Texas Inc. (1993); Treasurer and Vice President of FMR (1993). David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management & Research (Far East) Inc.; Secretary of FMR Texas Inc.
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East) FMR Far East provides investment advisory services to Fidelity Management & Research Company and Fidelity Management Trust Company. The directors and officers of the Sub-Adviser have held the following positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the Executive Committee of FMR; Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc. and Fidelity Management & Research (U.K.) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President and Director of FMR Far East; President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc. and Fidelity Management & Research (U.K.) Inc.; Senior Vice President and Trustee of funds advised by FMR. Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice President of Fidelity Management & Research (U.K.) Inc.; Director of Worldwide Research of FMR. William R. Ebsworth Vice President of FMR Far East. Bill Wilder Vice President of FMR Far East (1993). Stephen P. Jonas Treasurer of FMR Far East (1993), Fidelity Management & Research (U.K.) Inc. (1993), and FMR Texas Inc. (1993); Treasurer and Vice President of FMR (1993). David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management & Research (U.K.) Inc.; Secretary of FMR Texas Inc.
Item 29. Principal Underwriters (a) Fidelity Distributors Corporation (FDC) acts as distributor for most funds advised by FMR and the following other funds: ARK Funds (b) Name and Principal Positions and Offices Positions and Offices Business Address* With Underwriter With Registrant Edward C. Johnson 3d Director Trustee and President Nita B. Kincaid Director None W. Humphrey Bogart Director None Kurt A. Lange President and Treasurer None William L. Adair Senior Vice President None Thomas W. Littauer Senior Vice President None Arthur S. Loring Vice President and Clerk Secretary * 82 Devonshire Street, Boston, MA (c) Not applicable. Item 30. Location of Accounts and Records All accounts, books, and other documents required to be maintained by Section 31a of the 1940 Act and the Rules promulgated thereunder are maintained by Fidelity Management & Research Company or Fidelity Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds' respective custodians The Chase Manhattan Bank, 1211 Avenue of the Americas, New York, N.Y. and Brown Brothers Harriman & Co., 40 Water Street, Boston, MA. Item 31. Management Services Not applicable. Item 32. Undertakings The Registrant undertakes for Dividend Growth Fund: to call a meeting of shareholders for the purpose of voting upon the question of removal of a trustee or trustees, when requested to do so by record holders of not less than 10% of its outstanding shares; and (2) to assist in communications with other shareholders pursuant to Section 16(c)(1) and (2), whenever shareholders meeting the qualifications set forth in Section 16(c) seek the opportunity to communicate with other shareholders with a view toward requesting a meeting. The Registrant on behalf of Fidelity Growth & Income Portfolio, Fidelity OTC Portfolio, Fidelity Blue Chip Growth Fund, and Fidelity Dividend Growth Fund undertakes, provided the information required by Item 5A is contained in the annual report, to furnish each person to whom a prospectus has been delivered, upon their request and without charge, a copy of the Registrant's latest annual report to shareholders. The Registrant on behalf of Fidelity Growth & Income Portfolio, Fidelity OTC Portfolio, Fidelity Blue Chip Growth Fund, and Fidelity Dividend Growth Fund undertakes to deliver to each person who has received the prospectus or annual or semiannual financial report for the fund in an electronic format, upon his or her request and without charge, a paper copy of the prospectus or annual or semiannual report for the fund. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for the effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 33 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, and Commonwealth of Massachusetts, on the 14th day of September 1995. FIDELITY SECURITIES FUND By /s/Edward C. Johnson 3d (dagger) Edward C. Johnson 3d, President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. (Signature) (Title) (Date)
/s/Edward C. Johnson 3d(dagger) President and Trustee September 14, 1995 Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber Treasurer September 14, 1995 Kenneth A. Rathgeber /s/J. Gary Burkhead Trustee September 14, 1995 J. Gary Burkhead /s/Ralph F. Cox * Trustee September 14, 1995 Ralph F. Cox /s/Phyllis Burke Davis * Trustee September 14, 1995 Phyllis Burke Davis /s/Richard J. Flynn * Trustee September 14, 1995 Richard J. Flynn /s/E. Bradley Jones * Trustee September 14, 1995 E. Bradley Jones /s/Donald J. Kirk * Trustee September 14, 1995 Donald J. Kirk /s/Peter S. Lynch * Trustee September 14, 1995 Peter S. Lynch /s/Edward H. Malone * Trustee September 14, 1995 Edward H. Malone /s/Marvin L. Mann * Trustee September 14, 1995 Marvin L. Mann /s/Gerald C. McDonough* Trustee September 14, 1995 Gerald C. McDonough /s/Thomas R. Williams * Trustee September 14, 1995 Thomas R. Williams (dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of attorney dated December 15, 1994 and filed herewith. * Signature affixed by Robert C. Hacker pursuant to a power of attorney dated December 15, 1994 and filed herewith. POWER OF ATTORNEY We, the undersigned Directors, Trustees or General Partners, as the case may be, of the following investment companies:
Fidelity Advisor Annuity Fund Fidelity Income Fund Fidelity Advisor Series I Fidelity Institutional Trust Fidelity Advisor Series II Fidelity Investment Trust Fidelity Advisor Series III Fidelity Magellan Fund Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust Fidelity Advisor Series VI Fidelity Municipal Trust Fidelity Advisor Series VII Fidelity New York Municipal Trust Fidelity Advisor Series VIII Fidelity Puritan Trust Fidelity California Municipal Trust Fidelity School Street Trust Fidelity Capital Trust Fidelity Securities Fund Fidelity Charles Street Trust Fidelity Select Portfolios Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P. Fidelity Congress Street Fund Fidelity Summer Street Trust Fidelity Contrafund Fidelity Trend Fund Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities Fidelity Deutsche Mark Performance Fund, L.P. Portfolio, L.P. Fidelity Union Street Trust Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P. Fidelity Exchange Fund Spartan U.S. Treasury Money Market Fidelity Financial Trust Fund Fidelity Fixed-Income Trust Variable Insurance Products Fund Fidelity Government Securities Fund Variable Insurance Products Fund II Fidelity Hastings Street Trust
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individuals serve as Board Members (collectively, the "Funds"), hereby severally constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Djinis, each of them singly, our true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for us and in our names in the appropriate capacities, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in our names and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS our hands on this fifteenth day of December, 1994. /s/Edward C. Johnson 3d /s/Donald J. Kirk Edward C. Johnson 3d Donald J. Kirk /s/J. Gary Burkhead /s/Peter S. Lynch J. Gary Burkhead Peter S. Lynch /s/Ralph F. Cox /s/Marvin L. Mann Ralph F. Cox Marvin L. Mann /s/Phyllis Burke Davis /s/Edward H. Malone Phyllis Burke Davis Edward H. Malone /s/Richard J. Flynn /s/Gerald C. McDonough Richard J. Flynn Gerald C. McDonough /s/E. Bradley Jones /s/Thomas R. Williams E. Bradley Jones Thomas R. Williams POWER OF ATTORNEY I, the undersigned President and Director, Trustee or General Partner, as the case may be, of the following investment companies:
Fidelity Advisor Annuity Fund Fidelity Institutional Trust Fidelity Advisor Series I Fidelity Investment Trust Fidelity Advisor Series II Fidelity Magellan Fund Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust Fidelity Advisor Series IV Fidelity Money Market Trust Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust Fidelity Advisor Series VI Fidelity Municipal Trust Fidelity Advisor Series VII Fidelity New York Municipal Trust Fidelity Advisor Series VIII Fidelity Puritan Trust Fidelity California Municipal Trust Fidelity School Street Trust Fidelity Capital Trust Fidelity Securities Fund Fidelity Charles Street Trust Fidelity Select Portfolios Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P. Fidelity Congress Street Fund Fidelity Summer Street Trust Fidelity Contrafund Fidelity Trend Fund Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities Fidelity Destiny Portfolios Fund, L.P. Fidelity Deutsche Mark Performance Fidelity Union Street Trust Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P. Fidelity Devonshire Trust Spartan U.S. Treasury Money Market Fidelity Exchange Fund Fund Fidelity Financial Trust Variable Insurance Products Fund Fidelity Fixed-Income Trust Variable Insurance Products Fund II Fidelity Government Securities Fund Fidelity Hastings Street Trust Fidelity Income Fund
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as President and Board Member (collectively, the "Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true and lawful attorney-in-fact, with full power of substitution, and with full power to sign for me and in my name in the appropriate capacity, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorney-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS my hand on the date set forth below. /s/Edward C. Johnson 3d December 15, 1994 Edward C. Johnson 3d EX-99.B6 2 Exhibit 6(c) GENERAL DISTRIBUTION AGREEMENT between FIDELITY SECURITIES FUND: FIDELITY BLUE CHIP GROWTH FUND and FIDELITY DISTRIBUTORS CORPORATION Agreement made this 17th day of December, 1987, by and between Fidelity Securities Fund, a Massachusetts business trust which may issue one or more series of beneficial interest ("Issuer"), with respect to shares of Fidelity Blue Chip Growth Fund, 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 the Distributor 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: the Distributor (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"). 2. Sale of Shares by the Issuer - The rights granted to the Distributor 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 the Distributor 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, plus a sales charge (if any) 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, the Distributor 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 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 the Distributor except such unconditional orders as may have been placed with the Distributor before it had knowledge of the suspension. In addition, the Issuer reserves the right to suspend sales and the Distributor's 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. 6. Solicitation of Sales - In consideration of these rights granted to the Distributor, the Distributor agrees to use all reasonable efforts, consistent with its other business, to secure purchasers for shares of the Issuer. This shall not prevent the Distributor from entering into like arrangements (including arrangements involving the payment of underwriting commissions) with other issuers. This does not obligate the Distributor 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, the Distributor 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 - The Distributor 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 the Distributor's use. This shall not be construed to prevent the Distributor 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 the Distributor, and the Distributor may participate directly or indirectly in brokerage commissions or "spreads" for transactions in portfolio securities of the Issuer. However, all sums of money received by the Distributor as a result of such purchases and sales or as a result of such participation must, after reimbursement of actual expenses of the Distributor in connection with such activity, be paid over by the Distributor for the benefit 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 the Distributor may reasonably be expected to sell. The Issuer shall make available to the Distributor such number of copies of its currently effective Prospectus and Statement of Additional Information as the Distributor may reasonably request. The Issuer shall furnish to the Distributor copies of all information, financial statements and other papers which the Distributor 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 issue 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 sale (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 the 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. 11. Indemnification - The Issuer agrees to indemnify and hold harmless the Distributor and each of its directors and officers and each person, if any, who controls the Distributor 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 the Distributor 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 the Distributor. In no case (i) is the indemnity of the Issuer in favor of the Distributor or any person indemnified to be deemed to protect the Distributor or any person against any liability to the Issuer or its security holders to which the Distributor 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 the Distributor or any person indemnified unless the Distributor 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 the Distributor or any such person (or after the Distributor 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 the Distributor 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 claims, but if the Issuer elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to the Distributor 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, the Distributor, 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 the Distributor, 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 the Distributor 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. The Distributor 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 (including the reasonable cost of investigating or defending any alleged 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 the Distributor 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 the Distributor. In no case (i) is the indemnity of the Distributor in favor of 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 the Distributor 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 the Distributor 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 the Distributor of any claim shall not relieve the Distributor 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 the Distributor, 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 enforce the claim, but if the Distributor 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 the Distributor elects to assume the defense of any suit and retain counsel, the Issuer or controlling persons, defendant or defendants in the suit, shall bear the fees and expense of any additional counsel retained by them. If the Distributor 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. The Distributor agrees to notify the Issuer promptly of the commencement of any litigation or proceedings against it in connection with the issue 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 January 31, 1988 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 82 Devonshire Street, Boston, Massachusetts, and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts. 14. Limitation of Liability - The Distributor is expressly put on notice of the limitation of shareholder liability as set forth in the Declaration of Trust 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. The Distributor shall not seek satisfaction of any such obligation from the shareholders or any shareholder of the Issuer. Nor shall the Distributor seek satisfaction of any such obligation from the Trustees or any individual Trustee of the Issuer. The Distributor understands that the rights and obligations of each series of shares of the Issuer under the Issuer's Declaration of Trust are separate and distinct from those of any and all other series. 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. FIDELITY SECURITIES FUND: FIDELITY BLUE CHIP GROWTH FUND Attest: /s/ Arthur S. Loring By /s/ John F. O'Brien Arthur S. Loring John F. O'Brien Secretary FIDELITY DISTRIBUTORS CORPORATION Attest: /s/ Arthur S. Loring By /s/ John F. O'Brien Arthur S. Loring John F. O'Brien Clerk EX-99.B11 3 Exhibit 11 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference, into the Prospectuses and Statements of Additional Information in Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A of Fidelity Securities Fund: Fidelity OTC Portfolio, Fidelity Growth & Income Portfolio, and Fidelity Blue Chip Growth Fund of our reports dated September 1, 1995 on the financial statements and financial highlights included in the July 31, 1995 Annual Reports to Shareholders, and of our report dated August 31, 1995 on the financial statements and financial highlights included in the July 31, 1995 Annual Report to Shareholders of Fidelity Dividend Growth Fund. We further consent to the references to our Firm under the headings "Financial Highlights" in the Prospectuses and "Auditor" in the Statements of Additional Information. /s/COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. Boston, Massachusetts September 12, 1995 EX-99.B14 4 Exhibit 14(c) FIDELITY DEFINED CONTRIBUTION RETIREMENT PLAN AND TRUST AGREEMENT Article I. Introduction 17 Article 2. Definitions 17 2.1 "Account" or "Accounts" 17 2.2 "Adoption Agreement" 17 2.3 "Affiliated Employer" 17 2.4 "Break in Service" 17 2.5 "Business" 17 2.6 "Code" 17 2.7 "Compensation" 17 2.8 "Earned Income" 17 2.9 "Earnings" 17 2.10 "Effective Date" 17 2.11 "Employee" 17 2.12 "Employer" 17 2.13 "Employer Contribution Account" 17 2.14 "Hour of Service" 17 2.15 "Insurance Contract" 18 2.16 "Life Insurance Policy" 18 2.17 "Owner-Employee" 18 2.18 "Participant" 18 2.19 "Participant Contribution Account" 18 2.20 "Plan Year" 18 2.21 "Prototype Plan" 18 2.22 "Registered Investment Company" 18 2.23 "Self-Employed Individual" 18 2.24 "Sponsor" 18 2.25 "Trust" 18 2.26 "Years of Service" 18 Article 3. Participation 18 3.1 General Rule 18 3.2 Special Rule for Former Participants 19 3.3 Owner-Employee as Participant: Multiple Businesses 19 3.4 Participation in Employer Contributions 19 Article 4. Contributions 19 4.1 Contributions by the Employer 19 4.2 Time and Manner of Employer Contributions 19 4.3 Vesting 20 4.4 Contributions by Participants 20 Article 5. Investment of Contributions 20 5.1 Direction by Participant 20 5.2 Investments 20 5.3 Reinvestment of Earnings 20 Article 6. Payment of Benefits 21 6.1 Retirement of Termination Benefits 21 6.2 Death Benefits; Designation of Beneficiary 21 6.3 Manner of Distribution 21 6.4 Restriction on Immediate Distributions 21 6.5 Special Rules for Annuity Contracts 22 6.6 Distribution Procedure 22 6.7 Claims 22 6.8 Appeal and Review 22 Article 7. Joint and Survivor Annuity Requirements 22 7.1 Applicability 22 7.2 Qualified Joint and Survivor Annuity 23 7.3 Qualified Preretirement Survivor Annuity 23 7.4 Definitions 23 7.5 Notice Requirements 23 Article 8. Minimum Distribution Requirements 24 8.1 General Rules 24 8.2 Required Beginning Date 24 8.3 Limits on Distribution Periods 24 8.4 Determination of Amount to be Distributed Each Year 24 8.5 Death Distribution Provisions 25 Article 9. Life Insurance Policies 25 9.1 Purchase of Life Insurance Policies 25 9.2 Distributions with Respect to Life Insurance Policies 26 Article 10. Amendment and Termination 26 10.1 Sponsor's Right to Amend 26 10.2 Employer's Right to Amend 26 10.3 Certain Amendments Prohibited 26 10.4 Termination of the Plan and Trust 26 10.5 Procedure Upon Termination of Trust 26 Article 11. Miscellaneous 26 11.1 Status of Participants 26 11.2 Administration and Enforcement 27 11.3 Transfers and Rollovers 27 11.4 Condition of Plan and Trust Agreement 27 11.5 Inalienability of Benefits 27 11.6 Governing Law 27 11.7 Merger or Consolidation of Plan 27 11.8 Failure of Qualification 27 11.9 Leased Employees 27 11.10 Changes in Vesting Schedule 28 Article 12. Limitations on Allocations 28 12.1 Definitions 28 12.2 Participation Only in This Plan 29 12.3 Participation in Additional Prototype Defined Contribution Plan 29 12.4 Participation in Other Defined Contribution Plans 30 12.5 Participation in Defined Benefit Plan 30 Article 13. Rights and Duties of Trustee 30 13.1 Establishment of Trust Fund 30 13.2 Exclusive Benefit 30 13.3 Reports of the Trustee and the Employer 30 13.4 Fees and Expenses of the Trust 31 13.5 Limitation of Duties and Liabilities 31 13.6 Substitution, Resignation, or Removal of Trustee 31 Article 14. Transitional Rules 31 14.1 Applicability 31 14.2 Joint and Survivor Annuity Rules 31 14.3 Certain Distributions 32 Article 1. Introduction By executing the Adoption Agreement the Employer has established a retirement plan (the "Plan") governed by the Adoption Agreement and this Plan and Trust Agreement. The purpose of the Plan is to create a retirement fund intended to help provide for the future security of the Participants and their beneficiaries. Article 2. Definitions As used in this Plan the following terms shall have the meanings set forth below: 2.1 "Account" or "Accounts" shall mean, with respect to any Participant, the aggregate of his Employer Contribution Account and Participant Contribution Account. 2.2 "Adoption Agreement" shall mean the original Application executed by the Employer and any amendment thereto. 2.3 "Affiliated Employer" shall mean the Employer and a trade or business, whether or not incorporated, which is any of the following: (a) a member of a group of controlled corporations (within the meaning of Section 414(b) of the Code) which includes the Employer; or (b) a trade or business under common control (within the meaning of Section 414(c) of the Code) with the Employer; or (c) a member of an affiliated service group (within the meaning of Section 414(m) of the Code) which includes the Employer; or (d) an entity otherwise required to be aggregated with the Employer pursuant to Section 414(o) of the Code. In determining service for eligibility to participate in the Plan, all employees of Affiliated Employers will be treated as employed by a single employer. 2.4 "Break in Service" shall mean a period of 12 consecutive months, commencing on the date on which an individual first performs an Hour of Service or on any anniversary thereof, during which he is not credited with more than 500 Hours of Service. 2.5 "Business" shall mean the trade or business of any Employer which is not a corporation. 2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor provisions of law. 2.7 "Compensation" shall mean all of a Participant's earnings which are reported on Internal Revenue Service Form W-2, excluding deferred compensation, but increased by amounts withheld under a salary reduction agreement in connection with a cafeteria plan under Section 125 of the Code, a cash or deferred plan under Section 401(k) of the Code, a simplified employee pension under Section 408(k) of the Code, or a tax-deferred annuity under Section 403(b) of the Code. If the Plan is adopted as an amendment to an existing plan, the definition in this Section 2.7 is effective as of the first day of the Plan Year in which the Plan is adopted. 2.8 "Earned Income" shall mean the net earnings from self-employment derived by a Self-Employed Individual from the Business with respect to which the Plan is established, for which personal services of the individual are a material income-producing factor, excluding items not included in gross income and the deductions allocated to such items; and reduced by (i) contributions by the Employer to qualified plans, to the extent deductible under Section 404 of the Code, and (ii) any deduction allowed to the Employer under Section 164(f) of the Code for taxable years beginning after December 31, 1989. 2.9 "Earnings" shall mean the first $200,000 (as adjusted by the Secretary at the same time and in the same manner as prescribed under Section 415(d) of the Code) of the sum of the Compensation and the Earned Income received by each Participant during a Plan Year. In determining the Earnings of a Participant, the rules of Section 414(q)(6) of the Code shall apply, but in applying those rules the term "family" shall include only the Participant's spouse and the Participant's lineal descendants who have not reached age 19 by the last day of the Plan Year. If, as a result of the application of such rules, the adjusted $200,000 limitation is exceeded, then (except for purposes of determining the portion of Earnings up to the integration level if this Plan provides for permitted disparity), the limitation shall be prorated among the affected individuals in proportion to each such individual's Earnings as determined under this Section 2.9 prior to the application of this limitation. 2.10 "Effective Date" shall mean the date specified in the Adoption Agreement. If the Adoption Agreement indicates that the Employer is adopting the Plan as an amendment to an existing plan, the provisions of the existing plan apply to all events preceding the Effective Date, except as to specific provisions of the Plan, which set forth a retroactive effective date in accordance with Section 1140 of the Tax Reform Act of 1986. 2.11 "Employee" shall mean (i) a common law employee of an Affiliated Employer; (ii) in the case of an Affiliated Employer, which is a sole proprietorship, the sole proprietor thereof; (iii) in the case of an Affiliated Employer, which is a partnership, a partner thereof; and (iv) any individual treated as an employee of an Affiliated Employer under the "leased employee" rules in Section 11.9 of the Plan. The term "Employee" shall include a Self-Employed Individual and an Owner-Employee, but for purposes of participation in accordance with Section 3.1 shall exclude (i) any individual who is a nonresident alien receiving no earned income from an Affiliated Employer which constitutes income from sources within the United States, and (ii) any individual included in a unit of employees covered by a collective bargaining agreement as to which retirement benefits were the subject of good faith bargaining. For this purpose, the term "unit of employees" does not include any organization of which more than half the members are employees who are owners, officers, or executives of the Employer. 2.12 "Employer" shall mean the Employer named in the Adoption Agreement, and any successor thereto. 2.13 "Employer Contribution Account" shall mean an account established on the books of the Trust for the purpose of recording the Employer contributions made on behalf of a Participant and any income, expenses, gains, or losses incurred thereon. 2.14 "Hour of Service" shall mean: (a) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for an Affiliated Employer. These hours shall be credited to the Employee for the computation period or periods in which the duties are performed. (b) Each hour for which an Employee is paid, or entitled to payment, by an Affiliated Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), jury duty, military duty, layoff, or leave of absence; provided, however, that no more than 501 Hours of Service shall be credited under this Paragraph (b) to an Employee on account of any single continuous period during which the Employee performs no services (whether or not such period occurs in a single Plan Year or other computation period). Hours under this paragraph shall be calculated and credited pursuant to Section 2530.200b-2(b) and (c) of the Department of Labor regulations, which are incorporated herein by this reference; and (c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Affiliated Employer; provided, however, that the same Hours of Service shall not be credited under both Paragraph (a) above and this Paragraph (c), and provided, further, that no more than 501 Hours of Service shall be credited under this Paragraph (c) with respect to payments of back pay, to the extent that such back pay is agreed to or awarded for a period of time described in Paragraph (b) above, during which the Employee did not or would not have performed any duties. These hours shall be credited to the Employee for the computation period or periods to which the award or payment pertains, rather than the computation period in which the award, agreement, or payment is made. Hours of Service will be credited to leased employees in accordance with Section 11.9. If the Employer maintains the plan of a predecessor employer, Hours of Service will be credited for service with such predecessor employer. An Employee who is absent from work on account of pregnancy of the Employee, or of the birth of a child of the Employee, or adoption of a child by the Employee, or for purposes of caring for a newborn or newly adopted child, shall be credited during such absence with the number of Hours of Service that would normally have been credited to him but for such absence (or, if the number just described cannot be determined, with eight Hours of Service per day of such absence); provided, however, that no more than 501 Hours of Service shall be credited with respect to any such pregnancy, birth, or adoption; and provided, further, that Hours of Service shall be credited under this sentence solely for the purpose of determining whether an Employee has incurred a Break in Service. The Employee must furnish to the Employer such information as shall be reasonably required to establish the reason for an absence and the number of days for which the absence continued. Hours of Service credited in accordance with the preceding sentence shall be credited for the computation period (determined under Section 2.26) in which the absence begins, if necessary to prevent the Employee from incurring a Break in Service in such period, or if not, in the period following the period in which the absence begins. 2.15 "Insurance Contract" shall mean a guaranteed investment contract, a fixed or variable annuity contract, or other investment product issued by an insurance company and approved by the Sponsor as an investment medium under the Plan, provided that (i) an Insurance Contract shall contain no life insurance element, (ii) the mode or modes of distribution of funds under an Insurance Contract shall in all events be subject to the direction of the Trustee in accordance with Section 9.2, and (iii) an Insurance Contract held under the Plan shall be convertible to any extent necessary for compliance with Section 6.4. 2.16 "Life Insurance Policy" shall have the meaning set forth in Section 9.1. 2.17 "Owner-Employee" shall mean the sole proprietor, if the Employer is a sole proprietorship, or a partner who owns more than 10% of either the capital interest or the profits interest, if the Employer is a partnership. 2.18 "Participant" shall mean an Employee who has met the requirements of Section 3.1 or Section 3.2. 2.19 "Participant Contribution Account" shall mean an account established on the books of the Trust for the purpose of recording the contributions made by a Participant and any income, expenses, gains, or losses incurred thereon. 2.20 "Plan Year" shall be the period of 12 consecutive months designated by the Employer in the Adoption Agreement. 2.21 "Prototype Plan" shall mean the form of the Plan, as approved from time to time by the Internal Revenue Service. 2.22 "Registered Investment Company" shall mean any one or more corporations or trusts registered under the Investment Company Act of 1940 and approved by the Sponsor for use under the Plan for which Fidelity Management & Research Company or any of its successors or affiliates serves as investment advisor, and any other such entity as is acceptable to the Trustee in its sole discretion; and "Registered Investment Company Shares" shall mean the shares, trust certificates, or other evidences of ownership in any such Registered Investment Company. 2.23 "Self-Employed Individual" shall mean an individual whose personal services are a material income-producing factor in the Business and who has Earned Income from the Business (or would have had such Earned Income if the Business had net profits) for the taxable year, including a partner or a sole proprietor. 2.24 "Sponsor" shall mean Fidelity Management & Research Company, a Massachusetts corporation, or its successor. 2.25 "Trust" shall mean the trust fund established under Section 13.1, and "Trustee" shall mean the Trustee named in the Adoption Agreement or any successor to such Trustee. 2.26 "Year of Service" shall mean a period of 12 consecutive months, commencing on the date on which an individual first performs an Hour of Service or on any anniversary thereof, during which he is credited with at least 1,000 Hours of Service; except that in the case of an Employee who returns to service with the Employer after having incurred a Break in Service, the period of 12 consecutive months shall commence on the date on which he first performs an Hour of Service after the Break in Service, and each anniversary thereof. Article 3. Participation 3.1 General Rule. Each Employee shall become a Participant on the first day of the calendar month in which he first fulfills the age and service requirements specified by the Employer in the Adoption Agreement. If the Employer has specified that the number of Years of Service required for eligibility shall not be interrupted, then an Employee who incurs a Break in Service before completing the required number of Years of Service shall not thereafter be credited with any Year of Service completed prior to the Break in Service. If the Employer has specified that the number of Years of Service required for eligibility may be interrupted, then an Employee who incurs a Break in Service before completing the required number of Years of Service shall continue to be credited with Years of Service completed before the Break in Service. If the Employer has specified a fractional part of a Year of Service, an Employee shall not be required to complete any specified number of Hours of Service in order to receive credit for a fractional part of a Year of Service. In the event a Participant is no longer a member of an eligible class of Employees and becomes ineligible to participate but has not incurred a Break in Service, such Employee will participate immediately upon returning to an eligible class of Employees. If such a Participant incurs a Break in Service, eligibility will be determined under the Break in Service rules of this Section 3.1. In the event an Employee who is not a member of an eligible class of Employees becomes a member of an eligible class, such Employee will participate immediately if such Employee has satisfied the minimum age and service requirements and would have otherwise previously become a Participant. 3.2 Special Rule for Former Participants. A former Participant whose employment with the Employer terminates shall again become a Participant on the day on which he first performs an Hour of Service for the Employer after such termination. 3.3 Owner-Employee as Participant: Multiple Businesses. If the Plan provides contributions or benefits for one or more Owner-Employees who control both the Business and one or more other trades or businesses, the Plan and the plans established with respect to such other trades or businesses must, when looked at as a single plan, satisfy Sections 401(a) and (d) of the Code with respect to the employees (which term shall include an employee within the meaning of Section 401(c)(1) of the Code) of the Employer and all such other trades or businesses. If this Plan provides contributions or benefits for one or more Owner-Employees who control one or more other trades or businesses, the employees of each such other trade or business must be included in a plan that satisfies Sections 401(a) and (d) of the Code and that provides contributions and benefits not less favorable than those provided for such Owner-Employees under this Plan. If an individual is covered as an Owner-Employee under the plans of two or more trades or businesses that are not controlled and the individual controls a trade or business, then the contributions or benefits of the employees under the plan of the trades or businesses that are controlled must be as favorable as those provided for him under the most favorable plan of the trade or business that is not controlled. For purposes of this Section 3.3, an Owner-Employee, or two or more Owner-Employees, shall be considered to control a trade or business if such Owner-Employee, or such two or more Owner-Employees together: (a) own the entire interest in an unincorporated trade or business, or (b) in the case of a partnership, own more than 50 percent of either the capital interest or the profits interest in such partnership. For this purpose, an Owner-Employee or a group of Owner-Employees shall be treated as owning any interest in a partnership that is owned, directly or indirectly, by a partnership controlled by him or them within the meaning of the preceding sentence. 3.4 Participation in Employer Contributions. The Employer's contribution to the Plan for any Plan Year shall be allocated in accordance with Section 4.1 among the Employer Contribution Accounts of all Participants who are active Employees on the last day of the Plan Year, or who are credited with more than 500 Hours of Service during the Plan Year, or who left employment during the Plan Year on account of death, total disability, or attainment of age 59 1/2 or older. Article 4. Contributions 4.1 Contributions by the Employer. Subject to the requirements and limitations contained in this Article 4 and in Article 12, for each Plan Year beginning with the Plan Year in which the Effective Date falls the Employer shall make a contribution to the Trust in the amount determined under the following rules. (a) Profit Sharing Plans. In the case of a profit sharing plan, the contribution shall be a discretionary amount determined by the Employer, not to exceed the amount deductible under Section 404 of the Code. Contributions for any Plan Year shall be allocated as of the last day of the Plan Year among the Employer Contribution Accounts of the Participants in the ratio that each Participant's Earnings bears to the Earnings of all Participants; provided, however, that if the Employer has selected in the Adoption Agreement an allocation formula integrated with Social Security, contributions shall instead be allocated in accordance with the following formula: (1) Contributions shall first be allocated among the Accounts of Participants in the ratio that each Participant's Earnings bears to the aggregate Earnings of all Participants. The total amount allocated in this manner shall be equal to at least 3% of all Participants' Earnings, or (if less) the total amount of the Employer contribution. The amount allocated under this paragraph (1) shall be designated the "Base Contribution Percentage." (2) Contributions shall next be allocated among the Accounts of Participants in the ratio that each Participant's Earnings in excess of the taxable wage base (that is, the amount that may be considered "wages" under Section 3121(a)(1) of the Internal Revenue Code) bears to the aggregate of such Earnings of all Participants. The total amount to be allocated in this manner shall not exceed the product of (i) all Participants' Earnings in excess of the taxable wage base and (ii) the lesser of the Base Contribution Percentage or 5.7% (or such other tax rate as may be in effect for employer contributions to old age insurance under the Social Security Act). Both the taxable wage base and the Social Security old age insurance tax rate shall be those in effect on the first day of the Plan Year. (3) Contributions shall next be allocated among the Accounts of Participants (whether or not they received an allocation under the preceding paragraph) in the ratio that each Participant's Earnings bears to the aggregate Earnings of all Participants. (b) Money Purchase Pension Plans. In the case of a money purchase pension plan, the contribution to be made and allocated to the Employer Contribution Account of each Participant shall be the amount specified in the Adoption Agreement, but in no event more than the amount deductible under Section 404 of the Code. (c) Paired Plans. An Employer that adopts paired Profit Sharing and Money Purchase Pension plans using this basic plan document must specify in the Adoption Agreement for one of the plans a contribution rate of no less than 3% of each Participant's Earnings. Only one of the paired plans may be integrated with Social Security. Fidelity Profit Sharing Plan #001 may be paired with Fidelity Money Purchase Pension Plan #002, and Fidelity Profit Sharing Plan #003 may be paired with Fidelity Money Purchase Pension Plan #004. 4.2 Time and Manner of Employer Contributions. Employer contributions for a Plan Year shall be remitted to the Trustee not later than the due date (including extensions) prescribed by law for filing the Employer's federal income tax return for the fiscal year coinciding with such Plan Year. Each contribution shall be accompanied by written instructions specifying (i) the amount thereof that constitutes an Employer contribution and the names of the Participants who are entitled to participate in such contribution and (ii) the amount thereof that constitutes Participants' contributions and the names of the Participants by whom such contributions were made. If proper written instructions are not received, the Trustee shall hold the contribution unallocated, and invested in shares of the "money market" Registered Investment Company specified in the Adoption Agreement, without liability for rising security prices or distributions, pending receipt of written instructions or clarification. Each such contribution shall also be accompanied by investment instructions pursuant to Section 5.1. The Trustee shall have no responsibility for determining the correctness of the amount or timing of any contribution, or for the collection of any contribution if the Employer should fail to make contributions as provided in the Plan. 4.3 Vesting. A Participant's interest in his Accounts shall immediately become and at all times remain fully vested and non-forfeitable. 4.4 Contributions by Participants. Participants may not make contributions to the Plan. If the Plan is adopted as an amendment of an existing plan that permitted employees to make nondeductible contributions for any Plan Year beginning after December 31, 1986, such contributions in any such Plan Year may not exceed the maximum allowed under the nondiscrimination test contained in Code Section 401(m)(2). Any Plan that has accepted nondeductible employee contributions must maintain Participant Contribution Accounts so long as any amounts attributable to such contributions remain in the Trust Fund. Subject to Article 7, a Participant may at any time withdraw amounts credited to his Participant Contribution Account by submitting to the Trustee, through the Employer, a written request specifying the amount to be withdrawn (which shall not be less than $100, unless the entire amount credited is less than $100, in which case the entire amount credited must be withdrawn). Payment of such withdrawals shall be made within 30 days of the Trustee's receipt of such a request. Except to the extent that such withdrawals are made, a Participant's Participant Contribution Account shall be distributable at the same time and in the same manner as his Employer Contribution Account. Article 5. Investment of Contributions 5.1 Direction by Participant. Each Participant will determine the manner in which contributions allocated to his Account are to be invested or reinvested, by providing specific instructions in a form and manner acceptable to the Trustee. An investment medium must be approved by the Trustee in order to be available under the Plan. In the event that at any time there shall be credited to a Participant's Account cash for which no such instructions have been furnished, or for which the instructions furnished are unclear to the Trustee, or for which the instructions furnished would require investment in a medium not approved by the Sponsor for use under the Plan, such cash shall be invested in shares of the "money market" Registered Investment Company designated in the Participant's initial written investment instructions (or, if the Participant has never provided written instructions, in the Adoption Agreement); provided, however, that a balance of up to $100 of uninvested cash may be maintained in a Participant's Account for administrative convenience. While any balance remains in the Account of a deceased Participant, the beneficiary of the deceased Participant (as determined in accordance with Section 6.2) shall direct the investment of the Account as though the beneficiary were the Participant. The Trustee shall have no duty to question the directions of a Participant in the investment of his Account or to advise him regarding the purchase, retention or sale of assets credited to his Account, nor shall the Trustee be liable for any loss which results from the Participant's exercise of control over his Account. The Trustee may designate one or more corporations affiliated with the Trustee as its agent or agents for the purpose of receiving Participants' investment instructions. 5.2 Investments. Subject to such reasonable and nondiscriminatory rules, limits and procedures as the Trustee or Employer may establish from time to time to facilitate administration of the Plan, all contributions under the Plan shall be invested and reinvested in one or more of the following, as directed by the Participant: (a) Registered Investment Company Shares; (b) marketable securities obtainable over the counter or on a recognized securities exchange or directly from a Registered Investment Company; (c) Insurance Contracts; (d) deposits bearing a reasonable rate of interest and maintained by the Trustee or by any bank acceptable to the Trustee; (e) Life Insurance Policies meeting the terms and conditions of Article 9; or (f) any other investment medium permitted by the Trustee from time to time. Any other provision hereof to the contrary notwithstanding, a Participant may not direct that any part or all of an Account be invested in assets other than Registered Investment Company Shares unless the aggregate amount which the Participant (or following the death of the Participant, his beneficiary) proposes to invest in such assets is at least such amount as the Trustee shall establish from time to time. The Trustee may require any Account which is invested in assets other than Registered Investment Company Shares to maintain an investment of not more than $500 in shares of the "money market" Registered Investment Company designated by the Participant in his written investment instructions, in order to provide a medium for investing available cash pending other instructions and for convenience in collecting fees and expenses from the Account. Commissions and other costs attributable to the acquisition of an investment shall be charged to the Account of the Participant for which such investment is acquired. No charge shall be made for purchase or sale of stock of a Registered Investment Company managed by Fidelity Management & Research Company, other than the charges set forth in the most recent prospectus of such Registered Investment Company. A Participant may, by delivery of specific instructions, purchase an option or direct that covered call options be written on securities held in his Account. Such covered call instructions must specify the number and identity of shares to which the option applies, the term of the option, and the option price. Any assets of the Plan may be held in the name of the Trustee or its nominee or nominees, and any assets so held may be commingled with other such assets registered in that name, whether or not held under similar Trust Agreements or in any fiduciary capacity whatsoever; provided, however, that the books of the Trustee shall at all times reflect the identity of the beneficial owners of such assets. The Trustee shall cause to be delivered to each Participant, at the Employer's address, all notices, prospectuses, financial statements, proxies and proxy-soliciting materials relating to assets held in his Account. The Trustee shall not vote or exercise any other rights with respect to any assets held hereunder except in accordance with the written instructions of the Participant for whose Account such assets are held. 5.3 Reinvestment of Earnings. Except as provided in Article 9, all dividends, capital gains, income, interest and distributions of every nature received in respect of the assets in a Participant's Account shall be reinvested as follows: (a) a distribution of any nature received in respect of Registered Investment Company Shares shall be reinvested in additional shares of that Registered Investment Company; (b) any other distribution of any nature received in respect of assets in the Account shall be invested as provided in Section 5.1. Assets of the Plan shall be valued, at their fair market value, on each December 31 and on such other dates as the Trustee considers necessary or convenient. The income, gains, expenses and losses attributable to a Participant's Account shall be credited or debited, as applicable, to his Account alone. Article 6. Payment of Benefits 6.1 Retirement or Termination Benefits. A Participant shall become entitled to benefits under the Plan, in an amount equal to the combined credit balance of his Accounts at the time of payment, when he (i) reaches age 59 1/2 ("Normal Retirement Age") or (ii) terminates his service with the Employer (whether before or after he reaches Normal Retirement Age). Payment of benefits to such a Participant must commence within 60 days after the end of the Plan Year in which the Participant reaches Normal Retirement Age or terminates his service with the Employer, whichever is later; provided, however, that: (a) a Participant shall file a claim for benefits with the Employer, specifying the manner of distribution in accordance with Section 6.3, and the date on which payment is to commence; and (b) a Participant may elect to postpone the commencement of benefits to any date which satisfies the requirements of this Article 6 and Article 7. For purposes of this Section 6.1, the failure of a Participant (and his spouse, if spousal consent is required pursuant to Article 7) to consent to a distribution while a benefit is "immediately distributable" within the meaning of Section 6.4 shall be considered an election to postpone the commencement of payment. 6.2 Death Benefits; Designation of Beneficiary. Subject to Section 7.3, the beneficiary of a deceased Participant who had received no distribution of benefits before his death shall be entitled to benefits under the Plan, in an amount equal to the combined credit balance of the deceased Participant's Accounts at the time of payment, commencing within 60 days after the end of the Plan Year in which the Participant dies; provided, however, that: (a) a beneficiary shall file a claim for benefits with the Trustee, specifying the is to commence; manner of distribution in accordance with Section 6.3, and the date on which payment (b) a beneficiary who is the surviving spouse of a deceased Participant may elect to have benefits commence within the 90-day period following the date of the Participant's death; and (c) a beneficiary may elect to postpone the commencement of benefits to any date which satisfies the requirements of this Article 6, Article 7 and Article 8. In the case of a Participant who dies after having begun to receive a distribution of benefits in installments under Section 6.3(b), distribution of installments shall continue after his death to his beneficiary in accordance with Section 8.5(a). In the case of a Participant who dies after having received a distribution under Section 6.3(a), (c), or (d), no death benefit shall be payable from the Plan. A Participant may designate a beneficiary by completing and returning to the Trustee a form provided for this purpose. The form most recently completed and returned to the Trustee before the Participant's death shall supersede any earlier form. If no form has been filed with the Trustee before the death of a Participant, his beneficiary shall be the person(s) designated in a form filed with the Plan Administrator before the Participant's death and before March 1, 1990. If a Participant has not designated any beneficiary by filing a form with the Trustee or the Plan Administrator before his death, or if no beneficiary so designated survives the Participant, his beneficiary shall be his surviving spouse, or if there is no surviving spouse, his estate. A married Participant may designate a beneficiary other than his spouse only if his spouse consents in writing to the designation, and the spouse's consent acknowledges the effect of the consent and is witnessed by a notary public or a representative of the Plan. The preceding sentence shall apply to any change in the beneficiary or beneficiaries named in a designation to which the spouse has consented, unless the terms of the spouse's original written consent expressly permit such a change, and acknowledge that the spouse voluntarily relinquishes the right to limit the consent to a specific beneficiary. The marriage of a Participant shall nullify any designation of a beneficiary previously executed by the Participant. If it is established to the satisfaction of the Plan Administrator that the Participant has no spouse or that the spouse cannot be located, the requirement of spousal consent shall not apply. Any spousal consent obtained pursuant to this Section 6.2, and any decision of the Plan Administrator that the consent of a spouse cannot be obtained, shall apply only with respect to the particular spouse involved. 6.3 Manner of Distribution. Subject to the rules of Article 7 concerning joint and survivor annuities, benefits shall be distributed in one or more of the following forms, as designated in writing by the Participant or beneficiary: (a) a lump sum in cash or in kind; (b) a series of substantially equal annual (or more frequent) installments, in cash or in kind, over a period that meets the requirements of Article 8; (c) a fixed or variable annuity contract, other than a life annuity contract, purchased from an insurance company; (d) a life annuity contract (with or without a period certain or guaranteed-refund feature) purchased from an insurance company. If the Plan has been adopted as an amendment of an existing plan, any other form of benefit available under that plan before its amendment shall be made available under the Plan in accordance with paragraph (c) or (d) of this Section 6.3 by the purchase from an insurance company of an annuity contract providing for payment in the desired form. Subject to Article 7, the Account balance of a Participant or beneficiary who fails to elect a manner of distribution shall be distributed in cash in accordance with paragraph (b) of this Section 6.3. 6.4 Restriction on Immediate Distributions. A Participant's Account balance is considered "immediately distributable" if any part of the Account balance could be distributed to the Participant (or his surviving spouse) before the Participant attains, or would have attained if not deceased, age 62. (a) If the value of a Participant's Account balance derived from Employer and Employee contributions exceeds ( or at the time of any prior distribution exceeded) $3,500, and the Account balance is immediately distributable, the Participant and his spouse (or where either the Participant or the spouse has died, the survivor) must consent to any such distribution, unless an exception described in paragraph (b) applies. The consent of the Participant and his spouse shall be obtained in writing within the 90-day period ending on the annuity starting date, which is the first day of the first period for which an amount is paid as an annuity (or any other form). The Plan Administrator shall notify the Participant and the spouse, no less then 30 days and no more than 90 days before the annuity starting date, of the right to defer any distribution until the Participant's sixty-second (62nd) birthday. Such notification shall include a general description of the material features of the optional forms of benefit available under the Plan and an explanation of their relative values, in a manner that would satisfy the notice requirements of Section 417(a)(3) of the Code. (b) The following exceptions to paragraph (a) apply: (1) If the exception in Section 7.1(b) (for certain profit sharing plans) applies with respect to the Participant, the spouse need not consent to the distribution of an Account balance that is immediately distributable. (2) Only the Participant need consent to a distribution in the form of a Qualified Joint and Survivor Annuity (as defined in Section 7.4(d)) while the Account balance is immediately distributable. (3) Neither the Participant's nor the spouse's consent shall be required to the extent that a distribution is required to satisfy Section 401(a)(9) or Section 415 of the Code. (4) For purposes of determining the applicability of the foregoing consent requirements to distributions made before the first day of the first Plan Year beginning after December 31, 1988, a Participant's Account balance shall not include amounts attributable to accumulated deductible employee contributions within the meaning of Section 72(o)(5)(B) of the Code. 6.5 Special Rules for Annuity Contracts. The following rules shall apply to distributions made, in whole or in part, in the form of an annuity contract: (a) Nontransferability. Any annuity contract distributed under the Plan must be nontransferable. (b) Compatibility with Plan. The terms of any annuity contract purchased and distributed by the Plan to a Participant shall comply with the requirements of this Article 6, Article 7 and Article 8. (c) Insurance Contracts. No distribution in kind shall include an Insurance Contract unless the mode of payment under the Insurance Contract meets the requirements of this Section 6.5. 6.6 Distribution Procedure. The Trustee shall make or commence distributions to or for the benefit of Participants only on receipt of a written order from the Employer certifying that a distribution of a Participant's benefits is payable pursuant to the Plan, and specifying the time, manner and amount of payment. The Trustee shall be fully protected in acting upon the written directions of the Employer in making benefit distributions, and shall have no duty to determine the rights or benefits of any person under the Plan or to inquire into the right or power of the Employer to direct any such distribution. A beneficiary designation form completed and filed in accordance with Section 6.2 shall be deemed a written order of the Employer for purposes of this Section 6.6. The Trustee shall be entitled to assume conclusively that any determination by the Employer with respect to a distribution meets the requirements of the Plan. The Trustee shall not be required to make any payment hereunder in excess of the net realizable value of the assets of the Trust at the time of such payment, nor to make any payment in cash unless the Employer has furnished written instructions as to the assets to be converted to cash for the purposes of making payment. 6.7 Claims. A Participant or beneficiary who believes he is entitled to benefits under the Plan shall complete and deliver to the Employer a written claim for benefits on a form provided by the Employer. The Employer shall respond to such a claim within 60 days either by commencement of payment of benefits or by a written notice that the claim has been denied, setting forth the reasons for the denial and citing relevant provisions of the Plan, indicating if further information is necessary or if the claimant must satisfy further conditions or requirements to qualify for benefits, and describing the procedure for appeal and review established by Section 6.8. A claimant who receives no response within 90 days may consider his claim denied, and may proceed as described in Section 6.8. 6.8 Appeal and Review. A Participant or beneficiary whose claim for benefits has been denied, either by notice of denial or by passage of time, may at any time within 90 days of such denial appeal the denial of his claim by requesting review by the Employer. Such a request shall be in writing and may be submitted by the claimant or his representative. The claimant or his representative or both may also appear personally before the Employer to submit issues and comments orally. The Employer shall issue a decision within 60 days of receipt of a written request for review (unless special circumstances, such as need for a hearing, justify delay, but in any event within 120 days of receipt of a written request for review). Such a decision shall be in writing, and shall include specific reasons for the decision, with reference to the provisions of the Plan upon which the decision is based. The Employer's decision on review shall be final and binding upon all parties. Article 7. Joint and Survivor Annuity Requirements 7.1 Applicability. (a) Generally. The provisions of Sections 7.2 through 7.5 shall generally apply to a Participant who is credited with at least one Hour of Service on or after August 23, 1984, and such other Participants as provided in Section 14.2. (b) Exception for Certain Profit Sharing Plans. The provisions of Sections 7.2 through 7.5 shall not apply to a Participant in a profit sharing plan if: (i) the Participant does not elect payment of benefits in the form of a life annuity, and (ii) on the death of the Participant, his Account Balance will be paid to his surviving spouse (unless there is no surviving spouse, or the surviving spouse has consented to the designation of another Beneficiary in a manner conforming to a Qualified Election) and the surviving spouse may elect to have distribution of the Account Balance (adjusted in accordance with Section 5.3 for gains or losses occurring after the Participant's death) commence within the 90-day period following the date of the Participant's death. (The provisions of Section 6.2 meet the requirements of clause (ii) of the preceding sentence.) The Participant may waive the spousal death benefit described in this paragraph (b) at any time, provided that no such waiver shall be effective unless it satisfies the conditions applicable under Section 7.4(c) to a Participant's waiver of a Qualified Preretirement Survivor Annuity. The exception in this paragraph (b) shall not be operative with respect to a Participant in a profit sharing plan if the Plan: (1) Is a direct or indirect transferee of a defined benefit plan, money purchase pension plan, target benefit plan, stock bonus plan, or profit sharing plan which is subject to the survivor annuity requirements of Sections 401(a)(11) and 417 of the Code; or (2) Is adopted as an amendment of a plan subject to the survivor annuity requirements of Sections 401(a)(11) and 417 of the Code. For purposes of this paragraph (b), Account Balance shall have the meaning provided in Section 7.4(f). The provisions of Sections 7.2 through 7.5 set forth the survivor annuity requirements of Sections 401(a)(11) and 417 of the Code. (c) Exception for Certain Amounts. The provisions of Sections 7.2 through 7.5 shall not apply to any distribution made on or after the first day of the first Plan Year beginning after December 31, 1988, from or under a separate account attributable solely to accumulated deductible employee contributions as defined in Section 72(o)(5)(B) of the Code, and maintained on behalf of a Participant in a money purchase pension plan or a target benefit plan, provided that the exceptions applicable to certain profit sharing plans under paragraph (b) are applicable with respect to the separate account (for this purpose, Account Balance means the Participant's separate account balance attributable solely to accumulated deductible employee contributions within the meaning of Section 72(o)(5)(B) of the Code). 7.2 Qualified Joint and Survivor Annuity. Unless an optional form of benefit is selected pursuant to a Qualified Election within the 90-day period ending on the Annuity Starting Date, a married Participant's Account Balance will be paid in the form of a Qualified Joint and Survivor Annuity and an unmarried Participant's Account Balance will be paid in the form of a life annuity. In either case, the Participant may elect to have such an annuity distributed upon his attainment of the Earliest Retirement Age under the Plan. 7.3 Qualified Preretirement Survivor Annuity. Unless an optional form of benefit has been selected within the Election Period pursuant to a Qualified Election, the Account Balance of a Participant who dies before the Annuity Starting Date shall be applied toward the purchase of an annuity for the life of his surviving spouse (a "Qualified Preretirement Survivor Annuity"). The surviving spouse may elect to have such an annuity distributed within a reasonable period after the Participant's death. For purposes of this Article 7, the term "spouse" means the current spouse or surviving spouse of a Participant, except that a former spouse will be treated as the spouse or surviving spouse (and a current spouse will not be treated as the spouse or surviving spouse) to the extent provided under a qualified domestic relations order as described in Section 414(p) of the Code. 7.4 Definitions. The following definitions apply: (a) Election Period means the period beginning on the first day of the Plan Year in which a Participant attains age 35 and ending on the date of the Participant's death. If a Participant separates from service before the first day of the Plan Year in which he reaches age 35, the Election Period with respect to his account balance as of the date of separation shall begin on the date of separation. (b) Earliest Retirement Age means the earliest date on which the Participant could elect to receive Retirement benefits under the Plan. (c) Qualified Election means a waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity. Any such waiver shall not be effective unless: (1) the Participant's spouse consents in writing to the waiver; (2) the waiver designates a specific Beneficiary, including any class of beneficiaries or any contingent beneficiaries, which may not be changed without spousal consent (unless the spouse's consent expressly permits designations by the Participant without any further spousal consent); (3) the spouse's consent acknowledges the effect of the waiver; and (4) the spouse's consent is witnessed by a plan representative or notary public. Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity shall not be effective unless the waiver designates a form of benefit payment which may not be changed without spousal consent (unless the spouse's consent expressly permits designations by the Participant without any further spousal consent). If it is established to the satisfaction of a plan representative that there is no spouse or that the spouse cannot be located, a waiver will be deemed a Qualified Election. Any consent by a spouse obtained under these provisions (and any establishment that the consent of a spouse may not be obtained) shall be effective only with respect to the particular spouse involved. A consent that permits designations by the Participant without any requirement of further consent by the spouse must acknowledge that the spouse has the right to limit the consent to a specific Beneficiary and a specific form of benefit where applicable, and that the spouse voluntarily elects to relinquish either or both of those rights. A revocation of a prior waiver may be made by a Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in Section 7.5. (d) Qualified Joint and Survivor Annuity means an immediate annuity for the life of a Participant, with a survivor annuity for the life of the spouse which is not less than 50 percent and not more than 100 percent of the amount of the annuity which is payable during the joint lives of the Participant and the spouse, and which is the amount of benefit that can be purchased with the Participant's Account Balance. The percentage of the survivor annuity under the Plan shall be 50 percent. (e) Annuity Starting Date means the first day of the first period for which an amount is paid as an annuity (or any other form). (f) Account Balance means the aggregate value of the Participant's Account Balance derived from Employer and Employee contributions (including rollovers), including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article 7 shall apply to a Participant who is vested in amounts attributable to Employer contributions, Employee contributions or both at the time of death or distribution. 7.5 Notice Requirements. In the case of a Qualified Joint and Survivor Annuity, no less than 30 days and no more than 90 days before a Participant's Annuity Starting Date the Plan Administrator shall provide to him a written explanation of (i) the terms and conditions of a Qualified Joint and Survivor Annuity, (ii) the Participant's right to make, and the effect of, an election to waive the Qualified Joint and Survivor Annuity form of benefit, (iii) the rights of the Participant's spouse, and (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity. In the case of a Qualified Preretirement Survivor Annuity, within the applicable period for a Participant, the Plan Administrator shall provide to him a written explanation of the Qualified Preretirement Survivor Annuity, in terms and manner comparable to the requirements applicable to the explanation of a Qualified Joint and Survivor Annuity as described in the preceding paragraph. The applicable period for a Participant is whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; (ii) a reasonable period ending after an individual becomes a Participant; (iii) a reasonable period ending after this Article 7 first applies to the Participant. Notwithstanding the foregoing, in the case of a Participant who separates from service before attaining age 35, notice must be provided within a reasonable period ending after his separation from service. For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (i), (ii) and (iii) is the end of the two-year period beginning one year before the date the applicable event occurs, and ending one year after that date. In the case of a Participant who separates from service before the Plan Year in which he reaches age 35, notice shall be provided within the two-year period beginning one year before the separation and ending one year after the separation. If such a Participant thereafter returns to employment with the Employer, the applicable period for the Participant shall be redetermined. A Participant who will not attain age 35 as of the end of a Plan Year may make a special Qualified Election to waive the Qualified Preretirement Survivor Annuity for the period beginning on the date of such election and ending on the first day of the Plan Year in which the Participant will attain age 35. Such election shall not be valid unless the Participant receives a written explanation of the Qualified Preretirement Survivor Annuity in such terms as are comparable to the explanation required under this Section 7.5. Qualified Preretirement Survivor Annuity coverage will be automatically reinstated as of the first day of the Plan Year in which the Participant attains age 35. Any new waiver on or after such date shall be subject to the full requirements of this article. Article 8. Minimum Distribution Requirements 8.1 General Rules. Except as otherwise provided in Article 7, Joint and Survivor Annuity Requirements, the requirements of this Article 8 shall apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of the Plan. Unless otherwise specified, the provisions of this Article 8 apply to calendar years beginning after December 31, 1984. All distributions required under this Article 8 shall be determined and made in accordance with the Income Tax Regulations under Section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the regulations. 8.2 Required Beginning Date. The entire interest of a Participant must be distributed, or begin to be distributed, no later than the Participant's required beginning date, determined as follows: (a) General Rule. The required beginning date of a Participant is the first day of April of the calendar year following the calendar year in which the Participant attains age 70 1/2. (b) Transitional Rules. The required beginning date of a Participant who attains age 70 1/2 before January 1, 1988, shall be determined in accordance with (1) or (2) below: (1) Non-5-percent owners. The required beginning date of a Participant who is not a 5-percent owner is the first day of April of the calendar year following the calendar year in which the later of his Retirement or his attainment of age 70 1/2 occurs. (2) 5-percent owners. The required beginning date of a Participant who is a 5-percent owner during any year beginning after December 31, 1979, is the first day of April following the later of:(i) the calendar year in which the Participant attains age 70 1/2, or (ii) the earlier of the calendar year with or within which ends the Plan Year in which the Participant becomes a 5-percent owner, or the calendar year in which the Participant retires. The required beginning date of a Participant who is not a 5-percent owner, who attains age 70 1/2 during 1988 and who has not retired as of January 1, 1989, is April 1, 1990. (c) Rules for 5-percent Owners. A Participant is treated as a 5-percent owner for purposes of this Section 8.2 if he is a 5-percent owner as defined in Section 416(i) of the Code (determined in accordance with Section 416 but without regard to whether the Plan is top heavy) at any time during the Plan Year ending with or within the calendar year in which he attains age 66 1/2, or any subsequent Plan Year. Once distributions have begun to a 5-percent owner under this Section 8.2, they must continue, even if the Participant ceases to be a 5-percent owner in a subsequent year. 8.3 Limits on Distribution Periods. As of the first Distribution Calendar Year, distributions not made in a single sum may be made only over one or a combination of the following periods: (a) the life of the Participant, (b) the life of the Participant and his Designated Beneficiary, (c) a period certain not extending beyond the Life Expectancy of the Participant, or (d) a period certain not extending beyond the Joint and Last Survivor Expectancy of the Participant and his Designated Beneficiary. Designated Beneficiary means the individual who is designated under Section 6.2 of the Plan as the beneficiary of a Participant, in accordance with Section 401(a)(9) of the Code and the regulations thereunder. Distribution Calendar Year means a calendar year for which a minimum distribution is required under Section 401(a)(9) of the Code and this Section 8.3. For distributions beginning before the Participant's death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant's required beginning date. For distributions beginning after the Participant's death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin pursuant to Section 8.5. Life Expectancy and Joint and Last Survivor Expectancy are computed by use of the expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Unless otherwise elected by the Participant (or his spouse, in the case of distributions described in Section 8.5(b)) by the time distributions are required to begin, Life Expectancies shall be recalculated annually. Any such election shall be irrevocable as to the Participant (or spouse) and shall apply to all subsequent years. The Life Expectancy of a nonspouse beneficiary may not be recalculated. 8.4 Determination of Amount to be Distributed Each Year. If the Participant's interest is to be distributed in other than a single sum, the following minimum distribution rules shall apply on or after the required beginning date. Paragraphs (a) through (d) apply to distributions in forms other than the purchase of an annuity contract. (a) If a Participant's Benefit is to be distributed over (1) a period not extending beyond the Life Expectancy of the Participant or the Joint Life and Last Survivor Expectancy of the Participant and his Designated Beneficiary, or (2) a period not extending beyond the Life Expectancy of the Designated Beneficiary, the amount required to be distributed for each calendar year, beginning with distributions for the first Distribution Calendar Year, must at least equal the quotient obtained by dividing the Participant's Benefit by the Applicable Life Expectancy. (b) For calendar years beginning before January 1, 1989, if the Participant's spouse is not the Designated Beneficiary, the method of distribution selected must assure that at least 50 percent of the present value of the amount available for distribution is paid within the Life Expectancy of the Participant. (c) For calendar years beginning after December 31, 1988, the amount to be distributed each year, beginning with distributions for the first Distribution Calendar Year, shall not be less than the quotient obtained by dividing the Participant's Benefit by the lesser of (1) the Applicable Life Expectancy or (2) if the Participant's spouse is not the Designated Beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations. Distributions after the death of the Participant shall be distributed using the Applicable Life Expectancy in paragraph (a) above as the relevant divisor, without regard to Regulations Section 1.401(a)(9)-2. (d) The minimum distribution required for the Participant's first Distribution Calendar Year must be made on or before the Participant's required beginning date. The minimum distribution for other calendar years, including the minimum distribution for the Distribution Calendar Year in which the Employee's required beginning date occurs, must be made on or before December 31 of that Distribution Calendar Year. (e) If the Participant's Benefit is distributed in the form of an annuity contract purchased from an insurance company, distributions thereunder shall be made in accordance with the requirements of Section 401(a)(9) of the Code and the regulations thereunder. Applicable Life Expectancy means the Life Expectancy (or Joint and Last Survivor Expectancy) calculated using the attained age of the Participant (or Designated Beneficiary ) as of the Participant's (or Designated Beneficiary's) birthday in the applicable calendar year, reduced by one for each calendar year which has elapsed since the date Life Expectancy was first calculated. If Life Expectancy is being recalculated, the Applicable Life Expectancy shall be the Life Expectancy as so recalculated. The applicable calendar year shall be the first Distribution Calendar Year, and if Life Expectancy is being recalculated such succeeding calendar year. If annuity payments commence in accordance with Section 8.4(e) before the required beginning date, the applicable calendar year is the year such payments commence. If distribution is in the form of an immediate annuity purchased after the Participant's death with the Participant's remaining interest in the Plan, the applicable calendar year is the year of purchase. Participant's Benefit means the Account Balance as the last valuation date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year), increased by the amount of any contributions or Forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. For purposes of the preceding sentence, if any portion of the minimum distribution for the first Distribution Calendar Year is made in the second Distribution Calendar Year on or before the required beginning date, the amount of the minimum distribution made in the second Distribution Calendar Year shall be treated as if it had been made in the immediately preceding Distribution Calendar Year. 8.5 Death Distribution Provisions. (a) Distribution Beginning before Death. If the Participant dies after distribution of his interest has begun, the remaining portion of his interest will continue to be distributed at least as rapidly as under the method of distribution being used before the Participant's death. (b) Distribution Beginning after Death. If the Participant dies before distribution of his interest begins, distribution of his entire interest shall be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death, except to the extent that an election is made to receive distributions in accordance with (1) or (2) below: (1) If any portion of the Participant's interest is payable to a Designated Beneficiary, distributions may be made over the Designated Beneficiary's life, or over a period certain not greater than the Life Expectancy of the Designated Beneficiary, commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died; or (2) If the Designated Beneficiary is the Participant's surviving spouse, the date distributions are required to begin in accordance with (1) above shall not be earlier than the later of (i) December 31 of the calendar year immediately following the calendar year in which the Participant died, and (ii) December 31 of the calendar year in which the Participant would have attained age 70 1/2. If the Participant has not made an election pursuant to this Section 8.5 by the time of his death, the Participant's Designated Beneficiary must elect the method of distribution no later than the earlier of (i) December 31 of the calendar year in which distributions would be required to begin under this Section 8.5, or (ii) December 31 of the calendar year which contains the fifth anniversary of the date of death of the Participant. If the Participant has no Designated Beneficiary, or if the Designated Beneficiary does not elect a method of distribution, distribution of the Participant's entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (c) For purposes of paragraph (b), if the surviving spouse dies after the Participant, but before payments to the spouse begin, the provisions of paragraph (b), with the exception of sub-paragraph (2) therein, shall be applied as if the surviving spouse were the Participant. (d) For purposes of this Section 8.5, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse of the Participant if the amount becomes payable to the surviving spouse when the child reaches the age of majority. (e) For the purposes of this Section 8.5, distribution of a Participant's interest is considered to begin on the Participant's required beginning date (or, if paragraph (c) above is applicable, the date distribution is required to begin to the surviving spouse pursuant to paragraph (b) above). If distribution in the form of an annuity contract described in Section 8.4(e) irrevocable commences to the Participant before the required beginning date, the date distribution is considered to begin is the date distribution actually commences. Article 9. Life Insurance Policies 9.1 Purchase of Life Insurance Policies. Subject to such reasonable and non-discriminatory rules, limits and procedures as the Trustee or Employer may establish from time to time, a Participant may from time to time direct the Trustee to apply amounts credited or to be credited to his Account to the payment of premiums on one or more ordinary life insurance policies or other insurance contracts containing a life insurance element and approved by the Trustee for purchase under the Plan ("Life Insurance Policies"); provided that the Participant supplies such information and instructions and submits to such examination as may be required, and provided further that the Employer certifies to the Trustee that such direction will not cause the total premiums paid from the Participant's Account to exceed the following limitations: (a) No more than one-half ( 1/2 ) of the aggregate amount of Employer contributions allocated to the Participant may be used to pay premiums on Life Insurance Policies providing for both non-decreasing death benefits and non-increasing premiums; and (b) No more than one-fourth ( 1/4 ) of the aggregate amount of Employer contributions allocated to the Participant may be used to pay premiums on Life Insurance Policies other than those described in paragraph (a); and (c) The sum of one-half ( 1/2 ) of the premiums under paragraph (a) and all other premiums paid may not exceed one-fourth ( 1/4 ) of the aggregate Employer contributions allocated to the Participant. The Life Insurance Policies available to Participants hereunder shall be non-transferable when held by anyone other than the Trustee, and shall be limited to those permitted by the Trustee from time to time. Subject to Article 7, a Life Insurance Policy held under the Plan shall be distributed to the Participant upon commencement of benefits, or converted to cash or an annuity to any extent necessary for compliance with Sections 6.3 and 8.5. Any dividends or credits on a Life Insurance Policy shall be allocated to the Participant's Employer Contribution Account or Participant Contribution Account, according to the source from which premiums are paid. No loans may be made on Life Insurance Policies under the Plan. The Trustee shall apply for and be the owner of any Life Insurance Policy purchased under the terms of the Plan. The Life Insurance Policy must provide that the proceeds will be payable to the Trustee; however, the Trustee shall be required to pay over all proceeds of Life Insurance Policies to the Participant's Designated Beneficiary in accordance with the distribution provisions of Section 8.5 of the Plan. A Participant's spouse will be the Designated Beneficiary in all circumstances unless a Qualified Election has been made in accordance with Section 7.4(c) (or, in the case of a Participant in a profit sharing plan to which the spousal annuity rules of Article 7 do not apply, spousal consent to the designation of another beneficiary has been obtained in accordance with Section 6.2). Under no circumstances shall the Trust retain any part of the proceeds. In case of any conflict between the provisions of a Life Insurance Policy and the Plan, the provisions of the Plan shall control. 9.2 Distributions with Respect to Life Insurance Policies. Upon the death of a Participant, any payments which are due or which may become due under a Life Insurance Policy issued under the Plan shall be paid in accordance with the terms of the Policy; provided, however, that: (a) to the extent (if any) that the terms of the Policy do not govern the disposition of the proceeds, they shall be distributed to the same persons or estates as are determined under Section 6.2 and the action taken thereunder; and (b) the method of distribution under each Policy shall conform with the provision governing the manner of distribution set out in Section 8.5. Subject to Article 7, Joint and Survivor Annuity Requirements, distributions with respect to a Life Insurance Policy other than as a result of the death of a Participant or the termination of the Plan shall commence as provided in Section 6.1, and the Life Insurance Policy shall then be distributed to the Participant after converting it, if necessary, so that it does not provide any options which do not conform to Section 6.5. The cash value of Life Insurance Policies purchased for a Participant shall be treated as part of his Employer Contribution Account or Participant Contribution Account, according to the source from which premiums are paid. A Policy which cannot be distributed promptly after the cessation of payment of premiums from Employer contributions shall be made paid-up for whatever face amount its cash value will provide. Article 10. Amendment and Termination 10.1 Sponsor's Right to Amend. The Sponsor may amend any part of the prototype form of this Plan by mailing written notice of such amendment to the Employer; provided, however, that: (a) the Sponsor shall have no power to amend or terminate the Plan in such manner as would cause or permit any part of the assets in the Trust to be diverted to purposes other than for the exclusive benefit of Participants and beneficiaries as described in Section 13.2, or as would cause or permit any portion of such assets to revert to or become the property of the Employer in violation of such Section; (b) the Sponsor shall not have the right to amend the Plan in a manner that violates Section 10.3; and (c) the Sponsor shall have no power to amend the Plan in such a manner as would increase the duties of liabilities of the Trustee unless the Trustee consents thereto in writing. 10.2 Employer's Right to Amend. The Employer may at any time and from time to time modify or amend this Plan in whole or in part (including retroactive amendments), by delivering to the Trustee a written copy of such amendment signed by the Employer; provided, however, that any such amendment other than the one signed below (including an amendment designed to allow the Plan to operate under a waiver of the minimum funding standard pursuant to Section 412(d) of the Code) will constitute substitution by the Employer of an individually designed plan for the approved Prototype Plan, upon which event the Trustee named in the Adoption Agreement will resign pursuant to Section 13.6: (a) a change of the Employer's prior choice of an optional provision indicated on the Adoption Agreement; (b) the addition or modification of provisions stated in the Adoption Agreement to allow the Plan to satisfy Section 415 of the Code, or to avoid duplication of minimum benefits under Section 416 of the Code because of the required aggregation of multiple plans; or (c) the addition of certain model amendments published by the Internal Revenue Service which specifically provide that their adoption will not cause a plan to be treated as individually designed. An election made by the Employer within the prototype form of the Plan shall be deemed to continue after amendment of the prototype form by the Sponsor and until the Employer expressly further amends the election by execution of a written document acceptable in form to the Trustee and delivered to the Trustee. 10.3 Certain Amendments Prohibited. No amendment to the Plan shall be effective to the extent that it has the effect of reducing a Participant's accrued benefit. An amendment shall be treated as reducing a Participant's accrued benefit if it has the effect of reducing his account balance (except that a Participant's Account balance may be reduced to the extent permitted by Section 412(c)(8) of the Code), or of eliminating the availability of an optional form of benefit with respect to amounts attributable to contributions made before the adoption of the amendment. 10.4 Termination of the Plan and Trust. The Employer may terminate the Plan, or the Plan and the Trust, at any time by delivering to the Trustee a written notice signed by or on behalf of the Employer and specifying the date or dates as of which the Plan and Trust shall terminate. 10.5 Procedure Upon Termination of Trust. As soon as administratively feasible after the stated date that the Plan terminates pursuant to Section 10.4, the Trustee shall, after paying all expenses of the Trust, allocating any unallocated assets of the Trust Fund, and adjusting all Accounts to reflect such expenses and allocations, distribute to Participants, former Participants and beneficiaries the assets credited to their Accounts; provided, however, that the Trustee shall not be required to make any such distribution until it has received notice of any determination by the Internal Revenue Service which the Trustee may reasonably require. Each such distribution shall be made promptly in accordance with Section 6.3. Upon completion of such distribution the Trustee shall be relieved from all further liability with respect to all amounts so paid. Article 11. Miscellaneous 11.1 Status of Participants. Neither the establishment of the Plan and the Trust or any modification thereof, nor the creation of any fund or account, nor the payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the Employer, the Trustee or a Life Insurance Company, except as provided herein or by the terms of Life Insurance Policies, and in no event shall the terms of employment of any Employee or Participant be modified or in any way be affected hereby. 11.2 Administration and Enforcement. The Plan shall be administered by the Employer, who shall be responsible for the operation of the Plan and Trust Agreement in accordance with its terms. The Employer shall be the "Named Fiduciary" and "Plan Administrator" for purposes of the Employee Retirement Income Security Act of 1974; provided, however, that the Employer's administrative powers and duties may be delegated to a committee established for the purpose by the Employer, in which case the committee shall be the "Named Fiduciary" and "Plan Administrator." From time to time the Employer shall furnish to the Trustee a written instrument in a form acceptable to the Trustee, specifying the person or persons authorized to give instructions and directions on behalf of the Employer under the Plan, and the Trustee shall be conclusively entitled to rely on the identity of such person or persons as disclosed in the most recent such instrument. The Employer shall have discretionary authority to determine all questions arising out of the administration, interpretation and application of the Plan, which determinations shall be conclusive and binding on all persons. 11.3 Transfers and Rollovers. Notwithstanding any other provision hereof, with the consent of the Trustee, the Employer may cause to be transferred to the Plan all or any of the assets held in any other plan which satisfies the applicable requirements of Section 401 of the Code, and which is maintained by the Employer for the benefit of any of the Participants. Any such assets so transferred shall be accompanied by written instructions from the Employer, which shall be conclusive, naming the Participants for whose benefit such assets have been transferred and showing separately the respective contributions by the Employer and by the Participants and identifying the assets attributable to the various contributions. The Employer, with the consent of the Trustee, may permit an Employee (whether or not a Participant) to transfer or cause to be transferred to the Plan any assets held for his benefit in a qualified plan of a former employer of his or in an individual retirement savings plan which has been used by the Employee exclusively as a conduit for a prior distribution of assets held for his benefit in a qualified plan of a former employer of his. Such a transfer shall be made in the form of cash or property permitted as an investment hereunder or readily marketable assets, either: (a) directly between the trustee or custodian of the prior employer's plan and the Trustee, in which case the transferred assets shall be accompanied by written instructions showing separately the respective contributions by the prior employer and by the transferring Employee, and identifying the assets attributable to the various contributions; or (b) by the Employee to the Trustee, in which case the assets transferred must be accompanied by a written representation by the Employee that the assets meet the requirements for rollover contributions set forth in Section 402(a)(5) and (6) or Section 408(d)(3) of the Code (whichever is applicable). The Trustee will not accept assets which are not either in a medium proper for investment hereunder or in cash. It shall hold the assets for investment in accordance with the provisions of Article 5, and shall in accordance with the written instructions of the Employer make appropriate credits to the Account(s) of the Employee(s) for whose benefit assets have been transferred. Any amounts so credited as contributions previously made by an employer or by an Employee under a transferor plan, as specified by the Employer, shall be treated as contributions previously made under the Plan by the Employer or by the Employee, as the case may be. For purposes of Section 4.4 concerning withdrawal of voluntary contributions, voluntary contributions made by an Employee under any other plan and transferred to this Plan pursuant to paragraph (a) of this Section 11.3 shall be considered contributions made to this Plan pursuant to Section 4.4. Subject to the provisions of Article 13, the Employer may direct the Trustee to transfer assets held in the Trust for the account of a former Participant to the custodian or trustee of any other plan or plans maintained by the employer of the former Participant for the benefit of the former Participant, or to the custodian or trustee of an individual retirement savings plan established by the former Participant, provided that the Trustee has received evidence satisfactory to it that such other plan meets all applicable requirements of the Code. The assets so transferred shall be accompanied by written instructions from the Employer naming the person for whose benefit such assets have been transferred, showing separately the respective contributions by the Employer and by the Participant, and identifying the assets attributable to the various contributions. The Trustee shall have no further liabilities under the terms of this Agreement with respect to assets so transferred. 11.4 Condition of Plan and Trust Agreement. It is a condition of this Plan and Trust Agreement, and each Employee by participating herein expressly agrees, that he shall look solely to the assets of the Trust for the payment of any benefit under the Plan. 11.5 Inalienability of Benefits. The benefits provided hereunder shall not be subject to alienation, pledge, use as security for a loan, assignment, garnishment, attachment, execution or levy of any kind, and any attempt to cause such benefits to be so subjected shall not be recognized; provided, however, that the rule just stated shall not apply in the case of a qualified domestic relations order, as defined in Section 414(p) of the Code. A domestic relations order entered before January 1, 1985, will be treated as a qualified domestic relations order if payment of benefits pursuant to the order has commenced as of that date, and in the sole discretion of the Employer as Plan Administrator, may be so treated if such payment has not commenced, whether or not the order satisfies the requirements of Section 414(p) of the Code. 11.6 Governing Law. This Plan shall be construed, administered and enforced according to the laws of the Commonwealth of Massachusetts to the extent not pre-empted by the laws of the United States of America (including the Employee Retirement Income Security Act of 1974); any provision of this Plan in conflict with applicable federal law shall survive to the extent permitted by that law. 11.7 Merger or Consolidation of the Plan. A merger or consolidation of the Plan with, or transfer in whole or in part of the assets of the Plan to, any other plan of deferred compensation may be consummated or made if, but only if, the benefits to which each Participant would become entitled if the merged, consolidated or transferee plan were terminated immediately after such merger, consolidation or transfer are at least equal to the benefits to which such Participant would have been entitled had the Plan been terminated immediately prior to such merger, consolidation or transfer. 11.8 Failure of Qualification. If the Plan as maintained by the Employer fails to attain or to maintain qualification under the Code, it shall be considered an individually designed plan and no longer the Prototype Plan; upon such event the Trustee named in the Adoption Agreement shall resign pursuant to Section 13.6. An Employer who is not entitled to rely on the opinion letter issued with respect to the Prototype Plan, as set forth in the Adoption Agreement, shall promptly apply for a determination letter as to the Plan, and shall promptly inform the Trustee of the outcome of such application. 11.9 Leased Employees. Any leased employee within the meaning of Section 414(n) of the Code shall be treated as an employee of the recipient employer; however, contributions or benefits provided by the leasing organization which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer. The preceding sentence shall not apply to any person who would otherwise be considered a leased employee, if leased employees do not constitute more than 20 percent of the recipient's non-highly compensated workforce (as defined by Code Section 414(n)(5)(C)(ii)), and such employee is covered by a money purchase pension plan providing: (1) a non-integrated employer contribution rate of at least 10 percent of compensation (as defined in Section 415(c)(3) of the Code, but including amounts contributed by the employer pursuant to a salary reduction agreement which are excludable from the employee's gross income under Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of the Code), (2) immediate participation, and (3) full and immediate vesting. The term "leased employee" means any person (other than an employee of the Employer) who pursuant to an agreement between the recipient and any other person ("leasing organization") has performed services for the recipient (or for the recipient and related persons determined in accordance with Section 414(n)(6) of the Code) on a substantially full-time basis for a period of at least one year, and such services are of a type historically performed by employees in the business field of the recipient employer. 11.10 Changes in Vesting Schedule. In the event that this Plan is adopted as an amendment to an existing plan, the interest of any Participant shall become fully vested and non-forfeitable as of the Effective Date. Article 12. Limitations on Allocations 12.1 Definitions. For purposes of this Article 12, the following terms shall have the meanings set forth below: "Annual additions": The sum of the following amounts credited to a Participant's Account for the "Limitation year": (a) Employer contributions; and (b) For any Plan Year beginning after December 31, 1986, Participant contributions. For this purpose, any "excess amount" applied under Section 12.2 or 12.3 in the "limitation year" to reduce employer contributions will be considered "annual additions" for such "limitation year." Amounts allocated after March 31, 1984, to an individual medical account, as defined in Section 415(1)(2) of the Code, which is part of a pension or annuity plan maintained by the employer, are treated as "annual additions" to a defined contribution plan. Also, amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by the employer, are treated as "annual additions" to a defined contribution plan. "Compensation": A Participant's earned income, wages, salaries, and fees for professional services and other amounts received for personal services actually rendered in the course of employment with the employer maintaining the plan (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses), and excluding the following: (a) Employer contributions to a plan of deferred compensation which are not includible in the employee's gross income for the taxable year in which contributed, or employer contributions under a simplified employee pension plan to the extent such contributions are deductible by the employee, or any distributions from a plan of deferred compensation; (b) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by the employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; (c) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and (d) other amounts which received special tax benefits, or contributions made by the employer (whether or not under a salary reduction agreement) towards the purchase of an annuity described in Section 403(b) of the Code (whether or not the amounts are actually excludable from the gross income of the employee). For purposes of applying the limitations of this article, "compensation" for a "limitation year" is the "compensation" actually paid or includible in gross income during such year. "Defined benefit fraction": A fraction, the numerator of which is the sum of the Participant's "projected annual benefits" under all the defined benefit plans (whether or not terminated) maintained by the employer, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the "limitation year" under Sections 415(b) and (d) of the Code or 140 percent of the "highest average compensation," including any adjustments under Section 415(b) of the Code. Notwithstanding the above, if the Participant was a participant as of the first day of the first "limitation year" beginning after December 31, 1986, in one or more defined benefit plans maintained by the employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125 percent of the sum of the annual benefits under such plans which the Participant had accrued as of the close of the last "limitation year" beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plan after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Section 415 for all "limitation years" beginning before January 1, 1987. "Defined contribution dollar limitation": $30,000 or if greater, one-fourth of the defined benefit dollar limitation set forth in Section 415(b)(1) of the Code as in effect for the "limitation year." "Defined contribution fraction": A fraction, the numerator of which is the sum of the "annual additions" to the Participant's account under all the defined contributions plans (whether or not terminated) maintained by the employer for the current and all prior "limitation years" (including the "annual additions" attributable to the Participant's nondeductible employee contributions to all defined benefit plans, whether or not terminated, maintained by the employer, and the "annual additions," as defined above, attributable to all welfare benefit funds, as defined in Section 419(e) of the Code, and individual medical accounts, as defined in Section 415(1)(2) of the Code, maintained by the employer), and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior "limitation years" of service with the employer (regardless of whether a defined contribution plan was maintained by the employer). The maximum aggregate amount in any "limitation year" is the lesser of 125 percent of the dollar limitation determined under Sections 415(b) and (d) of the Code in effect under Section 415(c)(1)(A) of the Code or 35 percent of the Participant's "compensation" for such year. If the employee was a participant as of the first day of the first "limitation year" beginning after December 31, 1986, in one or more defined contribution plans maintained by the employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the defined benefit fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal to the product of (1) the excess of the sum of the fractions over 1.0 times (2) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last "limitation year" beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the plan made after May 5, 1986, but using the Section 415 limitation applicable to the first "limitation year" beginning on or after January 1, 1987. The "annual addition" for any "limitation year" beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as "annual additions." Employer: For purposes of this Article 12, "employer" shall mean the employer that adopts this plan, and all members of a controlled group of corporations (as defined in Section 414(b) of the Code as modified by Section 415(h)), all commonly controlled trades or businesses (as defined in Section 414(c) as modified by Section 415(h)) or affiliated service groups (as defined in Section 414(m)) of which the adopting employer is a part, and any other entity required to be aggregated with the employer pursuant to Section 414(o) of the Code. "Excess amount": The excess of the Participant's "annual additions" for the "limitation year" over the "maximum permissible amount." "Highest average compensation": The average compensation for the three consecutive years of service with the employer that produces the highest average. A year of service with the employer is the period of 12 consecutive months defined in Section 2.26. "Limitation year": A calendar year, or the other period of 12 consecutive months elected by the Employer in the Adoption Agreement. All qualified plans maintained by the Employer must use the same "limitation year." If the "limitation year" is amended to a different period of 12 consecutive months, the new "limitation year" must begin on a date within the "limitation year" in which the amendment is made. "Master or prototype plan": A plan the form of which is the subject of a favorable opinion letter from the Internal Revenue Service. "Maximum permissible amount": The lesser of (a) the "defined contribution dollar limitation" or (b) 25% of the Participant's "compensation" for the "limitation year." The compensation limitation referred to in (b) shall not apply to any contribution for medical benefits (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an "annual addition" under Section 415(l)(1) or Section 419A(d)(2) of the Code. If a short "limitation year" is created because of an amendment changing the "limitation year," the "maximum permissible amount" will not exceed the "defined contribution dollar limitation" multiplied by a fraction of which the numerator is equal to the number of months in the short "limitation year," and the denominator is 12. "Projected annual benefit": The annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the Participant would be entitled under the terms of the plan assuming: (a) the Participant will continue employment until normal retirement age under the plan (or current age, if later), and (b) the Participant's "compensation" for the current "limitation year" and all other relevant factors used to determine benefits under the plan will remain constant for all future "limitation years." 12.2 Participation Only in This Plan. If the Participant does not participate in, and has never participated in another qualified plan or a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by the employer, or an individual medical account, as defined in Section 415(l)(2) of the Code, maintained by the employer, which provides an "annual addition" the amount of "annual additions" which may be credited to the Participant's Account for any "limitation year" will not exceed the lesser of the "maximum permissible amount" or any other limitation contained in this Plan. If the employer contribution that would otherwise be contributed or allocated to the Participant's Account would cause the "annual additions" for the "limitation year" to exceed the "maximum permissible amount," the amount contributed or allocated will be reduced so that the "annual additions" for the "limitation year" will equal the "maximum permissible amount." Prior to determining the Participant's actual "compensation" for the "limitation year," the employer may determine the "maximum permissible amount" for a Participant on the basis of a reasonable estimation of the Participant's "compensation" for the "limitation year," uniformly determined for all Participants similarly situated. As soon as is administratively feasible after the end of the "limitation year," the "maximum permissible amount" for the "limitation year" will be determined on the basis of the Participant's actual "compensation" for the "limitation year." If pursuant to the last sentence of the preceding paragraph there is an "excess amount," the excess will be disposed of as follows: (a) Any nondeductible voluntary employee contributions, to the extent they would reduce the "excess amount," will be returned to the Participant; (b) If after the application of paragraph (a) an "excess amount" still exists, and the Participant is covered by the Plan at the end of the "limitation year," the "excess amount" in the Participant's Account will be used to reduce employer contributions for such Participant in the next "limitation year," and each succeeding "limitation year" if necessary; (c) If after the application of paragraph (a) an "excess amount" still exists, and the Participant is not covered by the Plan at the end of the "limitation year," the employer's contribution on behalf of the Participant will be reduced to the extent necessary to eliminate the "excess amount"; (d) If a suspense account is in existence at any time during a "limitation year" pursuant to this Section 12.2, it will participate in the allocation of the Trust's investment gains and losses. If a suspense account is in existence at any time during a particular "limitation year," all amounts in the suspense account must be allocated and reallocated to Participants' accounts before any Employer or any Employee contributions may be made to the Plan for that "limitation year." Excess amounts may not be distributed to Participants or former Participants. 12.3 Participation in Additional Prototype Defined Contribution Plan. This Section 12.3 applies if, in addition to this Plan, the Participant is covered under another qualified master or prototype defined contribution plan or a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by the employer, or an individual medical account, as defined in Section 415(l)(2) of the Code, maintained by the employer, which provides an "annual addition" during any "limitation year." The "annual additions" which may be credited to a Participant's account under this Plan for any such "limitation year" will not exceed the "maximum permissible amount" reduced by the "annual additions" credited to a Participant's Account under the other plans and welfare benefit funds for the same "limitation year." If the "annual additions" with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the employer are less than the "maximum permissible amount" and the employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the "annual additions" for the "limitation year" to exceed this limitation, the amount contributed or allocated will be reduced so that the "annual additions" under all such plans and funds for the "limitation year" will equal the "maximum permissible amount." If the "annual additions" with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the "maximum permissible amount," no amount will be contributed or allocated to the Participant's Account under this Plan for the "limitation year." Prior to determining the Participant's actual "compensation" for the "limitation year," the Employer may determine the "maximum permissible amount" for a Participant in the manner described in Section 12.2. As soon as is administratively feasible after the end of the "limitation year," the "maximum permissible amount" for the "limitation year" will be determined on the basis of the Participant's actual "compensation" for the "limitation year." If, pursuant to the preceding paragraph, a Participant's "annual additions" under this Plan and such other plans would result in an "excess amount" for a "limitation year," the "excess amount" will be deemed to consist of the "annual additions" last allocated, except that annual additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. If an "excess amount" was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the "excess amount" attributed to this Plan will be the product of: (a) the total "excess amount" allocated as of such date, times (b) the ratio of (i) the "annual additions" allocated to the Participant for the "limitation year" as of such date under this Plan to (ii) the total "annual additions" allocated to the Participant for the "limitation year" as of such date under this and all other qualified master or prototype defined contribution plans. Any "excess amount" attributed to this Plan will be disposed of in the manner described in Section 12.2. 12.4 Participation in Other Defined Contribution Plans. If the Participant is covered under another qualified defined contribution plan maintained by the Employer which is not a "master or prototype plan," "annual additions" which may be credited to the Participant's Account under this plan for any "limitation year" will be limited in accordance with Section 12.3 as though the other plan were a "master or prototype plan." 12.5 Participation in Defined Benefit Plan. If the Employer maintains, or at any time maintained, a qualified defined benefit plan covering any Participant in this Plan, the sum of the Participant's "defined benefit plan fraction" and "defined contribution plan fraction" will not exceed 1.0 in any "limitation year." The "annual additions" which may be credited to the Participant's Account under this Plan for any "limitation year" will be limited in accordance with the method described by the Employer in the Adoption Agreement, which shall preclude Employer discretion. Article 13. Rights and Duties of Trustee 13.1 Establishment of Trust Fund. The Trustee shall accept and hold in the Trust such contributions by or on behalf of participants as it may receive from time to time from the Employer, and shall open and maintain records of contributions to and withdrawals from Participant's, Accounts for such individuals as the Employer shall from time to time certify to it, by name and Social Security number, as Participants in the Plan. 13.2 Exclusive Benefit. The Trustee shall hold the assets of the Trust Fund for the exclusive purpose of providing benefits to Participants and beneficiaries and defraying the reasonable expenses of administering the Plan, and no such assets shall ever revert to the Employer except that: (a) contributions made by the Employer by mistake of fact may be returned to the Employer within one (1) year of the date of payment, (b) contributions that are conditioned on the deductibility thereof under the Code may be returned to the Employer within one (1) year of the disallowance of the deduction, (c) contributions that are conditioned on the initial qualification of the Plan under the Code may be returned to the Employer within one (1) year after such qualification is denied by determination of the Internal Revenue Service, but only if an application for determination of such qualification is made within the time prescribed by law for filing the Employer's federal income tax return for its taxable year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe, and (d) amounts held in a suspense account may be returned to the Employer on termination of the Plan, to the extent that they may not then be allocated to any Participant's Account in accordance with Article 12. All contributions under the Plan are hereby expressly conditioned on the initial qualification of the Plan and their deductibility under the Code. 13.3 Reports of the Trustee and the Employer. Not later than 120 days after the close of each Plan Year (or after the Trustee's resignation or removal pursuant to Section 13.6) the Trustee shall furnish to the Employer a written report containing such information as shall be reasonably necessary to complete reports and disclosures required of the Employer pursuant to the Employee Retirement Income Security Act of 1974, including, without limitation, records of the transactions performed in connection with the Plan during the period in question, and either a statement of the fair market value of the assets of each Participant's Account as of the end of the period, or information adequate to permit the Employer to compare such value. Upon the expiration of 60 days following the date on which such a report is furnished to the Employer, the Trustee shall be forever released and discharged from all liability and accountability to anyone with respect to its acts, transactions, duties, obligations or responsibilities as shown in or reflected by such report, except with respect to any such acts or transactions as to which the Employer shall have filed written objections within such sixty-day period. The Employer shall be responsible for the preparation and filing of such reports and disclosures as may be required by the Employee Retirement Income Security Act of 1974, and for providing notice to interested parties as required by Section 7476 of the Code. The Employer shall also prepare any return or report required as a result of liability incurred by the account for tax on unrelated business taxable income, or windfall profits tax, or any return or report necessary to preserve the availability of any credit or deduction with respect thereto. 13.4 Fees and Expenses of the Trust. The Trustee shall be entitled to the fees set forth in the forms provided for Participants' written investment instructions or an addendum thereto, as amended from time to time, and to reimbursement of all reasonable expenses incurred in the performance of its duties. In the event of the failure of the Employer to pay agreed compensation or to reimburse expenses, the same shall be paid from the assets of the Trust. To the extent incurred by the Trustee, any income, gift, estate and inheritance taxes and other taxes of any kind whatsoever, including transfer taxes incurred in connection with the investment or reinvestment of the assets of the Trust, that may be levied or assessed in respect of such assets, if allocable to specific Participants shall be charged to their Accounts, and if not so allocable shall be charged proportionately to all Participants' Accounts. All other administrative expenses incurred by the Trustee in the performance of its duties, including fees for legal services rendered to the Trustee, shall be charged proportionately to all Accounts. All such fees and taxes and other administrative expenses charged to a Participant's Account will be collected from the amount of any contribution or distribution to be credited to such Account, or by selling assets credited to such Account, and the Trustee is expressly authorized to cause Registered Investment Company Shares to be redeemed, or other securities to be sold, for the purpose of paying such amounts. The Employer shall be responsible for payment of any deficiency. 13.5 Limitation of Duties and Liabilities. The Trustee shall not be responsible in any way for the collection of contributions provided for under the Plan, the purpose or propriety of any distribution made pursuant to Section 6.6 or any other action or nonaction taken pursuant to the request of the Employer, the Plan Administrator or a Participant; the validity or effect of the Plan and Trust Agreement; the qualification of the Plan or the Trust under the Code and the Employee Retirement Income Security Act of 1974; or the examination of the Plan. The Employer and the executor, administrator, or successor of the Employer, as appropriate, shall at all times fully indemnify and save harmless the Trustee, and its successors and assigns from any liability arising from distributions so made or actions so taken, and from any and all liability whatsoever which may arise in connection with this Agreement, except liability arising from the gross negligence or willful misconduct of the Trustee. The Trustee shall not be under any duty to take any action other than as herein specified with respect to the Trust, unless the Employer shall furnish the Trustee with instructions in proper form and such instructions shall have been specifically agreed to by the Trustee in writing, or to defend or engage in any suit with respect to the Trust unless the Trustee shall have first agreed in writing to do so and shall have been fully indemnified to its satisfaction. The Trustee and its agents may conclusively rely upon and shall be protected in acting upon any written order from the Employer or any other notice, request, consent, certificate or other instrument or paper believed by it to be genuine and to have been properly executed, and, so long as it acts in good faith, in taking or omitting to take any other action. The Trustee may delegate to one or more corporations affiliated with the Trustee the performance of record keeping and other ministerial services in connection with the Plan, for a reasonable fee to be borne by the Trustee and not by the Plan or the Trust. Any such agent's duties and responsibilities shall be confined solely to the performance of such services, and shall continue only for so long as the Trustee named in the Adoption Agreement serves as Trustee. The Trustee shall not have any liability with respect to money transferred to an Insurance Company pursuant to the Plan, or be responsible for the validity of any Life Insurance Policy. 13.6 Substitution, Resignation or Removal of Trustee. The Sponsor may at any time appoint as a substitute for the Trustee named in the Adoption Agreement another institution affiliated with the Sponsor that is a bank or is qualified to act as a nonbank trustee in accordance with Section 1.401-12(n) of the Income Tax Regulations; provided that the Sponsor shall notify the Employer in writing at least 30 days in advance of the effective date of any such appointment. The Trustee may resign at any time upon 30 days' notice in writing to the Employer, and may be removed by the Employer at any time upon 30 days' notice in writing to the Trustee. Upon resignation of the Trustee, the Sponsor may propose a successor trustee, but the appointment of such a successor shall be subject to the approval of the Employer. Upon removal of the Trustee, the Employer shall appoint a successor Trustee, but in that event the Plan shall be considered an individually designed plan for purposes of Section 10.1. Upon receipt by the Trustee of written acceptance of appointment by a substitute or successor trustee, the Trustee shall transfer and pay over to such successor the assets of the Trust. The Trustee is authorized, however, to reserve such sum of money or property as it may deem advisable for payment of all its fees, compensation, costs and expenses, or for payment of any other liabilities constituting a charge on or against the assets of the Trust or on or against the Trustee, with any balance of such reserve remaining after the payment of all such items to be paid over to the substitute or successor trustee. The Trustee shall not be liable for the acts or omissions of any substitute or successor trustee. If within 90 days after the Trustee's resignation or removal the Employer has not appointed a successor Trustee which has accepted such appointment, the Trustee shall terminate the Trust pursuant to Section 10.4. The Trustee named in the Adoption Agreement has accepted its appointment, and intends to serve, only for so long as the Employer's plan is a Prototype Plan. Article 14. Transitional Rules 14.1 Applicability. The provisions of this Article 14 apply only to Employers who maintained a qualified retirement plan prior to the adoption of this Plan. 14.2 Joint and Survivor Annuity Rules. Any living Participant not receiving benefits on August 23, 1984, who would otherwise not receive the benefits prescribed by Sections 7.2 and 7.3, must be given the opportunity to elect to have Article 7 apply, if such Participant is credited with at least one Hour of Service under this Plan or a predecessor plan in a Plan Year beginning on or after January 1, 1976, and such Participant had at least 10 Years of Service when he or she separated from service. Any living Participant not receiving benefits on August 23, 1984, who was credited with at least one Hour of Service under this Plan or a predecessor plan on or after September 2, 1974, and who is not otherwise credited with any service in a Plan Year beginning on or after January 1, 1976, must be given the opportunity to have his or her benefits paid in accordance with this Section 14.2. The respective opportunities to elect (as described in the two preceding sentences) must be afforded to the appropriate Participants during the period commencing on August 23, 1984, and ending on the date benefits would otherwise commence to said Participants. Any Participant who has elected pursuant to the second sentence of this Section 14.2, and any Participant who does not elect under the first sentence of this Section 14.2, or who meets the requirements of the first sentence except that he does not have at least 10 Years of Service when he separates from service, shall have his benefits distributed in accordance with all of the following requirements, if benefits would have been payable in the form of a life annuity: (a) Automatic joint and survivor annuity. If benefits in the form of a life annuity become payable to a married Participant who: (i) begins to receive payments under the Plan on or after Normal Retirement Age; or (ii) dies on or after Normal Retirement Age while still working for the Employer; or (iii) begins to receive payments on or after the qualified early retirement age; or (iv) separates from service on or after attaining Normal Retirement Age (or the qualified early retirement age) and after satisfying the eligibility requirements for the payment of benefits under the Plan and thereafter dies before beginning to receive such benefits; then such benefits will be received under this Plan in the form of a qualified joint and survivor annuity, unless the Participant has elected otherwise during the election period. The election period must begin at least six months before the Participant attains qualified early retirement age and end not more than 90 days before the commencement of benefits. Any election hereunder will be made in writing and may be changed by the Participant at any time. (b) Election of early survivor annuity. A Participant who is employed after attaining the qualified early retirement age will be given the opportunity to elect, during the election period, to have a survivor annuity payable on death. If the Participant elects the survivor annuity, payments under such annuity must not be less than the payments which would have been made to the spouse under the qualified joint and survivor annuity if the Participant had retired on the day before his death. Any election under this provision will be made in writing and may be changed by the Participant at any time. The election period begins on the later of (1) the 90th day before the Participant attains the qualified early retirement age, or (2) the date on which participation begins, and ends on the date the Participant terminates employment. (c) For purposes of this Section 14.2: (1) Qualified early retirement age is the latest of (i) the earliest date, under the Plan, on which the Participant may elect to receive retirement benefits, (ii) the first day of the 120th month beginning before the Participant reaches Normal Retirement Age, or (iii) the date the Participant begins participation. (2) Qualified joint and survivor annuity is an annuity for the life of the Participant with a survivor annuity for the life of the spouse, as described in Section 7.4(d). 14.3 Certain Distributions. Subject to the requirements of Article 7, and notwithstanding the provisions of Article 8, distribution on behalf of any participant, including a 5-percent owner, may be made in accordance with all of the following requirements (regardless of when such distribution commences): (a) The distribution by the trust is one which would not have disqualified the trust under Section 401(a)(9) of the Internal Revenue Code as in effect prior to amendment by the Deficit Reduction Act of 1984. (b) The distribution is in accordance with a method of distribution designated by the Employee whose interest in the trust is being distributed or, if the Employee is deceased, by a beneficiary of such Employee. (c) Such designation was in writing, was signed by the Employee or the beneficiary, and was made before January 1, 1984. (d) The Employee had accrued a benefit under the Plan as of December 31, 1983. (e) The method of distribution designated by the Employee or the beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the Employee's death, the beneficiaries of the Employee listed in order of priority. A distribution upon death will not be covered by this transitional rule unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the Employee. For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Employee or the beneficiary to whom such distribution is being made will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in subsections (a) and (e). If a designation is revoked, any subsequent distribution must satisfy the requirements of Section 401(a)(9) of the Code and the regulations thereunder. If a designation is revoked after the date distributions are required to begin, the Trust must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Section 401(a)(9) of the Code and the regulations thereunder, but for the designation described in paragraphs (b) through (e). For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the Income Tax Regulations. Any changes in the designation generally will be considered to be a revocation of the designation, but the mere substitution or addition of another beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life). In the case of an amount transferred or rolled over from one plan to another plan, the rules in Q&A J-2 and Q&A J-3 of Section 1.401(a)(9)-1 of the Income Tax Regulations shall apply. EX-99.B14 5 Exhibit 14(d) The Fidelity Prototype Defined Benefit Pension Plan and Trust The Fidelity Prototype Defined Benefit Pension Plan and Trust Table of Contents Page ARTICLE I - DEFINITIONS 1 ARTICLE II - ELIGIBILITY 21 2.1 Conditions of Eligibility 21 2.2 Application for Participation 21 2.3 Eligibility Computation Periods 21 2.4 Years of Service for Eligibility 22 2.5 Return to Eligible Classification 22 ARTICLE III - BENEFITS 22 3.1 Normal Retirement Benefits 22 3.2 Early Retirement Benefits 23 3.3 Late Retirement Benefits 23 3.4 Disability Retirement Benefits 23 3.5 Death Benefits 23 3.6 Termination of Employment Before Retirement 24 3.7 Limitation on Benefits 24 3.8 Minimum Benefits Payable 26 3.9 Limitation on Distributions 26 3.10 No Suspension of Benefits 26 3.11 Payment of Benefits 26 ARTICLE IV - VESTING 26 4.1 Vesting of Employer Provided Accrued Benefit 26 4.2 Vesting Computation Periods 27 4.3 Years of Service for Vesting 27 4.4 Amendment of Vesting Schedule 27 4.5 Forfeitures 28 ARTICLE V - CONTRIBUTION AND VALUATION 28 5.1 Employer Contributions 28 5.2 Actuarial Methods 29 5.3 Rollover Contributions 29 5.4 Directed Investment Account 30 ARTICLE VI - DISTRIBUTION OF BENEFITS 30 6.1 Cash-Out Provisions 30 6.2 Immediate Distributions 30 6.3 Commencement of Benefits 31 6.4 Normal Form of Benefit 31 6.5 Qualified Joint and Survivor Annuities 32 6.6 Qualified Preretirement Survivor Annuities 32 6.7 Optional Forms of Payment 33 6.8 Required Distributions 34 6.9 Death Distribution Provisions 34 6.10 Life Expectancy 35 6.11 Transitional Rule 35 6.12 Eligible Rollover Distributions 36 ARTICLE VII - TOP HEAVY PROVISIONS 37 7.1 Top Heavy Plan Requirements 37 7.2 Minimum Vesting 37 7.3 Minimum Accrued Benefit 37 ARTICLE VIII - PLAN ADMINISTRATION 38 8.1 Powers and Responsibilities of the Employer 38 8.2 Assignment and Designation of Administrative Authority 39 8.3 Allocation and Delegation of Responsibilities 39 8.4 Powers, Duties and Responsibilities 39 8.5 Records and Reports 40 8.6 Appointment of Advisers 40 8.7 Information from Employer 40 8.8 Payment of Expenses 40 8.9 Majority Actions 40 8.10 Claims Procedure 40 8.11 Claims Review Procedure 41 8.12 Distribution for Minor Beneficiary 41 ARTICLE IX - TRUST PROVISIONS 41 9.1 Basic Responsibility of the Trustee 41 9.2 Investment Powers and Duties of the Trustee 42 9.3 Other Powers of the Trustee 42 9.4 Duties of the Trustee Regarding Payments 45 9.5 Trustee's Compensation and Expenses and Taxes 45 9.6 Annual Report of the Trustee 45 9.7 Resignation, Removal and Succession of Trustee 46 9.8 Trustee Indemnification 46 ARTICLE X - PLAN LOANS 46 10.1 Loans to Participants 46 ARTICLE XI - PLAN AMENDMENT 48 11.1 Amendment 48 ARTICLE XII - PLAN TERMINATION, MERGER OR CONSOLIDATION 48 12.1 Termination 48 12.2 Limitation of Benefits on Early Termination 49 12.3 Merger or Consolidation 50 ARTICLE XIII - MISCELLANEOUS 50 13.1 Control of Entities by Owner-Employees 50 13.2 Qualification 51 13.3 Participant's Rights 51 13.4 Alienation 51 13.5 Construction of Agreement 52 13.6 Gender and Number 52 13.7 Legal Action 52 13.8 Prohibition Against Diversion of Funds 52 13.9 Employer's and Trustee's Protective Clause 52 13.10 Insurer's Protective Clause 52 13.11 Sponsoring Organization Indemnification 53 13.12 Receipt and Release for Payments 53 13.13 Named Fiduciaries and Allocation of Responsibility 53 13.14 Headings 53 13.15 Location of Participant or Beneficiary Unknown 53 ARTICLE XIV - PARTICIPATING EMPLOYERS 54 14.1 Election to Become a Participating Employer 54 14.2 Requirements of Participating Employers 54 14.3 Designation of Agent 54 14.4 Employee Transfers 55 14.5 Amendment 55 14.6 Discontinuance of Participation 55 14.7 Administrator's Authority 55 The Fidelity Prototype Defined Benefit Pension Plan and Trust This Plan and Trust Document, as amended from time to time, together with the Adoption Agreement executed by the Employer and the Trustee shall constitute a Plan and Trust intended to qualify under Section 401(a) of the Code for the exclusive purpose of providing retirement benefits for those Employees and their Beneficiaries who qualify under the terms of the Plan. ARTICLE I - DEFINITIONS The following words and phrases as used herein shall have the meanings set forth below unless a different meaning is clearly required by the context: 1 "Accrued Benefit" means at any time the product of the Participant's normal retirement benefit multiplied by a fraction, not greater than one, the numerator of which is the Participant's Years of Participation at such time and the denominator of which is the Years of Participation the Participant would have at the later of the year containing the Participant's Normal Retirement Age or the current year. However, if in accordance with the Adoption Agreement the Plan has had a fresh-start, and after the latest Fresh-Start Date, the fresh-start rule used under the Plan is the formula with wear-away, the amount in the preceding sentence will not be less than the Participant's Frozen Accrued Benefit. If the Plan has had a fresh-start, and after the latest Fresh-Start Date, the fresh-start rule used under the Plan is the formula with extended wear-away, in determining the Participant's Accrued Benefit with respect to years of credited service after the latest Fresh-Start Date under the formula without wear-away, the numerator in the above fraction will be limited to the Participant's Years of Participation after the latest Fresh-Start Date. If this Plan satisfies the requirements of Treas. Reg. (sub-section) 1.401(a)(4)-13(d) for a fresh-start as of the last day of the last Plan Year beginning before January 1, 1994, then, notwithstanding any other provisions of the Plan, any section 401(a)(17) employee's Accrued Benefit, frozen in accordance with Treas. Reg. (sub-section) 1.401(a)(4)-13 as of a fresh-start date, shall be adjusted to reflect increases in the employee's Compensation after the fresh-start date. However, this adjustment may be made only if the adjustment will not cause the Plan to fail to satisfy the consistency requirement of Treas. Reg. (sub-section) 1.401(a)(4)-13(c), as modified by (sub-section) 1.401(a)(17)-1(e). In determining a section 401(a)(17) employee's Accrued Benefit in any Plan Year beginning on or after January 1, 1994, the portion of the employee's frozen Accrued Benefit attributable to Plan Years beginning before January 1, 1994, will be determined in accordance with Method A for TRA '86 section 401(a)(17) employees and Method B for OBRA '93 section 401(a)(17) employees. A "TRA '86 section 401(a)(17) employee" means an employee whose Accrued Benefit as of a date on or after the first day of the first Plan Year beginning on or after January 1, 1989, is based on Compensation for a year beginning prior to the TRA '86 statutory effective date that exceeded $200,000. An "OBRA '93 section 401(a)(17) employee" means an employee whose Accrued Benefit as of a date on or after the first day of the first Plan Year beginning on or after January 1, 1994, is based on Compensation for a year beginning prior to the first day of the first Plan Year beginning on or after January 1, 1994, that exceeded $150,000. Method A (employees who are both TRA '86 and OBRA '93 section 401(a)(17) employees): Step 1: Determine of each OBRA '93 section 401(a)(17) employee's frozen Accrued Benefit as of the last day of the last Plan Year beginning before January 1, 1989. Step 2: Adjust the amount in step 1 up through the last day of the last Plan Year beginning before the first Plan Year beginning on or after January 1, 1994, by multiplying it by the following fraction (not less than one). The numerator of the fraction is the TRA '86 section 401(a)(17) employee's average Compensation determined for the current year (as limited by section 401(a)(17), using the same definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1989. The denominator of the fraction is the employee's average Compensation for the last day of the Plan Year beginning before January 1, 1989, using the definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1989. Step 3: Determine the TRA '86 section 401(a)(17) employee's frozen Accrued Benefit as of the last day of the last Plan Year beginning before January 1, 1994. Step 4: Subtract the amount determined in step 2 from the amount determined in step 3. Step 5: Adjust the amount in step 4 by multiplying it by the following fraction (not less than 1). The numerator of the fraction is the TRA '86 section 401(a)(17) employee's average Compensation determined for the current year (as limited by section 401(a)(17)), using the same definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1994. The denominator of the fraction is the employee's average Compensation for the last day of the last Plan Year beginning before January 1, 1994, using the definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1994. Step 6: Adjust the amount in step 1 by multiplying it by the following fraction (not less than 1). The numerator of the fraction is the TRA '86 section 401(a)(17) employee's average Compensation for the current year (as limited by section 401(a)(17)), using the same definition of Compensation and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1989. The denominator of the fraction is the employee's average Compensation for the last day of the last Plan Year beginning before January 1, 1989, using the definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1989. Step 7: Add the amounts determined in step 5, and the greater of steps 6 or 2. Method B (employees who are only OBRA '93 section 401(a)(17) employees): Step 1: Determine the Accrued Benefit of each OBRA '93 section 401(a)(17) employee as of the last day of the Plan Year beginning before January 1, 1994. Step 2: Adjust the amount in step 1 by multiplying it by the following fraction (not less than 1). The numerator of the fraction is the average Compensation of the OBRA '93 section 401(a)(17) employee determined for the current year (as limited by section 401(a)(17)), using the same definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1994. The denominator of the fraction is the employee's average Compensation for the last day of the last Plan Year beginning before January 1, 1994, using the definition and Compensation formula in effect as of the last day of the last Plan Year beginning before January 1, 1994. When determining the Accrued Benefit, the normal retirement benefit is the annual benefit to which the Participant would be entitled if the Participant continues to earn annually until the later of the year containing the Participant's Normal Retirement Age or the current year, the Participant's current average annual Compensation. This rate of Compensation is computed on the basis of twelve times the Average Monthly Compensation taken into account under Section 1.11 of the Plan (but not to exceed the ten years of service immediately preceding the determination). For Plan Years beginning before Section 411 of the Code is applicable hereto, the Participants' Accrued Benefit shall be the greater of that provided by the Plan, or 1/2 of the benefit which would have accrued had the provisions of this Section 1.1 been in effect. In the event the Accrued Benefit as of the effective date of Section 411 of the Code is less than that provided by this Section 1.1, such difference shall be accrued in accordance with this Section 1.1. Notwithstanding the above, if an Employee resumes participation in the Plan following a Break in Service, he shall be credited with a Year of Participation for the period commencing on his reemployment date and ending at the beginning of the first day of the next Plan Year. A Participant shall be credited with a Year of Participation in the Plan Year in which he satisfies the eligibility requirements of Article II. 1 "Actuarial Equivalent" or "Actuarial Equivalence" means a form of benefit differing in time, period, or manner of payment from a specific benefit provided under the Plan but having the same value when computed using the interest rate and mortality table specified in the Adoption Agreement. Notwithstanding the preceding paragraph, Actuarial Equivalence will be determined on the basis of the interest rate described below, if it produces a benefit greater than that determined under the preceding paragraph. The interest rate used shall be: 1 the interest rate used by the Pension Benefit Guaranty Corporation (as of the first day of the Plan Year which contains the Annuity Starting Date) to value a benefit upon termination of an insufficient trusteed single-employer plan, if the present value of the benefit (using such rate) does not exceed $25,000; and 2 120 percent of the interest rate described in paragraph (a) above, if the present value of the benefit (determined under paragraph (a) above) exceeds $25,000; provided that in no event shall the present value of the benefit determined under this paragraph (b) be less than $25,000. 2 "Administrator" means the person or entity designated in the Adoption Agreement to administer the Plan. If no person or entity is so designated the Employer shall be the Administrator. 3 "Adoption Agreement" means the separate agreement which is executed by the Employer and which sets forth the elective provisions of this Plan and Trust. 4 "Aggregation Group" means a Required Aggregation Group or a Permissive Aggregation Group. 5 "Anniversary Date" means the anniversary date specified in the Adoption Agreement. 6 "Annual Addition" means the sum of the following amounts credited to a Participant's account for the Limitation Year: (a) Employer contributions; (b) Employee contributions; (c) forfeitures; (d) amounts allocated after March 31, 1984, to an individual medical account, as defined in Section 415(l)(2) of the Code, that is part of a pension or annuity plan maintained by the Employer. Also, amounts derived from contributions paid or accrued after December 31, 1985 which are attributable to post-retirement medical benefits allocated to the separate account of a Key Employee under a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by the Employer, are treated as Annual Additions to a defined contribution plan; and (e) allocations under a simplified employee pension, as defined in Section 408(k) of the Code, maintained by the Employer. 1 "Annual Benefit" means a retirement benefit under the Plan which is payable annually in the form of a straight life annuity. Except as provided below, a benefit payable in a form other than a straight life annuity must be adjusted to an Actuarially Equivalent straight life annuity before applying the limitations of Section 3.7. The interest rate assumption used to determine Actuarial Equivalence will be the greater of the interest rate specified in the Adoption Agreement or five percent. The Annual Benefit does not include any benefits attributable to employee contributions or rollover contributions, or the assets transferred from a qualified plan that was not maintained by the Employer. No actuarial adjustment to the benefit is required for (a) the value of a Qualified Joint and Survivor Annuity, (b) the value of benefits that are not directly related to retirement benefits (such as qualified disability benefits, pre-retirement death benefits and post-retirement medical benefits) and (c) the value of post-retirement cost-of-living increases made in accordance with Section 415(d) of the Code and section 1.415-3(c)(2)(iii) of the Federal Income Tax Regulations. 2 "Annuity Starting Date" means the first day of the first period for which an amount is paid as an annuity or any other form. 3 "Applicable Period" means whichever of the following periods ends last: (a) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; (b) a reasonable period ending after the individual becomes a Participant; (c) a reasonable period ending after the Plan ceases to fully subsidize the cost of the Qualified Preretirement Survivor Annuity; or (d) a reasonable period ending after Section 401(a)(11) of the Code first applies to the Participant. Notwithstanding the foregoing, the "Applicable Period" shall be a reasonable period ending after separation of service in the case of a Participant who separates from service before attaining age 35. A reasonable period ending after the enumerated events described in (b), (c) and (d) above is the end of the two year period beginning one year prior to the date the applicable event occurs and ending one year after that date. In the case of a Participant who separates from service before the Plan Year in which age 35 is attained, notice shall be provided within the two year period beginning one year prior to separation and ending one year after separation. If such a Participant thereafter returns to employment with the Employer, the Applicable Period for such Participant shall be redetermined. 4 "Average Monthly Compensation" means the monthly Compensation of a Participant as specified in the Adoption Agreement. If a Participant has less than the number of Years of Service specified in the Adoption Agreement from his date of employment to his date of termination, his Average Monthly Compensation will be based on his monthly Compensation during his months of service. 5 "Beneficiary" means the person(s) or entity designated by a Participant in a manner prescribed by the Administrator and in accordance with Section 1.50, to the extent applicable, to receive the benefits which are payable under the Plan upon or after the death of such Participant. In the event no valid designation of Beneficiary exists at the time of a Participant's death, any benefits payable under the Plan shall be paid to his spouse or, if none, to his estate. 6 "Break-in-Service" means a 12-consecutive month period (computation period) during which an Employee does not complete more than 500 Hours of Service with the Employer. An Employee shall not incur a Break-in-Service for the Plan Year in which he becomes a Participant, suffers Total and Permanent Disability, retires or dies. 7 "Code" means the Internal Revenue Code of 1986, as amended. 8 "Compensation" means, as elected by the Employer in the Adoption Agreement: 1 Information required to be reported under Sections 6041, 6051 and 6052 of the Code (wages, tips and other compensation as reported on Form W-2). Compensation is defined as wages within the meaning of Section 3401(a) of the Code, and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Sections 6041(d), 6051(a)(3) or 6052 of the Code. Compensation must be determined without regard to any rules under Section 3401(a) of the Code that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Code). 2 Section 3401(a) Wages. Compensation is defined as wages within the meaning of Section 3401(a) of the Code for the purposes of income tax withholding at the source but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Code). 3 Section 415 Safe-harbor. Compensation is defined as wages, salaries, and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer to the extent that the amounts are includable in gross income (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or other expense allowances under a nonaccountable plan (as described in Section (sub-section)1.62-6(c) of the Treasury Regulations), and excluding the following: (i) Employer contributions to a plan of deferred compensation which are not includable in the Employee's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; (ii) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; (iii) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and (iv) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in Section 403(b) of the Code (whether or not the contributions are actually excludable from the gross income of the Employee). For any self-employed individual covered under the Plan, Compensation will mean Earned Income. Compensation shall include only that compensation which is actually paid to the Participant during the determination period. Except as provided elsewhere in this Plan, the determination period shall be the period elected by the Employer in the Adoption Agreement. If the Employer makes no election, the applicable period shall be the Plan Year. Notwithstanding the above, if elected by the Employer in the Adoption Agreement, Compensation shall include any amount which is contributed by the Employer pursuant to a salary reduction agreement and which is not includable in the gross income of the Employee under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code. For years beginning after December 31, 1988 but before January 1, 1994, the annual Compensation of each Participant taken into account for determining all benefits provided under the Plan for any determination period shall not exceed $200,000. This limitation shall be adjusted by the Secretary of the Treasury at the same time and in the same manner as under Section 415(d) of the Code, except that the dollar increase in effect on January 1 of any calendar year is effective for years beginning in such calendar year. For Plan Years beginning on or after January 1, 1994, the annual Compensation of each Participant taken into account for determining all benefits provided under the Plan for any determination period shall not exceed $150,000. This limitation shall be adjusted for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. For Plan Years beginning on or after January 1, 1994, any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean this $150,000 limit. If the period over which Compensation is determined consists of fewer than 12 months, the annual Compensation limit is an amount equal to the otherwise applicable annual Compensation limit multiplied by a fraction, the numerator of which is the number of months in the short period, and the denominator of which is 12. In determining the Compensation of a Participant for purposes of this limitation, the rules of Section 414(q)(6) of the Code shall apply, except in applying such rules, the term "family" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the year. If, as a result of the application of such rules the adjusted $200,000 limitation is exceeded, then the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section prior to the application of this limitation. If Compensation for any prior determination period is taken into account in determining an Employee's benefits for the current determination period, the Compensation for such prior period is subject to the applicable annual compensation limit in effect for that prior period. For this purpose, for years beginning before the first day of the first Plan Year beginning on or after January 1, 1994, the applicable annual compensation limit is $150,000. 1 "Defined Benefit Fraction" means a fraction, the numerator of which is the sum of the Participant's Projected Annual Benefits under all the defined benefit plans (whether or not terminated) maintained by the Employer, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the Limitation Year under Sections 415(b) and (d) of the Code or 140 percent of the Participant's Highest Average Compensation including any adjustments under Section 415(b) of the Code. Notwithstanding the above, if the Participant was a Participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125 percent of the sum of the Annual Benefits under such plans which the Participant had accrued as of the close of the last Limitation Year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plans after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Section 415 of the Code for all Limitation Years beginning before January 1, 1987. 1 "Defined Contribution Fraction" means a fraction, the numerator of which is the sum of the Annual Additions to the Participant's account under all the defined contribution plans (whether or not terminated) maintained by the Employer for the current and all prior Limitation Years (including the Annual Additions attributable to the Participant's nondeductible employee contributions to this and all other defined benefit plans (whether or not terminated) maintained by the Employer, and the Annual Additions attributable to all welfare benefit funds, individual medical accounts and simplified employee pensions maintained by the Employer) and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior Limitation Years of service with the Employer (regardless of whether a defined contribution plan was maintained by the Employer). The maximum aggregate amount in any Limitation Year in the lesser of 125 percent of the dollar limitation determined under Sections 415(b) and (d) of the Code in effect under Section 415(c)(1)(A) of the Code or 35 percent of the Participant's Compensation for such year. If the Employee was a participant as of the first day of the first Limitation Year beginning after December 31, 1986, in one or more defined contribution plans maintained by the Employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal to the product of (1) the excess of the sum of the fractions over 1.0 times (2) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the plans after May 5, 1986, but using the Section 415 limitation applicable to the first Limitation Year beginning on or after January 1, 1987. The Annual Addition for any Limitation Year beginning before January 1, 1987, shall not be recomputed to treat all Employee contributions as Annual Additions. 1 "Determination Date" means (a) the last day of the preceding Plan Year, or (b) in the case of the first Plan Year, the last day of such Plan Year. 2 "Early Retirement Date" means any Anniversary Date (prior to the Normal Retirement Date) coinciding with or following the date on which a Participant has satisfied the age and service requirements specified in the Adoption Agreement. 3 "Earned Income" means the net earnings from self-employment derived from the trade or business with respect to which the Plan is established, for which personal services of the individual are a material income-producing factor. Net earnings will be determined without regard to items not included in gross income and the deductions allocable to such items. Net earnings are reduced by contributions by the Employer to a qualified plan to the extent deductible under Section 404 of the Code. Net earnings shall be determined with regard to the deduction allowed to the taxpayer by Section 164(f) of the Code for taxable years beginning after December 31, 1989. 4 "Election Period" means the period which begins on the first day of the Plan Year in which the Participant attains age 35 and ends on the date of the Participant's death. If a Participant separates from service prior to the first day of the Plan Year in which age 35 is attained, with respect to benefits accrued prior to separation, the election period shall begin on the date of separation. 5 "Employee" means any individual employed by the Employer (other than as an independent contractor) maintaining the Plan or by any other employer required to be aggregated with such Employer under Sections 414(b), (c), (m) or (o) of the Code. The term "Employee" shall also include any Leased Employee deemed to be an Employee of any Employer described in the preceding sentence as provided in Sections 414(n) or (o) of the Code. 6 "Employer" means the entity named in the Adoption Agreement as the Plan sponsor and any other employer which with the consent of the sponsoring Employer has completed and executed the Adoption Agreement, and any successor entity which shall maintain the Plan. For purposes of Section 3.7, the term "Employer" shall mean the entity that adopts the Plan and all members of the controlled group of corporations (as defined in Section 414(b) of the Code, as modified by Section 415(h) of the Code), all commonly controlled trades or businesses (as defined in Section 414(c) of the Code, as modified by Section 415(h) of the Code), or affiliated service groups (as defined in Section 414(m) of the Code) of which the adopting entity is a part and any other entity required to be aggregated pursuant to Section 414(o) of the Code. 7 "Entry Date" means the date(s) specified in the Adoption Agreement as of which eligible Employees may become Participants. 8 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 9 "Fiscal Year" means the Employer's accounting year as specified in the Adoption Agreement. 10 "Five-Percent Owner" means any Employee who owns (or is considered as owning within the meaning of Section 318 of the Code) more than five percent of the outstanding stock of the Employer or stock possessing more than five percent of the total combined voting power of all stock of the Employer or, if, the Employer is not a corporation, any person who owns more than five percent of the capital or profits interest in the Employer. For purposes of this Section, Section 318(a)(2)(C) of the Code shall be applied by substituting "five percent" for "50 percent" each time it appears therein. 11 "Fresh-Start Date" generally means the last day of a Plan Year preceding a Plan Year for which any amendment of the Plan that directly or indirectly affects the amount of a Participant's benefit determined under the current benefit formula (such as an amendment to the definition of compensation used in the current benefit formula or a change in the normal retirement age of the Plan) is made effective. However, if under the Adoption Agreement the fresh start group is limited to an acquired group of employees, or a group of employees with a frozen accrued benefit attributable to assets and liabilities transferred to the Plan, the Fresh Start Date will be the date designated in the Adoption Agreement. If this Plan has had a fresh start for all Participants, and in a subsequent Plan Year is aggregated for purposes of Code Section 401(a)(4) with another plan that did not make the same fresh start, this Plan will have a fresh start on the last day of the Plan Year preceding the Plan Year during which the plans are first aggregated. 12 "Frozen Accrued Benefit" means the amount of the Participant's Accrued Benefit determined in accordance with the provisions of the Plan applicable in the year containing the latest Fresh-Start Date, determined as if the Participant terminated employment with the Employer as of the latest Fresh-Start Date (or the date the Participant actually terminated employment with the Employer, if earlier), without regard to any amendment made to the Plan after that date other than amendments recognized as effective as of or before the date under Code Section 401(b) or Treas. Reg. Section 1.401(a)(4)-11(g). If the Participant has not had a fresh start, the Participant's Frozen Accrued Benefit will be zero. 1 If, as of the Participant's latest Fresh-Start Date, the amount of a Participant's Frozen Accrued Benefit was limited by the application of Section 415 of the Code, the Participant's Frozen Accrued Benefit will be increased for years after the latest Fresh-Start Date to the extent permitted under Section 415(d)(1) of the Code. In addition, the Frozen Accrued Benefit of a Participant whose Frozen Accrued Benefit includes the top-heavy minimum benefits provided in Section 7.3, will be increased to the extent necessary to comply with the average compensation requirement of Section 416(c)(1)(D)(i) of the Code. 2 If: (a) the Plan's normal form of benefit in effect on the Participant's latest Fresh-Start Date is not the same as the normal form under the Plan after such Fresh-Start Date and/or (b) the Normal Retirement Age for any Participant on that date was greater than the Normal Retirement Age for that Participant under the Plan after such Fresh-Start Date, the Frozen Accrued Benefit will be expressed as an Actuarially Equivalent benefit in the normal form under the Plan after the Participant's latest Fresh-Start Date, commencing at the Participant's Normal Retirement Age under the Plan in effect after such latest Fresh-Start Date. 3 If the Plan provides a new optional form of benefit with respect to a Participant's Frozen Accrued Benefit, such new optional form of benefit will be provided with respect to each Participant's entire Accrued Benefit (i.e., accrued both before and after the Fresh-Start Date). In addition, if this Plan is a unit credit plan, with respect to Plan Years beginning after the latest Fresh-Start Date, the current benefit formula will provide each Participant in the fresh-start group a benefit of not less than .5% of the Participant's average annual Compensation times the Participant's Years of Service after the latest Fresh-Start Date. If this is a flat benefit plan, then with respect to Plan Years beginning after the Plan's latest Fresh-Start Date, the current benefit formula will provide each Participant a benefit of not less than 25% of the Participant's average annual Compensation. If a Participant will have less than 50 Years of Service after the latest Fresh-Start Date through the year the Participant attains Normal Retirement Age (or current age, if later), then such minimum percentage will be reduced by multiplying it by the ratio that the Participant's Years of Service after the latest Fresh-Start Date bears to 50. 13 "Highest Average Compensation" means the average Compensation for the three consecutive Years of Service with the Employer that produces the highest average. 14 "Highly Compensated Employee" includes active Highly Compensated Employees and former Highly Compensated Employees. 1 An active Highly Compensated Employee includes any Employee who performs service for the Employer during the determination year and who, during the look-back year: (i) received compensation from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (ii) received compensation from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a member of the top-paid group for such year; or (iii) was an officer of the Employer and received compensation during such year that is greater than 50 percent of the dollar limitation in effect under Section 415(b)(1)(A) of the Code. If elected by the Employer in the Adoption Agreement, the preceding sentence will be modified by substituting $50,000 for $75,000 in (i) and by disregarding (ii). This simplified definition of "Highly Compensated Employee" will apply only to Employers that maintain significant business activities (and employ Employees) in at least two significantly separate geographic areas. The term Highly Compensated Employee also includes: (i) Employees who are both described in items (i), (ii) or (iii) above if the term "determination year" is substituted for the term "look-back year" and the Employee is one of the 100 Employees who received the most compensation from the Employer during the determination year; and (ii) Employees who are Five-Percent Owners at any time during the look-back year or determination year. 2 If no officer has satisfied the compensation requirement described in the first sentence of paragraph (a) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a Highly Compensated Employee. 3 For the purposes of this Section, the determination year shall be the Plan Year and the look-back year shall be the 12-month period immediately preceding the determination year. 4 A former Highly Compensated Employee includes any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no service for the Employer during the determination year, and was an active Highly Compensated Employee for either the separation year or any determination year ending on or after the date the Employee reaches age 55. 5 If an Employee is, during a determination year or look-back year, a family member of either a Five-Percent Owner who is an active or former Employee, or a Highly Compensated Employee who is one of the 10 most Highly Compensated Employees ranked on the basis of compensation paid by the Employer during such year, then the family member and the Five-Percent Owner or top-ten Highly Compensated Employee shall be aggregated. In such case, the family member and Five-Percent Owner or top-ten Highly Compensated Employee shall be treated as a single employee receiving compensation and Plan contributions or benefits equal to the sum of such compensation and contributions or benefits of the family member and Five-Percent Owner or top-ten Highly Compensated Employee. For purposes of this Section, family member includes the spouse, lineal ascendants and descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. 6 The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees, the number of Employees treated as officers and the compensation that is considered, will be made in accordance with Section 414(q) of the Code and the regulations thereunder. 15 "Hour of Service" means: 1 Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours will be credited to the Employee for the computation period in which the duties are performed; and 2 Each hour for which an Employee is paid, or entitled to payment by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), lay-off, military duty, jury duty or leave of absence. No more than 501 Hours of Service will be credited under this paragraph (b) for any single continuous period (whether or not such period occurs in a single computation period); and 3 Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service will not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). These hours will be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made. Hours of Service under this Section will be calculated and credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations which is incorporated herein by reference. Hours of Service will be credited for employment with other members of an affiliated service group (under Section 414(m) of the Code), a controlled group of corporations (under Section 414(b) of the Code), or a group of trades or businesses under common control (under Section 414(c) of the Code), of which the adopting Employer is a member and any other entity required to be aggregated with the Employer pursuant to Section 414(o) of the Code. Hours of Service will also be credited for any individual considered an Employee for purposes of this Plan under Sections 414(n) or (o) of the Code. Solely for purposes of determining whether a Break-in-Service has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, eight Hours of Service per day of such absence. For purposes of this Section, an absence from work for maternity or paternity reasons means an absence (i) by reason of the pregnancy of the individual, (ii) by reason of the birth of a child of the individual, (iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement; provided that an individual shall be credited with no more than 501 Hours of Service on account of any single period of absence for maternity or paternity reasons. The Hours of Service credited under this paragraph shall be credited in the computation period in which the absence begins if the crediting is necessary to prevent a Break-in-Service in that period, or in all other cases, in the following computation period. Service will be determined on the basis of the method selected in the Adoption Agreement. 1 "Insurer" means any legal reserve life insurance company which shall issue one or more annuity contracts under the Trust. 2 "Investment Manager" means any person, firm or corporation who is a registered investment adviser under the Investment Advisers Act of 1940, a bank as defined in that Act, or an insurance company qualified to perform services described in (a) under the laws of more than one state, and (a) who has the power to manage, acquire, or dispose of Plan assets, and (b) who acknowledges in writing its fiduciary responsibility to the Plan. 3 "Key Employee" means any Employee or former employee (and their Beneficiaries) who at any time during the Plan Year that includes the Determination Date or any of the four preceding Plan Years is (or was): 1 an officer of the Employer having annual compensation, greater than 50 percent of the amount in effect under Section 415(b)(1)(A) of the Code for any such Plan Year; provided that in no event shall the number of individuals treated as officers exceed 50 Employees, or, if it would result in a smaller number of officers, the greater of three Employees or 10 percent of the total number of Employees; 2 one of the 10 Employees having annual compensation from the Employer of more than the maximum dollar limitation in effect under Section 415(c)(1)(A) of the Code for the calendar year in which such Plan Year ends and owning (or considered as owning within the meaning of Section 318 of the Code) the largest interest in the Employer provided that such interest is more than 0.5 percent of the Employer. For purposes of this Section, Section 318(a)(2)(C) of the Code shall be applied by substituting "five percent" for "50 percent" each time it appear therein; 3 a Five-Percent Owner of the Employer; or 4 a one-percent owner of the Employer having annual compensation from the Employer of more than $150,000. For purposes of this section, "compensation" shall mean Compensation as defined in Section 1.15 and as elected by the Employer in the Adoption Agreement, except that it shall include amounts contributed by the Employer pursuant to a salary reduction agreement that are not includable in the Employee's gross income under Code Section 125, 402(e)(3), 402(h)(1)(B) or 403(b) regardless of the Employer's election in the Adoption Agreement. The determination of who is a Key Employee shall in all events be made in accordance with Code Section 416(i)(1) and the regulations thereunder. 1 "Late Retirement Date" means the Anniversary Date coinciding with or next following a Participant's actual retirement after having reached his Normal Retirement Date. 2 "Leased Employee" means any person (other than an Employee of the recipient) who pursuant to an agreement between the recipient and any other person ("leasing organization") has performed services for the recipient (or for the recipient and related persons determined in accordance with Section 414(n)(6) of the Code) on a substantially full-time basis for a period of at least one year, and such services are of a type historically performed by employees in the business field of the recipient employer. Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer. A Leased Employee shall not be considered an employee of the recipient if: (a) such employee is covered by a money purchase pension plan providing: (i) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined in Section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee's gross income under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code, (ii) immediate participation, and (iii) full and immediate vesting; and (b) Leased Employees do not constitute more than 20 percent of the recipient's nonhighly compensated workforce. 1 "Limitation Year" means the 12-consecutive month period elected by the Employer in the Adoption Agreement. All qualified plans maintained by the Employer must use the same Limitation Year. 2 "Maximum Permissible Amount" means, the lesser of $90,000 (the "defined benefit dollar limitation") or 100 percent of the Participant's Highest Average Compensation. Effective on January 1, 1988, and each January 1 thereafter, the defined benefit dollar limitation will be automatically adjusted to the new dollar limitation prescribed by the Secretary of the Treasury. The new limitation will apply to Limitation Years ending within the calendar year of the date of the adjustment. 1 If the Participant has less than 10 Years of Participation in the Plan, the defined benefit dollar limitation is reduced by one-tenth for each Year of Participation (or part thereof) less than 10. If the Participant has less than 10 Years of Service for vesting purposes with the Employer, the compensation limitation is reduced by one-tenth for each Year of Service (or part thereof) less than 10. The adjustment of the preceding sentence shall be applied in the denominator of the Defined Benefit Fraction based upon Years of Service. Years of Service shall include future years occurring before the Participant's Normal Retirement Age. Such future years shall include the year which contains the date the Participant reaches Normal Retirement Age, only if it can be reasonably anticipated that the Participant will receive a Year of Service for such year. 2 If the Annual Benefit of the Participant commences before the Participant's Social Security Retirement Age, but on or after age 62, the defined benefit dollar limitation as reduced above, if necessary, shall be determined as follows: (i) If the Participant's Social Security Retirement Age is 65, the dollar limitation for benefits commencing on or after age 62 is determined by reducing the defined benefit dollar limitation by 5/9 of one percent for each month by which benefits commence before the month in which the Participant attains age 65. (ii) If a Participant's Social Security Retirement Age is greater than 65, the dollar limitation for benefits commencing on or after age 62 is determined by reducing the defined benefit dollar limitation by 5/9 of one percent for each of the first 36 months and 5/12 of one percent for each of the additional months (up to 24 months) by which benefits commence before the month of the Participant's Social Security Retirement Age. 1 If the Annual Benefit of a Participant commences prior to age 62, the defined benefit dollar limitation shall be the Actuarial Equivalent of an annual benefit beginning at age 62. To determine Actuarial Equivalence, the interest rate assumption is the greater of the rate specified in the Adoption Agreement or five percent. Any decrease in the defined benefit dollar limitation determined in accordance with this paragraph (c) shall not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death of the Participant. 2 If the Annual Benefit of a Participant commences after the Participant's Social Security Retirement Age, the defined benefit dollar limitation as reduced in paragraph (a) above, if necessary, shall be adjusted so that it is the Actuarial Equivalent of an Annual Benefit of such dollar limitation beginning at the Participant's Social Security Retirement Age. To determine Actuarial Equivalence, the interest rate assumption used is the lesser of the rate specified in the Adoption Agreement or five percent. 2 "Non-Key Employee" means any Employee or former Employee (and their Beneficiaries) who is not a Key Employee with respect to the Plan for the Plan Year. 3 "Normal Retirement Age" means the age specified in the Adoption Agreement at which time a Participant shall become eligible to receive his normal retirement benefit. 4 "Normal Retirement Date" means the date specified in the Adoption Agreement on which a Participant shall become eligible to have his benefits distributed to him. 5 "Owner-Employee" means an individual who is a sole proprietor or who is a partner owning more than 10 percent of either the capital or profits interest of the partnership. 6 "Participant" shall mean any eligible Employee who elects to participate in the Plan as provided in Article II and who continues to be entitled to benefits under the Plan. 7 "Permissive Aggregation Group" means the Required Aggregation Group of plans plus any other plan or plans of the Employer that, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Section 401(a)(4) and Section 410 of the Code. 8 "Plan" shall mean this prototype Plan and the Adoption Agreement as executed by the Employer. 9 "Plan Year" is the 12 consecutive month period designated by the Employer in the Adoption Agreement. 10 "Present Value" means the value of a Participant's Accrued Benefit at the date of valuation determined pursuant to Section 1.2. 11 "Projected Annual Benefit" means the Annual Benefit to which the Participant would be entitled under the Plan assuming: 1 the Participant will continue employment until Normal Retirement Age (or current age, if later); and 2 the Participant's Compensation for the current Limitation Year and all other relevant factors used to determine benefits under the Plan will remain constant for all future Limitation Years. 12 "Qualified Election" means a waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity made in accordance with the following procedures. Any waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity shall not be effective unless: (a) the Participant's spouse consents in writing to the election; (b) the election designates a specific alternate Beneficiary, including any class of Beneficiaries or any contingent beneficiaries (or form of benefit) which may not be changed without spousal consent (or the spouse expressly permits designations by the Participant without any further spousal consent); (c) the spouse's consent acknowledges the effect of the election; and (d) the spouse's consent is witnessed by a Plan representative or notary public. In addition, a Participant's waiver of a Qualified Joint and Survivor Annuity will not be effective unless the election designates a form of benefit payment that may not be changed without spousal consent (or the spouse expressly permits designations by the Participant without any further spousal consent). If it is established to the satisfaction of a Plan representative that such written consent may not be obtained because there is no spouse or the spouse cannot be located, a waiver will be deemed a Qualified Election. Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A consent that permits designations by the Participant without any requirement of further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific beneficiary, and a specific form of benefit where applicable, and that the spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the spouse at any time prior to the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received proper notice. 13 "Qualified Joint and Survivor Annuity" means an immediate annuity for the life of the Participant with a survivor annuity for the life of the Participant's spouse which is not less than 50 percent and not more than 100 percent of the amount of the annuity which is payable during the joint lives of the Participant and the spouse and which is the Actuarial Equivalent of the normal form of benefit. The percentage of the survivor annuity under the Plan shall be 50 percent (unless a different percentage is elected by the Employer in the Adoption Agreement). A Participant may elect to have such annuity distributed upon attainment of the earliest retirement age under the Plan. 14 "Qualified Preretirement Survivor Annuity" means: 1 in the case of a Participant who dies after reaching the earliest date he could have retired under the Plan, an amount equal to the same benefit that would be payable if the Participant had retired with a Qualified Joint and Survivor Annuity on the day before the Participant's date of death; or 2 in the case of a Participant who dies on or before reaching the earliest date he could have retired under the Plan, an amount equal to the same benefit that would have been payable if the Participant had terminated his employment at the earlier of his actual termination of employment or death, survived until the earliest date he could have retired under the Plan, retired on that date with a Qualified Joint and Survivor Annuity and died on the next day. 15 "Required Aggregation Group" means (a) each qualified plan of the Employer (regardless of whether such plan has been terminated) in which at least one Key Employee participates or participated at any time during the five Plan Years ending on the Determination Date and (b) any other qualified plan of the Employer which enables a plan described in (a) to meet the requirements of Sections 401(a)(4) or 410 of the Code. 16 "Required Beginning Date" means: 1 except as provided in paragraph (b) below, the first day of April of the calendar year following the calendar year in which the Participant attains age 70 1/2; 2 with respect to a Participant who reached age 70 1/2 before 1988: (i) who is not a Five-Percent Owner, April 1 of the calendar year following the calendar year in which the later of retirement or attainment of age 70 1/2 occurs; or (ii) who is a Five-Percent Owner during any year beginning after December 31, 1979, April 1 following the later of (1) the calendar year in which he reaches age 70 1/2 or (2) the earlier of the calendar year with or within which ends the Plan Year in which he becomes a Five-Percent Owner, or the calendar year in which he retires. 1 A Participant shall be treated as a Five-Percent Owner for purposes of this Section if such Participant is a Five-Percent Owner as defined in Code Section 416(i) (determined in accordance with Code Section 416 but without regard to whether the Plan is Top Heavy) at any time during the Plan Year ending with or within the calendar year in which such owner attains age 66 1/2 or any subsequent Plan Year. 2 "Rollover Account" means the separate account established and maintained by the Administrator for each Participant with respect to his total interest in the Plan resulting from the Participant's rollover contributions. 3 "Self-Employed Individual" means an individual who has Earned Income for the taxable year from the trade or business for which the Plan is established; also an individual who would have had Earned Income but for the fact that the trade or business had no net profits for the taxable year. 4 "Social Security Retirement Age" means age 65 in the case of a Participant attaining age 62 before January 1, 2000 (i.e., born before January 1, 1938), age 66 for a Participant attaining age 62 after December 31, 1999 and before January 1, 2017 (i.e., born after December 31, 1937, but before January 1, 1955), and age 67 for a Participant attaining age 62 after December 31, 2016 (i.e., born after December 3, 1954). 5 "Sponsoring Organization" means Fidelity Management and Research Company, or its successor. 6 "Super Top Heavy Plan" means the Plan if it would be a Top-Heavy Plan if "90 percent" was substituted for "60 percent" each time it appears in Section 1.57. 7 "Top-Heavy Plan" means for any Plan Year beginning after December 31, 1983, the Plan, if any of the following conditions exist: 1 The Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group. 2 The Plan is part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60 percent. 3 The Plan is part of a Required Aggregation Group and part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent. 8 "Top-Heavy Ratio" means: 1 If the Employer maintains one or more defined benefit plans and the Employer has not maintained any defined contribution plan (including any simplified employee pension plan) which during the five-year period ending on the Determination Date has or has had account balances, the Top-Heavy Ratio for this Plan alone or for the Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of the present value of accrued benefits of all Key Employees as of the Determination Date(s) (including any part of any accrued benefit distributed in the five-year period ending on the Determination Date(s)) and the denominator of which is the sum of the present value of accrued benefits (including any part of any accrued benefit distributed in the five-year period ending on the Determination Date(s)), determined in accordance with Section 416 of the Code and the regulations thereunder. 2 If the Employer maintains one or more defined benefit plans and the Employer maintains or has maintained one or more defined contribution plans (including any simplified employee pension plan) which during the five-year period ending on the Determination Date(s) has or has had any account balances, the Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the present value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees, determined in accordance with paragraph (a) above, and the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the present value of accrued benefits under the defined benefit plan or plans for participants, determined in accordance with paragraph (a) above, and the account balances under the aggregated defined contribution plan or plans for all participants as of the Determination Date(s), all determined in accordance with Section 416 of the Code and the regulations thereunder. The account balances under a defined contribution plan in both the numerator and denominator of the Top-Heavy Ratio are increased for any distribution of an account balance made in the five-year period ending on the Determination Date. 3 For purposes of paragraph (a) and (b) above the value of account balances and the present value of accrued benefits shall be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Section 416 of the Code and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (i) who is a Former Key Employee, or (ii) who has not been credited with at least one Hour of Service with any Employer maintaining the Plan at any time during the five-year period ending on the Determination Date shall be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account shall be made in accordance with Section 416 of the Code and the regulations thereunder. Deductible employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans the value of account balances and accrued benefits shall be calculated with reference to the Determination Dates that fall within the same calendar year. The Accrued Benefit of a Participant other than a Key Employee shall be determined under (i) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or (ii) if there is not such a method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code. 1 "Top-Heavy Plan Year" means that, for a particular Plan Year commencing after December 31, 1983, the Plan is a Top-Heavy Plan. 2 "Total and Permanent Disability" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The disability of a Participant shall be determined by a licensed physician chosen by the Administrator. The determination shall be applied uniformly to all Participants. 3 "Trust" means the legal entity created by the trust provisions of this document. 4 "Trustee" shall mean the person(s) or entity specified in the Adoption Agreement. The term "Trustee" also means an entity that succeeds to the trust business of the Trustee by merger or acquisition, without further action or approval. 5 "Trust Fund" means all of the assets held by the Trustee under the Trust as the same shall exist from time to time. 6 "Valuation Date" means the date specified in the Adoption Agreement as of which account balances or Accrued Benefits are valued for purposes of calculating the Top-Heavy Ratio. 7 "Year of Participation" means a Plan Year during which a Participant completes more than 500 Hours of Service or is employed on the last day of the Plan Year. 8 "Year of Service" shall mean a 12-consecutive month period (computation period) herein set forth, during which an Employee completes at least 1000 Hours of Service. Years of Service with a predecessor employer will be treated as service for the Employer, as specified in the Adoption Agreement. ARTICLE II - ELIGIBILITY .1 Conditions of Eligibility. An Employee shall become eligible to participate in the Plan on the first Entry Date for which he has satisfied the eligibility requirements specified in the Adoption Agreement. The Employer shall give each Employee written notice of his eligibility to participate in the Plan in sufficient time to enable such Employee to submit an application for participation in the Plan prior to the close of the Plan Year in which he first becomes an eligible Employee. .2 Application for Participation. In order to become a Participant hereunder, each eligible Employee must make application to the Administrator for participation in the Plan and agree to the terms hereof. In the event an eligible Employee fails to file such application, the Employer shall file such application on behalf of such Employee on a nondiscriminatory basis. Upon the acceptance of any benefits under the Plan, such Employee shall automatically be bound by the terms and conditions of the Plan and all amendments hereto. .3 Eligibility Computation Periods. For purposes of determining Years of Service and Breaks-in-Service for purposes of eligibility, the initial eligibility computation period is the 12-consecutive month period beginning on the date the Employee first performs an Hour of Service for the Employer (or his reemployment date following a Break-in-Service). The succeeding eligibility computation periods shall be the Plan Year, commencing with the first Plan Year which begins prior to the first anniversary of the Employee's employment commencement date regardless of whether the Employee is entitled to be credited with 1,000 Hours of Service during the initial eligibility computation period. An Employee who is credited with 1,000 Hours of Service in both the initial eligibility computation period and the first Plan Year which commences prior to the first anniversary of the Employee's initial eligibility computation period will be credited with two Years of Service for purposes of eligibility to participate. Years of Service and Breaks-in-Service are measured on the same eligibility computation period. .4 Years of Service for Eligibility. All Years of Service with the Employer are counted toward eligibility except the following: (a) If the Plan requires more than one Year of Service for eligibility and if an Employee has a Break-in-Service before satisfying the Plan's requirement for eligibility, service before such Break-in-Service will not be taken into account. (b) In the case of a Participant who does not have any nonforfeitable right to his Accrued Benefit derived from Employer contributions, Years of Service before a period of consecutive Breaks-in-Service will not be taken into account in computing eligibility service if the number of consecutive Breaks-in-Service in such period equals or exceeds the greater of five or the aggregate number of Years of Service. Such aggregate number of Years of Service will not include any Years of Service disregarded under the preceding sentence by reason of prior Breaks-in-Service. (c) If a Participant's Years of Service are disregarded pursuant to the preceding paragraph, such Participant will be treated as a new Employee for eligibility purposes. If a Participant's Years of Service may not be disregarded pursuant to the preceding paragraph, such Participant shall continue to participate in the Plan, or, if terminated, shall participate immediately upon reemployment. .5 Return to Eligible Classification. In the event a Participant is no longer a member of an eligible class of Employees but has not incurred a Break-in-Service, such Employee will participate in the Plan immediately upon returning to an eligible class of Employees. If such Participant incurs a Break-in-Service, eligibility will be determined under the Break-in-Service rules described above. In the event an Employee who is not a member of an eligible class of Employees becomes a member of an eligible class, such Employee will participate in the Plan immediately if such Employee has satisfied the minimum age and service requirements, if any, and would have otherwise previously become a Participant. ARTICLE III - BENEFITS .1 Normal Retirement Benefits. The amount of monthly retirement benefit to be provided for each Participant who retires on his Normal Retirement Date shall be the benefit specified in the Adoption Agreement. A Participant's normal retirement benefit shall commence on his Normal Retirement Date and shall be paid in the normal form unless an optional form of benefit is selected in accordance with Article VI. The normal retirement benefit of each Participant shall not be less than the largest periodic benefit that would have been payable to the Participant upon separation from service at or prior to Normal Retirement Age under the Plan exclusive of Social Security supplements, premiums on disability or term insurance, and the value of disability benefits not in excess of the normal retirement benefit. For purposes of comparing periodic benefits in the same form, commencing prior to and at Normal Retirement Age, the greater benefit is determined by converting the benefit payable prior to Normal Retirement Age into the same form of annuity benefit payable at Normal Retirement Age and comparing the amount of such annuity payments. In the case of a Top Heavy Plan, a Participant's normal retirement benefit shall not be smaller than the minimum benefit to which the Participant is entitled under Section 7.3. Increases in a Participant's monthly retirement benefits resulting from a change in compensation shall be recognized as of each Anniversary Date, but decreases in monthly retirement benefits shall not be recognized until the decrease in compensation has been in effect for two Plan Years. .1 Early Retirement Benefits. If specified in the Adoption Agreement, a Participant may elect to retire on an Early Retirement Date. In the event that a Participant makes such an election, he shall be entitled to receive an early retirement benefit equal to his Accrued Benefit payable at his Normal Retirement Date. However, if a Participant so elects, he may receive payment of an early retirement benefit commencing on or before the first Anniversary Date coinciding with or next following his Early Retirement Date, which early retirement benefit shall be equal to the amount specified in Section 3.9 and in the Adoption Agreement. If a Participant separates from service before satisfying the age requirement for early retirement, but after satisfying the service requirement, the Participant will be entitled to elect an early retirement benefit upon satisfaction of such age requirement. .1 Late Retirement Benefits. At the request of a Participant he may be continued in employment beyond his Normal Retirement Date. The retirement benefit provided shall be equal to the greater of (i) the Actuarial Equivalent of the benefit to which the Participant would have been entitled if benefits commenced at Normal Retirement Age, and (ii) his Accrued Benefit, based on his Years of Service for benefit accrual up to his Late Retirement Date. .2 Disability Retirement Benefits. If specified in the Adoption Agreement, a Participant who becomes Totally and Permanently Disabled shall be entitled to receive a disability retirement benefit equal to the amount specified in the Adoption Agreement. On or before the Anniversary Date coinciding with or next following the event of a Participant's Total and Permanent Disability, the Administrator shall direct the Trustee to commence payment of benefits to such Participant. .3 Death Benefits. Death benefits payable by reason of the death of a Participant shall be paid to his Beneficiary in accordance with Article VI, the options selected in the Adoption Agreement and the following: upon the death of a participant subsequent to his Normal Retirement Date, but prior to commencement of his retirement benefits, his Beneficiary shall be entitled to a death benefit in an amount equal to the Actuarial Equivalent of the benefit the Participant would have received at his retirement date credited with interest subsequent to such date at the rate determined under Section 411(c)(2)(C) of the Code, if applicable. .4 Termination of Employment Before Retirement. (a) When a terminated Participant has incurred a Break-in-Service, his participation in the Plan shall cease. Subject to Section 3.2 and Article VI, a vested Participant who terminates employment before his Normal Retirement Date shall begin to receive his Accrued Benefit upon reaching his Normal Retirement Date. (b) Subject to Article VI, in the event a terminated Participant becomes Totally and Permanently Disabled prior to his Annuity Starting Date, such terminated Participant shall be entitled to receive the Present Value of his vested Accrued Benefit on or before the Anniversary Date coinciding with or next following the date of his Total and Permanent Disability. (c) Subject to Article VI, in the event of a terminated Participant's death prior to his Annuity Starting Date, his Beneficiary shall be entitled to receive the Present Value of such Participant's vested Accrued Benefit on or before the Anniversary Date coinciding with or next following the date of his death. (d) For the purposes of determining the Present Value of Accrued Benefit in this regard, the interest rate assumption shall be the lesser of the rate specified in the Adoption Agreement or the rate used by the Pension Benefit Guaranty Corporation for calculating immediate annuities for plan terminations. (e) If a former Participant again becomes a Participant, such renewed participation shall not result in duplication of benefits. Accordingly, if he has received a distribution of his vested Accrued Benefit under the Plan by reason of prior participation and such distribution has not been repaid in accordance with Article VI, such Participant's service with respect to which he has received a distribution shall be disregarded in determining his Accrued Benefit. .5 Limitation on Benefits. (a) This paragraph (a), except for sub-paragraph (a)(iii), applies regardless of whether any Participant is or has ever been a participant in another qualified plan maintained by the Employer. If any Participant is or has ever been a participant in another qualified plan, a welfare benefit fund, as defined in Section 419(e) of the Code, an individual medical account, as defined in Section 415(l)(2) of the Code or a simplified employee pension, as defined in Section 408(k) of the Code, maintained by the Employer, that provides an Annual Addition, paragraph (b) below is also applicable to that Participant's benefits. (i) The Annual Benefit otherwise payable to a Participant at any time will not exceed the Maximum Permissible Amount. If the benefit the Participant would otherwise accrue in a Limitation Year would produce an Annual Benefit in excess of the Maximum Permissible Amount, the rate of accrual will be reduced so that the Annual Benefit will equal the Maximum Permissible Amount. (ii) If a Participant has made nondeductible employee contributions under the Plan, the amount of such contributions is treated as an Annual Addition to a qualified defined contribution plan, for purposes of sub-paragraph 3.7(a)(i) and sub-paragraph 3.7(b)(ii). (iii) The limitation in sub-paragraph 3.7(a)(i) is deemed satisfied if the Annual Benefit payable to a Participant is not more than $1,000 multiplied by the Participant's number of Years of Service (not to exceed 10) with the Employer, and the Employer has not at any time maintained a defined contribution plan, a welfare benefit plan, or an individual medical account in which such Participant participated. (a) This paragraph (b) applies if any Participant is covered, or has ever been covered, by another qualified plan maintained by the Employer, including a qualified plan, a welfare benefit fund, an individual medical account or simplified employee pension that provides an Annual Addition. (i) If a Participant is, or has ever been, covered under more than one defined benefit plan maintained by the Employer, the sum of the Participant's Annual Benefits from all such plans may not exceed the Maximum Permissible Amount. The Employer will choose in the Adoption Agreement the method by which the plans will meet this limitation. (ii) If the Employer maintains, or at any time maintained, one or more qualified defined contribution plans covering any Participant in this Plan, a welfare benefit fund, an individual medical account or a simplified employee pension, the sum of the Participant's Defined Contribution Fraction and Defined Benefit Fraction will not exceed 1.0 in any Limitation Year, and the Annual Benefit otherwise payable to the Participant under this Plan will be limited as specified in the Adoption Agreement. (a) In the case of an individual who was a Participant in one or more defined benefit plans of the Employer as of the first day of the first Limitation Year beginning after December 31, 1986, the application of the limitations of this Section shall not cause the Maximum Permissible Amount for such individual under all such defined benefit plans to be less than the individual's current Accrued Benefit. The preceding sentence applies only if such defined benefit plans met the requirements of Section 415 of the Code for all Limitation Years beginning before January 1, 1987. A Participant's current Accrued Benefit for purposes of this paragraph (c) shall be determined as if the Participant had separated from service as of the close of the last Limitation Year beginning before January 1, 1987, and shall be expressed as an annual benefit within the meaning of Section 415(b)(2) of the Code. In determining the amount of a Participant's current Accrued Benefit the following shall be disregarded: (i) any change in the terms and conditions of the Plan after May 5, 1986; and (ii) any cost of living adjustments occurring after May 5, 1986. .1 Minimum Benefits Payable. Notwithstanding the provisions of Section 3.2 and 3.4, the benefits payable to a Participant or a Beneficiary pursuant to such Sections shall not be less than a Participant's Present Value of Vested Accrued Benefit as of the date of distribution. .2 Limitation on Distributions. In the event a Participant receives a distribution of his Vested Accrued Benefit prior to his Normal Retirement Age, the amount of the distribution shall be limited to his Vested Accrued Benefit reduced by 1/15th for each year prior to the earlier of his Normal Retirement Age or age 65 until age 60 and 1/30th for each year prior to age 60 until 55 and reduced actuarially for each additional year thereafter that the Anniversary Date on which he commenced to receive his benefit precedes his Normal Retirement Date as stated in the Adoption Agreement. .3 No Suspension of Benefits. In the event a Participant receiving benefits continues his employment or recommences employment with the Employer, his benefits will continue unchanged. .4 Payment of Benefits. Benefits under this Plan shall be paid only upon death, disability, normal or early retirement, or termination of employment, or upon Plan Termination. ARTICLE IV - VESTING .1 Vesting of Employer Provided Accrued Benefit. (a) The vested portion of a Participant's Employer-derived Accrued Benefit shall be a percentage of such Participant's Accrued Benefit determined on the basis of the Participant's Years of Service according to the vesting schedule specified in the Adoption Agreement. (b) Notwithstanding the vesting schedule elected by the Employer in the Adoption Agreement, a Participant's right to his Employer-derived Accrued Benefit shall be nonforfeitable upon the attainment of Normal Retirement Age. In addition, a Participant shall become fully vested upon satisfying the requirements for early retirement (if applicable). .2 Vesting Computation Periods. For purposes of determining Years of Service and Breaks-in-Service for purposes of vesting, the computation period is the Plan Year. For purposes of computing a Participant's vested interest in his Accrued Benefit, Years of Service and Breaks-in-Service shall be measured on the same computation period. .3 Years of Service for Vesting. (a) In the case of any Participant who has incurred a Break-in-Service, Years of Service before such Break-in-Service will not be taken into account until the Participant has completed a Year of Service after such Break-in-Service. (b) In the case of a Participant who has five or more consecutive Breaks-in-Service, his pre-break Years of Service will count in vesting of his post-break Employer-derived Accrued Benefit only if either: (i) such Participant had any nonforfeitable interest in his Accrued Benefit attributable to Employer contributions at the time of his separation from service, or (ii) upon returning to service the number of consecutive Breaks-in-Service is less than the number of Years of Service. .1 Amendment of Vesting Schedule. (a) If the Plan's vesting schedule is amended or the Plan is amended in any way that directly or indirectly affects the computation of a Participant's nonforfeitable Accrued Benefit, or if the Plan is deemed amended by an automatic change to or from a top-heavy vesting schedule, each Participant with at least three Years of Service with the Employer may elect within a reasonable period after the adoption of the amendment or change, to have his nonforfeitable percentage computed under the Plan without regard to such amendment or change. For Participants who do not have at least one Hour of Service in any Plan Year beginning after December 31, 1988, the preceding sentence shall be applied by substituting "five Years of Service" for "three Years of Service" where such language appears. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (i) 60 days after the amendment is adopted; (ii) 60 days after the amendment becomes effective; or (iii) 60 days after the Participant is issued written notice of the amendment by the Employer or Administrator. (a) No amendment to the Plan (including a change in the actuarial basis for determining optional or early retirement benefits) shall be effective to the extent that it has the effect of decreasing a Participant's Accrued Benefit. Notwithstanding the preceding sentence, a Participant's Accrued Benefit may be reduced to the extent permitted under Section 412(c)(8) of the Code. For purposes of this paragraph, a Plan amendment which has the effect of (i) eliminating or reducing an early retirement benefit or a retirement-type subsidy, or (ii) eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment, shall be treated as reducing accrued benefits. In the case of a retirement-type subsidy, the preceding sentence shall apply only with respect to a Participant who satisfies (either before or after the amendment) the preamendment conditions for the subsidy. In general, a retirement-type subsidy is a subsidy that continues after retirement, but does not include a qualified disability benefit, a medical benefit, a social security supplement, or a death benefit. Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's Employer-derived Accrued Benefit will not be less than the percentage computed under the Plan without regard to such amendment. .2 Forfeitures. The nonvested portion of a Participant's Accrued Benefit shall be forfeited upon the distribution of the Participant's entire vested Accrued Benefit. All such forfeitures shall be used only to reduce future costs of the Plan. If a Participant who has received a distribution of his vested Accrued Benefit thereafter again becomes an Employee, any forfeited portion of such Participant's Accrued Benefit shall be restored subject to the repayment provisions of Article VI and shall become vested, if at all, in accordance with this Article IV. ARTICLE V - CONTRIBUTION AND VALUATION .1 Employer Contributions. (a) No contribution shall be required under the Plan from any Participant. The Employer shall pay to the Trustee from time to time such amounts as the Administrator and Employer shall determine to be necessary to provide the benefits under the Plan determined by the application of accepted actuarial methods and assumptions. The Employer shall endeavor to make its contributions in quarterly installments in accordance with Section 412(m) of the Code. The method of funding shall be consistent with Plan objectives. However, the Employer may pay such contributions as appropriate directly to the Insurer, and such payment shall be deemed a contribution to the Plan to the same extent as if the payment had been made to the Trustee. (b) Notwithstanding anything herein to the contrary, if the Commissioner of Internal Revenue Service or his delegate should determine that the Plan does not initially qualify as a tax-exempt plan under Sections 401 and 501 of the Code, and such determination is not contested, or if contested, is finally upheld, any contribution made incident to that initial qualification by the Employer must be returned to the Employer within one year after the date the initial qualification is denied. (c) In the case of a contribution which is made by a mistake of fact, such contribution shall be returned to the Employer within one year after the payment of the contribution. (d) Notwithstanding any provisions to the contrary, any contribution by the Employer to the Trust Fund is conditioned upon the deductibility of the contribution by the Employer under the Code and, to the extent any such deduction is disallowed, the Employer may within one year following a final determination of the disallowance, whether by agreement with the Internal Revenue Service or by final decision of a court of competent jurisdiction, demand repayment of such disallowed contribution and the Trustee shall return such contribution within one year following the disallowance. .2 Actuarial Methods. In establishing the liabilities under the Plan and contributions thereto, the enrolled actuary will use such methods and assumptions as will reasonably reflect the cost of the benefits. The Plan assets are to be valued on the basis of any reasonable method of valuation that takes into account fair market value pursuant to regulations prescribed by the Secretary of Treasury. A determination of experience gains and losses and a valuation of the Plan's assets and liabilities shall be made at least once each Plan Year. .3 Rollover Contributions. (a) If specified in the Adoption Agreement and with the consent of the Administrator, amounts may be transferred from other qualified plans or individual retirement accounts in accordance with Section 402 or Section 408 of the Code. The amounts transferred shall be considered an additional Accrued Benefit and set up in a separate account herein referred to as a Participant's Rollover Account. Amounts in a Participant's Rollover Account shall be held by the Trustee pursuant to the provisions of the Plan, and such amounts shall not be subject to forfeiture for any reason and may not be withdrawn by or distributed to the Participant, in whole or in part, except as provided in paragraph (b) below. (b) At his Normal Retirement Date, or such other date when the Participant or his Beneficiary shall be entitled to receive benefits, the Participant's Rollover Account shall be used to provide additional benefits to the Participant or Beneficiary. (c) The Accrued Benefit under this Section shall be the balance of a Participant's Rollover Account as of any applicable date. Unless the Administrator directs that the Participant's Rollover Account be segregated into a separate account for such Participant it shall be invested as part of the general Trust Fund and shall share in any income earned thereon, any investment gains and losses attributable thereto, less any expenses. (d) The Administrator may direct that employee rollover contributions made after the first month of the Plan Year pursuant to this Section be segregated into a separate account for each Participant in Fidelity Cash Reserves, a money market mutual fund, until the first day of the following Plan Year (or the first day following any interim "valuation date"), at which time they shall be invested in accordance with paragraph (c) above. (e) All amounts allocated to a Participant's Rollover Account may be treated as a Directed Investment Account pursuant to Section 5.4. .4 Directed Investment Account. (a) If permitted in the Adoption Agreement all Participants may direct the Trustee as to the investment of all or a portion of their Rollover Account. Participants may direct the Trustee in writing to invest all or a portion of their Rollover Account in specific investments permitted under Section 9.2 and other applicable provisions of the Plan. To the extent so directed, the Trustees are relieved of their fiduciary responsibilities as provided in Section 404 of ERISA. That portion of the Rollover Account of any Participant so directing will thereupon be considered a Directed Investment Account which shall not share in Trust Fund earnings. Directed investment in "collectibles" as defined in Code Section 408(m) shall not be permitted. (b) A separate Directed Investment Account shall be established for each Participant who has directed an investment. Transfers between the Participant's regular account and his Directed Investment Account shall be charged and credited as the case may be to each account. The Directed Investment Account shall not share in Trust Fund earnings, but shall be charged or credited as appropriate with the net earnings, gains, losses and expenses as well as appreciations or depreciations in market value during each Plan Year attributable to such account. Such amounts shall not be considered in determining Trust Fund gains or losses. ARTICLE VI - DISTRIBUTION OF BENEFITS .1 Cash-Out Provisions. If a Participant terminates service, and the Present Value of the Participant's vested Accrued Benefit derived from Employer and Employee contributions is not greater than $3,500, the Employee will receive a distribution of the present value of the entire vested portion of such Accrued Benefit and the non-vested portion will be treated as a forfeiture. For purposes of this Section, if the present value of a Participant's vested Accrued Benefit is zero, the Participant shall be deemed to have received a distribution of such vested Accrued Benefit. .2 Immediate Distributions. If a Participant terminates service, and the Present Value of the Participant's vested Accrued Benefit derived from Employer and Employee contributions exceeds (or at the time of any prior distribution exceeded) $3,500, and the Accrued Benefit is immediately distributable, the Participant and the Participant's spouse must consent to any distribution of such Accrued Benefit. In accordance with the provisions of Section 6.5, the consent of the Participant and the Participant's spouse shall be obtained in writing within the 90-day period ending on the Annuity Starting Date. The Plan Administrator shall notify the Participant and the Participant's spouse of the right to defer any distribution until the Participant's Accrued Benefit is no longer immediately distributable. An Accrued Benefit is immediately distributable if any part of the Accrued Benefit could be distributed to the Participant (or surviving spouse) before the Participant attains (or would have attained if not deceased) the later of Normal Retirement Age or age 62. Notwithstanding the foregoing, only the Participant need consent to the commencement of a distribution in the form of a Qualified Joint and Survivor Annuity while the Accrued Benefit is immediately distributable. Neither the consent of the Participant nor the Participant's spouse shall be required to the extent that a distribution is required to satisfy Section 401(a)(9) or Section 415 of the Code. If a Participant receives a distribution pursuant to this Section and the Participant resumes covered employment under the Plan, he shall have the right to restore his Employer-provided Accrued Benefit (including all optional forms of benefits and subsidies relating to such benefits) to the extent forfeited upon the repayment to the Plan of the full amount of the distribution plus interest, compounded annually from the date of distribution at the rate determined for purposes of Section 411(c) of the Code. Such repayment must be made before the earlier of five years after the first date on which the Participant is subsequently reemployed by the Employer, or the date the Participant incurs five consecutive Breaks-in-Service following the date of distribution. If a Participant is deemed to receive a distribution pursuant to Section 6.1, and the Participant resumes employment covered under the Plan before the date the Participant incurs five consecutive Breaks-in-Service, upon the reemployment of such Participant, the Employer-provided Accrued Benefit will be restored to the amount of such Accrued Benefit on the date of the deemed distribution. .1 Commencement of Benefits. Unless the Participant elects otherwise, distribution of benefits will begin no later than the 60th day after the latest of the close of the Plan Year in which: (a) the Participant attains age 65 or Normal Retirement Age, if earlier; (b) occurs the 10th anniversary of the year in which the Participant commenced participation in the Plan; or (c) the Participant terminates service with the Employer. Notwithstanding the foregoing, the failure of a Participant and spouse to consent to a distribution while a benefit is immediately distributable, within the meaning of Section 6.2 of the Plan, shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy this Section. .1 Normal Form of Benefit. Subject to Section 6.5, the normal form of benefit from the Plan shall be a straight life annuity. The term "straight life annuity" means an annuity payable in equal installments for the life of the Participant that terminates upon the Participant's death. The amount of any other form of benefit under the terms of the Plan will be the Actuarial Equivalent of the Participant's Accrued Benefit in the normal form commencing at Normal Retirement Age. .2 Qualified Joint and Survivor Annuities. (a) Unless an optional form of benefit is selected pursuant to a Qualified Election within the 90-day period ending on the Annuity Starting Date, a married Participant's vested Accrued Benefit will be paid in the form of a Qualified Joint and Survivor Annuity. (b) The Plan Administrator shall provide each Participant no less than 30 days and no more than 90 days prior to the Annuity Starting Date a written explanation of: (i) the terms and conditions of a Qualified Joint and Survivor Annuity; (ii) the Participant's right to make and the effect of an election to waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the rights of a Participant's spouse; (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity; and (v) the relative values of the various optional forms of benefit under the Plan. .3 Qualified Preretirement Survivor Annuities. (a) Subject to Section 6.1, if a married Participant who is vested in his Accrued Benefit dies before his Annuity Starting Date, his spouse, if living on his date of death, shall receive a Qualified Preretirement Survivor Annuity, unless, pursuant to a Qualified Election, the Participant waived the Qualified Preretirement Survivor Annuity and his spouse consented to such waiver during the Election Period. (b) Subject to Section 6.1, if the Participant dies after reaching the earliest date on which he could have retired under the Plan, the surviving spouse's Qualified Preretirement Survivor Annuity shall commence within a reasonable period after the Participant's death; provided, however, that if the Participant dies before reaching his Normal Retirement Date, the spouse may elect to defer the payment of benefits until the first day of the month following the date on which the Participant would have reached his Normal Retirement Date. If the Participant dies before reaching the earliest date on which he could have retired under the Plan, the Qualified Preretirement Survivor Annuity shall begin on the date that would have been the earliest date on which the Participant could have retired under the Plan, or such later date as the spouse may elect, but no later than the date on which the Participant would have reached his Normal Retirement Date. The actuarial value of benefits that commence later than the date on which payments would have been made to the surviving spouse under a Qualified Joint and Survivor Annuity in accordance with this provision shall be adjusted to reflect the delayed payment so that they will be the Actuarial Equivalent of benefits beginning on such earlier date. (c) The Plan Administrator shall provide each Participant within the Applicable Period, a written explanation of: (i) the terms and conditions of the spouse's Qualified Preretirement Survivor Annuity; (ii) the right of the Participant to waive the spouse's Qualified Preretirement Survivor Annuity; and (iii) the rights of the Participant's spouse with respect to such waiver. If the Participant waives the spouse's Qualified Preretirement Survivor Annuity, the Participant's benefit shall be paid in one of the alternate forms available under the Plan. (d) In the event there is an election to waive the spouse's Qualified Preretirement Survivor Annuity, and for death benefits in excess of the Qualified Preretirement Survivor Annuity, such benefits shall be paid as directed by the Participant: (i) to his spouse, in one of the optional forms available under the Plan, beginning as soon as administratively practicable following the date of the Participant's death, or at such later time elected by the surviving spouse, beginning no later than December 31 of the year in which the Participant would have reached his Normal Retirement Date had he lived; or (ii) to a designated Beneficiary other than his spouse in one of the optional forms available under the Plan, beginning no later than December 31 of the year following the year of the Participant's death. (a) In the event there is a waiver of the Qualified Preretirement Survivor Annuity and an election to receive such benefit in the form of installment payments, then upon the death of the Participant, the Administrator shall direct the Trustee to segregate the Participant's Accrued Benefit into a separate Trust Fund and the Trustee shall invest such segregated Trust Fund separately and the funds accumulated in such Trust Fund shall be used for the payment of such installments. The Administrator, in its sole discretion, may direct the Trustee, to at any time, purchase for the benefit of the Participant's Beneficiary, an annuity with all amounts held in the segregated Trust Fund. .2 Optional Forms of Payment. Subject to the spousal consent requirements (if applicable) and in lieu of the normal form of benefit payment provided for in the Plan, a Participant may elect one of the following forms of benefit payment, each of which shall be the Actuarial Equivalent of the normal form of benefit payment, as described in Section 6.4: (a) A single lump-sum payment in cash or property; (b) Payments over a period certain in monthly, quarterly, semiannual or annual cash installments. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and his designated Beneficiary). (c) Purchase of an Annuity. However, such annuity may not be in any form that will provide payments over a period extending beyond either the life of the Participant (or the lives of the Participant and his designated Beneficiary) or the life expectancy of the Participant (or the life expectancy of the Participant and his designated Beneficiary). The terms of any annuity purchased and distributed to a Participant or Beneficiary must comply with the requirements of this Plan and must be nontransferable. .3 Required Distributions. The requirements of this Section will apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of this Plan. (a) All distributions required under this Section shall be determined and made in accordance with Section 401(a)(9) of the Code and the regulations promulgated thereunder, including the incidental benefit requirement. (b) The entire interest of a Participant must be distributed or begin to be distributed no later than the Participant's Required Beginning Date. (c) Distributions, if not made in a single-sum, may only be made over one of the following periods (or a combination thereof): (i) the life of the Participant; (ii) the life of the Participant and a designated Beneficiary; (iii) a period certain not extending beyond the life expectancy of the Participant; or (iv) a period certain not extending beyond the joint and last survivor expectancy of the Participant and a designated Beneficiary. .1 Death Distribution Provisions. (a) If a Participant dies after distribution of his Accrued Benefit has begun, the remaining portion of his Accrued Benefit will continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participant's death. (b) If a Participant dies before distribution of his Accrued Benefit begins, distribution of the Participant's entire Accrued Benefit shall be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death except to the extent that an election is made to receive distributions in accordance with (i) or (ii) below: (i) if any portion of the Participant's interest is payable to a designated Beneficiary, distributions may be made over the life or over a period certain not greater than the life expectancy of the designated Beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died; (ii) if the designated Beneficiary is the Participant's surviving spouse, the date distributions are required to begin in accordance with (i) above shall not be earlier than the later of (1) December 31 of the calendar year immediately following the calendar year in which the Participant died and (2) December 31 of the calendar year in which the Participant would have attained age 70 1/2. The Participant's designated Beneficiary must elect the method of distribution no later than the earlier of (1) December 31 of the calendar year in which distributions would be required to begin under this Section, or (2) December 31 of the calendar year which contains the fifth anniversary of the date of death of the Participant. If the Participant has no designated Beneficiary, or if the designated Beneficiary does not elect a method of distribution, distribution of the Participant's entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. For purposes of this Section, if the surviving spouse dies after the Participant, but before payments to such spouse begin, the provisions of this Section, with the exception of sub-paragraph b(ii), shall be applied as if the surviving spouse were the Participant. For purposes of this Section, any amount paid to a child of a Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. .1 Life Expectancy. Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Section 1.72-9 of the Treasury Regulations. Life expectancy of a Participant and a Participant's spouse may be recalculated, but not more frequently than annually. .2 Transitional Rule. Notwithstanding the other provisions of this Article VI and subject to Section 6.5, distribution on behalf of any Participant, including a Five-Percent Owner, may be made in accordance with all of the following requirements, regardless of when such distribution commences: (a) the distribution is one which would not have disqualified the Plan under Section 401(a)(9) of the Code as in effect prior to amendment by the Deficit Reduction Act of 1984; (b) the distribution is in accordance with a method of distribution designated by the Participant whose interest in the Plan is being distributed or, if the Participant is deceased, by a Beneficiary of such Participant; (c) such designation was in writing, was signed by the Participant or the Beneficiary, and was made before January 1, 1984; (d) the Participant had accrued a benefit under the Plan as of December 31, 1983; and (e) the method of distribution designated by the Participant or the Beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the Participant's death, the Beneficiaries of the Participant listed in order of priority. A distribution upon death will not be covered by this transitional rule unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the Participant. For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Participant, or the Beneficiary, to whom such distribution is being made, will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in paragraph (a) and (e) above. If a designation is revoked, any subsequent distribution must satisfy the requirements of Section 401(a)(9) of the Code and the regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the Plan must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been distributed to satisfy Section 401(a)(9) of the Code and the regulations thereunder, but for the provisions of this Section. Any changes in the designation will be considered to be a revocation of the designation. However, the substitute or addition of another Beneficiary under the designation shall not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, either directly or indirectly. .1 Eligible Rollover Distributions. (a) This Section applies to distributions made on or after January 1, 1993. Notwithstanding any provisions of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (b) An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (c) An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (d) A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (e) A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. ARTICLE VII - TOP HEAVY PROVISIONS .1 Top Heavy Plan Requirements. Unless the Employer elects in the Adoption Agreement to satisfy the Top-Heavy Plan requirements in each Plan Year, the Plan shall, notwithstanding any other provisions in the Plan to the contrary, satisfy the requirements of this Section for each Plan Year in which the Plan is a Top-Heavy Plan. .1 Minimum Vesting. For any Plan Year in which this Plan is a Top-Heavy Plan, one of the minimum vesting schedules as elected by the Employer in the Adoption Agreement will automatically apply to the Plan. The minimum vesting schedule applies to all benefits within the meaning of Section 411(a)(7) of the Code except those attributable to Employee contributions, including benefits accrued before the effective date of Section 416 of the Code and benefits accrued before the Plan become a Top-Heavy Plan. Further, no decrease in a Participant's nonforfeitable percentage may occur in the event the Plan's status as a Top-Heavy Plan changes for any Plan Year. However, this provision does not apply to the Accrued Benefit of any Employee who does not have an Hour of Service after the Plan has initially become a Top-Heavy Plan and such Employee's Accrued Benefit attributable to Employer contributions and forfeitures will be determined without regard to this provision. The minimum Accrued Benefit provided for in Section 7.3 below (to the extent required to be nonforfeitable under Section 416(b) of the Code) may not be forfeited under Section 411(a)(3)(B) or Section 411(a)(3)(D) of the Code. .1 Minimum Accrued Benefit. Unless a Participant is covered under another qualified plan or plans of the Employer and the Employer has specified in the Adoption Agreement that the minimum contribution or benefit requirement applicable to a Top-Heavy Plan shall be met in such other plan or plans, then for any Plan Year in which this Plan is a Top-Heavy Plan: (a) Each Participant who is not a Key Employee and has completed 1,000 Hours of Service will accrue a benefit (to be provided solely by Employer contributions and expressed as a life annuity commencing at Normal Retirement Age) of not less than two percent of his highest average Compensation for the five consecutive years for which the Participant had the highest Compensation. The aggregate Compensation for the years during such five-year period in which the Participant was credited with a Year of Service will be divided by the number of such years in order to determine average annual Compensation. The minimum accrual is determined without regard to any Social Security contribution. The minimum accrual applies even though under other Plan provisions the Participant would not otherwise be entitled to receive an accrual, or would have received a lesser accrual for the year because (i) the Non-Key Employee fails to make mandatory contributions to the Plan, (ii) the Non-Key Employee's Compensation is less than a stated amount, (iii) the Non-Key Employee is not employed on the last day of the accrual computation period, or (iv) the Plan is integrated with Social Security. (b) No additional benefit accruals shall be provided pursuant to paragraph (a) above to the extent that the total accruals on behalf of the Participant attributable to Employer contributions will provide a benefit expressed as a life annuity commencing at Normal Retirement Age that equals or exceeds 20 percent of the Participant's highest average Compensation for the five consecutive years for which the participant had the highest Compensation. (c) All accruals of Employer derived benefit, whether or not attributable to years for which the Plan is a Top-Heavy Plan, may be used in computing whether the minimum accrual requirements of paragraph (b) above are satisfied. (d) If the form of benefit is other than a single life annuity, the Employee must receive an amount that is the Actuarial Equivalent of the minimum single life annuity benefit. If the benefit commences at a date other than at Normal Retirement Age, the Employee must receive at least an amount that is the Actuarial Equivalent of the minimum single life annuity benefit commencing at Normal Retirement Age. ARTICLE VIII - PLAN ADMINISTRATION .1 Powers and Responsibilities of the Employer. (a) The Employer shall be empowered to establish the Trust and to appoint and remove the Trustee and the Administrator from time to time as it deems necessary. (b) The Employer shall establish a funding policy and method consistent with the objectives of the Plan. The Employer or its delegate shall communicate such funding policy to the Trustee, who shall coordinate such funding policy with the Plan's investment policy. The communication of such funding policy and method shall not, however, constitute a directive to the Trustee as to investment of the Trust Funds. Such funding policy and method shall be consistent with the objectives of this Plan and with the requirements of Title I of ERISA. (c) The Employer may in its discretion appoint an Investment Manager to manage all or a designated portion of the assets of the Plan. In such event, the Trustee shall follow the directive of the Investment Manager in investing the assets of the Plan managed by the Investment Manager. (d) The Employer shall periodically review the performance of any fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or pursuant to procedures established hereunder. This requirement may be satisfied by formal periodic review by the Employer or by a qualified person specifically designated by the Employer, through day-to-day conduct and evaluation, or through other appropriate means. .2 Assignment and Designation of Administrative Authority. The Employer shall appoint one or more Administrators. Any person, including, but not limited to, the Employees of the Employer, shall be eligible to serve as an Administrator. Any person so appointed shall signify his acceptance by filing written acceptance with the Employer. An Administrator may resign by delivering his written resignation to the Employer or be removed by the Employer by delivery of written notice of removal, to take effect at a date specified therein, or upon delivery to the Administrator if no date is specified. The Employer, upon the resignation or removal of an Administrator, shall promptly designate in writing a successor to this position. If the Employer does not appoint an Administrator, the Employer will function as the Administrator. .1 Allocation and Delegation of Responsibilities. If more than one person is appointed as Administrator, the responsibilities of each Administrator may be specified by the Employer and accepted in writing by each Administrator. In the event that no such delegation is made by the Employer, the Administrators may allocate the responsibilities among themselves, in which event the Administrators shall notify the Employer and the Trustee in writing of such action and specify the responsibilities of each Administrator. The Trustee thereafter shall accept and rely upon any documents executed by the appropriate Administrator until such time as the Employer or the Administrators file with the Trustee a written revocation of such designation. .2 Powers, Duties and Responsibilities. The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power to determine all questions arising in connection with the administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan provided, however, that any procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to be deemed a qualified plan under the terms of Section 401(a) of the Code as amended from time to time, and shall comply with the terms of ERISA and all regulations issued pursuant thereto. The Administrator shall have all powers necessary or appropriate to accomplish his duties under the Plan. .3 Records and Reports. The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to the Internal Revenue Service, Department of Labor, Participants, Beneficiaries and others as required by law. .4 Appointment of Advisers. The Administrator, or the Trustee with the consent of the Administrator, may appoint counsel, specialists, and advisers, and other persons as the Administrator or the Trustee deems necessary or desirable in connection with the administration of this Plan. .5 Information from Employer. To enable the Administrator to perform his functions, the Employer shall supply full and timely information to the Administrator on all matters relating to the Compensation of all Participants, their Hours of Service, their Years of Service, their retirement, death, disability, or termination of employment, and such other pertinent facts as the Administrator may require; and the Administrator shall advise the Trustee of such of the foregoing facts as may be pertinent to the Trustee's duties under the Plan. The Administrator may rely upon such information as is supplied by the Employer and shall have no duty or responsibility to verify such information. .6 Payment of Expenses. All expenses of administration may be paid out of the Trust Fund unless paid by the Employer. Such expenses shall include any expenses incident to the functioning of the Administrator, including, but not limited to, fees of accountants, counsel, and other specialists, and other costs of administering the Plan. Until paid, the expenses shall constitute a liability of the Trust Fund. However, the Employer may reimburse the Trust for any administration expense incurred pursuant to the above. Any administration expense paid to the Trust as a reimbursement shall not be considered as an Employer contribution. .7 Majority Actions. Except where there has been an allocation and delegation of administrative authority pursuant to Section 8.3, if there shall be more than one Administrator, they shall act by a majority of their number, but may authorize one or more of them to sign all papers on their behalf. .8 Claims Procedure. Claims for benefit under the Plan may be filed with the Administrator on forms supplied by the Employer. Written notice of the disposition of a claim shall be furnished to the claimant within 90 days after the application thereof is filed. In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided. In addition, the claimant shall be furnished with an explanation of the Plan's claims review procedure. .9 Claims Review Procedure. Any Employee, former Employee, or Beneficiary of either, who has been denied a benefit by a decision of the Administrator shall be entitled to request the Administrator to give further consideration to his claim by filing with the Administrator a written request for a hearing. Such request, together with a written statement of the reasons why the claimant believes his claim should be allowed, shall be filed with the Administrator no later than 60 days after receipt of the written notification of a denial of a claim. The Administrator shall then conduct a hearing within the next 60 days, at which the claimant may be represented by an attorney or any other representative of his choosing and at which the claimant shall have an opportunity to submit written and oral evidence and arguments in support of his claim. At the hearing (or prior thereto upon 5 business days written notice to the Administrator) the claimant or his representative shall have an opportunity to review all documents in the possession of the Administrator which are pertinent to the claim at issue and its disallowance. Either the claimant or the Administrator may cause a court reporter to attend the hearing and record the proceedings. In such event, a complete written transcript of the proceedings shall be furnished to both parties by the court reporter. The full expense of any such court reporter and such transcripts shall be borne by the party causing the court reporter to attend the hearing. A final decision as to the allowance of the claim shall be made by the Administrator within 60 days of receipt of the appeal (unless there has been an extension due to special circumstances, provided the delay and the special circumstances occasioning it are communicated to the claimant within the 60 day period). Such communication shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. .10 Distribution for Minor Beneficiary. In the event a distribution is to be made to a minor, then the Administrator may, in the Administrator's sole discretion, direct that such distribution be paid to the legal guardian, or if none, to a parent of such Beneficiary, a responsible adult with whom the Beneficiary maintains his residence, or to the custodian for such Beneficiary under the Uniform Gifts to Minors Act or Gifts to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides, so long as such person has a legal right to receive payments on behalf of the minor. Such a payment to the legal guardian or parent of a minor Beneficiary shall fully discharge the Trustee, Employer, and Plan from further liability on account thereof. ARTICLE IX - TRUST PROVISIONS .1 Basic Responsibility of the Trustee. The Trustee shall have the following categories of responsibilities: (a) Consistent with the funding policy and method determined by the Employer to invest, manage, and control the Plan assets subject, however, to the direction of an Investment Manager if the Employer should appoint such manager as to all or a portion of the assets of the Plan; (b) At the direction of the Administrator, to pay benefits required under the Plan to be paid to Participants, or, in the event of their death, to their Beneficiaries; (c) To maintain records of receipts and disbursements and furnish to the Employer and/or Administrator for each Fiscal Year a written annual report. If there shall be more than one Trustee, they shall act by a majority of their number, but may authorize one or more of them to sign papers on their behalf. .1 Investment Powers and Duties of the Trustee. The Trustee shall invest and reinvest the Trust Fund and keep the Trust Fund invested without distinction between principal and income, in such Registered Investment Company Shares (as hereinafter defined), other securities available through Fidelity Brokerage Services, Inc. and cleared through National Financial Services Corporation, or any other assets acceptable to the Trustee and approved by the Sponsoring Organization. The Trustee shall at all times in making investments of the Trust Fund consider, among other factors, the short and long-term financial needs of the Plan on the basis of information furnished by the Employer. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code or ERISA so that at all times this Plan may qualify as a qualified Plan and Trust. "Registered Investment Company Shares" shall mean the shares, trust certificates, partnership interests or other evidences of ownership in any one or more corporations, trusts or partnerships registered under the Investment Company Act of 1940 for which Fidelity Management & Research Company or any of its successors or affiliates serves as investment adviser. .2 Other Powers of the Trustee. The Trustee, in addition to all powers and authorities under common law, statutory authority, including ERISA, and other provisions of the Plan, but subject to Section 9.2 of the Plan, shall have the following powers and authorities, to be exercised in the Trustee's sole discretion: (a) To purchase, or subscribe for, any securities or other property and to retain the same; (b) To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement; (c) To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property; (d) To cause any securities or other property to be registered in the Trustee's own name or in the name of one or more of the Trustee's nominees, and to hold any investments in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust Fund; (e) To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing; (f) To keep such portion of the Trust Fund in cash or cash balances as the Trustee may, from time to time, deem to be in the best interests of the Plan, without liability for interest thereon; (g) To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder; (h) To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (i) To settle, compromise, or submit to arbitration any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings; (j) To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel may or may not be agent or counsel for the Employer; (k) To apply for and procure from responsible insurance companies, to be selected by the Administrator, as an investment of the Trust Fund such annuity contracts as the Administrator shall deem proper; to exercise, at any time or from time to time, whatever rights and privileges may be granted under such annuity contracts; to collect, receive, and settle for the proceeds of all such annuity, or other contracts as and when entitled to do sounder the provisions thereof; (l) Except as hereinafter expressly authorized, the Trustee is prohibited from selling or purchasing stock options. The Trustee is expressly authorized to write and sell call options under which the holder of the option has the right to purchase shares of stock held by the Trustee as a part of the assets of this Trust, if such options are traded on and sold through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, which exchange has been authorized to provide a market for option contracts pursuant to Rule 9B-1 promulgated under such Act, and so long as the Trustee at all times up to and including the time of exercise or expiration of any such option holds sufficient stock in the assets of this Trust to meet the obligations under such option if exercised. In addition, the Trustee is expressly authorized to purchase and acquire call options for the purchase of shares of stock covered by such options if the options are traded on and purchased through a national securities exchange as described in the immediately preceding sentence, and so long as any such option is purchased solely in a closing purchase transaction, meaning the purchase of an exchange traded call option the effect of which is to reduce or eliminate the obligations of the Trustee with respect to a stock option contract or contracts which it has previously written and sold in a transaction authorized under the immediately preceding sentence; (m) To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations; (n) To pool all or any of the Trust Fund, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or an affiliated company of the Employer, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests; (o) To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan. (p) Directed Investment Account. The powers granted to the Trustee shall be exercised in the sole fiduciary discretion of the Trustee. However, if Participants are so empowered by the Employer, each Participant may direct the Trustee to separate and keep separate all of his Rollover Account; and further each Participant is authorized and empowered, in his sole and absolute discretion, to give directions to the Trustee in such form as the Trustee may require concerning the investment of the Participant's Directed Investment Account in any one or more of the investments permitted in Section 9.2. Neither the Trustee nor any other persons including the Administrator shall be under any duty to question any such direction of the Participant or to review any securities or other property, or to make any suggestions to the Participant in connection therewith, and the Trustee shall comply as promptly as practicable with directions given by the Participant hereunder. Any such direction may be of a continuing nature or otherwise and may be revoked by the Participant at any time in such form as the Trustee may require. The Trustee shall not be responsible or liable for any loss or expense which may arise from or result from compliance with any directions from the Participant nor shall the Trustee be responsible for, or liable for, any loss or expense which may result from the Trustee's refusal or failure to comply with any directions from the Participant. The Trustee may refuse to comply with any direction from the Participant in the event the Trustee, in its sole and absolute discretion, deems such directions improper by virtue of applicable law. Any costs and expenses related to compliance with the Participant's directions shall be borne by the Participant's Directed Investment Account. Upon the written direction of the Administrator, the Trustee shall transfer some or all of the assets held under the Trust to another qualified plan or trust meeting the requirements of the Code. .1 Duties of the Trustee Regarding Payments. At the direction of the Administrator, the Trustee shall, from time to time, in accordance with the terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be responsible in any way for the application of such payments. .2 Trustee's Compensation and Expenses and Taxes. The Trustee shall be paid such reasonable compensation as shall from time to time be agreed upon in writing by the Employer and the Trustee. An individual serving as Trustee who already receives full-time pay from the Employer shall not receive additional compensation. In addition, the Trustee shall be reimbursed for any reasonable expenses, including reasonable counsel fees incurred by it as Trustee. Such compensation and expenses shall be paid from the Trust Fund unless paid or advanced by the Employer. All taxes of any kind and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect of, the Trust Fund or the income thereof, shall be paid from the Trust Fund. .3 Annual Report of the Trustee. Within sixty (60) days after the later of the Anniversary Date or receipt of the Employer's contribution for each Fiscal Year, the Trustee shall furnish to the Employer and Administrator a written statement of account with respect to the Fiscal Year for which such contribution was made setting forth: (a) the net income, or loss, of the Trust Fund; (b) the gains, or losses, realized by the Trust Fund upon sales or other disposition of the assets; (c) the increase, or decrease, in the value of the Trust Fund; (d) all payments and distributions made from the Trust Fund; and (e) such further information as the Trustee and/or Administrator deems appropriate. The Employer, upon its receipt of each such statement of account, shall acknowledge receipt thereof in writing and advise the Trustee and/or Administrator of its approval or disapproval thereof. Failure by the Employer to disapprove any such statement of account within thirty (30) days after its receipt thereof shall be deemed an approval thereof. The approval by the Employer of any statements of account shall be binding as to all matters embraced therein as between the Employer and the Trustee to the same extent as if the account of the Trustee had been settled by judgment or decree in an action for a judicial settlement of its account in a court of competent jurisdiction in which the Trustee, the Employer and all persons having or claiming an interest in the Plan were parties; provided, however, that nothing herein contained shall deprive the Trustee of its right to have its accounts judicially settled if the Trustee so desires. .4 Resignation, Removal and Succession of Trustee. (a) The Trustee may resign at any time by delivering to the Employer, at least thirty (30) days before its effective date, a written notice of his resignation. (b) The Employer may remove the Trustee by mailing by registered or certified mail, addressed to such Trustee at his last known address, at least thirty (30) days before its effective date, a written notice of his removal. (c) Upon the death, resignation, incapacity, or removal of any Trustee, a successor may be appointed by the Employer; and such successor, upon accepting such appointment in writing and delivering same to the Employer, shall, without further act, become vested with all the estate, rights, powers, discretions, and duties of his predecessor as if he were originally named as a Trustee herein. Until such a successor is appointed, the remaining Trustee or Trustees shall have full authority to act under the terms of the Plan and Trust. (d) Whenever any Trustee hereunder ceases to serve as such, he shall furnish to the Employer and Administrator a written statement of account with respect to the portion of the Fiscal Year during which he served as Trustee. This statement shall be either (i) included as part of the annual statement of account for the Fiscal Year required under Section 9.6 or (ii) set forth in a special statement. Any such special statement of account should be rendered to the Employer no later than the due date of the annual statement of account for the Fiscal Year. The procedures set forth in Section 9.6 for the approval by the Employer of annual statements of account shall apply to any special statement of account rendered hereunder and approval by the Employer of any such special statement in the manner provided in Section 9.6 shall have the same effect upon the statement as the Employer's approval of an annual statement of account. No successor to the Trustee shall have any duty or responsibility to investigate the acts or transactions of any predecessor who has rendered all statements of account required by Section 9.6 and this paragraph. .5 Trustee Indemnification. The Employer agrees to indemnify and save harmless the Trustee against any and all claims, losses, damages, expenses and liabilities the Trustee may incur in the exercise and performance of the Trustee's powers and duties hereunder, unless the same are determined to be due to gross negligence or willful misconduct. ARTICLE X - PLAN LOANS .1 Loans to Participants. .2 (a) If elected in the Adoption Agreement, the Trustee may, in the Trustee's sole discretion, make loans to Participants and Beneficiaries under the following circumstances: (i) loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis; (ii) loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees; and (iii) loans shall be adequately secured and bear a reasonable rate of interest. (b) A Participant must obtain the consent of his spouse, if any, within the 90 day period before the time the Accrued Benefit is used as security for the loan. The consent must be in writing, must acknowledge the effect of the loan and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that loan. A new consent shall be required if the Accrued Benefit is used for negotiation, extension, renewal, or other revision of the loan. (c) In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. (d) Loans shall not be made to any shareholder-employee or Owner-Employee. For purposes of this requirement, a "shareholder-employee" means an Employee or officer of an electing small business (Subchapter S) corporation who owns (or is considered as owning within the meaning of Section 318(a)(1) of the Code), on any day during the taxable year of such corporation, more than 5% of the outstanding stock of the corporation. (e) No loan to any Participant or Beneficiary may be made to the extent that such loan when added to the outstanding balance of all other loans to the Participant or Beneficiary would exceed the lesser of: (i) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is made, over the outstanding balance of loans from the plan on the date the loan is made; or (ii) one-half of the present value of the Participant's vested Accrued Benefit or, if greater, the total Accrued Benefit up to $10,000. For the purpose of the above limitation, all loans from all plans of the Employer and other members of a group of employers described in Sections 414(b), (c), (m) and (o) shall be aggregated. However, if the Participant is an affected Employee under the pre-termination restrictions in Section 12.2, the total of all the affected Employee's outstanding loans will not exceed the amount that such affected Employee would be entitled to under the pre-termination restrictions. (a) Any loan shall by its terms require that repayment (principal and interest) be amortized in level payments, not less frequently than quarterly, over a period not extending beyond the five years from the date of the loan, unless such loan is used to acquire a dwelling unit which within a reasonable time (determined at the time the loan is made) will be used as the principal residence of the Participant. ARTICLE XI - PLAN AMENDMENT .1 Amendment. Fidelity Management and Research Company, the sponsoring organization, may amend any part of the Plan. The Employer shall have the right at any time to amend the Adoption Agreement, including but not limited to amendments stated in the Adoption Agreement which allow the Plan to satisfy Section 415 of the Code or to avoid duplication of minimum benefits under Section 416 of the Code because of the required aggregation of multiple plans. However, no such amendment shall authorize or permit any part of the Trust (other than such part as is required to pay taxes and administration expenses) to be used for or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries; no such amendment shall cause any reduction in the Accrued Benefit of any Participant, or cause or permit any portion of the Trust Fund to revert to or become the property of the Employer (unless all Plan liabilities have first been satisfied); and no such amendment which affects the rights, duties or responsibilities of the Trustee and Administrator may be made without the Trustee's and Administrator's written consent. If the Employer amends any provision other than those contained in the Adoption Agreement, it shall no longer participate in this master or prototype Plan, but will be considered to have an individually designed plan. ARTICLE XII - PLAN TERMINATION, MERGER OR CONSOLIDATION .1 Termination. The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee and Administrator written notice of such termination. Upon any termination (full or partial), all unallocated amounts shall be allocated in accordance with the provisions hereof and the Accrued Benefit of each affected Participant shall become fully vested and shall not thereafter be subject to forfeiture. Upon termination of the Plan, the Employer, by written notice to the Trustee and Administrator, may direct either: (a) continuation of the Trust and the distribution of benefits at such time and in such manner as though the Plan had not been terminated; or (b) subject to paragraph (c) of this Section, complete distribution of the assets in the Trust Fund to the Participants. (c) upon full or partial termination of the Plan, the Administrator shall, subject to provision for expense of administration or liquidation, allocate Plan assets in accordance with the priorities of Section 4044 of ERISA. Any excess assets remaining after such allocation shall be returned to the Employer in accordance with ERISA Section 4044(d). .2 Limitation of Benefits on Early Termination. (a) In the event of Plan termination, the benefit of any Highly Compensated Employee is limited to a benefit that is not discriminatory under Section 401(a)(4) of the Code. (b) Benefits distributed to any of the 25 most Highly Compensated Employees with the greatest Compensation in the current or any prior year are restricted such that the annual payments are not greater than an amount equal to the payment that would be made on behalf of the Employee under a straight life annuity that is the Actuarial Equivalent of the sum of the Employee's Accrued Benefit, the Employee's other benefits under the Plan (other than a Social Security supplement, within the meaning of Section 1.411(a)-7(c)(4)(ii) of the Income Tax Regulations), and the amount the Employee is entitled to receive under a Social Security supplement. (c) The preceding paragraph shall not apply if: (i) after payment of the benefit to an Employee described in the preceding paragraph, the value of Plan assets equals or exceeds 110 percent of the value of current liabilities, as defined in Section 412(l)(7) of the Code, (ii) the value of the benefits for an Employee described above is less than one percent of the value of current liabilities before such distribution, or (iii) the value of the benefits payable under the Plan to an Employee described above does not exceed $3,500. (a) For purposes of this Section, benefits include loans in excess of the amount set forth in Section 72(p)(2)(A) of the Code, any periodic income, any withdrawal values payable to a living employee and any death benefits not provided for by insurance on the Employee's life. (b) An Employee's otherwise restricted benefit may be distributed in full to the affected Employee if prior to the receipt of the restricted amount, the Employee enters into a written agreement with the Plan Administrator to secure repayment to the Plan of the restricted amount. The restricted amount is the excess of the amounts distributed to the Employee (accumulated with reasonable interest) over the amounts that could have been distributed to the Employee under the straight life annuity described in Article VI of the Plan (accumulated with reasonable interest). The Employee may secure repayment of the restricted amount upon distribution by: (i) entering into an agreement for promptly depositing in escrow with an acceptable depository, property having a fair market value equal to at least 125 percent of the restricted amount, (ii) providing a bank letter of credit in an amount equal to at least 100 percent of the restricted amount, or (iii) posting a bond equal to at least 100 percent of the restricted amount. If the Employee elects to post bond, the bond will be furnished by an insurance company, bonding company or other surety for Federal bonds. (a) The escrow arrangement may provide that an Employee may withdraw amounts in excess of 125 percent of the restricted amount. If the market value of the property in an escrow account falls below 110 percent of the remaining restricted amount, the Employee must deposit additional property to bring the value of the property held by the depository up to 125 percent of the restricted amount. The escrow arrangement may provide that the Employee may have the right to receive any income from the property placed in escrow, subject to the Employee's obligation to deposit additional property, as set forth in the preceding sentence. If the Plan Administrator certifies to the depository, surety or bank that the Employee (or the Employee's estate) is no longer obligated to repay any restricted amount, a depository may deliver to the Employee any property held under an escrow agreement, and a surety or bank may release any liability on an Employee's bond or letter of credit. .2 Merger or Consolidation. In the event of a merger or consolidation with, or transfer of assets to any other plan, each Participant will receive a benefit immediately after such merger, consolidation or transfer (if the Plan then terminated) which is at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the merger, consolidation or transfer. ARTICLE XIII - MISCELLANEOUS .1 Control of Entities by Owner-Employees. (a) If this Plan provides contributions or benefits for one or more Owner-Employees who control both the business for which this Plan is established and one or more other trades or businesses, this Plan and the plan established for other trades or businesses must, when looked at as a single plan, satisfy Sections 401(a) and (d) of the Code for the employees of this and all other trades or businesses. (b) If this Plan provides contributions or benefits for one or more Owner-Employees who control one or more other trades or businesses, the employees of the other trades or businesses must be included in a plan which satisfies Sections 401(a) and (d) of the Code and which provides contributions and benefits not less favorable than provided for Owner-Employees under this Plan. (c) If an individual is covered as an Owner-Employee under the plans of two or more trades or businesses which are not controlled and the individual controls a trade or business, then the benefits or contributions of the employees under the plan of the trade or business which are controlled must be as favorable as those provided for him under the most favorable plan of the trade or business which is not controlled. (d) For purposes of the preceding paragraphs, an Owner-Employee, or two or more Owner-Employees, will be considered to control a trade or business if the Owner-Employee, or two or more Owner-Employees together: (i) own the entire interest in an unincorporated trade or business, or (ii) in the case of a partnership, own more than 50 percent of either the capital interest or the profits interest in the partnership. For purposes of the preceding sentence, an Owner-Employee, or two or more Owner-Employees shall be treated as owning any interest in a partnership which is owned, directly or indirectly, by a partnership which such Owner-Employee, or such two or more Owner-Employees, are considered to control within the meaning of the preceding sentence. .1 Qualification. The Employer shall immediately notify Fidelity Management & Research Company of any determination that its Plan does not meet the requirements of Section 401(a) of the Code and such Plan shall no longer be considered a Plan established through adoption of this Prototype Plan, and will be considered an individually designed plan. .2 Participant's Rights. This Plan shall not be deemed to constitute a contract between the Employer and any Participant or to be consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan. .3 Alienation. (a) No benefit which shall be payable out of the Trust Fund to any person (including a Participant or Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void. The preceding sentence shall not apply to a "qualified domestic relations order" as defined in Section 414(p) of the Code or any domestic relations order entered before January 1, 1985. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under the Plan. (b) In the event a Participant's benefits are garnished or attached by order of any court, the Administrator may bring an action for a declaratory judgment in a court of competent jurisdiction to determine the proper recipient of the benefits to be paid by the Plan. During the pendency of said action, any benefits that become payable shall be paid into the court as they become payable, to be distributed by the court to the recipient it deems proper at the close of said action. .4 Construction of Agreement. This Plan shall be construed and enforced according to ERISA and the laws of the State or Commonwealth in which this Plan was executed, other than its laws respecting choice of law, to the extent not preempted by ERISA. .5 Gender and Number. Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply. .6 Legal Action. In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan established hereunder to which the Trustee or the Administrator may be a party, and such claim, suit, or proceeding is resolved in favor of the Trustee or Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, attorney's fees, and other expenses pertaining thereto incurred by them for which they shall have become liable. .7 Prohibition Against Diversion of Funds. It shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any trust fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Beneficiaries. .8 Employer's and Trustee's Protective Clause. Neither the Employer nor the Trustee, nor their successors, shall be responsible for the validity of any annuity contract issued hereunder or for the failure on the part of the Insurer to make payments provided by any such contract, or for the action of any person which may delay payment or render a contract null and void or unenforceable in whole or in part. .9 Insurer's Protective Clause. The Insurer who shall issue contracts hereunder shall not have any responsibility for the validity of this Plan or for the tax or legal aspects of this Plan. The Insurer shall be protected and held harmless in acting in accordance with any written direction of the Trustee, and shall have no duty to see to the application of any funds paid to the Trustee, nor be required to question any actions directed by the Trustee. Regardless of any provision of this Plan, the Insurer shall not be required to take or permit any action or allow any benefit or privilege contrary to the terms of any contract which it issues hereunder, or the rules of the Insurer. .10 Sponsoring Organization Indemnification. The Employer and the Trustee agree to indemnify and save harmless the Sponsoring Organization and its affiliates from and against any and all claims, losses, damages, expenses and liabilities the Sponsoring Organization may incur in connection with this Plan, unless the same are determined to be due to the Sponsoring Organization's (or affiliate's) gross negligence or willful misconduct. .11 Receipt and Release for Payments. Any payment to any Participant, his legal representative, Beneficiary, or to any guardian appointed for such Participant or Beneficiary made in accordance with the provisions of this Plan, shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Trustee and the Employer, either of whom may require such Participant, legal representative, Beneficiary or guardian as a condition precedent to such payment, to execute a receipt and release thereof in such form as shall be determined by the Trustee or Employer. .12 Named Fiduciaries and Allocation of Responsibility. The "named fiduciaries" of this Plan are (1) the Employer, (2) the Administrator, (3) the Trustee and (4) any Investment Manager appointed hereunder. The named fiduciaries shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under this Plan. Each named fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of this Plan, authorizing or providing for such direction, information or action. Furthermore, each named fiduciary may rely upon any such direction, information or action of another named fiduciary as being proper under this Plan and is not required to inquire into the propriety of any such direction, information or action. It is intended under this Plan that each named fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations. No named Fiduciary shall guarantee the Trust Fund in any manner against investment loss or depreciation in asset value. Any person or group may serve in more than one fiduciary capacity. .13 Headings. The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. .14 Location of Participant or Beneficiary Unknown. In the event that all, or any portion, of the distribution payable to a Participant or his Beneficiary hereunder shall, at the expiration of five (5) years after it shall become payable, remain unpaid solely by reason of the inability of the Administrator, after sending a registered letter, return receipt requested, to the last known address, and after further diligent effort, to ascertain the whereabouts of such Participant or his Beneficiary, the amount so distributable shall be forfeited and shall be used to reduce the cost of the Plan. In the event a Participant or Beneficiary is located subsequent to his benefit being forfeited, such benefit shall be restored. ARTICLE XIV - PARTICIPATING EMPLOYERS .1 Election to Become a Participating Employer. Notwithstanding anything herein to the contrary, with the consent of the Employer and Trustee, any other corporation or entity (provided an Owner-Employer of such entity does not participate in the Plan for Plan Years beginning before January 1, 1984), whether an affiliate or subsidiary or not, may adopt this Plan and all of the provisions hereof, and participate herein and be known as a "Participating Employer". .2 Requirements of Participating Employers. (a) Each Participating Employer shall be required to select the same Adoption Agreement provisions (including the same Trustee) as those selected by the Employer. (b) The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof. (c) On the basis of information furnished by the Administrator, the Trustee shall keep separate books and records concerning the affairs of each Participating Employer hereunder and as to the Accrued Benefits of the Participants of each Participating Employer. The Trustee may, but need not, register contracts so as to evidence that a particular Participating Employer is the interested Employer hereunder, but in any event of Employee transfer from one Participating Employer to another, the employing Employer shall immediately notify the Trustee thereof. (d) In the event of termination of employment of any transferred Employee, any portion of the Accrued Benefit of such Employee which has not been vested under the provisions of this Plan shall be allocated by the Trustee at the direction of the Administrator to the respective equities of the Participating Employers for whom such Employee has rendered service in the proportion that each Participating Employer has contributed toward the benefits of such Employee. The amount so allocated shall be retained by the Trustee and shall be used to reduce the contribution by the respective Participating Employer, for the next succeeding year or years. (e) (f) 1 Any expenses of the Trust which are to be paid by the Employer or borne by the Trust Fund shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants. 2 Designation of Agent. Each Participating Employer shall be deemed to be a part of this Plan; provided, however, that with respect to all of its relations with the Trustee and Administrator for the purpose of this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer as its agent. Unless the context of the Plan clearly indicates the contrary, the word "Employer" shall be deemed to include each Participating Employer as related to its adoption of the Plan. 3 Employee Transfers. It is anticipated that an Employee may be transferred between Participating Employers, and in the event of any such transfer, the Employee involved shall carry with him such accumulated service eligibility. No such transfer shall effect a termination of employment hereunder, and the Participating Employer to which the Employee is transferred shall thereupon become obligated hereunder with respect to such Employee in the same manner as was the Participating Employer from whom the Employee was transferred. 4 Amendment. Amendment of this Plan by the Employer at any time when there shall be a Participating Employer hereunder shall only be by the written action of each and every Participating Employer and with the consent of the Trustee where such consent is necessary in accordance with the terms of this Plan. 5 Discontinuance of Participation. Any Participating Employer shall be permitted to discontinue or revoke its participation in the Plan. At the time of any such discontinuance or revocation, satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the Trustee. The Trustee shall thereafter transfer, deliver and assign contracts and other Trust Fund assets allocable to the Participants of such Participating Employer to such new Trustee as shall have been designated by such Participating Employer, in the event that it has established a separate pension plan for its Employees. If no successor is designated, the Trustee shall retain such assets for the benefit of the Employees of said Participating Employer. In no such event shall any part of the corpus or income of the Trust as it relates to such Participating Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees of such Participating Employer. 6 Administrator's Authority. The Administrator of the Employer shall have authority to make any and all necessary rules or regulations, binding upon all Participating Employers and all Participants, to effectuate the purpose of this Article. u:\smc\fidelity\dbplan.2 11.09.94 THE FIDELITY PROTOTYPE DEFINED BENEFIT PLAN ADOPTION AGREEMENT Adoption Agreement for Fidelity Standardized Non-Integrated Defined Benefit Pension Plan and Trust The undersigned Employer adopts the Fidelity Standardized Non-Integrated Defined Benefit Plan for those Employees who shall qualify as Participants hereunder, to be known as the A1 (Enter Plan Name) It shall be effective as of the date specified below. NOTE: If the Employer fails to complete this Adoption Agreement properly, it may result in disqualification of the Employer's Plan. In addition, the Employer's failure to check or complete an Item as directed will result, in many instances, in the automatic selection of the option indicated in the text of the Agreement. Any questions concerning the adoption of the Plan should be directed to: Fidelity Investments [address] [telephone number] The Employer hereby selects the following Plan specifications: Employer Information B1 Name of Employer a. b. B2 Address a. b. c. d. City State Zip B3 Telephone e. B4 Employer Identification Number a. - b. Applied for B5 Business Code Number (same as shown on Form 1120) B6 Date Business Commenced B7 Type of Entity a. S Corporation b. Professional Service Corporation c. Corporation d. Sole Proprietorship e. Partnership f. Other g. Member of controlled group? If yes, one of above must also be checked. h. Member of an affiliated service group? If yes, one of above must also be checked. B8 Name(s) of Trustee(s) a. b. c. B9 Trustee's Address a. Use Employer Address b. Street c. d. e. City State Zip B10 Location of Employer's Principal Office: a. State b. Commonwealth of c. and this Trust shall be governed under the law of same. B11 Employer Fiscal Year: 12 months commencing on a. and month day ending on b. month day Plan Information This Adoption Agreement of the Fidelity Standardized Non-Integrated Defined Benefit Pension Plan and Trust shall: C1 a. establish a new Plan and Trust effective as of b. (hereinafter called the "Effective Date") month day year c. constitute an amendment and restatement in its entirety of a previously Qualified Plan and Trust of the Employer which was effective d. (hereinafter called the "Effective Date". The effective date of this amendment and restatement is e. . C2 Plan Year (12 consecutive month period) Beginning a. (e.g., May 1st) month day Plan Year Ending b. month day C3 Anniversary Date of Plan (Annual Valuation Date) a. month day C4 Plan Number assigned by the Employer (Circle One) 001 002 003 004 005 C5 Name of Plan Administrator (Document provides for the Employer to appoint an Administrator. If none is named, the Employer will become the Administrator.) a. Employer (Use Employer Address) b. Name c. Address d. City e. State f. Zip g. Telephone h. Administrator's I.D. Number - C6 Plan's Agent for Service of Legal Process a. Name b. Use Employer Address c. Address d. City State Zip
Note: Eligibility, Participation and Vesting For purposes of this section, the term D1 ELIGIBLE EMPLOYEES shall mean: "Employee" shall include all Employees of this Employer or any employer required to be a. all Employees who have satisfied the eligibility requirements. aggregated with this Employer under Code Section 414(b), (c) or (m) and individuals b. all Employees who have satisfied the eligibility requirements except: required to be considered Employees of any such employer under Section 414(n). Employees included in a unit of employees covered by a collective bargaining agreement between the Employer and "employee representatives," if retirement benefits were the subject of good faith bargaining and if two percent or less of the employees of the Employer who are covered pursuant to that agreement are professionals as defined in Treas. Reg. Section 1.410(b)-9. For this purpose, the term, "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers, or executives of the Employer. Employees who are nonresident aliens and who receive no earned income (within the meaning of Code Section 911(d)(2)) from the Employer that constitutes income from sources within the United States (within the meaning of Code Section 861(a)(3)). D2 HOURS OF SERVICE will be determined on the basis of the method selected below. Only one method may be selected. The method selected will be applied to all Employees covered under the Plan: a. on the basis of actual hours for which an Employee is paid or entitled to payment. b. on the basis of day worked. An Employee will be credited with ten (10) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour of Service during the day. c. on the basis of weeks worked. An Employee will be credited with forty-five (45) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour of Service during the week. d. on the basis of semi-monthly payroll periods. An Employee will be credited with ninety-five (95) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour of Service during the semi-monthly payroll period. e. on the basis of months worked. An Employee will be credited with one hundred ninety (190) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour of Service during the month. D3 CONDITIONS OF ELIGIBILITY (Check only one of the choices below.) (Minimum age may not exceed 21.) (Maximum Years of Service may not exceed 2.) (If more than one Year of Service is required, immediate 100% vesting is mandatory.)
For New Plans Any Employee who . . . (applicable where eligibility requirements is same for current and all future years) a. is employed during the Plan Year. (No waiting period, no minimum age) b. has completed Year(s) of Service (No minimum age, use fraction [i.e., 6/12] for less than 1 year) c. has reached his birthday. (No service requirement) d. has completed Year(s) of Service (use fraction for less than 1 year) and has reached his e. birthday.
Note: For Amended Plans If the Year(s) of Service selected is or includes Any Employee who was a Participant in the Plan prior to the Effective Date of a fractional year, an Employee will not be this Amendment. Thereafter, any Employee who . . . required to complete any specified number of Hours of Service to receive credit for such f. fractional year. is employed during the Plan Year. (No waiting period, no minimum age). The eligibility requirements under the Plan may not be more favorable for officers, g. owners, or highly compensated Employees has completed Year(s) of Service. (No minimum age, use fraction for less than for other Employees. than 1 year) h. has reached his birthday. (No service requirement) i. has completed Year(s) of Service (use fraction for less than 1 year) and has reached his j. birthday. D4 ENTRY DATE. An Eligible Employee shall become a Participant as of: a. the first day of the Plan Year in which he met the requirements. b. the first day of the Plan Year in which he met the requirements, if he met the requirements in the first 6 months of the Plan Year, or as of the first day of the next succeeding Plan Year if he met the requirements in the last 6 months of the Plan Year. c. the earlier of the first day of the seventh month, or the first day of the Plan Year, next following the date in which he met the requirements. d. the first day of the Plan Year next following the date on which he met the requirements. (Eligibility must be 6 months/age 24 1/2 or less, for Plan Years beginning before January 1, 1985. Otherwise, age must be 20 1/2 or less.)
D5 VESTING OF PARTICIPANT'S INTEREST The vesting schedule, based on number of Years of Service, shall be as follows: a. 100% upon entering Plan. (Required if eligibility requirement is greater than 1 year.) b. Years of Service Percentage 0-4 years 0% 5 years 100% c. Years of Service Percentage d. Years of Service Percentage 0-1 year 0% 0-1 year 0% 1 year 25% 1 year 20% 2 years 50% 2 years 40% 3 years 75% 3 years 60% 4 years 100% 4 years 80% 5 years 100% e. Years of Service Percentage f. Years of Service Percentage 0-2 years 0% 0-2 years 0% 3 years 100% 2 years 20% 3 years 40% 4 years 60% 5 years 80% 6 years 100% g. Years of Service Percentage h. Years of Service Percentage* 0-3 years 0% _____ _____ 3 years 20% _____ _____ 4 years 40% _____ _____ 5 years 60% _____ _____ 6 years 80% _____ _____ 7 years 100% _____ _____ * Each entry in this column must provide vesting at least as rapid as in D5 g.
NOTE: D6 Plan Shall Recognize Service with a Predecessor Employer If the Predecessor Employer maintained a a. qualified plan, b. must be marked. No. b. Yes: Years of Service with shall be recognized for the purpose of this Plan, for eligibility purposes only.
Note: Retirement Benefits The Limitation Year shall be the same as the E1 COMPENSATION with respect to any Participant means: year on which Compensation is based. a. Wages, Tips and Other Box 10 Compensation on Form W-2, or b. Section 3401(a) wages, or c. Section 415 Safe-harbor compensation Compensation d. shall include e. shall not include employer contributions made pursuant to a salary reduction agreement which are not includible in the gross income of the employee under sections 125, 402(e)(3), 402(h) or 403(b) of the Internal Revenue Code. For purposes of this Section, Compensation shall be based on: f. the Plan Year. g. the following consecutive twelve month period ending with or within the Plan Year (enter the day and the month this period begins)**: __________ (day) __________ (month) ** For employees whose date of hire is less than 12 months before the end of the designated 12-month period, Compensation shall be based on the Plan Year.
NOTE: E2 Compensation must be averaged over a period Average Monthly Compensation shall be based on a. Plan or b. total Years of of not less than 3 years. Service and shall be averaged over: c. highest consecutive years within the last 10 years to date of termination of employment. d. highest consecutive years to date of termination of employment. e. highest consecutive years within the last 10 years excluding the 5 years preceding Normal Retirement Date. E3 NORMAL RETIREMENT AGE ("NRA") means: a. the date a Participant attains his birthday. (maximum 65) b. the later of the date a Participant attains his birthday (maximum 65) or the c. (not to exceed 5) year anniversary of the first day of the Plan Year in which participation in the Plan commenced. If, for plan years beginning before January 1, 1988, normal retirement age was determined with reference to the anniversary of the participation commencement date (more than 5 but not to exceed 10 years), the anniversary date for Participants who first commenced participation under the plan before the first plan year beginning on or after January 1, 1988, shall be the earlier of (A) the tenth anniversary of the date the Participant commenced participation in the plan (or such anniversary as had been elected by the employer, if less than 10) or (B) the fifth anniversary of the first day of the first plan year beginning on or after January 1, 1988. The participation commencement date is the first day of the first plan year in which the Participant commenced participation in the plan. E4 NORMAL RETIREMENT DATE shall commence as of the: a. first day of the month b. Anniversary Date c. date coinciding with or next following the Participant's "NRA". d. date nearest the Participant's "NRA." E5 THE NORMAL RETIREMENT BENEFIT payable to a Participant (for funding purposes) shall be: a. a life annuity. b. an annuity for life and ____ years certain. (May not exceed 10) c. a ____% joint and survivor annuity. (Not less than 50%).
NOTE: E6 These factors shall also be used for ACTUARIAL EQUIVALENT (as provided by the Employer's Actuary) means amounts determining present value for Top Heavy of equal value when computed using: purposes pursuant to Section 2.2 a. Interest Rate: Mortality Rate: E7 BENEFIT FORMULAS...A Participant's Monthly Retirement Benefit shall be equal to: a. __________% of such Participant's Average Monthly Compensation (flat benefit plan). b. __________% of Average Monthly Compensation, multiplied by the Participant's total number of years of participation (unit credit plan). E8 WEAR-AWAY PROVISIONS. Each Participant's accrued benefit under the plan will be equal to: a. Formula with wear-away -- the greater of: ( a) the Participant's frozen Accrued Benefit, if any, and ( b) the Participant's Accrued Benefit determined with respect to the current benefit formula as applied to the Participant's total years of service for benefit accrual under the plan. b. Formula without wear-away -- the sum of: ( a) the Participant's frozen Accrued Benefit, if any, and ( b) the Participant's Accrued Benefit determined with respect to the current benefit formula as applied to the Participant's years of service for benefit accrual beginning after the fresh-start date. If, however, the Participant's benefit under the plan is accrued under the fractional accrual rule in section ___ of the plan or the 3 percent accrual rule in section ___ of the plan, or if this plan satisfies the safe harbor for insurance contract plans in Income Tax Regulations section 1.401(a)(4)-3(b)(7), this formula without wear-away will not apply, and the Participant's Accrued Benefit will be determined in accordance with the formula with wear-away above. c. Formula with extended wear-away -- the greater of the Accrued Benefit determined for the Participant under the formula with wear-away or the formula without wear-away above. If, however, the Participant's benefit under the plan is accrued under the 3 percent accrual rule in section ___ of the plan, the formula with extended wear-away will not apply, and the Participant's Accrued Benefit will be determined in accordance with the formula with wear-away above. Reductions and Limitations
NOTE: The above Monthly Retirement Benefit shall be modified as follows: The limitations on Years of Service in E9 and E9 E10 apply only for purposes of benefit a. accruals and do not apply to eligibility or Years of Service with the Employer shall be limited to ___ years. vesting b. N/A E10 a. Years of Service prior to _________________ shall not be recognized. month/day/year b. N/A E11 a. Notwithstanding the above, a Participant's Monthly Retirement Benefit shall not exceed $_____________. b. N/A E12 LIMITATIONS ON BENEFITS If you maintain, or at any time maintained another qualified plan in which any Participant in this Plan is (or was) a Participant or could possibly become a Participant, you must complete this section. a. If the Participant is or has ever been a Participant in more than one defined benefit plan maintained by the Employer, the Participant may not accrue a benefit in the Plan that would cause the sum of the Annual Benefits under this Plan and all other such defined benefit plans to exceed the Maximum Permissible Amount. 1. The rate of accrual in this Defined Benefit Plan will be reduced to the extent necessary so that the total Annual Benefits payable at any time under such plans will not exceed the Maximum Permissible Amount, as specified in Section 6.1 of the Plan. 2. Provide the method under which the Plans will meet the limitation of Section 415(b) of the International Revenue Code in a manner that precludes Employer discretion. b. If the Participant is or ever has been a Participant in a defined contribution plan maintained by the Employer, the Participant may not accrue a benefit in this Plan that would cause the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction to exceed 1.0. 1. The rate of accrual in this Defined Benefit Plan will be reduced to the extent necessary so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction will equal 1.0, as specified in Section 6.1 of the Plan. 2. Provide the method under which the Plan involved will meet the 1.0 limitation in a manner that precludes Employer discretion. Top-Heavy Requirements F1 TOP-HEAVY PROVISIONS The top-heavy requirements specified in Section 2.1 of the Plan: a. shall apply only for Plan Years when the Plan is or becomes top heavy. b. shall apply in all Plan Years. In each Plan Year that the Plan is top-heavy, the minimum required contribution: c. shall be provided in this Plan. d. shall be provided by the _______________ Plan. F2 TOP-HEAVY DUPLICATIONS When a Non-Key Employee is a Participant in this Plan and a Defined Contribution Plan is maintained by the Employer, indicate the method under which the Plans will provide top heavy minimum benefits for Non-Key Employees that will preclude Employer discretion and avoid inadvertent omissions (include any adjustments required under Code Section 415(e)). Early and Late Retirement, Disability and Death Benefits G1 EARLY RETIREMENT DATE means, prior to a Participant's Normal Retirement Date: a. any Anniversary Date coinciding with or next following the date on which a Participant attained his _______ birthday and has completed at least b. ___________ Years of Service. c. no Early Retirement provision provided. G2 EARLY RETIREMENT BENEFITS (must coordinate with G1) payable at early retirement shall be equal to the: a. Accrued Benefit reduced by 1/15 for each year until age 60 and 1/30 for each year until age 55 (and actuarially thereafter) that the Early Retirement Date precedes the Normal Retirement Date. b. Present Value of Accrued Benefit. c. Accrued Benefit reduced by 1/2 of 1% for each month early retirement precedes normal retirement. d. No early retirement benefits. Participants retiring prior to normal retirement shall be considered terminated. G3 LATE RETIREMENT BENEFITS payable to a Participant shall be the greater of (i) the Actuarial Equivalent of the benefit he would have received at his Normal Retirement Date, and (ii) his Accrued Benefit, based on his Years of Service for benefit accrual up to his Late Retirement Date. G4 DISABILITY RETIREMENT BENEFITS shall be equal to: a. early retirement benefit without regard to age and service requirements. b. 100% of Present Value of Accrued Benefit. c. no disability benefits, disabled Participants shall be treated in the same manner as Terminated Participants.
NOTE: G5 In no event shall the Participant's death benefit DEATH BENEFITS The pre-retirement death benefit payable under this Plan is be less than the present value of his Vested (select one of the below): Accrued Benefit, as of the date of death. The interest and mortality factors used to compute death benefits shall be those used to compute a. actuarial equivalence as stated in Section E6. None, other than the qualified preretirement survivor annuity. b. The qualified preretirement survivor annuity plus the proceeds of insurance policies purchased on the Participant's life; provided that any death benefit in addition to the qualified preretirement survivor annuity shall be reduced to the extent necessary so that the sum of such additional benefit and the present value of the qualified preretirement survivor annuity does not exceed 100 times the Participant's anticipated monthly benefit. For purpose of this requirement the total face amount of policies purchased will be _____ (fill in the amount but not in excess of 100) times the Participant's anticipated monthly benefit. c. The qualified preretirement survivor annuity plus the excess, if any, of the present value of the Participant's accrued benefit minus the present value of the qualified preretirement survivor annuity. d. The qualified preretirement survivor annuity plus, if a positive amount, the incidental reserve. The incidental reserve equals the proceeds of insurance policies purchased on a Participant's life plus the theoretical ILP reserve minus the sum of the present value of the qualified preretirement survivor annuity and the cash value of the policies purchased. For purposes of this requirement, the face amount of the insurance policies will be that purchasable by ________ (fill in the amount but not greater than 66 if whole life and not greater than 33 if term and/or universal life) percent of the theoretical contribution. For purposes of b., c. and d. above, the calculations of present value of any benefit shall be determined in accordance with Plan Section 1.2. For purposes of d. above, the following definitions apply: Theoretical ILP reserve is the reserve that would be available at the time of death if for each year of plan participation a contribution had been made on behalf of the Participant in an amount equal to the theoretical contribution. Theoretical contribution is the contribution that would be made on behalf of the Participant, using the individual level premium funding method from the age at which participation commenced to normal retirement age, to fund the Participant's entire retirement benefit without regard to pre-retirement ancillary benefits. The entire retirement benefit for this purpose is based upon a straight life annuity and assumes continuation of current salary (no salary scale) and the current defined benefit fraction under section 415(e) of the Internal Revenue Code. G6 TERMINATION Benefits shall be equal to the Accrued Benefit reduced in accordance with Section G2 for Early Retirement Benefits. Miscellaneous H1 Loans to Participants a. Yes, loans may be made. b. No, loans may not be made. H2 Definition of Highly Compensated Employee a. The simplified definition of highly compensated employee in Section 1.31(a) of the plan for employers that maintain significant business activities (and employ employees) in at least two significantly separate geographic areas will apply. H3 Transfers from Qualified Plans a. Yes, transfers from qualified plans will be allowed. b. No, transfers from qualified plans will not be allowed. H4 Directed Investment Accounts are permitted for the vested interest in any one or more accounts. a. Yes, at the Administrator's discretion (may create administrative problems). b. No. H5 Accrued Benefit shall be calculated using the Fractional Rule and shall be a fraction based upon the number of: a. Plan Years of Service to Normal Retirement Date, as stated in Section 1.1 of the Plan. b. Total Years of Service to Normal Retirement Date.
NOTE: H6 Certain professional service employers with Pension Benefit Guaranty Corporation Coverage...Will this Plan be covered by less than twenty-five Participants are exempt the P.B.G.C.? from P.B.G.C. coverage, as are plans maintained solely for substantial owners and a. other plans exempted under Section 4021 of Yes. ERISA. b. No. H7 The pre-termination restriction in Section 11.2 of the Plan will be effective __________ (no later than the first day of the 1994 plan year). An Employer who has ever maintained or who later adopts any plan in addition to this Plan (including a welfare benefit fund, as defined in Code Section 419(e), which provides post-retirement medical benefits allocated to separate accounts for Key Employees, as defined in Code Section 419A(d)(3) or an individual medical account, as defined in Code Section 415(l)(2)) may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Code Section 401. If an Employer who adopts or maintains multiple plans wishes to obtain reliance that the Employer's plan(s) are qualified, application for a determination letter should be made to the appropriate key district director of Internal Revenue. In addition, an Employer may rely upon the opinion letter issued by the National Office of the Internal Revenue Service only if the plan adopted by the Employer satisfies Code Section 401(a)(26) with respect to its prior benefit structure. If an Employer wishes to obtain reliance that its plan is qualified, the Employer may request a determination from the appropriate key district director with regard to its prior benefit structure. An Employer may not be entitled to rely on the opinion letter issued by the National Office in certain other circumstances, which are specified in the opinion letter issued with respect to the Plan or in Section 6 of Revenue Procedure 89-9, as amended. This Adoption Agreement may be used only in conjunction with the basic Plan document. This Adoption Agreement and the basic Plan document shall together be known as Fidelity Investments Standardized Non-Integrated Defined Benefit Plan. Fidelity will inform the Employer of any amendments made to this Plan and Trust Agreement or of the discontinuance or abandonment of this Plan and Trust. We have consulted our attorney with reference to this Plan and Trust Agreement. We understand that the Employer may amend any election in this Adoption Agreement by giving the Trustee written notification of such Amendment as adopted. The Employer hereby agrees to the provisions of the Plan and Trust. IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Agreement to be executed on this ______ day of _____________, 19____. EMPLOYER: (enter name) TRUSTEE By: (enter name) TRUSTEE PARTICIPATING EMPLOYER: TRUSTEE (enter name) By: (enter name) u:\smc\fidelity\dbplanaa.4 11.28.94
EX-99.B14 6 Exhibit 14(f) CORPORATEPLAN FOR RETIREMENT 100SM THE PROFIT SHARING/401(K) PLAN FIDELITY BASIC PLAN DOCUMENT NO. 10 CORPORATEPLAN FOR RETIREMENT 100SM PROFIT SHARING/401(K) PLAN ARTICLE 1 ADOPTION AGREEMENT ARTICLE 2 DEFINITIONS 2.01 Definitions ARTICLE 3 PARTICIPATION 3.01 Date of Participation 3.02 Resumption of Participation Following Re employment 3.03 Cessation or Resumption of Participation Following a Change in Status 3.04 Participation by Owner-Employee; Controlled Businesses 3.05 Omission of Eligible Employee ARTICLE 4 CONTRIBUTIONS 4.01 Deferral Contributions 4.02 Additional Limit on Deferral Contributions 4.03 Matching Contributions 4.04 Limit on Matching Contributions 4.05 Special Rules 4.06 Discretionary Employer Contributions 4.07 Time of Making Employer Contributions 4.08 Return of Employer Contributions 4.09 Employee Contributions 4.10 Rollover Contributions 4.11 Deductible Voluntary Employee Contributions 4.12 Reserved ARTICLE 5 PARTICIPANTS' ACCOUNTS 5.01 Individual Accounts 5.02 Valuation of Accounts 5.03 Code Section 415 Limitations ARTICLE 6 INVESTMENT OF CONTRIBUTIONS 6.01 Manner of Investment 6.02 Investment Decisions 6.03 Participant Directions to Trustee ARTICLE 7 RIGHT TO BENEFITS 7.01 Normal or Early Retirement 7.02 Late Retirement 7.03 Disability Retirement 7.04 Death 7.05 Other Termination of Employment 7.06 Separate Account 7.07 Forfeitures 7.08 Adjustment for Investment Experience 7.09 Participant Loans 7.10 In-Service/Hardship Withdrawals 7.11 Prior Plan In-Service Distribution Rules ARTICLE 8 DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE. 8.01 Distribution of Benefits to Participants and Beneficiaries 8.02 Annuity Distributions 8.03 Joint and Survivor Annuities/Pre-retirement Survivor Annuities 8.04 Installment Distributions 8.05 Immediate Distributions 8.06 Determination of Method of Distribution 8.07 Notice to Trustee 8.08 Time of Distribution 8.09 Whereabouts of Participants and Beneficiaries ARTICLE 9 TOP-HEAVY PROVISIONS. 9.01 Application 9.02 Definitions 9.03 Minimum Contribution 9.04 Adjustment to the Limitation on Contributions and Benefits 9.05 Minimum Vesting ARTICLE 10 AMENDMENT AND TERMINATION. 10.01 Amendment by Employer 10.02 Amendment by Prototype Sponsor 10.03 Amendments Affecting Vested and/or Accrued Benefits 10.04 Retroactive Amendments 10.05 Termination 10.06 Distribution upon Termination of the Plan 10.07 Merger or Consolidation of Plan; Transfer of Plan Assets ARTICLE 11 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO OR FROM OTHER QUALIFIED PLANS 11.01 Amendment and Continuation of Predecessor Plan 11.02 Transfer of Funds from an Existing Plan 11.03 Acceptance of Assets by Trustee 11.04 Transfer of Assets from Trust ARTICLE 12 MISCELLANEOUS 12.01 Communication to Participants 12.02 Limitation of Rights 12.03 Nonalienability of Benefits and Qualified Domestic Relations Orders 12.04 Facility of Payment 12.05 Information between Employer and Trustee 12.06 Effect of Failure to Qualify under Code 12.07 Notices 12.08 Governing Law 12.09 Non-Discrimination Data Substantiation ARTICLE 13 PLAN ADMINISTRATION 13.01 Powers and responsibilities of the Administrator 13.02 Nondiscriminatory Exercise of Authority 13.03 Claims and Review Procedures 13.04 Named Fiduciary 13.05 Costs of Administration ARTICLE 14 TRUST AGREEMENT 14.01 Acceptance of Trust Responsibilities 14.02 Establishment of Trust Fund 14.03 Exclusive Benefit 14.04 Powers of Trustee 14.05 Accounts 14.06 Approving of Accounts 14.07 Distribution from Trust Fund 14.08 Transfer of Amounts from Qualified Plan 14.10 Reserved 14.11 Voting; Delivery of Information 14.12 Compensation and Expenses of Trustee 14.13 Reliance by Trustee on Other Persons 14.14 Indemnification by Employer 14.15 Consultation by Trustee with Counsel 14.16 Persons Dealing with the Trustee 14.17 Resignation or Removal of Trustee 14.18 Fiscal Year of the Trust 14.19 Discharge of Duties by Fiduciaries 14.20 Amendment 14.21 Plan Termination 14.22 Permitted Reversion of Funds to Employer 14.23 Governing Law ARTICLE 1 ADOPTION AGREEMENT ARTICLE 2 DEFINITIONS 2.01 DEFINITIONS (a) Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context: (1) "Account" means an account established on the books of the Trust for the purpose of recording contributions made on behalf of a Participant and any income, expenses, gains or losses incurred thereon. (2) "Administrator" means the Employer adopting this Plan, or other person designated by the Employer in Section 1.01(c). (3) "Adoption Agreement" means Article 1 under which the Employer establishes and adopts, or amends, the Plan and Trust and designates the optional provisions selected by the Employer, and the Trustee accepts its responsibilities under Article 14. The provisions of the Adoption Agreement shall be an integral part of the Plan. (4) "Annuity Starting Date" means the first day of the first period for which an amount is payable as an annuity or in any other form. (5) "Beneficiary" means the person or persons entitled under Section 7.04 to receive benefits under the Plan upon the death of a Participant, provided that for purposes of Section 7.04 such term shall be applied in accordance with Section 401(a)(9) of the Code and the regulations thereunder. (6) "Code" means the Internal Revenue Code of 1986, as amended from time to time. (7) "Compensation" shall mean: (A) for purposes of Article 4 (Contributions) other than Section 4.02 (Additional Limit on Deferral Contributions) and Section 4.04 (Limit on Matching Contributions), Compensation as defined in Section 5.03(e)(2) excluding any items elected by the Employer in Section 1.04(a), reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation and welfare benefits, but including amounts that are not includable in the gross income of the Participant under a salary reduction agreement by reason of the application of Sections 125, 401(k), 402(h)(1)(B), or 403(b) of the Code; and (B) for purposes of Section 2.01(a)(16) (Highly Compensated Employees), Section 4.02, Section 5.03 (Code Section 415 Limitations), and Section 9.03 (Top Heavy Plan Minimum Contributions), Compensation as defined in Section 5.03(e)(2). (C) for purposes of Section 4.02 (Additional Limit on Deferral Contributions) and Section 4.04 (Limit on Matching Contributions), the Employer may elect Compensation as defined in Section 2.01(a)(7)(A) or Section 5.03(e) (2) excluding reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation and welfare benefits, but including amounts that are not includable in the gross income of the Participant under a salary reduction agreement by reason of the application of Section 125, 401(k), 402(h) or 403(b) of the Code. Compensation shall generally be based on the amount actually paid to the Participant during the Plan Year or, for purposes of Article 4 if so elected by the Employer in Section 1.04(b), during that portion of the Plan Year during which the Employee is eligible to participate. Notwithstanding the preceding sentence, Compensation for purposes of Section 5.03 (Code Section 415 Limitations) shall be based on the amount actually paid or made available to the Participant during the Limitation Year. Compensation for the initial Plan Year for a new Plan shall be based upon eligible Participant Compensation, subject to Section 1.04(b), from the Effective Date listed in Section 1.01(g)(1) through the end of the first Plan Year. In the case of any Self-Employed Individual, Compensation shall mean the Individual's Earned Income. For Plan Year's beginning after December 31, 1988 and before January 1, 1994, the annual Compensation of each Participant taken into account for determining all benefits provided under the Plan for any determination period shall not exceed $200,000. This limitation shall be adjusted by the Secretary at the same time and in the same manner as under Section 415(d) of the Code, except that the dollar increase in effect on January 1 of any calendar year is effective for years beginning in such calendar year and the first adjustment to the $200,000 limitation is effected on January 1, 1990. If a Plan determines Compensation on a period of time that contains fewer than 12 calendar months, then annual Compensation limit is amount equal to the annual Compensation limit for the calendar year in which the Compensation period begins multiplied by the ratio obtained by dividing the number of full months in the period by 12. In addition to other applicable limitations set forth in the plan, and notwithstanding any other provision of the plan to the contrary, for Plan Years beginning on or after January 1, 1994, the annual Compensation of each Employee taken into account under the plan shall not exceed the OBRA '93 annual Compensation limit. The OBRA '93 annual Compensation limit is $150,000, as adjusted by the Commissioner for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which Compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual Compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. For plan years beginning on or after January 1, 1994, any reference in this plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 annual Compensation limit set forth in this provision. The annual Compensation limit applies for purposes of applying the nondiscrimination rules under Sections 401(a)(4), 401(a)(5), 401(l), 401(k)(3), 401(m)(2), 403(b)(12), 404(a)(2) and 410(b)(2) of the Code. If Compensation for any prior determination period is taken into account in determining an Employees' benefits accruing in the current plan year, the Compensation for that prior determination period is subject to the OBRA '93 annual Compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the first plan year beginning on or after January 1, 1994, the OBRA '93 annual Compensation limit is $150,000. If Compensation for any prior determination period is taken into account in determining an Employee's allocations or benefits for the current determination period, the Compensation for such prior year is subject to the applicable annual Compensation limit in effect for that prior year. For this purpose, for years beginning before January 1, 1990, the applicable annual Compensation limit is $200,000. In determining the Compensation of a Participant for purposes of this limitation, the rules of Section 414(q)(6) of the Code shall apply, except that in applying such rules, the term "family" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the year. If the $200,000 limitation is exceeded as a result of the application of these rules, then the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section prior to the application of this limitation. (8) "Earned Income" means the net earnings of a Self-Employed Individual derived from the trade or business with respect to which the Plan is established and for which the personal services of such individual are a material income-providing factor, excluding any items not included in gross income and the deductions allocated to such items, except that for taxable years beginning after December 31, 1989 net earnings shall be determined with regard to the deduction allowed under Section 164(f) of the Code, to the extent applicable to the Employer. Net earnings shall be reduced by contributions of the Employer to any qualified Plan, to the extent a deduction is allowed to the Employer for such contributions under Section 404 of the Code. (9) "Eligibility Computation Period" means each 12-consecutive month period beginning with the Employment Commencement Date and each anniversary thereof or, in the case of an Employee who before completing the eligibility requirements set forth in Section 1.03(a)(1) incurs a break in service for participation purposes and thereafter returns to the employ of the Employer or Related Employer, each 12-consecutive month period beginning with the first day of re-employment and each anniversary thereof. A "break in service for participation purposes" shall mean an Eligibility Computation Period during which the Participant does not complete more than 500 Hours of Service with the Employer. (10) "Employee" means any Employee of the Employer, any Self-Employed Individual or Owner-Employee. The Employer must specify in Section 1.03(a)(3) any Employee, or class of Employees, not eligible to participate in the Plan. If the Employer elects to exclude collective bargaining Employees, the exclusion applies to any Employee of the Employer included in a unit of Employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between Employee representatives and one or more employers unless the collective bargaining agreement requires the Employee to be included within the Plan. The term "Employee representatives" does not include any organization more than half the members of which are owners, officers, or executives of the Employer. For purposes of the Plan, an individual shall be considered to become an Employee on the date on which he first completes an Hour of Service and he shall be considered to have ceased to be an Employee on the date on which he last completes an Hour of Service. The term also includes a Leased Employee, such that contributions or benefits provided by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the Employer. Notwithstanding the above, a Leased Employee shall not be considered an Employee if Leased Employees do not constitute more than 20 percent of the Employer's non-highly compensated work force (taking into account all Related Employers) and the Leased Employee is covered by a money purchase pension Plan maintained by the leasing organization which Plan provides (i) a non integrated employer contribution rate of at least 10 percent of Compensation, as defined for purposes of Section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from gross income under Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of the Code, (ii) full and immediate vesting, and (iii) immediate participation by each Employee of the leasing organization. (11) "Employer" means the employer named in Section 1.02(a) and any Related Employers required by this Section 2.01(a)(11). If Article 1 of the Employer's Plan is the Standardized Adoption Agreement, the term "Employer" includes all Related Employers. If Article 1 of the Employer's Plan is the Non-standardized Adoption Agreement, the term "Employer" includes those Related Employers designated in Section 1.02(b). (12) "Employment Commencement Date" means the date on which the Employee first performs an Hour of Service. (13) "ERISA" means the Employee Retirement Income Security Act of 1974, as from time to time amended. (14) "Fidelity Fund" means any Registered Investment Company or Managed Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans which is made available to Plans utilizing the CORPORATEplan FOR RETIREMENT 100SM Profit Sharing/401(k) Plan. (15) "Fund Share" means the share, unit, or other evidence of ownership in a Fidelity Fund. (16) "Highly Compensated Employee" means both highly compensated active Employees and highly compensated former Employees. A highly compensated active Employee includes any Employee who performs service for the Employer during the determination year and who, during the look-back year: (i) received Compensation from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (ii) received Compensation from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a member of the top-paid group for such year; or (iii) was an officer of the Employer and received Compensation during such year that is greater than 50 percent of the dollar limitation in effect under Section 415(b)(1)(A) of the Code. The term highly compensated Employee also includes: (i) Employees who are both described in the preceding sentence if the term "determination year" is substituted for the term "look-back year" and the Employee is one of the 100 Employees who received the most Compensation from the Employer during the determination year; and (ii) Employees who are 5 percent owners at any time during the look-back year or determination year. If no officer has satisfied the Compensation requirement of (iii) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a highly compensated Employee. For this purpose, the determination year shall be the Plan Year. The look-back year shall be the twelve-month period immediately preceding the determination year. The Employer may elect to make the look-back year calculation for a determination on the basis of the calendar year ending with or within the applicable determination year, as prescribed by Section 414(q) of the Code and the regulations issued thereunder. A highly compensated former Employee includes any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no service for the Employer during the determination year, and was a highly compensated active Employee for either the separation year or any determination year ending on or after the Employee's 55th birthday. If an Employee is, during a determination year or look-back year, a family member of either a 5 percent owner who is an active or former Employee or a highly compensated Employee who is one of the 10 most highly compensated Employees ranked on the basis of Compensation paid by the Employer during such year, then the family member and the 5 percent owner or top-ten highly compensated Employee shall be aggregated. In such case, the family member and 5 percent owner or top-ten highly compensated Employee shall be treated as a single Employee receiving Compensation and Plan contributions or benefits equal to the sum of such Compensation and contributions or benefits of the family member and 5 percent owner or top-ten highly compensated Employee. For purposes of this Section, family member includes the spouse, lineal ascendants and descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. The determination of who is a highly compensated Employee, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees, the number of Employees treated as officers and the Compensation that is considered, will be made in accordance with Section 414(q) of the Code and the regulations thereunder. The determination of who is a highly compensated Employee may be made pursuant to Internal Revenue Service Revenue Procedure 93-42, "Data Substantiation Guidelines and Non-Discrimination Requirements, of Section 401(a)(4), 410(b), and Related Code Sections" and subsequent regulations. (17) "Hour of Service" means, with respect to any Employee, (A) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, for the performance of duties for the Employer or a Related Employer, each such hour to be credited to the Employee for the Eligibility Computation Period in which the duties were performed; (B) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, by the Employer or Related Employer (including payments made or due from a trust fund or insurer to which the Employer contributes or pays premiums) on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty, or leave of absence, each such hour to be credited to the Employee for the Eligibility Computation Period in which such period of time occurs, subject to the following rules: (i) No more than 501 Hours of Service shall be credited under this paragraph (B) on account of any single continuous period during which the Employee performs no duties; (ii) Hours of Service shall not be credited under this paragraph (B) for a payment which solely reimburses the Employee for medically-related expenses, or which is made or due under a Plan maintained solely for the purpose of complying with applicable workmen's Compensation, unemployment Compensation or disability insurance laws; and (iii) If the period during which the Employee performs no duties falls within two or more Eligibility Computation Periods and if the payment made on account of such period is not calculated on the basis of units of time, the Hours of Service credited with respect to such period shall be allocated between not more than the first two such Eligibility Computation Periods on any reasonable basis consistently applied with respect to similarly situated Employees; and (C) Each hour not counted under paragraph (A) or (B) for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to be paid by the Employer or a Related Employer, each such hour to be credited to the Employee for the Eligibility Computation Period to which the award or agreement pertains rather than the Eligibility Computation Period in which the award agreement or payment is made. For purposes of determining Hours of Service, Employees of the Employer and of all Related Employers will be treated as employed by a single employer. For purposes of paragraphs (B) and (C) above, Hours of Service will be calculated in accordance with the provisions of Section 2530.200b-2(b) of the Department of Labor regulations which are incorporated herein by reference. Solely for purposes of determining whether a break in service for participation purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the hours of service which would otherwise been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. For purposes of this paragraph, an absence from work for maternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The hours of service credited under this paragraph shall be credited (1) in the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or (2) in all other cases, in the following computation period. (18) "Leased Employee" means any individual who provides services to the Employer or a Related Employer (the "recipient") but is not otherwise an Employee of the recipient if (i) such services are provided pursuant to an agreement between the recipient and any other person (the "leasing organization"), (ii) such individual has performed services for the recipient (or for the recipient and any related persons within the meaning of Section 414(n)(6) of the Code) on a substantially full-time basis for at least one year, and (iii) such services are of a type historically performed by Employees in the business field of the recipient. (19) "Normal Retirement Age" means the normal retirement age specified in Section 1.06(a) of the Adoption Agreement. If the Employer enforces a mandatory retirement age, the Normal Retirement Age is the lesser of that mandatory age or the age specified in Section 1.06(a). (20) "Owner-Employee" means, if the Employer is a sole proprietorship, the individual who is the sole proprietor, or if the Employer is a partnership, a partner who owns more than 10 percent of either the capital interest or the profits interest of the partnership. (21) "Participant" means any Employee who participates in the Plan in accordance with Article 3 hereof. (22) "Plan" means the Plan established by the Employer in the form of the prototype Plan as set forth herein as a new Plan or as an amendment to an existing Plan, by executing the Adoption Agreement, together with any and all amendments hereto. (23) "Plan Year" means the 12-consecutive month period designated by the Employer in Section 1.01(f). (24) "Prototype Sponsor" means Fidelity Management and Research Company, or its successor. (25) "Registered Investment Company" means any one or more corporations, partnerships or trusts registered under the Investment Company Act of 1940 for which Fidelity Management and Research Company serves as investment advisor. (26) "Related Employer" means any employer other than the Employer named in Section 1.02(a), if the Employer and such other employer are members of a controlled group of corporations (as defined in Section 414(b) of the Code) or an affiliated service group (as defined in Section 414(m)), or are trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c)), or such other employer is required to be aggregated with the Employer pursuant to regulations issued under Section 414(o). (27) "Self-Employed Individual" means an individual who has Earned Income for the taxable year from the Employer or who would have had Earned Income but for the fact that the trade or business had no net profits for the taxable year. (28) "Trust" means the trust created by the Employer in accordance with the provisions of Section 14.01. (29) "Trust Agreement" means the agreement between the Employer and the Trustee, as set forth in Article 14, under which the assets of the Plan are held, administered, and managed. (30) "Trust Fund" means the property held in Trust by the Trustee for the Accounts of the Participants and their Beneficiaries. (31) "Trustee" means the Fidelity Management Trust Company, or its successor. (32) "Year of Service for Participation" means, with respect to any Employee, an Eligibility Computation Period during which the Employee has been credited with at least 1,000 Hours of Service. If the Plan maintained by the Employer is the Plan of a predecessor employer, an Employee's Years of Service for Participation shall include years of service with such predecessor employer. In any case in which the Plan maintained by the Employer is not the Plan maintained by a predecessor employer, service for such predecessor shall be treated as service for the Employer, to the extent provided in Section 1.08. (33) "Years of Service for Vesting" means, with respect to any Employee, the number of whole years of his periods of service with the Employer or a Related Employer (the elapsed time method to compute vesting service). An Employee will receive credit for the aggregate of all time period(s) commencing with the Employee's Employment Commencement Date and ending on the date a break in service begins. An Employee will also receive credit for any period of severance of less than 12 consecutive months. Fractional periods of a year will be expressed in terms of days. In the case of a Participant who has 5 consecutive 1-year breaks in service, all years of service after such breaks in service will be disregarded for the purpose of vesting the Employer-derived account balance that accrued before such breaks, but both pre-break and post-break service will count for the purposes of vesting the Employer-derived account balance that accrues after such breaks. Both accounts will share in the earnings and losses of the fund. In the case of a Participant who does not have 5 consecutive 1-year breaks in service, both the pre-break and post-break service will count in vesting both the pre-break and post-break employer-derived account balance. A break in service is a period of severance of at least 12 consecutive months. Period of severance is a continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the 12 month anniversary of the date on which the Employee was otherwise first absent from service. In the case of an individual who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a break in service. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. If the Plan maintained by the Employer is the Plan of a predecessor employer, an Employee's Years of Service for Vesting shall include years of service with such predecessor employer. In any case in which the Plan maintained by the Employer is not the Plan maintained by a predecessor employer, service for such predecessor shall be treated as service for the Employer to the extent provided in Section 1.08. (b) Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the context clearly indicates otherwise. ARTICLE 3 PARTICIPATION 3.01 DATE OF PARTICIPATION All Employees in the eligible class (as defined in Section 1.03(a)(3)) who are in the service of the Employer on the Effective Date will become Participants on the date elected by the Employer in Section 1.03(c). Any other Employee will become a Participant in the Plan as of the first Entry Date on which he first satisfies the eligibility requirements set forth in Section 1.03(a). In the event that an Employee who is not a member of an eligible class (as defined in Section 1.03(a)(3)) becomes a member of an eligible class, the individual shall participate immediately if such individual had already satisfied the eligibility requirements and would have otherwise previously become a Participant. If an eligibility requirement other than one Year of Service is elected in 1.03(a)(1), an Employee may not be required to complete a minimum number of Hours of Service before becoming a Participant. An otherwise eligible Employee subject to a minimum months of service requirement shall become a Participant on the first Entry Date following his completion of the required number of consecutive months of employment measured from his Employment Commencement Date to the coinciding date in the applicable following month. For purposes of determining consecutive months of service, the Related Employer and predecessor employer rules contained in Sections 2.01(a)(17) and 2.01(a)(32) shall apply. 3.02 RESUMPTION OF PARTICIPATION FOLLOWING RE EMPLOYMENT If a Participant ceases to be an Employee and thereafter returns to the employ of the Employer he will be treated as follows: (a) he will again become a Participant on the first date on which he completes an Hour of Service for the Employer following his reemployment and is in the eligible class of Employees as defined in Section 1.03(a)(3), and (b) any distribution which he is receiving under the Plan will cease except as otherwise required under Section 8.08. 3.03 CESSATION OR RESUMPTION OF PARTICIPATION FOLLOWING A CHANGE IN STATUS If any Participant continues in the employ of the Employer or Related Employer but ceases to be a member of an eligible class as defined in Section 1.03(a)(3), the individual shall continue to be a Participant for most purposes until the entire amount of his benefit is distributed; however, the individual shall not be entitled to receive an allocation of contributions or forfeitures during the period that he is not a member of the eligible class. Such Participant shall continue to receive credit for service completed during the period for purposes of determining his vested interest in his Accounts. In the event that the individual subsequently again becomes a member of an eligible class of Employees, the individual shall resume full participation immediately upon the date of such change in status. 3.04 PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES If the Plan provides contributions or benefits for one or more Owner-Employees who control both the trade or business with respect to which the Plan is established and one or more other trades or businesses, the Plan and any Plan established with respect to such other trades or businesses must, when looked at as a single Plan, satisfy Sections 401(a) and 401(d) of the Code with respect to the Employees of this and all such other trades or businesses. If the Plan provides contributions or benefits for one or more Owner-Employees who control one or more other trades or businesses, the Employees of each such other trade or business must be included in a Plan which satisfies Sections 401(a) and 401(d) of the Code and which provides contributions and benefits not less favorable than provided for Owner-Employees under the Plan. If an individual is covered as an Owner-Employee under the Plans of two or more trades or businesses which are not controlled and the individual controls a trade or business, then the contributions or benefits of the Employees under the Plan of the trades or businesses which are controlled must be as favorable as those provided for him under the most favorable Plan of the trade or business which is not controlled. For purposes of this Section, an Owner-Employee, or two or more Owner-Employees, shall be considered to control a trade or business if such Owner-Employee, or such Owner-Employees together, (i) own the entire interest in an unincorporated trade or business, or (ii) in the case of a partnership, own more than 50 percent of either the capital interest or the profits interest in such partnership. For this purpose, an Owner-Employee, or two or more Owner-Employees, shall be treated as owning any interest in a partnership which is owned, directly or indirectly, by a partnership controlled by such Owner-Employee or such Owner-Employees. 3.05 OMISSION OF ELIGIBLE EMPLOYEE If any Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by his Employer for the year has been made, the Employer shall make a subsequent contribution, if necessary, so that the omitted Employee receives the total amount which the said Employee would have received had he not been omitted. For purposes of this Section 3.05, the term "contribution" shall not include Deferral Contributions and Matching Contributions made pursuant to Sections 4.01 and 4.03, respectively. ARTICLE 4 CONTRIBUTIONS 4.01 DEFERRAL CONTRIBUTIONS (a) Deferral Contributions. If so provided by the Employer in Section 1.05(b), each Participant may elect to execute a salary reduction agreement with the Employer to reduce his Compensation by a specified percentage not exceeding 15% per payroll period, subject to any exceptions elected by the Employer in Section 1.05(b)(2) and equal to a whole number multiple of one (1) percent. Such agreement shall become effective on the first day of the first payroll period for which the Employer can reasonably process the request. The Employer shall make a Deferral Contribution on behalf of the Participant corresponding to the amount of said reduction, subject to the restrictions set forth below. Under no circumstances may a salary reduction agreement be adopted retroactively. (b) A Participant may elect to change or discontinue the percentage by which his Compensation is reduced by notice to the Employer as provided in Section 1.05(b)(1). (c) No Participant shall be permitted to have Deferral Contributions made under the Plan, or any other qualified Plan maintained by the Employer, during the taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code in effect at the beginning of such taxable year. A Participant may assign to the Plan any Excess Deferrals made during the taxable year of the Participant by notifying the Plan Administrator on or before March 15 following the taxable year of the amount of the Excess Deferrals to be assigned to the Plan. A Participant is deemed to notify the Administrator of any Excess Deferrals that arise by taking into account only those Deferral Contributions made to the Plan and any other Plan of the Employer. Notwithstanding any other provision of the Plan, Excess Deferrals, plus any income and minus any loss allocable thereto, shall be distributed no later than April 15 to any Participant to whose account Excess Deferrals were so assigned for the preceding year and who claims Excess Deferrals for such taxable year. A Participant is deemed to notify the Administrator of any Excess Deferrals that arise by taking into account only those Deferred Contributions made to this Plan and any other plans of the Employer. "Excess Deferrals" shall mean those Deferral Contributions that are includable in a Participant's gross income under Section 402(g) of the Code to the extent such Participant's Deferral Contributions for a taxable year exceed the dollar limitation under such Code section. For purposes of determining Excess Deferrals, the term "Deferral Contributions" shall include the sum of all Employer Contributions made on behalf of such Participant pursuant to an election to defer under any qualified CODA as described in Section 401(k) of the Code, any simplified Employee pension cash or deferred arrangement as described in Section 402(h)(1)(B) of the Code, any eligible deferred Compensation Plan under Section 457, any Plan as described under Section 501(c)(18) of the Code, and any Employer Contributions made on the behalf of a Participant for the purchase of an annuity contract under Section 403(b) of the Code pursuant to a salary reduction agreement. Deferral Contributions shall not include any deferrals properly distributed as excess annual additions. Excess Deferrals shall be treated as annual additions under the Plan, unless such amounts are distributed no later than the first April 15 following the close of the Participant's taxable year. Deferral Contributions shall not include any deferrals properly distributed as excess annual additions. Excess Deferrals shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Deferrals is (1) income or loss allocable to the Participant's Deferral Contributions account for the taxable year multiplied by a fraction, the numerator of which is such Participant's Excess Deferrals for the year and the denominator is the Participant's account balance attributable to Deferral Contributions without regard to any income or loss occurring during such taxable year, or (2) such other amount determined under any reasonable method, provided that such method is used consistently for all Participants in calculating the distributions required under this Section 4.01(c) and Sections 4.02(d) and 4.04(d) for the Plan Year, and is used by the Plan in allocating income or loss to Participants' accounts. Income or loss allocable to the period between the end of the Plan Year and the date of distribution shall be disregarded in determining income or loss. (d) In order for the Plan to comply with the requirements of Sections 401(k), 402(g) and 415 of the Code and the regulations promulgated thereunder, at any time in a Plan Year the Administrator may reduce the rate of Deferral Contributions to be made on behalf of any Participant, or class of Participants, for the remainder of that Plan Year, or the Administrator may require that all Deferral Contributions to be made on behalf of a Participant be discontinued for the remainder of that Plan Year. Upon the close of the Plan Year or such earlier date as the Administrator may determine, any reduction or discontinuance in Deferral Contributions shall automatically cease until the Administrator again determines that such a reduction or discontinuance of Deferral Contributions is required. 4.02 ADDITIONAL LIMIT ON DEFERRAL CONTRIBUTIONS (a) The Actual Deferral Percentage (hereinafter "ADP") for Participants who are Highly Compensated Employees for each Plan Year and the ADP for Participants who are Non-highly Compensated Employees for the same Plan Year must satisfy one of the following tests: (1) The ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by 1.25; or (2) The ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by 2.0, provided that the ADP for Participants who are Highly Compensated Employees does not exceed the ADP for Participants who are Non-highly Compensated Employees by more than two (2) percentage points. (b) The following special rules apply for the purposes of this Section: (1) The ADP for any Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to have Deferral Contributions (and Qualified Discretionary Contributions if treated as Deferral Contributions for purposes of the ADP test) allocated to his or her accounts under two or more arrangements described in Section 401(k) of the Code, that are maintained by the Employer, shall be determined as if such Deferral Contributions (and, if applicable, such Qualified Discretionary Contributions) were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan Years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain Plans shall be treated as separate if mandatorily disaggregated under regulations under Section 401(k) of the Code. (2) In the event that this Plan satisfies the requirements of Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or more other Plans, or if one or more other Plans satisfy the requirements of such Sections of the Code only if aggregated with this Plan, then this Section shall be applied by determining the ADP of Employees as if all such Plans were a single Plan. For Plan Years beginning after December 31, 1989, Plans may be aggregated in order to satisfy section 401(k) of the Code only if they have the same Plan Year. (3) For purposes of determining the ADP of a Participant who is a 5-percent owner or one of the ten most highly-paid Highly Compensated Employees, the Deferral Contributions (and Qualified Discretionary Contributions if treated as Deferral Contributions for purposes of the ADP test) and Compensation of such Participant shall include the Deferral Contributions (and, if applicable, Qualified Discretionary Contributions) and Compensation for the Plan Year of Family Members (as defined in Section 414(q)(6) of the Code). Family Members, with respect to such Highly Compensated Employees, shall be disregarded as separate Employees in determining the ADP both for Participants who are Non-highly Compensated Employees and for Participants who are Highly Compensated Employees. (4) For purposes of determining the ADP test, Deferral Contributions and Qualified Discretionary Contributions must be made before the last day of the twelve-month period immediately following the Plan Year to which contributions relate. (5) The Employer shall maintain records sufficient to demonstrate satisfaction of the ADP test and the amount of Qualified Discretionary Contributions used in such test. (6) The determination and treatment of the ADP amounts of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. (c) The following definitions shall apply for purposes of this Section: (1) "Actual Deferral Percentage" shall mean, for a specified group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of (1) the amount of Employer contributions actually paid over to the trust on behalf of such Participant for the Plan Year to (2) the Participant's Compensation for such Plan Year. Employer contributions on behalf of any Participant shall include: (1) any Deferral Contributions made pursuant to the Participant's deferral election, including Excess Deferrals of Highly Compensated Employees, but excluding (a) Excess Deferrals of Non-Highly Compensated Employees that arise solely from Deferral Contributions made under the Plan or Plans of the Employer and (b) Deferral Contributions that are taken into account in the Contribution Percentage test (provided the ADP test is satisfied both with and without exclusion of these Deferral Contributions); and (2) at the election of the Employer, Qualified Discretionary Contributions. Matching Contributions, whether or not non-forfeitable when made, shall not be considered as Employer Contributions for purposes of this paragraph. For purposes of computing Actual Deferral Percentages, an Employee who would be a Participant but for the failure to make Deferral Contributions shall be treated as a Participant on whose behalf no Deferral Contributions are made. (2) "Excess Contributions" shall mean, with respect to any Plan Year, the excess of: (a) The aggregate amount of Employer contributions actually taken into account in computing the ADP of Highly Compensated Employees for such Plan Year, over (b) The maximum amount of such contributions permitted by the ADP test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of the ADPs, beginning with the highest of such percentages). (3) "Qualified Discretionary Contributions" shall mean contributions made by the Employer as elected in Section 1.05(b) (3) and allocated to Participant accounts of Non-highly Compensated Employees that such Participants may not elect to receive in cash until distributed from the Plan; that are nonforfeitable when made; and that are distributable only in accordance with the distribution provisions that are applicable to Deferral Contributions. Participants shall not be required to satisfy any hours of service or employment requirement in order to receive an allocation of such contributions. (d) Notwithstanding any other provision of this Plan, Excess Contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each Plan Year to Participants to whose accounts such Excess Contributions were allocated for the preceding Plan Year. If such excess amounts are distributed more than 2-1/2 months after the last day of the Plan Year in which such excess amounts arose, a ten (10) percent excise tax will be imposed on the employer maintaining the Plan with respect to such amounts. Such distributions shall be made to Highly Compensated Employees on the basis of the respective portions of the Excess Contributions attributable to each of such Employees. Excess Contributions of Participants who are subject to the family member aggregation rules of Section 414(q)(6) of the Code shall be allocated among the family members in proportion to the Deferral Contributions (and amounts treated as Deferral Contributions) of each family member that is combined to determine the combined ADP. Excess Contributions shall be treated as annual additions under the Plan. Excess Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Contributions is (1) income or loss allocable to the Participant's Deferral Contribution account (and if applicable, the Qualified Discretionary Contribution account) for the Plan Year multiplied by a fraction, the numerator of which is such Participant's Excess Contributions for the year and the denominator is the Participant's account balance attributable to Deferral Contributions without regard to any income or loss occurring during such Plan Year, or (2) an amount determined under any reasonable method, provided that such method is used consistently for all Participants in calculating any distributions required under Section 4.02(d) and Sections 4.01(c) and 4.04(d) for the Plan Year, and is used by the Plan in allocating income or loss to the Participants' accounts. Income or loss allocable to the period between the end of the Plan Year and the date of distribution shall be disregarded in determining income or loss. Excess Contributions shall be distributed from the Participant's Qualified Discretionary Contribution account only to the extent that such Excess Contributions exceed the balance in the Participant's Deferral Contributions account. 4.03 MATCHING CONTRIBUTIONS If so provided by the Employer in Section 1.05(c), the Employer shall make a Matching Contribution on behalf of each Participant who had Deferral Contributions made on his behalf during the year in accordance with Section 1.05(c)(3). The amount of the Matching Contribution shall be determined in accordance with Section 1.05(c)(1), subject to the limitations set forth in Section 4.04 and Section 404 of the Code. 4.04 LIMIT ON MATCHING CONTRIBUTIONS (a) The Average Contribution Percentage (hereinafter "ACP") for Participants who are Highly Compensated Employees for each Plan Year and the ACP for Participants who are Non-highly Compensated Employees for the same Plan Year must satisfy one of the following tests: (1) The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by 1.25; or (2) The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by two (2), provided that the ACP for Participants who are Highly Compensated Employees does not exceed the ACP for Participants who are Non-highly Compensated Employees by more than two (2) percentage points. (b) The following special rules apply for purposes of this section: (1) If one or more Highly Compensated Employees participate in both a qualified cash or deferred arrangement described in Section 401(k) of the Code (hereafter "CODA") and a Plan subject to the ACP test maintained by the Employer and the sum of the ADP and ACP of those Highly Compensated Employees subject to either or both tests exceeds the Aggregate Limit, then the ACP of those Highly Compensated Employees who also participate in a CODA will be reduced (beginning with such Highly Compensated Employee whose ACP is the highest) so that the limit is not exceeded. The amount by which each Highly Compensated Employee's Contribution Percentage Amounts is reduced shall be treated as an Excess Aggregate Contribution. The ADP and ACP of the Highly Compensated Employees are determined after any corrections required to meet the ADP and ACP tests. Multiple use does not occur if either the ADP or ACP of the Highly Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP of the Non-highly Compensated Employees. (2) For purposes of this section, the Contribution Percentage for any Participant who is a Highly Compensated Employee and who is eligible to have Contribution Percentage Amounts allocated to his or her account under two or more Plans described in section 401(a) of the Code, or arrangements described in section 401(k) of the Code that are maintained by the Employer, shall be determined as if the total of such Contribution Percentage Amounts was made under each Plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain Plans shall be treated as separate if mandatorily disaggregated under regulations under Section 401(m) of the Code. (3) In the event that this Plan satisfies the requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more other Plans, or if one or more other Plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the Contribution Percentage of Employees as if all such Plans were a single Plan. For Plan years beginning after December 31, 1989, Plans may be aggregated in order to satisfy Section 401(m) of the Code only if they have the same Plan Year. (4) For purposes of determining the Contribution percentage of a Participant who is a five-percent owner or one of the ten most highly-paid Highly Compensated Employees, the Contribution Percentage Amounts and Compensation of such Participant shall include the Contribution Percentage Amounts and Compensation for the Plan Year of Family Members (as defined in Section 414(q)(6) of the Code). Family Members, with respect to Highly Compensated Employees, shall be disregarded as separate Employees in determining the Contribution Percentage both for Participants who are Non-highly Compensated Employees and for Participants who are Highly Compensated Employees. (5) For purposes of determining the Contribution Percentage test, Matching Contributions and Qualified Discretionary Contributions will be considered made for a Plan Year if made no later than the end of the twelve-month period beginning on the day after the close of the Plan Year. (6) The Employer shall maintain records sufficient to demonstrate satisfaction of the ACP test and the amount of Qualified Discretionary Contributions used in such test. (7) The determination and treatment of the Contribution Percentage of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of Treasury. (c) The following definitions shall apply for purposes of this Section: (1) "Aggregate Limit" shall mean the greater of (A) or (B) where (A) is the sum of (i) 125 percent of the greater of the ADP of the Non-highly Compensated Employees for the Plan Year or the ACP of Non-highly Compensated Employees under the Plan subject to Section 401(m) of the Code for the Plan Year beginning with or within the Plan Year of the CODA and (ii) the lesser of 200% or two plus the lesser of such ADP or ACP and where (B) is the sum of (i) 125 percent of the lesser of the ADP of the Non-highly Compensated Employees for the Plan Year or the ACP of Non-highly Compensated Employees under the Plan subject to Section 401(m) of the Code for the Plan Year beginning with or within the Plan Year of the CODA and (ii) the lesser of 200% or two plus the greater of such ADP or ACP. (2) "Average Contribution Percentage" or "ACP" shall mean the average of the Contribution Percentages of the Eligible Participants in a group. (3) "Contribution Percentage" shall mean the ratio (expressed as a percentage) of the Participant's Contribution Percentage Amounts to the Participant's Compensation for the Plan Year. (4) "Contribution Percentage Amounts" shall mean the sum of Matching Contributions made under the Plan on behalf of the Participant for the Plan Year. Such Contribution Percentage Amounts shall not include Matching Contributions that are forfeited either to correct Excess Aggregate Contributions or because the contributions to which they relate are Excess Deferrals, Excess Contributions or Excess Aggregate Contributions. If so elected by the Employer in Section 1.05(b)(3), the Employer may include Qualified Discretionary Contributions in the Contribution Percentage Amounts. The Employer also may elect to use Deferral Contributions in the Contribution Percentage Amounts so long as the ADP test is met before the Deferral Contributions are used in the ACP test and continues to be met following the exclusion of those Deferral Contributions that are used to meet the ACP test. (5) "Deferral Contribution" shall mean any contribution made at the election of the Participant pursuant to a salary reduction agreement in accordance with Section 4.01(a). (6) "Eligible Participant" shall mean any Employee who is eligible to make an Employee Contribution, or a Deferral Contribution (if the employer takes such contributions into account in the calculation of the Contribution Percentage), or to receive a Matching Contribution. (7) Reserved (8) "Matching Contribution" shall mean an Employer Contribution made to this or any other defined contribution Plan on behalf of a Participant on account of a Participant's Deferral Contribution. (9) "Excess Aggregate Contributions" shall mean, with respect to any Plan Year, the excess of: (A) The aggregate Contribution Percentage Amounts taken into account in computing the numerator of the Contribution Percentage actually made on behalf of Highly Compensated Employees for such Plan Year, over (B) The maximum Contribution Percentage Amounts permitted by the ACP test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their Contribution Percentages beginning with the highest of such percentages). Such determination shall be made after first determining Excess Deferrals pursuant to Section 4.01 and then determining Excess Contributions pursuant to Section 4.02. (d) Notwithstanding any other provision of the Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed no later than the last day of each Plan Year to Participants to whose accounts such Excess Aggregate Contributions were allocated for the preceding Plan Year. Excess Aggregate Contributions of Participants who are subject to the family member aggregation rules of Section 414(q)(6) of the Code shall be allocated among the family members in proportion Matching Contributions of each family member that is combined to determine the combined ACP. If such Excess Aggregate Contributions are distributed more than 2 1/2 months after the last day of the Plan Year in which such excess amounts arose, a ten (10) percent excise tax will be imposed on the employer maintaining the Plan with respect to those amounts. Excess Aggregate Contributions shall be treated as annual additions under the Plan. Excess Aggregate Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Aggregate Contributions is (1) income or loss allocable to the Participant's Matching Contribution account (if any, and if all amounts therein are not used in the ADP test) and if applicable, Qualified Non-elective Contribution account for the Plan Year multiplied by a fraction, the numerator of which is such Participant's Excess Aggregate Contributions for the year and the denominator is the Participant's account balance(s) attributable to Contribution Percentage Amounts without regard to income or loss occurring during such Plan Year, or (2) such other amount determined under any reasonable method, provided that such method is used consistently for all Participants in calculating any distributions required under Section 4.04(d) and Sections 4.01(c) and 4.02(d) for the Plan Year, and is used by the Plan in allocating income or loss to the Participants' accounts. Income or loss allocable to the period between the end of the Plan Year and the date of distribution shall be disregarded in determining income or loss. Excess Aggregate Contributions shall be forfeited, if forfeitable, or distributed on a prorata basis from the Participant's Matching Contribution Account and if applicable, the Participant's Deferral Contributions Account or Qualified Discretionary Contribution Account or both. Forfeitures of Excess Aggregate Contributions shall be applied to reduce Employer contributions; the forfeitures shall be held in the money market fund, if any, listed in Section 1.14(b) pending such application. 4.05 SPECIAL RULES Deferral Contributions and Qualified Discretionary Contributions and income allocable to each are not distributable to a Participant or his or her beneficiary or beneficiaries, in accordance with such Participant's or beneficiary or beneficiaries election, earlier than upon separation from service, death, or disability, except as otherwise provided in Section 7.10, 7.11 or 10.06. Such amounts may also be distributed, but after March 31, 1988 in the form of a lump sum only, upon: (a) Termination of the Plan without establishment of another defined contribution Plan, other than an Employee stock ownership Plan (as defined in Section 4975(e) or Section 409 of the Code) or a simplified Employee pension Plan as defined in Section 408(k) of the Code. (b) The disposition by a corporation to an unrelated corporation of substantially all of the assets (within the meaning of Section 409(d)(2) of the Code) used in a trade or business of such corporation if such corporation continues to maintain this Plan after the disposition, but only with respect to Employees who continue employment with the corporation acquiring such assets. (c) The disposition by a corporation to an unrelated entity of such corporation's interest in a subsidiary (within the meaning of Section 409(d)(2) of the Code) if such corporation continues to maintain this Plan, but only with respect to Employees who continue employment with such subsidiary. The Participant's accrued benefit derived from Deferral Contributions and Qualified Discretionary Contributions is nonforfeitable. Separate accounts for Deferral Contributions, Qualified Discretionary Contributions, and Matching Contributions will be maintained for each Participant. Each account will be credited with the applicable contributions and earnings thereon. 4.06 DISCRETIONARY EMPLOYER CONTRIBUTIONS If so provided by the Employer in Sections 1.05(a)(1), for the Plan Year in which the Plan is adopted and for each Plan Year thereafter, the Employer may make Discretionary Employer Contributions to the Trust in accordance with Section 1.05 to be allocated among eligible Participants, in the ratio that each Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. 4.07 TIME OF MAKING EMPLOYER CONTRIBUTIONS The Employer will pay its contribution for each Plan Year not later than the time prescribed by law for filing the Employer's Federal income tax return for the fiscal (or taxable) year with or within which such Plan Year ends (including extensions thereof). The Trustee will have no authority to inquire into the correctness of the amounts contributed and paid over to the Trustee, to determine whether any contribution is payable under this Article 4, or to enforce, by suit or otherwise, the Employer's obligation, if any, to make a contribution to the Trustee. 4.08 RETURN OF EMPLOYER CONTRIBUTIONS The Trustee shall, upon request by the Employer, return to the Employer the amount (if any) determined under Section 14.22. Such amount shall be reduced by amounts attributable thereto which have been credited to the Accounts of Participants who have since received distributions from the Trust, except to the extent such amounts continue to be credited to such Participants' Accounts at the time the amount is returned to the Employer. Such amount shall also be reduced by the losses of the Trust attributable thereto, if and to the extent such losses exceed the gains and income attributable thereto, but will not be increased by the gains and income of the Trust attributable thereto, if and to the extent such gains and income exceed the losses attributable thereto. In no event will the return of a contribution hereunder cause the balance of the individual Account of any Participant to be reduced to less than the balance which would have been credited to the Account had the mistaken amount not been contributed. 4.09 EMPLOYEE CONTRIBUTIONS The Employer shall not allow Participants to make any Employee Contributions to the Plan. However, the Plan may accept a frozen Participant Employee Contribution Account. For purposes of this Plan, "Employee Contributions" shall mean any voluntary non-deductible contribution made to the Plan by or on behalf of a Participant that is or was included in the Participant's gross income in the year in which made and that is maintained under a separate account to which applicable earnings and losses are allocated. A Participant shall have a fully vested 100% nonforfeitable right to his Employee Contributions. 4.10 ROLLOVER CONTRIBUTIONS (a) Rollover of Eligible Rollover Distributions (1) An Employee who is or was a distributee of an "eligible rollover distribution"(as defined in Section 402(c)(4) of the Code and the regulations issued thereunder) from a qualified Plan or Section 403(b) annuity may directly transfer all or any portion of such distribution to the Trust or transfer all or any portion of such distribution to the Trust within sixty (60) days of payment. The transfer shall be made in the form of cash or allowable Fund Shares only. (2) The Employer may refuse to accept rollover contributions or instruct the Trustee not to accept rollover contributions under the Plan. (b) Treatment of Rollover Amount. (1) An Account will be established for the transferring Employee under Article 5, the rollover amount will be credited to the account and such amount will be subject to the terms of the Plan, including Section 8.01, except as otherwise provided in this Section 4.10. (2) The rollover account will at all times be fully vested in and nonforfeitable by the Employee. (c) Entry into Plan by Transferring Employee. Although an amount may be transferred to the Trust Fund under this Section 4.10 by an Employee who has not yet become a Participant in accordance with Article 4, and such amount is subject to the terms of the Plan as described in paragraph (b) above, the Employee will not become a Participant entitled to share in Employer Contributions until he has satisfied such requirements. (d) Monitoring of Rollovers. (1) The Administrator shall develop such procedures and require such information from transferring Employees as it deems necessary to insure that amounts transferred under this Section 4.10 meet the requirements for tax-free rollovers established by such Section and by Section 402(c) of the Code. No such amount may be transferred until approved by the Administrator. (2) If a transfer made under this Section 4.10 is later determined by the Administrator not to have met the requirements of this Section or of the Code or Treasury regulations, the Trustee shall, within a reasonable time after such determination is made, and on instructions from the Administrator, distribute to the Employee the amounts then held in the Trust attributable to the transferred amount. 4.11 DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS The Administrator will not accept deductible Employee contributions which are made for a taxable year beginning after December 31, 1986. Contributions made prior to that date will be maintained in a separate account which will be nonforfeitable at all times and which will share in the gains and losses of the trust in the same manner as described in Section 5.02. No part of the deductible voluntary contribution account will be used to purchase life insurance. Subject to Article 8, the Participant may withdraw any part of the deductible voluntary contribution account upon request. 4.12 RESERVED ARTICLE 5 PARTICIPANTS' ACCOUNTS 5.01 INDIVIDUAL ACCOUNTS The Administrator will establish and maintain an Account for each Participant which will reflect Employer and Employee Contributions made on behalf of the Participant and earnings, expenses, gains and losses attributable thereto, and investments made with amounts in the Participant's Account. The Administrator will establish and maintain such other accounts and records as it decides in its discretion to be reasonably required or appropriate in order to discharge its duties under the Plan. 5.02 VALUATION OF ACCOUNTS Participant Accounts will be valued at their fair market value at least annually as of a date specified by the Administrator in accordance with a method consistently followed and uniformly applied, and on such date earnings, expenses, gains and losses on investments made with amounts in each Participant's Account will be allocated to such Account. Participants will be furnished statements of their Account values at least once each Plan Year. 5.03 CODE SECTION 415 LIMITATIONS Notwithstanding any other provisions of the Plan: Subsections (a)(1) through (a)(4)--(These subsections apply to Employers who do not maintain any qualified Plan including a Welfare Benefit Fund, an Individual Medical Account, or a simplified Employee pension in addition to this Plan.) (a)(1) If the Participant does not participate in, and has never participated in any other qualified Plan, Welfare Benefit Fund, Individual Medical Account, or a simplified Employee pension, as defined in section 408(k) of the Code, maintained by the Employer, which provides an annual addition as defined in Section 5.03(e)(1), the amount of Annual Additions to a Participant's Account for a Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer contribution that would otherwise be contributed or allocated to the Participant's account would cause the annual additions for the limitation year to exceed the maximum permissible amount, the amount contributed or allocated will be reduced so that the annual additions for the limitation year will equal the maximum permissible amount. (a)(2) Prior to the determination of the Participant's actual Compensation for a Limitation Year, the Maximum Permissible Amount may be determined on the basis of a reasonable estimation of the Participant's Compensation for such Limitation Year, uniformly determined for all Participants similarly situated. Any Employer contributions based on estimated annual Compensation shall be reduced by any Excess Amounts carried over from prior years. (a)(3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for such Limitation Year shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (a)(4) If, pursuant to subsection (a)(3) or as a result of the allocation of forfeitures, or a reasonable error in determining the total Elective Deferrals there is an Excess Amount with respect to a Participant for a Limitation Year, such Excess Amount shall be disposed of as follows: (A) Any Elective Deferrals, to the extent they would reduce the Excess Amount, will be returned to the Participant. (B) If after the application of paragraph (A) an Excess amount still exists and the Participant is in the service of the Employer which is covered by the Plan at the end of the Limitation Year, then such Excess Amount shall be reapplied to reduce future Employer contributions under this Plan for the next Limitation Year (and for each succeeding year, as necessary) for such Participant, so that in each such Year the sum of actual Employer contributions plus the reapplied amount shall equal the amount of Employer contributions which would otherwise be made to such Participant's Account. (C) If after the application of paragraph (A) an Excess Amount still exists and the Participant is not in the service of the Employer which is covered by the Plan at the end of a Limitation Year, then such Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer contributions for all remaining Participants in the next Limitation Year and each succeeding Limitation Year if necessary. (D) If a suspense account is in existence at any time during the Limitation Year pursuant to this subsection, it will not participate in the allocation of the Trust Fund's investment gains and losses. All amounts in the suspense account must be allocated to the Accounts of Participants before any Employer contribution may be made for the Limitation Year. Except as provided in paragraph (A), Excess Amounts may not be distributed to Participants or former Participants. Subsections (b)(1) through (b)(6)--(These subsections apply to Employers who, in addition to this Plan, maintain one or more Plans, all of which are qualified Master or Prototype defined contribution Plans, any Welfare Benefit Fund, any Individual Medical Account, or any simplified Employee pension.) (b)(1) If, in addition to this Plan, the Participant is covered under any other qualified defined contribution Plans (all of which are qualified Master or Prototype Plans), Welfare Benefit Funds, Individual Medical Accounts, or simplified Employee pension Plans, maintained by the Employer, that provide an annual addition as defined in Section 5.03(e)(1), the amount of Annual Additions to a Participant's Account for a Limitation Year, shall not exceed the lesser of: (A) the Maximum Permissible Amount, reduced by the sum of any Annual Additions to the Participant's accounts for the same Limitation Year under such other qualified Master or Prototype defined contribution Plans, and Welfare Benefit Funds, Individual Medical Accounts, and simplified Employee pensions, or (B) any other limitation contained in this Plan. If the annual additions with respect to the Participant under other qualified Master or Prototype defined contribution Plans Welfare Benefit Funds, Individual Medical Accounts and simplified Employee pensions maintained by the Employer are less than the maximum permissible amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the annual additions for the limitation year to exceed this limitation, the amount contributed or allocated will be reduced so that the annual additions under all such Plans and funds for the limitation year will equal the maximum permissible amount. If the annual additions with respect to the Participant under such other qualified Master or Prototype defined contribution Plans, Welfare Benefit Funds, Individual Medical Accounts and simplified Employee pensions in the aggregate are equal to or greater than the maximum permissible amount, no amount will be contributed or allocated to the Participant's Account under this Plan for the limitation year. (b)(2) Prior to the determination of the Participant's actual Compensation for the Limitation Year, the amounts referred to in (b)(1)(A) above may be determined on the basis of a reasonable estimation of the Participant's Compensation for such Limitation Year, uniformly determined for all Participants similarly situated. Any Employer contribution based on estimated annual Compensation shall be reduced by any Excess Amounts carried over from prior years. (b)(3) As soon as is administratively feasible after the end of the Limitation Year, the amounts referred to in (b)(1)(A) shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (b)(4) If a Participant's Annual Additions under this Plan and all such other Plans result in an Excess Amount, such Excess Amount shall be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a simplified Employee pension will be deemed to have been allocated first, followed by Annual Additions to a Welfare Benefit Fund or Individual Medical Account regardless of the actual allocation date. (b)(5) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another Plan, the Excess Amount attributed to this Plan will be the product of: (A) the total Excess Amount allocated as of such date (including any amount which would have been allocated but for the limitations of Section 415 of the Code), times (B) the ratio of (i) the Annual Additions allocated to the Participant as of such date under this Plan, divided by (ii) the Annual Additions allocated as of such date under all qualified defined contribution Plans (determined without regard to the limitations of Section 415 of the Code). (b)(6) Any Excess Amounts attributed to this Plan shall be disposed of as provided in subsection (a)(4). Subsection (c)--(This subsection applies only to Employers who, in addition to this Plan, maintain one or more qualified Plans which are qualified defined contribution Plans other than Master or Prototype Plans.) (c) If the Employer also maintains another Plan which is a qualified defined contribution Plan other than a Master or Prototype Plan, Annual Additions allocated under this Plan on behalf of any Participant shall be limited in accordance with the provisions of (b)(1) through (b)(6), as though the other Plan were a Master or Prototype Plan, unless the Employer provides other limitations in the Adoption Agreement. Subsection (d)--(This subsection applies only to Employers who, in addition to this Plan, maintain or at any time maintained a qualified defined benefit Plan.) (d) If the Employer maintains, or at any time maintained, a qualified defined benefit Plan, the sum of any Participant's Defined Benefit Fraction and Defined Contribution Fraction shall not exceed the combined Plan limitation of 1.0 in any Limitation Year. The combined Plan limitation will be met as provided by the Employer in the Adoption Agreement. Subsections (e)(1) through (e)(9)--(Definitions.) (e)(1) "Annual Additions" means the sum of the following amounts credited to a Participant for a Limitation Year: (A) all Employer contributions, (B) all Employee contributions, (C) all forfeitures, (D) Amounts allocated, after March 31, 1984, to an Individual Medical Account which is part of a pension or annuity Plan maintained by the Employer are treated as Annual Additions to a defined contribution Plan. Also, amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key Employee, as defined in Section 419A(d)(3) of the Code, under a Welfare Benefit Fund maintained by the Employer are treated as Annual Additions to a defined contribution Plan, and (E) Allocations under a simplified Employee pension. For purposes of this Section 5.03, amounts reapplied to reduce Employer contributions under subsection (a)(4) shall also be included as Annual Additions. (e)(2) "Compensation" means wages as defined in Section 3401(a) of the Code and all other payments of Compensation to an Employee by the employer (in the course of the employer's trade or business) for which the employer is required to furnish the Employee a written statement under Sections 6041(d) and 6051(a)(3) of the Code. Compensation must be determined without regard to any rules under Section 3401(a) of the Code that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Code.) For any Self-Employed Individual Compensation will mean Earned Income. For limitation years beginning after December 31, 1991, for purposes of applying the limitations of this article, Compensation for a limitation year is the Compensation actually paid or made available during such limitation year. (e)(3) "Defined Benefit Fraction" means a fraction, the numerator of which is the sum of the Participant's annual benefits (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) under all the defined benefit Plans (whether or not terminated) maintained by the Employer, each such annual benefit computed on the assumptions that the Participant will remain in employment until the normal retirement age under each such Plan (or the Participant's current age, if later) and that all other factors used to determine benefits under such Plan will remain constant for all future Limitation Years, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the Limitation Year under Sections 415(b)(1)(A) and 415(d) of the Code or 140 percent of the Participant's average Compensation for the 3 highest consecutive calendar years of service during which the Participant was active in each such Plan, including any adjustments under Section 415(b) of the Code. However, if the Participant was a Participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined benefit Plans maintained by the Employer which were in existence on May 6, 1986 then the denominator of the Defined Benefit Fraction shall not be less than 125 percent of the Participant's total accrued benefit as of the close of the last Limitation Year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the Plan after May 5, 1986, under all such defined benefit Plans as met, individually and in the aggregate, the requirements of Section 415 of the Code for all Limitation Years beginning before January 1, 1987. (e)(4) "Defined Contribution Fraction" means a fraction, the numerator of which is the sum for the current and all prior Limitation Years of (A) all Annual Additions (if any) to the Participant's accounts under each defined contribution Plan (whether or not terminated) maintained by the Employer, and (B) all Annual Additions attributable to the Participant's nondeductible Employee contributions to all defined benefit Plans (whether or not terminated) maintained by the Employer, and the Participant's Annual Additions attributable to all Welfare Benefit Funds, Individual Medical Accounts, and simplified Employee pensions, maintained by the Employer, and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior Limitation Years during which the Participant was an Employee (regardless of whether the Employer maintained a defined contribution Plan in any such year). The maximum aggregate amount in any Limitation Year is the lesser of 125 percent of the dollar limitation in effect under Section 415(c)(1)(A) of the Code for each such year or 35 percent of the Participant's Compensation for each such year. If the Participant was a Participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined contribution Plans maintained by the Employer which were in existence on May 6, 1986 then the numerator of the Defined Contribution Fraction shall be adjusted if the sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment an amount equal to the product of (i) the excess of the sum of the fractions over 1.0 times (ii) the denominator of this fraction will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the Plan made after May 6, 1986, but using the Section 415 limitation applicable to the first Limitation Year beginning on or after January 1, 1987. The annual addition for any limitation year beginning before January 1, 1987 shall not be recomputed to treat all Employee contributions as annual additions. (e)(5) "Employer" means the Employer and any Related Employer that adopts this Plan. In the case of a group of employers which constitutes a controlled group of corporations (as defined in Section 414(b) of the Code as modified by Section 415(h)) or which constitutes trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) of the Code as modified by Section 415(h) of the Code) or which constitutes an affiliated service group (as defined in Section 414(m)of the Code) and any other entity required to be aggregated with the Employer pursuant to regulations issued under Section 414(o) of the Code, all such employers shall be considered a single employer for purposes of applying the limitations of this Section 5.03. (e)(6) "Excess Amount" means the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (e)(7) "Individual Medical Account" means an individual medical account as defined in Section 415(l)(2) of the Code. (e)(8) "Limitation Year" means the Plan Year. All qualified Plans of the Employer must use the same Limitation Year. If the Limitation Year is amended to a different 12-consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made. (e)(9) "Master or Prototype Plan" means a Plan the form of which is the subject of a favorable opinion letter from the Internal Revenue Service. (e)(10) "Maximum Permissible Amount" means for a Limitation Year with respect to any Participant the lesser of (i) $30,000 or, if greater, 25 percent of the dollar limitation set forth in Section 415(b)(1) of the Code, as in effect for the Limitation Year, or (ii) 25 percent of the Participant's Compensation for the Limitation Year. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12-consecutive month period, the Maximum Permissible Amount will not exceed the limitation in (e)(10)(i) multiplied by a fraction whose numerator is the number of months in the short Limitation Year and whose denominator is 12. The Compensation limitation referred to in subsection (e)(10)(ii) shall not apply to any contribution for medical benefits within the meaning of Section 401(h) or Section 419A(f)(2) of the Code after separation from service which is otherwise treated as an Annual Addition under Section 419A(d)(2) or Section 415(l)(1) of the Code. (e)(11) "Welfare Benefit Fund" means a welfare benefit fund as defined in Section 419(e) of the Code. ARTICLE 6 INVESTMENT OF CONTRIBUTIONS 6.01 MANNER OF INVESTMENT All contributions made to the Accounts of Participants shall be held for investment by the Trustee. The Accounts of Participants shall be invested and reinvested only in eligible investments selected by the Employer in Section 1.14(b), subject to Section 14.10. 6.02 INVESTMENT DECISIONS Investments shall be directed by each Participant in accordance with this Section and Section 1.14(a). Pursuant to Section 14.04, the Trustee shall have no discretion or authority with respect to the investment of the Trust Fund. (a) Reserved (b) Each Participant shall direct the investment of his Account among the Fidelity Funds listed in Section 1.14(b). The Participant shall file initial investment instructions with the Administrator, on such form as the Administrator may provide, selecting the Funds in which amounts credited to his Account will be invested. (1) Except as provided in this Section 6.02, only authorized Plan contacts and the Participant shall have access to a Participant's Account. While any balance remains in the Account of a Participant after his death, the Beneficiary of the Participant shall make decisions as to the investment of the Account as though the Beneficiary were the Participant. To the extent required by a qualified domestic relations order as defined in Section 414(p) of the Code, an alternate payee shall make investment decisions with respect to a Participant's Account as though such alternate payee were the Participant. (2) If the Trustee receives any contribution under the Plan as to which investment instructions have not been provided, the Trustee shall promptly notify the Administrator and the Administrator shall take steps to elicit instructions from the Participant. The Trustee shall credit any such contribution to the Participant's Account and such amount shall be invested in the Fidelity Fund selected by the Employer for such purposes or, absent Employer selection, in the most conservative Fidelity Fund listed in Section 1.14(b), until investment instructions have been received by the Trustee. (c) All dividends, interest, gains and distributions of any nature received in respect of Fund Shares shall be reinvested in additional shares of that Fidelity Fund. (d) Expenses attributable to the acquisition of investments shall be charged to the Account of the Participant for which such investment is made. 6.03 PARTICIPANT DIRECTIONS TO TRUSTEE All Participant initial investment instructions filed with the Administrator pursuant to the provisions of Section 6.02 shall be promptly transmitted by the Administrator to the Trustee. A Participant shall transmit subsequent investment instructions directly to the Trustee by means of the telephone exchange system maintained by the Trustee for such purposes. The method and frequency for change of investments will be determined under the (a) rules applicable to the investments selected by the Employer in Section 1.14(b) and (b) the additional rules of the Employer, if any, limiting the frequency of investment changes, which are included in a separate written administrative procedure adopted by the Employer and accepted by the Trustee. The Trustee shall have no duty to inquire into the investment decisions of a Participant or to advise him regarding the purchase, retention or sale of assets credited to his Account. ARTICLE 7 RIGHT TO BENEFITS 7.01 NORMAL OR EARLY RETIREMENT Each Participant who attains his Normal Retirement Age or, if so provided by the Employer in Section 1.06(b), Early Retirement Age will have a 100 percent nonforfeitable interest in his Account regardless of any vesting schedule elected in Section 1.07. If a Participant retires upon the attainment of Normal or Early Retirement Age, such retirement is referred to as a normal retirement. Upon his normal retirement the balance of the Participant's Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08, will be distributed to him in accordance with Article 8. If a Participant separates from service before satisfying the age requirements for early retirement, but has satisfied the service requirement, the Participant will be entitled to elect an early retirement distribution upon satisfaction of such age requirement. 7.02 LATE RETIREMENT If a Participant continues in the service of the Employer after attainment of Normal Retirement Age, he will continue to have a 100 percent nonforfeitable interest in his Account and will continue to participate in the Plan until the date he establishes with the Employer for his late retirement. Until he retires, he has a continuing election to receive all or any portion of his Account. Upon the earlier of his late retirement or the distribution date required under Section 8.08, the balance of his Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08, will be distributed to him in accordance with Article 8 below. 7.03 DISABILITY RETIREMENT If so provided by the Employer in Section 1.06(c), a Participant who becomes disabled will have a 100 percent nonforfeitable interest in his Account, the balance of which Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08, will be distributed to him in accordance with Article 8 below. A Participant is considered disabled if he cannot engage in any substantial, gainful activity because of a medically determinable physical or mental impairment likely to result in death or to be of a continuous period of not less than 12 months, and terminates his employment with the employer. Such termination of employment is referred to as a disability retirement. Determinations with respect to disability shall be made by the Administrator who may rely on the criteria set forth in Section 1.06(c) as evidence that the Participant is disabled. 7.04 DEATH Subject, if applicable, to Section 8.04, if a Participant dies before the distribution of his Account has commenced, or before such distribution has been completed, his Account shall become 100 percent vested and his designated Beneficiary or Beneficiaries will be entitled to receive the balance or remaining balance of his Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08. Distribution to the Beneficiary or Beneficiaries will be made in accordance with Article 8. A Participant may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries by giving notice to the Administrator on a form designated by the Administrator. If more than one person is designated as the Beneficiary, their respective interests shall be as indicated on the designation form. In the case of a married Participant the Participant's spouse shall be deemed to be the designated Beneficiary unless the Participant's spouse has consented to another designation in the manner described in Section 8.03(d). A copy of the death notice or other sufficient documentation must be filed with and approved by the Administrator. If upon the death of the Participant there is, in the opinion of the Administrator, no designated Beneficiary for part or all of the Participant's Account, such amount will be paid to his surviving spouse or, if none, to his estate (such spouse or estate shall be deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies after benefits to such Beneficiary have commenced, but before they have been completed, and, in the opinion of the Administrator, no person has been designated to receive such remaining benefits, then such benefits shall be paid in a lump sum to the deceased Beneficiary's estate. 7.05 OTHER TERMINATION OF EMPLOYMENT If a Participant terminates his employment for any reason other than death or normal, late, or disability retirement, he will be entitled to a termination benefit equal to (a) the vested percentage(s) of the value of the Matching and/or Discretionary Contributions to his Account, as adjusted for income, expense, gain, or loss, such percentage(s) determined in accordance with the vesting schedule(s) selected by the Employer in Section 1.07, and (b) the value of the Deferral, Qualified Discretionary and Rollover Contributions to his Account as adjusted for income, expense, gain or loss. The amount payable under this Section 7.05 will be subject to the provisions of Section 7.08 and will be distributed in accordance with Article 8 below. 7.06 SEPARATE ACCOUNT If a distribution from a Participant's Account has been made to him at a time when he has a nonforfeitable right to less than 100 percent of his Account, the vesting schedule in Section 1.07 will thereafter apply only to amounts in his Account attributable to Employer Contributions allocated after such distribution. The balance of his Account immediately after such distribution will be transferred to a separate account which will be maintained for the purpose of determining his interest therein according to the following provisions. At any relevant time prior to a forfeiture of any portion thereof under Section 7.07 a Participant's nonforfeitable interest in his Account held in a separate account described in the preceding paragraph will be equal to P(AB + (RxD))-(RxD), where P is the nonforfeitable percentage at the relevant time determined under Section 7.05; AB is the account balance of the separate account at the relevant time; D is the amount of the distribution; and R is the ratio of the account balance at the relevant time to the account balance after distribution. Following a forfeiture of any portion of such separate account under Section 7.07 below, any balance in the Participant's separate account will remain fully vested and nonforfeitable. 7.07 FORFEITURES If a Participant terminates his employment, any portion of his Account (including any amounts credited after his termination of employment) not payable to him under Section 7.05 will be forfeited by him upon the complete distribution to him of the vested portion of his Account, if any, subject to the possibility of reinstatement as described in the following paragraph. For purposes of this paragraph, if the value of an Employee's vested account balance is zero, the Employee shall be deemed to have received a distribution of his vested interest immediately following termination of employment. Such forfeitures will be applied to reduce the contributions of the Employer next payable under the Plan (or administrative expenses of the Plan); the forfeitures shall be held in a money market fund pending such application. If a Participant forfeits any portion of his Account under the preceding paragraph but does again become an Employee after such date, then the amount so forfeited, without any adjustment for the earnings, expenses, or losses or gains of the assets credited to his Account since the date forfeited, will be recredited to his Account (or to a separate account as described in Section 7.06, if applicable) but only if he repays to the Plan before the earlier of five years after the date of his re employment or the date he incurs 5 consecutive 1-year breaks in service following the date of the distribution the amount previously distributed to him, without interest, under Section 7.05. If an Employee is deemed to receive a distribution pursuant to this Section 7.07, and the Employee resumes employment before 5 consecutive 1-year breaks in service, the Employee shall be deemed to have repaid such distribution on the date of his re employment. Upon such an actual or deemed repayment, the provisions of the Plan (including Section 7.06) will thereafter apply as if no forfeiture had occurred. The amount to be recredited pursuant to this paragraph will be derived first from the forfeitures, if any, which as of the date of recrediting have yet to be applied as provided in the preceding paragraph and, to the extent such forfeitures are insufficient, from a special Employer contribution to be made by the Employer. If a Participant elects not to receive the nonforfeitable portion of his Account following his termination of employment, the non-vested portion of his Account shall be forfeited after the Participant has incurred five consecutive 1-year breaks in service as defined in Section 2.01(a)(33). No forfeitures will occur solely as a result of a Participant's withdrawal of Employee contributions. 7.08 ADJUSTMENT FOR INVESTMENT EXPERIENCE If any distribution under this Article 7 is not made in a single payment, the amount retained by the Trustee after the distribution will be subject to adjustment until distributed to reflect the income and gain or loss on the investments in which such amount is invested and any expenses properly charged under the Plan and Trust to such amounts. 7.09 PARTICIPANT LOANS If permitted under Section 1.09, the Administrator shall allow Participants to apply for a loan from the Plan, subject to the following: (a) Loan Application. All Plan loans shall be administered by the Administrator. Applications for loans shall be made to the Administrator on forms available from the Administrator. Loans shall be made available to all Participants on a reasonably equivalent basis. For this purpose, the term "Participant" means any Participant or Beneficiary, including an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, who is a party-in-interest (as determined under ERISA Section 3(14)) with respect to the Plan except no loans will be made to: (i) an Employee who makes a rollover contribution in accordance with Section 4.10 who has not satisfied the requirements of Section 3.01, or (ii) a shareholder-Employee or Owner-Employee. For purposes of this requirement, a shareholder-Employee means an Employee or officer of an electing small business (Subchapter S) corporation who owns (or is considered as owning within the meaning of Section 318(a)(1) of the Code), on any day during the taxable year of such corporation, more than 5% of the outstanding stock of the corporation. A Participant with an existing loan may not apply for another loan until the existing loan is paid in full and may not refinance an existing loan or attain a second loan for the purpose of paying off the existing loan. A Participant may not apply for more than one loan during each Plan Year. (b) Limitation of Loan Amount/Purpose of Loan. Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees. No loan to any Participant or Beneficiary can be made to the extent that such loan when added to the outstanding balance of all other loans to the Participant or Beneficiary would exceed the lesser of (a) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is made over the outstanding balance of loans from the Plan on the date the loan is made, or (b) one-half the present value of the nonforfeitable Account of the Participant. For the purpose of the above limitation, all loans from all Plans of the Employer and Related Employers are aggregated. A Participant may not request a loan for less than $1,000. The Employer may provide that loans only be made from certain contribution sources within Participant Account(s) by notifying the Trustee in writing of the restricted source. Loans may be made for any purpose or if elected by the Employer in Section 1.09(a), on account of hardship only. A loan will be considered to be made on account of hardship only if made on account of an immediate and heavy financial need described in Section 7.10(b)(1). (c) Terms of Loan. All loans shall bear a reasonable rate of interest as determined by the Administrator based on the prevailing interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances. The determination of a reasonable rate of interest must be based on appropriate regional factors unless the Plan is administered on a national basis in which case the Administrator may establish a uniform reasonable rate of interest applicable to all regions. All loans shall by their terms require that repayment (principal and interest) be amortized in level payments, not less than quarterly, over a period not extending beyond five years from the date of the loan unless such loan is for the purchase of a Participant's primary residence, in which case the repayment period may not extend beyond ten years from the date of the loan. A Participant may prepay the outstanding loan balance prior to maturity without penalty. (d) Security. Loans must be secured by the Participant's Accounts not to exceed 50 percent of the Participant's vested Account. A Participant must obtain the consent of his or her spouse, if any, to use a Participant Account as security for the loan, if the provisions of Section 8.03 apply to the Participant. Spousal consent shall be obtained no earlier than the beginning of the 90-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that loan. (e) Default. The Administrator shall treat a loan in default if: (1) any scheduled repayment remains unpaid more than 90 days; (2) there is an outstanding principal balance existing on a loan after the last scheduled repayment date. Upon default or termination of employment, the entire outstanding principal and accrued interest shall be immediately due and payable. If a distributable event (as defined by the Code) has occurred, the Administrator shall direct the Trustee to foreclose on the promissory note and offset the Participant's vested Account by the outstanding balance of the loan. If a distributable event has not occurred, the Administrator shall direct the Trustee to foreclose on the promissory note and offset the Participant's vested Account as soon as a distributable event occurs. (f) Pre-existing loans. The provision in paragraph (a) of this Section 7.09 limiting a Participant to one outstanding loan shall not apply to loans made before the Employer adopted this prototype Plan document. A Participant may not apply for a new loan until all outstanding loans made before the Employer adopted this prototype Plan have been paid in full. The Trustee may accept any loans made before the Employer adopted this prototype Plan document except such loans which require the Trustee to hold as security for the loan property other than the Participant's vested Account. As of the effective date of amendment of this Plan in Section 1.01(g)(2), the Trustee shall have the right to reamortize the outstanding principal balance of any Participant loan that is delinquent. Such reamortization shall be based upon the remaining life of the loan and the original maturity date may not be extended. Notwithstanding any other provision of this Plan, the portion of the Participant's vested Account used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. If less than 100% of the Participant's vested Account (determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account shall be adjusted by first reducing the vested Account by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. No loan to any Participant or Beneficiary can be made to the extent that such loan when added to the outstanding balance of all other loans to the Participant or Beneficiary would exceed the lesser of (a) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is made over the outstanding balance of loans from the Plan on the date the loan is made, or (b) one-half the present value of the nonforfeitable Account of the Participant. For the purpose of the above limitation, all loans from all Plans of the Employer and Related Employers are aggregated. 7.10 IN-SERVICE/HARDSHIP WITHDRAWALS Subject to the provisions of Article 8, a Participant shall not be permitted to withdraw any Employer or Employee Contributions (and earnings thereon) prior to retirement or termination of employment, except as follows: (a) Age 59 1/2. If permitted under Section 1.11(b), a Participant who has attained the age of 59 1/2 is permitted to withdraw upon request all or any portion the Accounts specified by the Employer in 1.11(b). (b) Hardship. If permitted under Section 1.10, a Participant may apply to the Administrator to withdraw some or all of his Deferral Contributions (and earnings thereon accrued as of December 31, 1988) and, if applicable, Rollover Contributions and such other amounts allowed by a predecessor Plan, if such withdrawal is made on account of a hardship. For purposes of this Section, a distribution is made on account of hardship if made on account of an immediate and heavy financial need of the Employee where such Employee lacks other available resources. Determinations with respect to hardship shall be made by the Administrator and shall be conclusive for purposes of the Plan, and shall be based on the following special rules: (1) The following are the only financial needs considered immediate and heavy: expenses incurred or necessary for medical care (within the meaning of Section 213(d) of the Code) of the Employee, the Employee's spouse, children, or dependents; the purchase (excluding mortgage payments) of a principal residence for the Employee; payment of tuition and related educational fees for the next twelve (12) months of post-secondary education for the Employee, the Employee's spouse, children or dependents; or the need to prevent the eviction of the Employee from, or a foreclosure on the mortgage of, the Employee's principal residence. (2) A distribution will be considered as necessary to satisfy an immediate and heavy financial need of the Employee only if: (i) The Employee has obtained all distributions, other than the hardship distributions, and all nontaxable (at the time of the loan) loans currently available under all Plans maintained by the Employer; (ii) The Employee suspends Deferral Contributions and Employee Contributions to the Plan for the 12-month period following the date of his hardship distribution. The suspension must also apply to all elective contributions and Employee contributions to all other qualified Plans and non-qualified Plans maintained by the Employer, other than any mandatory employer contribution portion of a defined benefit Plan, including stock option, stock purchase and other similar Plans, but not including health and welfare benefit Plans (other than the cash or deferred arrangement portion of a cafeteria Plan); (iii) The distribution is not in excess of the amount of an immediate and heavy financial need (including amounts necessary to pay any Federal, state or local income taxes or penalties reasonably anticipated to result from the distribution); and (iv) The Employee agrees to limit Deferral Contributions (elective contributions) to the Plan and any other qualified Plan maintained by the Employer for the Employee's taxable year immediately following the taxable year of the hardship distribution to the applicable limit under Section 402(g) of the Code for such taxable year less the amount of such Employee's Deferral Contributions for the taxable year of the hardship distribution. (3) A Participant must obtain the consent of his or her spouse, if any, to obtain a hardship withdrawal, if the provisions of Section 8.03 apply to the Participant. (c) Employee Contributions. A Participant may elect to withdraw, in cash, up to one hundred percent of the amount then credited to his Employee Contribution Account. Such withdrawals shall be limited to one (1) per Plan Year unless this prototype Plan document is an amendment of a prior Plan document, in which case the rules and restrictions governing Employee contribution withdrawals, if any, are incorporated herein by reference. 7.11 PRIOR PLAN IN-SERVICE DISTRIBUTION RULES If designated by the Employer in Section 1.11(b), or Section 1.11(c)(2) or (3)a Participant shall be entitled to withdraw at anytime prior to his termination of employment, subject to the provisions of Article 8 and the prior Plan, any vested Employer Contributions maintained in a Participant's Account for the specified period of time. ARTICLE 8 DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE. 8.01 DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES (a) Distributions from the Trust to a Participant or to the Beneficiary of the Participant shall be made in a lump sum in cash or, if elected by the Employer in Section 1.11, under a systematic withdrawal Plan (installment(s)) upon retirement, death, disability, or other termination of employment, unless another form of distribution is required or permitted in accordance with paragraph (d) of this Section 8.01 or Sections 1.11(c), 8.02, 8.03, 8.04 or 11.02. A distribution may be made in Fund Shares, at the election of the Participant, pursuant to the qualifying rollover of such distribution to a Fidelity Investments individual retirement account. (b) Distributions under a systematic withdrawal Plan must be made in substantially equal annual, or more frequent, installments, in cash, over a period certain which does not extend beyond the life expectancy of the Participant or the joint life expectancies of the Participant and his Beneficiary, or, if the Participant dies prior to the commencement of his benefits the life expectancy of the Participant's Beneficiary, as further described in Section 8.04. (c) Notwithstanding the provisions of Section 8.01(b) above, if a Participant's Account is, and at the time of any prior distribution(s) was, $3,500 or less, the balance of such Account shall be distributed in a lump sum as soon as practicable following retirement, disability, death or other termination of employment. (d) This paragraph (d) applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Article 8, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement Plan specified by the distributee in a direct rollover. The following definitions shall apply for purposes of this paragraph (d): (1) Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (2) Eligible retirement plan. An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity Plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement Plan is an individual retirement account or individual retirement annuity. (3) Distributee. A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (4) Direct rollover. A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. (5) If a distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution may commence less than 30 days after the notice required under Section 1.411(a) - 11(c) of the Income Tax Regulations is given, provided that: (a) the Plan Administrator clearly informs the Distributee that the Distributee has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (b) the Distributee after receiving the notice affirmatively elects a distribution. 8.02 ANNUITY DISTRIBUTIONS If so provided in Section 1.11(c), a Participant may elect distributions made in whole or in part in the form of an annuity contract subject to the provisions of Section 8.03. (a) An annuity contract distributed under the Plan must be purchased from an insurance company and must be nontransferable. The terms of an annuity contract shall comply with the requirements of the Plan and distributions under such contract shall be made in accordance with Section 401(a)(9) of the Code and the regulations thereunder. (b) The payment period of an annuity contract distributed to the Participant pursuant to this Section may be as long as the Participant lives. If the annuity is payable to the Participant and his spouse or designated Beneficiary, the payment period of an annuity contract may be for as long as either the Participant or his spouse or designated Beneficiary lives. Such an annuity may provide for an annuity certain feature for a period not exceeding the life expectancy of the Participant. If the annuity is payable to the Participant and his spouse such period may not exceed the joint life and last survivor expectancy of the Participant and his spouse, or, if the annuity is payable to the Participant and a designated Beneficiary, the joint life and last survivor expectancy of the Participant and such Beneficiary. If the Participant dies prior to the commencement of his benefits, the payment period of an annuity contract distributed to the Beneficiary of the Participant may be as long as the Participant's Beneficiary lives, and may provide for an annuity certain feature for a period not exceeding the life expectancy of the Beneficiary. Any annuity contract distributed under the Plan must provide for non increasing payments. 8.03 JOINT AND SURVIVOR ANNUITIES/PRE-RETIREMENT SURVIVOR ANNUITIES (a) Application. The provisions of this Section supersede any conflicting provisions of the Plan; provided, however, that paragraph (b) of this Section shall not apply if the Participant's Account does not exceed or at the time of any prior distribution did not exceed $3,500. A Participant is described in this Section only if (i) the Participant has elected distribution of his Account in the form of an Annuity Contract in accordance with Section 8.02, or (ii) the Trustee has directly or indirectly received a transfer of assets from another Plan (including a predecessor Plan) to which Section 401(a)(11) of the Code applies with respect to such Participant. (b) Retirement Annuity. Unless the Participant elects to waive the application of this subsection in a manner satisfying the requirements of subsection (d) below, to the extent applicable to the Participant, within the 90-day period preceding his Annuity Starting Date (which election may be revoked, and if revoked, remade, at any time in such period), the vested Account due any Participant to whom this subsection (b) applies will be paid to him by the purchase and delivery to him of an annuity contract described in Section 8.02 providing a life annuity only form of benefit or, if the Participant is married as of his Annuity Starting Date, providing an immediate annuity for the life of the Participant with a survivor annuity for the life of the Participant's spouse (determined as of the date of distribution of the contract) which is 50 percent of the amount of the annuity which is payable during the joint lives of the Participant and such spouse. The Participant may elect to receive distribution of his benefits in the form of such annuity as of the earliest date on which he could elect to receive retirement benefits under the Plan. Within the period beginning 90 days prior to the Participant's Annuity Starting Date and ending 30 days prior to such Date, the Administrator will provide such Participant with a written explanation of (i) the terms and conditions of the annuity contract described herein, (ii) the Participant's right to make and the effect of an election to waive application of this subsection, (iii) the rights of the Participant's spouse under subsection (d), and (iv) the right to revoke and the period of time effect of a revocation of the election to waive application of this subsection. (c) Annuity Death Benefit. Unless the Participant elects to waive the application of this subsection in a manner satisfying the requirements of subsection (d) below at any time within the applicable election period (which election may be revoked, and if revoked, remade, at any time in such period), if a married Participant to whom this Section applies dies before his Annuity Starting Date, then notwithstanding any designation of a Beneficiary to the contrary, 50 percent of his vested Account will be applied to purchase an annuity contract described in Section 8.02 providing an annuity for the life of the Participant's surviving spouse, which contract will then be promptly distributed to such spouse. In lieu of the purchase of such an annuity contract, the spouse may elect in writing to receive distributions under the Plan as if he or she had been designated by the Participant as his Beneficiary with respect to 50 percent of his Account. For purposes of this subsection, the applicable election period will commence on the first day of the Plan Year in which the Participant attains age 35 and will end on the date of the Participant's death, provided that in the case of a Participant who terminates his employment the applicable election period with respect to benefits accrued prior to the date of such termination will in no event commence later than the date of his termination of employment. A Participant may elect to waive the application of this subsection prior to the Plan Year in which he attains age 35, provided that any such waiver will cease to be effective as of the first day of the Plan Year in which the Participant attains age 35. The Administrator will provide a Participant to whom this subsection applies with a written explanation with respect to the annuity death benefit described in this subsection (c) comparable to that required under subsection (b) above. Such explanation shall be furnished within whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant reaches age 32 and ending with the end of the Plan Year preceding the Plan Year in which he reaches age 35, (ii) a reasonable period ending after the Employee becomes a Participant, (iii) a reasonable period ending after this Section 8.04 first becomes applicable to the Participant in accordance with Section 8.04(a), (iv) in the case of a Participant who separates from service before age 35, a reasonable period of time ending after separation from service. For purposes of the preceding sentence, the two-year period beginning one year prior to the date of the event described in clause (ii), (iii) or (iv), whichever is applicable, and ending one year after such date shall be considered reasonable, provided, that in the case of a Participant who separates from service under (iv) above and subsequently recommences employment with the Employer, the applicable period for such Participant shall be predetermined in accordance with this subsection. (d) Requirements of Elections. This subsection will be satisfied with respect to a waiver or designation which is required to satisfy this subsection if such waiver or designation is in writing and either (1) the Participant's spouse consents thereto in writing, which consent must acknowledge the effect of such waiver or designation and be witnessed by a notary public or Plan representative, or (2) the Participant establishes to the satisfaction of the Administrator that the consent of the Participant's spouse cannot be obtained because there is no spouse, because the spouse cannot be located or because of such other circumstances as the Secretary of Treasury may prescribe. Any consent by a spouse, or establishment that the consent of a spouse may not be obtained, will be effective only with respect to a specific Beneficiary (including any class of beneficiaries or any contingent beneficiaries) or form of benefits identified in the Participant's waiver or designation, unless the consent of the spouse expressly permits designations by the Participant without any requirement of further consent by the spouse. A consent which permits such designations by the Participant shall acknowledge that the spouse has the right to limit consent to a specific Beneficiary and form of benefits and that the spouse voluntarily elects to relinquish both such rights. A consent by a spouse shall be irrevocable once made. Any such consent, or establishment that such consent may not be obtained, will be effective only with respect to such spouse. For purposes of subsections (b) and (c) above, no consent of a spouse shall be valid unless the notice required by such subsection, whichever is applicable, has been provided to the Participant. (e) Former Spouse. For purposes of this Section 8.03, a former spouse of a Participant will be treated as the spouse or surviving spouse of the Participant, and a current spouse will not be so treated, to the extent required under a qualified domestic relations order, as defined in Section 414(p) of the Code. (f) Vested Account Balance. For purposes of this Section, vested Account shall include the aggregate value of the Participant's vested Account derived from Employer and Employee contributions (including rollovers), whether vested before or upon death. The provisions of this Section shall apply to a Participant who is vested in amounts attributable to Employer contributions, Employee contributions, or both, upon death or at the time of distribution. 8.04 INSTALLMENT DISTRIBUTIONS This Section shall be interpreted and applied in accordance with the regulations under Section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirement of section 1.401(a)(9)-2 of the regulations. (a) In General. If a Participant's benefit may be distributed in accordance with Section 8.01(b), the amount to be distributed for each calendar year for which a minimum distribution is required shall be at least an amount equal to the quotient obtained by dividing the Participant's interest in his Account by the life expectancy of the Participant or Beneficiary or the joint life and last survivor expectancy of the Participant and his Beneficiary, whichever is applicable. For calendar years beginning before January 1, 1989, if a Participant's Beneficiary is not his spouse, the method of distribution selected must insure that at least 50 percent of the present value of the amount available for distribution is paid within the life expectancy of the Participant. For calendar years beginning after December 31, 1988 the amount to be distributed for each calendar year shall not be less than an amount equal to the quotient obtained by dividing the Participant's interest in his Account by the lesser of (i) the applicable life expectancy under Section 8.01(b), or (ii) if a Participant's Beneficiary is not his spouse, the applicable divisor determined under Section 1.401(a)(9)-2, Q&A 4 of the Proposed Treasury Regulations, or any successor regulations of similar import. Distributions after the death of the Participant shall be made using the applicable life expectancy under (i) above, without regard to Section 1.401(a)(9)-2 of such regulations. The minimum distribution required under this subsection (a) for the calendar year immediately preceding the calendar year in which the Participant's required beginning date, as determined under Section 8.08(b), occurs shall be made on or before the Participant's required beginning date, as so determined. Minimum distributions for other calendar years shall be made on or before the close of such calendar year. (b) Additional Requirements for Distributions After Death of Participant. (1) Distribution beginning before Death. If the Participant dies before distribution of his benefits has begun, distributions shall be made in accordance with the provisions of this paragraph. Distributions under Section 8.01(a) shall be completed by the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. Distributions under Section 8.01(b) shall commence, if the Beneficiary is not the Participant's spouse, not later than the close of the calendar year immediately following the calendar year in which the death of the Participant occurs. Distributions under Section 8.01(b) to a Beneficiary who is the Participant's surviving spouse shall commence not later than the close of the calendar year in which the Participant would have attained age 70 1/2 or, if later, the close of the calendar year immediately following the calendar year in which the death of the Participant occurs. In the event such spouse dies prior to the date distribution to him or her commences, he or she will be treated for purposes of this subsection (other than the preceding sentence) as if he or she were the Participant. If the Participant has not designated a Beneficiary, or the Participant or Beneficiary has not effectively selected a method of distribution, distribution of the Participant's benefit shall be completed by the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. Any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. For purposes of this subsection (b)(1), the life expectancy of a Beneficiary who is the Participant's surviving spouse shall be recalculated annually unless the Participant's spouse irrevocably elects otherwise prior to the time distributions are required to begin. Life expectancy shall be computed in accordance with the provisions of subsection (a) above. (2) Distribution beginning after Death. If the Participant dies after distribution of his benefits has begun, distributions to the Participant's Beneficiary will be made at least as rapidly as under the method of distribution being used as of the date of the Participant's death. For purposes of this Section 8.04(b), distribution of a Participant's interest in his Account will be considered to begin as of the Participant's required beginning date, as determined under Section 8.08(b). If distribution in the form of an annuity irrevocably commences prior to such date, distribution will be considered to begin as of the actual date distribution commences. (c) Life Expectancy. For purposes of this Section, life expectancy shall be recalculated annually in the case of the Participant or a Beneficiary who is the Participant's spouse unless the Participant or Beneficiary irrevocably elects otherwise prior to the time distributions are required to begin. If not recalculated in accordance with the foregoing, life expectancy shall be calculated using the attained age of the Participant or Beneficiary, whichever is applicable, as of such individual's birth date in the first year for which a minimum distribution is required reduced by one for each elapsed calendar year since the date life expectancy was first calculated. For purposes of this Section, life expectancy and joint life and last survivor expectancy shall be computed by use of the expected return multiples in Table V and VI of section 1.72-9 of the income tax Regulations. A Participant's interest in his Account for purposes of this Section 8.04 shall be determined as of the last valuation date in the calendar year immediately preceding the calendar year for which a minimum distribution is required, increased by the amount of any contributions allocated to, and decreased by any distributions from, such Account after the valuation date. Any distribution for the first year for which a minimum distribution is required made after the close of such year shall be treated as if made prior to the close of such year. 8.05 IMMEDIATE DISTRIBUTIONS If the Account distributable to a Participant exceeds, or at the time of any prior distribution exceeded, $3,500, no distribution will be made to the Participant before he reaches his Normal Retirement Age (or age 62, if later), unless the written consent of the Participant has been obtained. Such consent shall be made in writing within the 90-day period ending on the Participant's Annuity Starting Date. Within the period beginning 90 days before the Participant's Annuity Starting Date and ending 30 days before such Date, the Administrator will provide such Participant with written notice comparable to the notice described in Section 8.03(b) containing a general description of the material features and an explanation of the relative values of the optional forms of benefit available under the Plan and informing the Participant of his right to defer receipt of the distribution until his Normal Retirement Age (or age 62, if later). The consent of the Participant's spouse must also be obtained if the Participant is subject to the provisions of Section 8.03(a), unless the distribution will be made in the form of the applicable retirement annuity contract described in Section 8.03(b). A spouse's consent to early distribution, if required, must satisfy the requirements of Section 8.03(d). Neither the consent of the Participant nor the Participant's spouse shall be required to the extent that a distribution is required to satisfy Section 401(a)(9) or Section 415 of the Code. In addition, upon termination of the Plan if it does not offer an annuity option (purchased from a commercial provider) and if the Employer or any Related Employer does not maintain another defined contribution Plan (other than an Employee stock ownership Plan as defined in Code Section 4975(e)(7)) the Participant's Account will, without the Participant's consent, be distributed to the Participant. However, if any Related Employer maintains another defined contribution Plan (other than an Employee stock ownership Plan as defined in Section 4975(e)(7) of the Code) then the Participant's Account will be transferred, without the Participant's consent, to the other Plan if the Participant does not consent to an immediate distribution. 8.06 DETERMINATION OF METHOD OF DISTRIBUTION The Participant will determine the method of distribution of benefits to himself and may determine the method of distribution to his Beneficiary. Such determination will be made prior to the time benefits become payable under the Plan. If the Participant does not determine the method of distribution to his Beneficiary or if the Participant permits his Beneficiary to override his determination, the Beneficiary, in the event of the Participant's death, will determine the method of distribution of benefits to himself as if he were the Participant. A determination by the Beneficiary must be made no later than the close of the calendar year in which distribution would be required to begin under Section 8.04(b) or, if earlier, the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. 8.07 NOTICE TO TRUSTEE The Administrator will notify the Trustee in a medium acceptable to the Trustee whenever any Participant or Beneficiary is entitled to receive benefits under the Plan. The Administrator's notice shall indicate the form of benefits that such Participant or Beneficiary shall receive and (in the case of distributions to a Participant) the name of any designated Beneficiary or Beneficiaries. 8.08 TIME OF DISTRIBUTION In no event will distribution to a Participant be made later than the earlier of the dates described in (a) and (b) below: (a) Absent the consent of the Participant (and his spouse, if appropriate), the 60th day after the close of the Plan Year in which occurs the later of the date on which the Participant attains age 65, the date on which the Participant ceases to be employed by the Employer; or the 10th anniversary of the year in which the Participant commenced participation in the Plan; and (b) April 1 of the calendar year first following the calendar year in which the Participant attains age 70 1/2 or, in the case of a Participant who had attained age 70 1/2 before January 1, 1988, the required beginning date determined in accordance with (1) or (2) below: (1) The required beginning date of a Participant who is not a 5-percent owner is the first day of April of the calendar year following the calendar year in which the later of retirement or attainment of age 70-1/2 occurs. (2) The required beginning date of a Participant who is a 5-percent owner during any year beginning after December 31, 1979, is the first day of April following the later of: (i) the calendar year in which the Participant attains age 70-1/2, or (ii) the earlier of the calendar year with or within which ends the Plan year in which the Participant becomes a 5-percent owner, or the calendar year in which the Participant retires. Notwithstanding the foregoing, in the case of a Participant who attained age 70 1/2 during 1988 and who had not retired prior to January 1, 1989, the required beginning date described in this paragraph shall be April 1, 1990. Notwithstanding (a) above, the failure of a Participant (and spouse) to consent to a distribution while a benefit is immediately distributable, within the meaning of Section 8.05, shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy (a) above. Once distributions have begun to a 5-percent owner under (b) above, they must continue to be distributed, even if the Participant ceases to be a 5-percent owner in a subsequent year. For purposes of (b) above, a Participant is treated as a 5-percent owner if such Participant is a 5-percent owner as defined in Section 416(i) of the Code (determined in accordance with Section 416 but without regard to whether the Plan is top-heavy) at any time during the Plan year ending with or within the calendar year in which such owner attains age 66-1/2 or any subsequent Plan year. The Administrator shall notify the Trustee in a medium acceptable to the Trustee whenever a distribution is necessary in order to comply with the minimum distribution rules set forth in this Section. 8.09 WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES The Administrator will at all times be responsible for determining the whereabouts of each Participant or Beneficiary who may be entitled to benefits under the Plan and will at all times be responsible for instructing the Trustee in writing as to the current address of each such Participant or Beneficiary. The Trustee will be entitled to rely on the latest written statement received from the Administrator as to such addresses. The Trustee will be under no duty to make any distributions under the Plan unless and until it has received written instructions from the Administrator satisfactory to the Trustee containing the name and address of the distributor, the time when the distribution is to occur, and the form which the distribution will take. Notwithstanding the foregoing, if the Trustee attempts to make a distribution in accordance with the Administrator's instructions but is unable to make such distribution because the whereabouts of the distributee is unknown, the Trustee will notify the Administrator of such situation and thereafter the Trustee will be under no duty to make any further distributions to such distributee until it receives further written instructions from the Administrator. If a benefit is forfeited because the Administrator determines that the Participant or beneficiary cannot be found, such benefit will be reinstated by the Sponsor if a claim is filed by the Participant or Beneficiary with the Administrator and the Administrator confirms the claim to the Sponsor. ARTICLE 9 TOP-HEAVY PROVISIONS. 9.01 APPLICATION If the Plan is or becomes a Top-Heavy Plan in any Plan Year or is automatically deemed to be Top-Heavy in accordance with the Employer's election in Section 1.12(a)(1) of the Adoption Agreement, the provisions of this Article 9 shall supersede any conflicting provision in the Plan. 9.02 DEFINITIONS For purposes of this Article 9, the following terms have the meanings set forth below: (a) Key Employee. Any Employee or former Employee (and the Beneficiary of any such Employee) who at any time during the determination period was (i) an officer of the Employer whose annual Compensation exceeds 50 percent of the dollar limitation under Section 415(b)(1)(A) of the Code, (ii) an owner (or considered an owner under Section 318 of the Code) of one of the ten largest interests in the Employer if such individual's annual Compensation exceeds the dollar limitation under Section 415(c)(1)(A) of the Code, (iii) a 5-percent owner of the Employer, or (iv) a 1-percent owner of the Employer who has annual Compensation of more than $150,000. For purposes of this paragraph, the determination period is the Plan Year containing the Determination Date and the four preceding Plan Years. The determination of who is a Key Employee shall be made in accordance with Section 416(i)(1) of the Code and the regulations thereunder. Annual Compensation means Compensation as defined in Section 5.03(e)(2), but including amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the Employee's gross income under Section 125, Section 402(a)(8), and Section 403(b) of the Code. (b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following conditions exists: (1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group; (2) the Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60 percent; or (3) the Plan is a part of a Required Aggregation Group and a Permissive Aggregation Group and the Top-Heavy Ratio for both Groups exceeds 60 percent. (c) Top-Heavy Ratio. (1) With respect to this Plan, or with respect to any Required Aggregation Group or Permissive Aggregation Group that consists solely of defined contribution Plans (including any simplified Employee pension Plans) and the Employer has not maintained any defined benefit Plan which during the 5-year period ending on the determination date(s) has or has had accrued benefits, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances of all Key Employees under the Plans as of the Determination Date (including any part of any account balance distributed in the 5-year period ending on the Determination Date), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 5-year period ending on the Determination Date) of all Participants under the Plans as of the Determination Date. Both the numerator and denominator of the Top-Heavy Ratio shall be increased, to the extent required by Section 416 of the Code, to reflect any contribution which is due but unpaid as of the Determination Date. (2) With respect to any Required Aggregation Group or Permissive Aggregation Group that includes one or more defined benefit Plans which, during the 5-year period ending on the Determination Date, has covered or could cover a Participant in this Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances under the defined contribution Plans for all Key Employees and the present value of accrued benefits under the defined benefit Plans for all Key Employees, and the denominator of which is the sum of the account balances under the defined contribution Plans for all Participants and the present value of accrued benefits under the defined benefit Plans for all Participants. Both the numerator and denominator of the Top-Heavy Ratio shall be increased for any distribution of an account balance or an accrued benefit made in the 5-year period ending on the Determination Date and any contribution due but unpaid as of the Determination Date. (3) For purposes of (1) and (2) above, the value of Accounts and the present value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Section 416 of the Code and the regulations thereunder for the first and second Plan years of a defined benefit Plan. The Account and accrued benefits of a Participant (i) who is not a Key Employee but who was a Key Employee in a prior year, or (ii) who has not been credited with at least one Hour of Service with the Employer at any time during the 5-year period ending on the Determination Date, will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account, shall be made in accordance with Section 416 of the Code and the regulations thereunder. Deductible Employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating Plans, the value of Accounts and accrued benefits shall be calculated with reference to the Determination Dates that fall within the same calendar year. For purposes of determining if the Plan, or any other Plan included in a Required Aggregation Group of which this Plan is a part, is a Top-Heavy Plan, the accrued benefit in a defined benefit Plan of an Employee other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all Plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of Section 411(b)(1)(C) of the Code. (d) Permissive Aggregation Group. The Required Aggregation Group plus any other qualified Plans of the Employer or a Related Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Sections 401(a)(4) and 410 of the Code. (e) Required Aggregation Group. (1) Each qualified Plan of the Employer or Related Employer in which at least one Key Employee participates, or has participated at any time during the determination period (regardless of whether the Plan has terminated), and (2) any other qualified Plan of the Employer or Related Employer which enables a Plan described in (1) above to meet the requirements of Sections 401(a)(4) or 410 of the Code. (f) Determination Date. For any Plan Year of the Plan subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of that Plan Year. (g) Valuation Date. The Determination Date. (h) Present Value. Present value shall be based only on the interest rate and mortality table specified in the Adoption Agreement. 9.03 MINIMUM CONTRIBUTION (a) Except as otherwise provided in (b) and (c) below, the Discretionary Contributions made on behalf of any Participant who is not a Key Employee shall not be less than the lesser of 3 percent (or such other percent elected by the Employer in Section 1.12(c)) of such Participant's Compensation or, in the case where the Employer has no defined benefit Plan which designates this Plan to satisfy Section 401 of the Code, the largest percentage of Employer contributions, as a percentage of the Key Employee's Compensation, as limited by Section 401(a)(17) of the Code, made on behalf of any Key Employee for that year. For purposes of computing the minimum contribution, Compensation shall mean Compensation as limited by Section 401(a)(17) of the Code. Further, the minimum contribution under this Section 9.03, shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive a contribution, or would have received a lesser contribution for the year, because (i) the Participant failed to complete 1,000 Hours of Service or any equivalent service requirement provided in the Adoption Agreement; or (ii) the Participant's Compensation was less than a stated amount. (b) The provisions of (a) above shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year. (c) The Employer contributions for the Plan Year made on behalf of each Participant who is not a Key Employee and who is a Participant in a defined benefit Plan maintained by the Employer shall not be less than 5 percent of such Participant's Compensation, unless the Employer has provided in Section 1.12(c) that the minimum contribution requirement will be met in the other Plan or Plans of the Employer. (d) The minimum contribution required under (a) above (to the extent required to be nonforfeitable under Section 416(b) of the Code) may not be forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code. 9.04 ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS If this Plan is in Top-Heavy status, the number 100 shall be substituted for the number 125 in subsections (e)(3) and (e)(4) of Section 5.03. However, this substitution shall not take effect with respect to this Plan in any Plan Year in which the following requirements are satisfied: (a) The Employer contributions for such Plan Year made on behalf of each Participant who is not a Key Employee and who is a Participant in a defined benefit Plan maintained by the Employer is not less than 7 1/2 percent of such Participant's Compensation. (b) The sum of the present value as of the Determination Date of (i) the aggregate accounts of all Key Employees under all defined contribution Plans of the Employer and (ii) the cumulative accrued benefits of all Key Employees under all defined benefit Plans of the Employer does not exceed 90 percent of the same amounts determined for all Participants under all Plans of the Employer that are Top-Heavy Plans, excluding Accounts and accrued benefits for Employees who formerly were but are no longer Key Employees. The substitutions of the number 100 for 125 shall not take effect in any limitation Year with respect to any Participant for whom no benefits are accrued or contributions made for such Year. 9.05 MINIMUM VESTING For any Plan Year in which the Plan is a Top-Heavy Plan and all Plan Years thereafter, the Top-Heavy vesting schedule elected in Section 1.07(a)(1) or 1.12(d), as applicable, will automatically apply to the Plan. The Top-Heavy vesting schedule applies to all benefits within the meaning of Section 411(a)(7) of the Code except those attributable to Employee Contributions or those already subject to a vesting schedule which vests at least as rapidly in all cases as the schedule elected in Section 1.12(d), including benefits accrued before the Plan becomes a Top-Heavy Plan. Further, no decrease in a Participant's nonforfeitable percentage may occur in the event the Plan's status as a Top-Heavy Plan changes for any Plan Year. However, this Section 9.05 does not apply to the Account of any Employee who does not have an Hour of Service after the Plan has initially become a Top-Heavy Plan and such Employee's Account attributable to Employer Contributions will be determined without regard to this Section 9.05. ARTICLE 10 AMENDMENT AND TERMINATION. 10.01 AMENDMENT BY EMPLOYER The Employer reserves the authority, subject to the provisions of Article 1 and Section 10.03, to amend the Plan: (a) Changing Elections Contained in the Adoption Agreement. By filing with the Trustee an amended Adoption Agreement, executed by the Employer only, on which said Employer has indicated a change or changes in provisions previously elected by it. Such changes are to be effective on the effective date of such amended Adoption Agreement except that retroactive changes to a previous election or elections pursuant to the regulations issued under Section 401(a)(4) of the Code shall be permitted. Any such change notwithstanding, no Participant's Account shall be reduced by such change below the amount to which the Participant would have been entitled if he had voluntarily left the employ of the Employer immediately prior to the date of the change. The Employer may from time to time make any amendment to the Plan that may be necessary to satisfy Sections 415 or 416 of the Code because of the required aggregation of multiple Plans by completing overriding Plan language in the Adoption Agreement. The Employer may also add certain model amendments published by the Internal Revenue Service which specifically provide that their adoption will not cause the Plan to be treated as an individually designed Plan; or (b) Other Changes. By amending any provision of the Plan for any reason other than those specified in (a) above. However, upon making such amendment, including a waiver of the minimum funding requirement under Section 412(d) of the Code, the Employer may no longer participate in this prototype Plan arrangement and will be deemed to have an individually designed Plan. Following such amendment, the Trustee may transfer the assets of the Trust to the trust forming part of such newly adopted Plan upon receipt of sufficient evidence (such as a determination letter or opinion letter from the Internal Revenue Service or an opinion of counsel satisfactory to the Trustee) that such trust will be a qualified trust under the Code. (c) Amendment Procedure. The Employer reserves the authority to amend the Plan by filing with the Trustee an amended Adoption Agreement, executed by the Employer only, on which said Employer has indicated a change or changes in provisions previously elected by it. Such change(s) is/are to be effective on the effective date of such amended Adoption Agreement. The Employer may from time to time make any amendment to the Plan that may be necessary to satisfy the Internal Revenue Code or ERISA. The Board of Directors for a Corporate Employer or other individual specified in the resolution adopting this Plan shall act on behalf of a Corporation. 10.02 AMENDMENT BY PROTOTYPE SPONSOR The Prototype Sponsor may in its discretion amend the Plan or the Adoption Agreement at any time, subject to the provisions of Article 1 and Section 10.03, and provided that the Prototype Sponsor mails a copy of such amendment to the Employer at its last known address as shown on the books of the Prototype Sponsor. 10.03 AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS (a) Except as permitted by Section 10.04, no amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's Account or eliminating an optional form of benefit with respect to benefits attributable to service before the amendment. Furthermore, if the vesting schedule of the Plan is amended, the nonforfeitable interest of a Participant in his Account, determined as of the later of the date the amendment is adopted or the date it becomes effective, will not be less than the Participant's nonforfeitable interest in his Account determined without regard to such amendment. (b) If the Plan's vesting schedule is amended, including any amendment resulting from a change to or from Top-Heavy Plan status, or the Plan is amended in any way that directly or indirectly affects the computation of a Participant's nonforfeitable interest in his Account, each Participant with at least three (3) Years of Service for Vesting with the Employer may elect, within a reasonable period after the adoption of the amendment, to have the nonforfeitable percentage of his Account computed under the Plan without regard to such amendment. The Participant's election may be made within 60 days from the latest of (i) the date the amendment is adopted; (ii) the date the amendment becomes effective; or (iii) the date the Participant is issued written notice of the amendment by the Employer or the Administrator. 10.04 RETROACTIVE AMENDMENTS An amendment made by the sponsor in accordance with Section 10.02 may be made effective on a date prior to the first day of the Plan Year in which it is adopted if such amendment is necessary or appropriate to enable the Plan and Trust to satisfy the applicable requirements of the Code or to conform the Plan to any change in federal law, or to any regulations or ruling thereunder. Any retroactive amendment by the Employer shall be subject to the provisions of Section 10.01. 10.05 TERMINATION The Employer has adopted the Plan with the intention and expectation that contributions will be continued indefinitely. However, said Employer has no obligation or liability whatsoever to maintain the Plan for any length of time and may discontinue contributions under the Plan or terminate the Plan at any time by written notice delivered to the Trustee without any liability hereunder for any such discontinuance or termination. 10.06 DISTRIBUTION UPON TERMINATION OF THE PLAN Upon termination or partial termination of the Plan or complete discontinuance of contributions thereunder, each Participant (including a terminated Participant with respect to amounts not previously forfeited by him) who is affected by such termination or partial termination or discontinuance will have a fully vested interest in his Account, and, subject to Section 4.05 and Article 8, the Trustee will distribute to each Participant or other person entitled to distribution the balance of the Participant's Account in a single lump sum payment. In the absence of such instructions, the Trustee will notify the Administrator of such situation and the Trustee will be under no duty to make any distributions under the Plan until it receives written instructions from the Administrator. Upon the completion of such distributions, the Trust will terminate, the Trustee will be relieved from all liability under the Trust, and no Participant or other person will have any claims thereunder, except as required by applicable law. 10.07 MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS In case of any merger or consolidation of the Plan with, or transfer of assets and liabilities of the Plan to, any other Plan, provision must be made so that each Participant would, if the Plan then terminated, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation or transfer if the Plan had then terminated. ARTICLE 11 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO OR FROM OTHER QUALIFIED PLANS 11.01 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN In the event the Employer has previously established a Plan (the "predecessor Plan") which is a defined contribution Plan under the Code and which on the date of adoption of the Plan meets the applicable requirements of section 401(a) of the Code, the Employer may, in accordance with the provisions of the predecessor Plan, amend and continue the predecessor Plan in the form of the Plan and become the Employer hereunder, subject to the following: (a) Subject to the provisions of the Plan, each individual who was a Participant or former Participant in the predecessor Plan immediately prior to the effective date of such amendment and continuation will become a Participant or former Participant in the Plan; (b) No election may be made under the vesting provisions of the Adoption Agreement if such election would reduce the benefits of a Participant under the Plan to less than the benefits to which he would have been entitled if he voluntarily separated from the service of the Employer immediately prior to such amendment and continuation; (c) No amendment to the Plan shall decrease a Participant's accrued benefit or eliminate an optional form of benefit and if the amendment of the predecessor Plan in the form of the Plan results in a change in the method of crediting service for vesting purposes between the general method set forth in Section 2530.200b-2 of the Department of Labor Regulations and the elapsed time method in Section 2.01(a)(33) of the Plan, each Participant with respect to whom the method of crediting vesting service is changed shall be treated in the manner set forth by the provisions of Section 1.410(a)-7(f)(1) of the Treasury Regulations which are incorporated herein by reference. (d) The amounts standing to the credit of a Participant's Account immediately prior to such amendment and continuation which represent the amounts properly attributable to (i) contributions by the Participant and (ii) contributions by the Employer and forfeitures will constitute the opening balance of his Account or Accounts under the Plan; (e) Amounts being paid to a former Participant or to a Beneficiary in accordance with the provisions of the predecessor Plan will continue to be paid in accordance with such provisions; (f) Any election and waiver of the qualified pre-retirement annuity in effect after August 23, 1984, under the predecessor Plan immediately before such amendment and continuation will be deemed a valid election and waiver of Beneficiary under Section 8.04 if such designation satisfies the requirements of Section 8.04(d), unless and until the Participant revokes such election and waiver under the Plan; and (g) Unless the Employer and the Trustee agree otherwise, all assets of the predecessor trust will be deemed to be assets of the Trust as of the effective date of such amendment. Such assets will be invested by the Trustee as soon as reasonably practicable pursuant to Article 6. The Employer agrees to assist the Trustee in any way requested by the Trustee in order to facilitate the transfer of assets from the predecessor trust to the Trust Fund. 11.02 TRANSFER OF FUNDS FROM AN EXISTING PLAN The Employer may from time to time direct the Trustee, in accordance with such rules as the Trustee may establish, to accept cash, allowable Fund Shares or Participant loan promissory notes transferred for the benefit of Participants from a trust forming part of another qualified Plan under the Code, provided such Plan is a defined contribution Plan. Such transferred assets will become assets of the Trust as of the date they are received by the Trustee. Such transferred assets will be credited to Participants' Account in accordance with their respective interests immediately upon receipt by the Trustee. A Participant's interest under the Plan in transferred assets which were fully vested and nonforfeitable under the transferring Plan will be fully vested and nonforfeitable at all times. Such transferred assets will be invested by the Trustee in accordance with the provisions of paragraph (g) of Section 11.01 as if such assets were transferred from a predecessor Plan. No transfer of assets in accordance with this Section may cause a loss of an accrued or optional form of benefit protected by Section 411(d)(6) of the Code. 11.03 ACCEPTANCE OF ASSETS BY TRUSTEE The Trustee will not accept assets which are not either in a medium proper for investment under the Plan, as set forth in Section 1.14(b), or in cash. Such assets shall be accompanied by written instructions showing separately the respective contributions by the prior employer and by the Employee, and identifying the assets attributable to such contributions. The Trustee shall establish such accounts as may be necessary or appropriate to reflect such contributions under the Plan. The Trustee shall hold such assets for investment in accordance with the provisions of Article 6, and shall in accordance with the written instructions of the Employer make appropriate credits to the Accounts of the Participants for whose benefit assets have been transferred. 11.04 TRANSFER OF ASSETS FROM TRUST The Employer may direct the Trustee to transfer all or a specified portion of the Trust assets to any other Plan or Plans maintained by the Employer or the employer or employers of a former Participant or Participants, provided that the Trustee has received evidence satisfactory to it that such other Plan meets all applicable requirements of the Code. The assets so transferred shall be accompanied by written instructions from the Employer naming the persons for whose benefit such assets have been transferred, showing separately the respective contributions by the Employer and by each Participant, if any, and identifying the assets attributable to the various contributions. The Trustee shall have no further liabilities with respect to assets so transferred. ARTICLE 12 MISCELLANEOUS 12.01 COMMUNICATION TO PARTICIPANTS The Plan will be communicated to all Participants by the Employer promptly after the Plan is adopted. 12.02 LIMITATION OF RIGHTS Neither the establishment of the Plan and the Trust, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to any Participant or other person any legal or equitable right against the Employer, Administrator or Trustee, except as provided herein; and in no event will the terms of employment or service of any Participant be modified or in any way affected hereby. It is a condition of the Plan, and each Participant expressly agrees by his participation herein, that each Participant will look solely to the assets held in the Trust for the payment of any benefit to which he is entitled under the Plan. 12.03 NONALIENABILITY OF BENEFITS AND QUALIFIED DOMESTIC RELATIONS ORDERS The benefits provided hereunder will not be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind, either voluntarily or involuntarily, and any attempt to cause such benefits to be so subjected will not be recognized, except to such extent as may be required by law. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a domestic relations order, unless such order is determined by the Plan Administrator to be a qualified domestic relations order, as defined in Section 414(p) of the Code, or any domestic relations order entered before January 1, 1985. The Administrator must establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the Administrator will promptly notify the Participant and any alternate payee named in the order, in writing, of the receipt of the order and the Plan's procedures for determining the qualified status of the order. Within a reasonable period of time after receiving the domestic relations order, the Administrator must determine the qualified status of the order and must notify the Participant and each alternate payee, in writing, of its determination. The Administrator must provide notice under this paragraph by mailing to the individual's address specified in the domestic relations order, or in a manner consistent with the Department of Labor regulations. If any portion of the Participant's Account is payable during the period the Administrator is making its determination of the qualified status of the domestic relations order, the Administrator must make a separate accounting of the amounts payable. If the Administrator determines the order is a qualified domestic relations order within 18 months of the date amounts first are payable following receipt of the order, the Administrator will direct the Trustee to distribute the payable amounts in accordance with the order. If the Administrator does not make his determination of the qualified status of the order within the 18 month determination period, the Administrator will direct the Trustee to distribute the payable amounts in the manner the Plan would distribute if the order did not exist and will apply the order prospectively if the Administrator later determines the order is a qualified domestic relations order. A domestic relations order will not fail to be deemed a qualified domestic relations order merely because it requires the distribution or segregation of all or part of a Participant's Account with respect to an alternate payee prior to the Participant's earliest retirement age (as defined in Section 414(p) of the Code) under the Plan. A distribution to an alternate payee prior to the Participant's attainment of the earliest retirement age is available only if: (1) the order specifies distribution at that time; and (2) if the present value of the alternate payee's benefits under the Plan exceeds $3,500, and the order requires, the alternate payee consents to any distribution occurring prior to the Participant's attainment of earliest retirement age. 12.04 FACILITY OF PAYMENT In the event the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his affairs by reason of minority, illness, infirmity or other incapacity, the Administrator may direct the Trustee to disburse such payments to a person or institution designated by a court which has jurisdiction over such recipient or a person or institution otherwise having the legal authority under State law for the care and control of such recipient. The receipt by such person or institution of any such payments shall be complete acquittance therefore, and any such payment to the extent thereof, shall discharge the liability of the Trust for the payment of benefits hereunder to such recipient. 12.05 INFORMATION BETWEEN EMPLOYER AND TRUSTEE The Employer agrees to furnish the Trustee, and the Trustee agrees to furnish the Employer with such information relating to the Plan and Trust as may be required by the other in order to carry out their respective duties hereunder, including without limitation information required under the Code and any regulations issued or forms adopted by the Treasury Department thereunder or under the provisions of ERISA and any regulations issued or forms adopted by the Labor Department thereunder. 12.06 EFFECT OF FAILURE TO QUALIFY UNDER CODE Notwithstanding any other provision contained herein, if the Employer fails to obtain or retain approval of the Plan by the Internal Revenue Service as a qualified Plan under the Code, the Employer may no longer participate in this prototype Plan arrangement and will be deemed to have an individually designed Plan. 12.07 NOTICES Any notice or other communication in connection with this Plan shall be deemed delivered in writing if addressed as provided below and if either actually delivered at said address or, in the case of a letter, three business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified: (a) If to the Employer or Administrator, to it at the address set forth in the Adoption Agreement, to the attention of the person specified to receive notice in the Adoption Agreement; (b) If to the Trustee, to it at the address set forth in the Adoption Agreement; or, in each case at such other address as the addressee shall have specified by written notice delivered in accordance with the foregoing to the addresser's then effective notice address. 12.08 GOVERNING LAW The Plan and the accompanying Adoption Agreement will be construed, administered and enforced according to ERISA, and to the extent not preempted thereby, the laws of the Commonwealth of Massachusetts. 12.09 NON-DISCRIMINATION DATA SUBSTANTIATION The Employer may elect to follow the guidelines for substantiating compliance with the non-discrimination rules pursuant to Internal Revenue Service Revenue Procedure 93-42, Data Substantiation Guidelines and Non-Discrimination Requirements of Section 401(a)(4), 410(b), and Related Code Sections. The guidance in this Revenue Procedure is designed to allow Employers to use alternative methods for substantiating compliance with the non-discrimination requirements. ARTICLE 13 PLAN ADMINISTRATION 13.01 POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR The Administrator has the full power and the full responsibility to administer the Plan in all of its details, subject, however, to the requirements of ERISA. The Administrator's powers and responsibilities include, but are not limited to, the following: (a) To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan; (b) To interpret the Plan, its interpretation thereof in good faith to be final and conclusive on all persons claiming benefits under the Plan; (c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan; (d) To administer the claims and review procedures specified in Section 13.03; (e) To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan; (f) To determine the person or persons to whom such benefits will be paid; (g) To authorize the payment of benefits and provide for the distribution of Code Section 402(f) notices; (h) To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA; (i) To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan; (j) By written instrument, to allocate and delegate its fiduciary responsibilities in accordance with Section 405 of ERISA including the formation of an Administrative Committee to administer the Plan; (k) To provide bonding coverage as required under Section 412 of ERISA. 13.02 NONDISCRIMINATORY EXERCISE OF AUTHORITY Whenever, in the administration of the Plan, any discretionary action by the Administrator is required, the Administrator shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment. 13.03 CLAIMS AND REVIEW PROCEDURES (a) Claims Procedure. If any person believes he is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and (iv) information as to the steps to be taken if the person wishes to submit a request for review. Such notification will be given within 90 days after the claim is received by the Administrator (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to such person within the initial 90-day period). If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his claim. (b) Review Procedure. Within 60 days after the date on which a person receives a written notice of a denied claim (or, if applicable, within 60 days after the date on which such denial is considered to have occurred), such person (or his duly authorized representative) may (i) file a written request with the Administrator for a review of his denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The decision on review will be made within 60 days after the request for review is received by the Administrator (or within 120 days, if special circumstances require an extension of time for processing the request, such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60-day period). If the decision on review is not made within such period, the claim will be considered denied. 13.04 NAMED FIDUCIARY The Administrator is a "named fiduciary" for purposes of Section 402(a)(1) of ERISA and has the powers and responsibilities with respect to the management and operation of the Plan described herein. 13.05 COSTS OF ADMINISTRATION Unless some or all are paid by the Employer, all reasonable costs and expenses (including legal, accounting, and Employee communication fees) incurred by the Administrator and the Trustee in administering the Plan and Trust will be paid first from the forfeitures (if any) resulting under Section 7.07, then from the remaining Trust Fund. All such costs and expenses paid from the Trust Fund will, unless allocable to the Accounts of particular Participants, be charged against the Accounts of all Participants on a prorata basis or in such other reasonable manner as may be directed by the Employer. ARTICLE 14 TRUST AGREEMENT 14.01 ACCEPTANCE OF TRUST RESPONSIBILITIES By executing the Adoption Agreement, the Employer establishes a trust to hold the assets of the Plan. By executing the Adoption Agreement, the Trustee agrees to accept the rights, duties and responsibilities set forth in this Article 14. 14.02 ESTABLISHMENT OF TRUST FUND A trust is hereby established under the Plan and the Trustee will open and maintain a Trust account for the Plan and, as part thereof, Participants' Accounts for such individuals as the Employer shall from time to time give written notice to the Trustee of Participants in the Plan. The Trustee will accept and hold in the Trust Fund such contributions on behalf of Participants as it may receive from time to time from the Employer. The Trust Fund shall be fully invested and reinvested in accordance with the applicable provisions of the Plan in Fund Shares or as otherwise provided in Section 14.10. 14.03 EXCLUSIVE BENEFIT The Trustee shall hold the assets of the Trust Fund for the exclusive purpose of providing benefits to Participants and Beneficiaries and defraying the reasonable expenses of administering the Plan. No assets of the Plan shall revert to the Employer except as specifically permitted by the terms of the Plan. 14.04 POWERS OF TRUSTEE The Trustee shall have no discretion or authority with respect to the investment of the Trust Fund but shall act solely as a directed trustee of the funds contributed to it. In addition to and not in limitation of such powers as the Trustee has by law or under any other provisions of the Plan, the Trustee will have the following powers, each of which the Trustee exercises solely as directed Trustee in accordance with the written direction of the Employer except to the extent a Plan asset is subject to Participant direction of investment and provided that no such power shall be exercised in any manner inconsistent with the provisions of ERlSA: (a) to deal with all or any part of the Trust Fund and to invest all or a part of the Trust Fund in investments available under the Plan, without regard to the law of any state regarding proper investment; (b) to retain uninvested such cash as it may deem necessary or advisable, without liability for interest thereon, for the administration of the Trust; (c) to sell, convert, redeem, exchange, or otherwise dispose of all or any part of the assets constituting the Trust Fund; (d) to enforce by suit or otherwise, or to waive, its rights on behalf of the Trust, and to defend claims asserted against it or the Trust, provided that the Trustee is indemnified to its satisfaction against liability and expenses; (e) to employ such agents and counsel as may be reasonably necessary in collecting, managing, administering, investing, distributing and protecting the Trust Fund or the assets thereof and to pay them reasonable Compensation; (f) to compromise, adjust and settle any and all claims against or in favor of it or the Trust; (g) to oppose, or participate in and consent to the reorganization, merger, consolidation, or readjustment of the finances of any enterprise, to pay assessments and expenses in connection therewith, and to deposit securities under deposit agreements; (h) to apply for or purchase annuity contracts in accordance with Section 8.02; (i) to hold securities unregistered, or to register them in its own name or in the name of nominees; (j) to appoint custodians to hold investments within the jurisdiction of the district courts of the United States and to deposit securities with stock clearing corporations or depositories or similar organizations; (k) to make, execute, acknowledge and deliver any and all instruments that it deems necessary or appropriate to carry out the powers herein granted; and (l) generally to exercise any of the powers of an owner with respect to all or any part of the Trust Fund. The Employer specifically acknowledges and authorizes that affiliates of the Trustee may act as its agent in the performance of ministerial, non fiduciary duties under the Trust. The expenses and compensation of such agent shall be paid by the Trustee. The Trustee shall provide the Employer with reasonable notice of any claim filed against the Plan or Trust or with regard to any related matter, or of any claim filed by the Trustee on behalf of the Plan or Trust or with regard to any related matter. 14.05 ACCOUNTS The Trustee will keep full accounts of all receipts and disbursements and other transactions hereunder. Within 60 days after the close of each Plan Year, within 60 days after termination of the Trust, and at such other times as may be appropriate, the Trustee will determine the then net fair market value of the Trust Fund as of the close of the Plan Year, as of the termination of the Trust, or as of such other time, whichever is applicable, and will render to the Employer and Administrator an account of its administration of the Trust during the period since the last such accounting, including all allocations made by it during such period. 14.06 APPROVING OF ACCOUNTS To the extent permitted by law, the written approval of any account by the Employer or Administrator will be final and binding, as to all matters and transactions stated or shown therein, upon the Employer, Administrator, Participants and all persons who then are or thereafter become interested in the Trust. The failure of the Employer or Administrator to notify the Trustee within six (6) months after the receipt of any account of its objection to the account will, to the extent permitted by law, be the equivalent of written approval. If the Employer or Administrator files any objections within such six (6) month period with respect to any matters or transactions stated or shown in the account, and the Employer or Administrator and the Trustee cannot amicably settle the question raised by such objections, the Trustee will have the right to have such questions settled by judicial proceedings. Nothing herein contained will be construed so as to deprive the Trustee of the right to have judicial settlement of its accounts. In any proceeding for a judicial settlement of any account or for instructions, the only necessary parties will be the Trustee, the Employer and the Administrator. 14.07 DISTRIBUTION FROM TRUST FUND The Trustee shall make such distribution from the Trust Fund as the Employer or Administrator may, in writing or any other form(s) acceptable to the Trustee, direct, as provided by the terms of the Plan, upon certification by the Employer or Administrator that the same is for the exclusive benefit of Participants or their Beneficiaries, or for the payment of expenses of administering the Plan. 14.08 TRANSFER OF AMOUNTS FROM QUALIFIED PLAN If the Plan provides that amounts may be transferred to the Plan from another qualified Plan or trust under Section 401(a) of the Code, such transfer shall be made in accordance with the provisions of the Plan and with such rules as may be established by the Trustee. The Trustee will only accept assets which are in a medium proper for investment under this Agreement or in cash. Such amounts shall be accompanied by written instructions showing separately the respective contributions by the prior employer and the transferring Employee, and identifying the assets attributable to such contributions. The Trustee shall hold such assets for investment in accordance with the provisions of this Agreement. 14.09 TRANSFER OF ASSETS FROM TRUST Subject to the provisions of the Plan, the Employer may direct the Trustee to transfer all or a specified portion of the Trust assets to any other Plan or Plans maintained by the Employer or the employer or employers of a former Participant or Participants, provided that the Trustee has received evidence satisfactory to it that such other Plan meets all applicable requirements of the Code. The assets so transferred shall be accompanied by written instructions from the Employer naming the persons for whose benefit such assets have been transferred, showing separately the respective contributions by the Employer and by each Participant, if any, and identifying the assets attributable to the various contributions. The Trustee shall have no further liabilities with respect to assets so transferred. 14.10 RESERVED 14.11 VOTING; DELIVERY OF INFORMATION The Trustee shall deliver, or cause to be executed and delivered, to the Employer or Plan Administrator all notices, prospectuses, financial statements, proxies and proxy soliciting materials received by the Trustee relating to securities held by the Trust or, if applicable, deliver these materials to the appropriate Participant or the Beneficiary of a deceased Participant. The Trustee shall not vote any securities held by the Trust except in accordance with the written instructions of the Employer, Participant or the Beneficiary of the Participant, if the Participant is deceased; provided, however, that the Trustee may, in the absence of instructions, vote "present" for the sole purpose of allowing such shares to be counted for establishment of a quorum at a shareholders' meeting. The Trustee shall have no duty to solicit instructions from Participants, the Beneficiary or the Employer. 14.12 COMPENSATION AND EXPENSES OF TRUSTEE The Trustee's fee for performing its duties hereunder will be such reasonable amounts as the Trustee may from time to time specify by written agreement with the Employer. Such fee, any taxes of any kind which may be levied or assessed upon or in respect of the Trust Fund and any and all expenses, including without limitation legal fees and expenses of administrative and judicial proceedings, reasonably incurred by the Trustee in connection with its duties and responsibilities hereunder will, unless some or all have been paid by said Employer, be paid first from forfeitures resulting under Section 7.07, then from the remaining Trust Fund and will, unless allocable to the Accounts of particular Participants, be charged against the respective Accounts of all Participants, in such reasonable manner as the Trustee may determine. 14.13 RELIANCE BY TRUSTEE ON OTHER PERSONS The Trustee may rely upon and act upon any writing from any person authorized by the Employer or Administrator to give instructions concerning the Plan and may conclusively rely upon and be protected in acting upon any written order from the Employer or Administrator or upon any other notice, request, consent, certificate, or other instructions or paper reasonably believed by it to have been executed by a duly authorized person, so long as it acts in good faith in taking or omitting to take any such action. The Trustee need not inquire as to the basis in fact of any statement in writing received from the Employer or Administrator. The Trustee will be entitled to rely on the latest certificate it has received from the Employer or Administrator as to any person or persons authorized to act for the Employer or Administrator hereunder and to sign on behalf of the Employer or Administrator any directions or instructions, until it receives from the Employer or Administrator written notice that such authority has been revoked. Notwithstanding any provision contained herein, the Trustee will be under no duty to take any action with respect to any Participant's Account (other than as specified herein) unless and until the Employer or Administrator furnishes the Trustee with written instructions on a form acceptable to the Trustee, and the Trustee agrees thereto in writing. The Trustee will not be liable for any action taken pursuant to the Employer's or Administrator's written instructions (nor for the collection of contributions under the Plan, nor the purpose or propriety of any distribution made thereunder). 14.14 INDEMNIFICATION BY EMPLOYER The Employer shall indemnify and save harmless the Trustee from and against any and all liability to which the Trustee may be subjected by reason of any act or conduct (except willful misconduct or negligence) in its capacity as Trustee, including all expenses reasonably incurred in its defense. 14.15 CONSULTATION BY TRUSTEE WITH COUNSEL The Trustee may consult with legal counsel (who may be but need not be counsel for the Employer or the Administrator) concerning any question which may arise with respect to its rights and duties under the Plan and Trust, and the opinion of such counsel will, to the extent permitted by law, be full and complete protection in respect of any action taken or omitted by the Trustee hereunder in good faith and in accordance with the opinion of such counsel. 14.16 PERSONS DEALING WITH THE TRUSTEE No person dealing with the Trustee will be bound to see to the application of any money or property paid or delivered to the Trustee or to inquire into the validity or propriety of any transactions. 14.17 RESIGNATION OR REMOVAL OF TRUSTEE The Trustee may resign at any time by written notice to the Employer, which resignation shall be effective 60 days after delivery to the Employer. The Trustee may be removed by the Employer by written notice to the Trustee, which removal shall be effective 60 days after delivery to the Trustee. Upon resignation or removal of the Trustee, the Employer may appoint a successor trustee. Any such successor trustee will, upon written acceptance of his appointment, become vested with the estate, rights, powers, discretion, duties and obligations of the Trustee hereunder as if he had been originally named as Trustee in this Agreement. Upon resignation or removal of the Trustee, the Employer will no longer participate in this prototype Plan and will be deemed to have adopted an individually designed Plan. In such event, the Employer shall appoint a successor trustee within said 60-day period and the Trustee will transfer the assets of the Trust to the successor trustee upon receipt of sufficient evidence (such as a determination letter or opinion letter from the Internal Revenue Service or an opinion of counsel satisfactory to the Trustee) that such trust will be a qualified trust under the Code. The appointment of a successor trustee shall be accomplished by delivery to the Trustee of written notice that the Employer has appointed such successor trustee, and written acceptance of such appointment by the successor trustee. The Trustee may, upon transfer and delivery of the Trust Fund to a successor trustee, reserve such reasonable amount as it shall deem necessary to provide for its fees, Compensation, costs and expenses, or for the payment of any other liabilities chargeable against the Trust Fund for which it may be liable. The Trustee shall not be liable for the acts or omissions of any successor trustee. 14.18 FISCAL YEAR OF THE TRUST The fiscal year of the Trust will coincide with the Plan Year. 14.19 DISCHARGE OF DUTIES BY FIDUCIARIES The Trustee and the Employer and any other fiduciary shall discharge their duties under the Plan and this Trust Agreement solely in the interests of Participants and their Beneficiaries in accordance with the requirements of ERISA. 14.20 AMENDMENT In accordance with provisions of the Plan, and subject to the limitations set forth therein, this Trust Agreement may be amended by an instrument in writing signed by the Employer and the Trustee. No amendment to this Trust Agreement shall divert any part of the Trust Fund to any purpose other than as provided in Section 2 hereof. 14.21 PLAN TERMINATION Upon termination or partial termination of the Plan or complete discontinuance of contributions thereunder, the Trustee will make distributions to the Participants or other persons entitled to distributions as the Employer or Administrator directs in accordance with the provisions of the Plan. In the absence of such instructions and unless the Plan otherwise provides, the Trustee will notify the Employer or Administrator of such situation and the Trustee will be under no duty to make any distributions under the Plan until it receives written instructions from the Employer or Administrator. Upon the completion of such distributions, the Trust will terminate, the Trustee will be relieved from all liability under the Trust, and no Participant or other person will have any claims thereunder, except as required by applicable law. 14.22 PERMITTED REVERSION OF FUNDS TO EMPLOYER If it is determined by the Internal Revenue Service that the Plan does not initially qualify under Section 401 of the Code, all assets then held under the Plan will be returned by the Trustee, as directed by the Administrator, to the Employer, but only if the application for determination is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan was adopted or such later date as may be prescribed by regulations. Such distribution will be made within one year after the date the initial qualification is denied. Upon such distribution the Plan will be considered to be rescinded and to be of no force or effect. Contributions under Plan are conditioned upon their deductibility under Section 404 of the Code. In the event the deduction of a contribution made by the Employer is disallowed under Section 404 of the Code, such contribution (to the extent disallowed) must be returned to the Employer within one year of the disallowance of the deduction. Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the contribution. 14.23 GOVERNING LAW This Trust Agreement will be construed, administered and enforced according to ERISA and, to the extent not preempted thereby, the laws of the Commonwealth of Massachusetts. THE CORPORATEPLAN FOR RETIREMENT 100SM (PROFIT SHARING/401(K) PLAN) A FIDELITY PROTOTYPE PLAN STANDARDIZED ADOPTION AGREEMENT 001 BASIC PLAN NO. 10 ADOPTION AGREEMENT ARTICLE 1 STANDARDIZED PROFIT SHARING PLAN 1.01 PLAN INFORMATION (A) NAME OF PLAN: This is the ________________________ Plan (the "Plan"). (B) TYPE OF PLAN: (1) 401(k) and Profit Sharing (2 ) Profit Sharing Only (3) 401(k) Only (C) NAME OF PLAN ADMINISTRATOR, IF NOT THE EMPLOYER: Address: Phone Number: The Plan Administrator is the agent for service of legal process for the Plan. (D) LIMITATION YEAR (check one): (1) Calendar Year (2) Plan Year (3) Other: (E) THREE DIGIT PLAN NUMBER: (F) PLAN YEAR END (month/day): (G) PLAN STATUS (check one): (1) Effective Date of new Plan: (2) Amendment Effective Date: _______________. This is (check one): (A) an amendment of The CORPORATEplan FOR RETIREMENT 100SM Adoption Agreement previously executed by the Employer; or (B) a conversion from another plan document into The CORPORATEplan FOR RETIREMENT 100SM. The original effective date of the Plan: The substantive provisions of the Plan shall apply prior to the Effective Date to the extent required by the Tax Reform Act of 1986 or other applicable laws. 1.02 EMPLOYER (A) THE EMPLOYER IS: Address: Contact's Name: Telephone Number: (1) Employer's Tax Identification Number: (2) Business form of Employer (check one): (A) Corporation (D) Governmental (B) Sole proprietor or partnership (E) Tax-exempt organization (C) Subchapter S Corporation NOTE: A tax-exempt employer, a state or local government or political subdivision thereof, or any agency or instrumentality thereof, may not maintain a 401(k) plan. However, a 401(k) plan of a tax-exempt employer adopted before July 2, 1986, or of a state or local government adopted before May 7, 1986, is grandfathered and not subject to the restriction. (3) Employer's fiscal year end: (4) Date business commenced: (B) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S) (as defined in Section 2.01(a)(26)) THAT MUST BE INCLUDED IN THE PLAN AND ARE LISTED BELOW FOR PURPOSES OF REFERENCE: 1.03 COVERAGE (A) ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW WILL BE ELIGIBLE TO PARTICIPATE IN THE PLAN: (1) SERVICE REQUIREMENT (check one): (A) no service requirement. (B) six consecutive months of service (no minimum number Hours of Service can be required). (C) one Year of Service (1,000 Hours of Service is required during the Eligibility Computation Period.) (2) AGE REQUIREMENT (check one): (A) no age requirement. (B) must have attained age ______ (not to exceed 21). (3) THE CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE IN THE PLAN (check one): (A) includes all Employees of the Employer. (B) includes all Employees of the Employer except for Employees covered by a collective bargaining agreement. (B) THE ENTRY DATE(S) SHALL BE (check one): (1) the first day of each Plan Year (not if Section 1.03(a)(1)(C) is elected). (2) the first day of each Plan Year and the date six months later. (3) the first day of each Plan Year and the first day of the fourth, seventh, and tenth months. (C) DATE OF INITIAL PARTICIPATION - AN EMPLOYEE WILL BECOME A PARTICIPANT UNLESS EXCLUDED BY SECTION 1.03(A)(3) ABOVE ON THE ENTRY DATE IMMEDIATELY FOLLOWING THE DATE THE EMPLOYEE COMPLETES THE SERVICE AND AGE REQUIREMENT(S) IN SECTION 1.03(A), IF ANY, EXCEPT (check one): (1) No exceptions. (2) Employees employed on the Effective Date in Section 1.01(g) will become Participants on that date. (3) Employees who meet the age and service requirement(s) of Section 1.03(a) on the Effective Date in Section 1.01(g) will become Participants on that date. 1.04 COMPENSATION (A) COMPENSATION WILL MEAN ALL OF EACH PARTICIPANT'S WAGES, TIPS, AND OTHER COMPENSATION AS REPORTED ON IRS FORM W-2. COMPENSATION FOR SELF-EMPLOYED INDIVIDUALS AND PARTNERS SHALL INCLUDE EARNED INCOME. (B) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION Contributions for the Plan Year in which an Employee first becomes a Participant shall be determined based on the Employee's Compensation (check one): (1) For the entire Plan Year. (2) For the portion of the Plan Year in which the Employee is eligible to participate in the Plan. 1.05 CONTRIBUTIONS (A) EMPLOYER CONTRIBUTIONS : (1) DISCRETIONARY FORMULA The Employer may decide each Plan Year whether to make a Discretionary Employer Contribution on behalf of eligible Participants in accordance with Section 4.06. Such contributions may only be FUNDED by the Employer AFTER the Plan Year ends and shall be allocated to eligible Participants based upon a nonintegrated allocation formula, in the ratio that each eligible Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. (2) ELIGIBILITY REQUIREMENTS For purposes of 1.05(a)(1), the Employer contribution shall be made for each Participant who is EITHER employed by the Employer on the last day of the Plan Year or earns more than 500 Hours of Service during the Plan Year. Note: Employer contributions funded during the plan year shall be treated as unconditional contributions. (B) DEFERRAL CONTRIBUTIONS (1) REGULAR CONTRIBUTIONS The Employer shall make a Deferral Contribution in accordance with Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the payroll period in question, not to exceed ___________% (NO MORE THAN 15%) of Compensation for that period. (A) A Participant may increase or decrease, on a prospective basis, his salary reduction agreement percentage as of the next Entry Date. (B) A Participant may revoke, on a prospective basis, a salary reduction agreement at any time upon proper notice to the Administrator but in such case may not file a new salary reduction agreement until any subsequent Entry Date. (2) BONUS CONTRIBUTIONS The Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of any Employer paid cash bonuses made for such Participants during the Plan Year. NOTE: A Participant's Contributions under (2) may not cause the Participant to exceed the percentage limit specified by the Employer in (1) after the Plan Year. The Employer has the right to restrict a Participant's right to make Deferral Contributions if they will adversely effect the Plan's ability to pass the Actual Deferral Percentage and/or the Actual Contribution Percentage test. (3) QUALIFIED DISCRETIONARY CONTRIBUTIONS The Employer may contribute an amount which it designates as a Qualified Discretionary Contribution to be included in the Actual Deferral Percentage or Actual Contribution Percentage test. Qualified Discretionary Contributions shall be allocated to Non-highly Compensated Employees (check one): (A) in the ratio which each such Participant's Compensation for the Plan Year bears to the total of all such Participants' Compensation for the Plan Year. (B) as a flat dollar amount for each such Participant for the Plan Year. (C) MATCHING CONTRIBUTIONS (only if Section 1.05(b) is checked) (1) THE EMPLOYER SHALL MAKE A MATCHING CONTRIBUTION ON BEHALF OF EACH PARTICIPANT IN AN AMOUNT EQUAL TO THE FOLLOWING PERCENTAGE OF A PARTICIPANT'S DEFERRAL CONTRIBUTIONS DURING THE PLAN YEAR (check one): (A) 50% (B) 100% (C) % (D) The percentage declared for the year, if any, by a Board of Directors' resolution. (2) MATCHING CONTRIBUTION LIMITS (check the appropriate box(es)): (A) Deferral Contributions in excess of ________% of the Participant's Compensation for the period in question shall not be considered for Matching Contributions. Note: If the Employer elects a percentage limit in (A) above and requests the Trustee to account separately for matched and unmatched Deferral Contributions, the Matching Contributions allocated to each Participant must be computed, and the percentage limit applied, based upon each payroll period. (B) Matching Contributions for each Participant for each Plan Year shall be limited to $___________. (3) ELIGIBILITY REQUIREMENT A Participant who makes Deferral Contributions during the Plan Year under Section 1.05(b) shall be entitled to Matching Contributions for that Plan Year. (D) EMPLOYEE AFTER-TAX CONTRIBUTIONS - FROZEN CONTRIBUTIONS Participants may not make voluntary non-deductible Employee Contributions but the Employer does maintain frozen Participant voluntary non-deductible Employee Contribution accounts. 1.06 RETIREMENT AGE(S) (A) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one): (1) age 65. (2) age ____ (specify between 55 and 64). (3) later of the age ___ (can not exceed 65) or the fifth anniversary of the Participant's Commencement Date. (B) THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER THE PARTICIPANT ATTAINS AGE (SPECIFY 55 OR GREATER) AND COMPLETES YEARS OF SERVICE FOR VESTING. (C) A PARTICIPANT IS ELIGIBLE FOR DISABILITY RETIREMENT IF HE/SHE (check the appropriate box(es)): (1) satisfies the requirements for benefits under the Employer's Long-Term Disability Plan. (2) satisfies the requirements for Social Security disability benefits. (3) is determined to be disabled by a physician approved by the Employer. 1.07 VESTING SCHEDULE (A) THE PARTICIPANT'S VESTED PERCENTAGE IN EMPLOYER CONTRIBUTIONS ELECTED IN SECTION 1.05(A) AND/OR MATCHING CONTRIBUTIONS ELECTED IN SECTION 1.05(C) SHALL BE BASED UPON THE SCHEDULE SELECTED BELOW. (1) EMPLOYER AND/OR MATCHING CONTRIBUTIONS (check one): (A) N/A - No Employer Contributions (B) 100% Vesting immediately (C) 3 year cliff (see C below) (D) 6 year graduated (see D below) (E) Other vesting (complete E below) YEARS OF VESTING SCHEDULE SERVICE FOR VESTING C D E 0 0% 0% ___ 1 0% 0% ___ 2 0% 20% ___ 3 100% 40% ___ 4 100% 60% ___ 5 100% 80% ___ 6 100% 100% 100% NOTE: A schedule elected under E above must be at least as favorable as one of the schedules in C or D above. 1.08 PREDECESSOR EMPLOYER SERVICE SERVICE FOR PURPOSES OF ELIGIBILITY IN SECTION 1.03(A)(1) AND VESTING IN SECTION 1.07(A) OF THIS PLAN SHALL INCLUDE SERVICE WITH THE FOLLOWING EMPLOYER(S): (A) (B) (C) (D) 1.09 PARTICIPANT LOANS PARTICIPANT LOANS (check (a) or (b)): (A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.09, SUBJECT TO A $1,000 MINIMUM AMOUNT AND WILL BE GRANTED (check (1) or (2)): (1) for any purpose. (2) for hardship withdrawal (as defined in Section 7.10) purposes only. (B) WILL NOT BE ALLOWED. 1.10 HARDSHIP WITHDRAWALS PARTICIPANT WITHDRAWALS FOR HARDSHIP PRIOR TO TERMINATION OF EMPLOYMENT (check one): (A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.10, SUBJECT TO A $1,000 MINIMUM AMOUNT. (B) WILL NOT BE ALLOWED. 1.11 DISTRIBUTIONS (A) SUBJECT TO ARTICLES 7 AND 8 AND (B) BELOW, DISTRIBUTIONS UNDER THE PLAN WILL BE PAID (check the appropriate box(es)): (1) as a lump sum. (2) under a systematic withdrawal plan (installments). (B) CHECK IF A PARTICIPANT WILL BE ENTITLED TO RECEIVE A DISTRIBUTION OF ALL OR ANY PORTION OF THE FOLLOWING ACCOUNTS WITHOUT TERMINATING EMPLOYMENT UPON ATTAINMENT OF AGE 59 1/2 (CHECK ONE): (1) Deferral Contribution Account (2) All vested Accounts (C) CHECK IF THE PLAN WAS CONVERTED (BY PLAN AMENDMENT) FROM ANOTHER DEFINED CONTRIBUTION PLAN, AND THE BENEFITS WERE PAYABLE AS (check the appropriate box(es)): (1) a form of single or joint and survivor life annuity. (2) an in-service withdrawal of vested Employer Contributions maintained in a Participant's Account (check (A) and/or (B)): (A) for at least (24 or more) months. (B) after the Participant has at least 60 months of participation. (3) NOTE TO EMPLOYER: Check this box if you have another distribution option that is a "protected benefit" under Section 411(d)(6) of the Internal Revenue Code. These additional forms of benefit may be provided for such plans under Articles 7 or 8. NOTE: Under Federal Law, distributions to Participants must generally begin no later than April 1 following the year in which the Participant attains age 70 1/2. 1.12 TOP HEAVY STATUS (A) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE 9 (check one): (1) for each Plan Year. (2) for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02. (3) Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.) (B) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY: (1) Interest rate: _____% per annum (2) Mortality table: _____________ (3) Not Applicable. (C) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR, EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST (3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE WITH SECTION 9.03 (check one): (1) under this Plan in any event. (2) under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer. (3) Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.) NOTE: Such minimum Employer contribution may be less than the percentage indicated in (c) above to the extent provided in Section 9.03(a). (D) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR AND SECTION 1.07(A)(1)(A) WAS ELECTED, THEN THE FOLLOWING VESTING SCHEDULE SHALL APPLY TO REQUIRED TOP-HEAVY EMPLOYER CONTRIBUTIONS FOR SUCH PLAN YEAR AND EACH PLAN YEAR THEREAFTER (CHECK ONE): (1) 100% vested after ________ (not in excess of 3) years of service for vesting. (2) YEARS OF SERVICE VESTING MUST BE AT LEAST FOR VESTING PERCENTAGE 0 ___ 0% 1 ___ 0% 2 ___ 20% 3 ___ 40% 4 ___ 60% 5 ___ 80% 6 ___ 100% (3) Not Applicable 1.13 TWO OR MORE PLANS - CODE SECTION 415 LIMITATION ON ANNUAL ADDITIONS If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could become a participant, the Employer must complete this section. The Employer must also complete this section if it maintains a welfare benefit fund, as defined in Section 419(e) of the Code, or an individual medical account, as defined in Section 415(l)(2) of the Code, under which amounts are treated as annual additions with respect to any Participant in this Plan. (A) IF THE EMPLOYER MAINTAINS, OR HAD MAINTAINED, ANY OTHER DEFINED CONTRIBUTION PLAN OR PLANS WHICH ARE NOT MASTER OR PROTOTYPE PLANS, ANNUAL ADDITIONS FOR ANY LIMITATION YEAR TO THIS PLAN WILL BE LIMITED (check one): (1) in accordance with Section 5.03 of this Plan. (2) in accordance with another method set forth on an attached separate sheet. (3) Not Applicable. (B) IF THE EMPLOYER MAINTAINS, OR HAD MAINTAINED, A DEFINED BENEFIT PLAN OR PLANS, THE SUM OF THE DEFINED CONTRIBUTION FRACTION AND DEFINED BENEFIT FRACTION FOR A LIMITATION YEAR MAY NOT EXCEED THE LIMITATION SPECIFIED IN CODE SECTION 415(E), MODIFIED BY SECTION 416(H)(1) OF THE CODE. THIS COMBINED PLAN LIMIT WILL BE MET AS FOLLOWS (check one): (1) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0. (2) another method of limiting Annual Additions or reducing projected annual benefits is set forth on an attached schedule. (3) Not Applicable. 1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS (A) INVESTMENT DIRECTIONS Participant Accounts will be invested in accordance with investment directions provided to the Trustee by each Participant for allocating his entire Account among the options listed in (b) below. (B) PLAN INVESTMENT OPTIONS The Employer hereby establishes a Trust under the plan in accordance with the provisions of Article 14, and the Trustee signifies acceptance of its duties under Article 14 by its signature below. Participant Accounts under the Trust will be invested among the Fidelity Funds listed below pursuant to Participant directions. Fund Name Fund Number (1) (2) (3) (4) (5) To the extent that the Employer selects as an investment option the Managed Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans (the "Group Trust"), the Employer hereby (A) agrees to the terms of the Group Trust and adopts said terms as a part of this Agreement and (B) acknowledges that it has received from the Trustee a copy of the Group Trust, the Declaration of Separate Fund for the Managed Income Portfolio of the Group Trust, and the Circular for the Managed Income Portfolio. NOTE: The method and frequency for change of investments will be determined under the rules applicable to the selected funds or, if applicable, the rules of the Employer adopted in accordance with Section 6.03. Information will be provided regarding expenses, if any, for changes in investment options. 1.15 RELIANCE ON OPINION LETTER An adopting Employer who has ever maintained or who later adopts any plan (including a welfare benefit fund, as defined in Code Section 419(e)), which provides post-retirement medical benefits allocated to separate accounts for key employees, as defined in Code Section 419A(d)(3), or an individual medical account, as defined in Code Section 415(1)(2) in addition to this Plan may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Section 401 of the Code. If the Employer who adopts or maintains multiple plans wishes to obtain reliance that his or her plan(s) qualified, application for a determination letter should be made to the appropriate Key District Director of the Internal Revenue Service. Failure to properly fill out the Adoption Agreement may result in disqualification of the Plan. The employer may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this plan is qualified under section 401 of the Code unless the terms of the plan, as herein adopted or amended, that pertain to the requirements of sections 401(a)(4), 401(a)(17), 401(1), 401(a)(5), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986, or later laws, (a) are made effective retroactively to the first day of the first plan year beginning after December 31, 1988 (or such later date on which these requirements first become effective with respect to this plan); or (b) are made effective no later than the first day on which the employer is no longer entitled, under regulations, to rely on a reasonable, good faith interpretation of these requirements, and the prior provisions of the plan constitute such an interpretation. This Adoption Agreement may be used only in conjunction with Fidelity Prototype Plan Basic Plan Document No. 10. The Prototype Sponsor shall inform the adopting Employer of any amendments made to the Plan or of the discontinuance or abandonment of the prototype plan document. 1.16 PROTOTYPE INFORMATION: Name of Prototype Sponsor: Fidelity Management & Research Co. Address of Prototype Sponsor: 82 Devonshire Street Boston, MA 02109 Questions regarding this prototype document may be directed to the following telephone number: 1-(800) 343-9184. EXECUTION PAGE (FIDELITY'S COPY) IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ________day of _______________, 19_______. Employer By Title Employer By Title Accepted by Fidelity Management Trust Company, as Trustee By Date Title EXECUTION PAGE (EMPLOYER'S COPY) IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ________day of _______________, 19_______. Employer By Title Employer By Title Accepted by Fidelity Management Trust Company, as Trustee By Date Title THE CORPORATEPLAN FOR RETIREMENT 100SM (PROFIT SHARING/401(K) PLAN) A FIDELITY PROTOTYPE PLAN NON-STANDARDIZED ADOPTION AGREEMENT 002 BASIC PLAN NO. 10 THE CORPORATEPLAN FOR RETIREMENT 100SM WILL BE SUBMITTED IN AUGUST TO THE INTERNAL REVENUE SERVICE IN ACCORDANCE WITH APPLICABLE REVENUE PROCEDURES FOR REVIEW AND APPROVAL AS A PROTOTYPE PLAN. REVISIONS MAY BE REQUIRED IN ORDER TO OBTAIN INTERNAL REVENUE SERVICE APPROVAL. THE REVISED DOCUMENT WILL BE DISTRIBUTED AS SOON AS POSSIBLE AFTER INTERNAL REVENUE SERVICE APPROVAL. ADOPTION AGREEMENT ARTICLE 1 NON-STANDARDIZED PROFIT SHARING PLAN 1.01 PLAN INFORMATION (A) NAME OF PLAN: This is the Plan (the "Plan"). (B) TYPE OF PLAN: (1) 401(k) and Profit Sharing (2 ) Profit Sharing Only (3) 401(k) Only (C) NAME OF PLAN ADMINISTRATOR, IF NOT THE EMPLOYER: Address: Phone Number: The Plan Administrator is the agent for service of legal process for the Plan. (D) LIMITATION YEAR (check one): (1) Calendar Year (2) Plan Year (3) Other: (E) THREE DIGIT PLAN NUMBER: (F) PLAN YEAR END (month/day): (G) PLAN STATUS (check one): (1) Effective Date of new Plan: (2) Amendment Effective Date: _______________. This is (check one): (A) an amendment of The CORPORATEplan FOR RETIREMENT 100SM Adoption Agreement previously executed by the Employer; or (B) a conversion from another plan document into The CORPORATEplan FOR RETIREMENT 100SM. The original effective date of the Plan: The substantive provisions of the Plan shall apply prior to the Effective Date to the extent required by the Tax Reform Act of 1986 or other applicable laws. 1.02 EMPLOYER (A) THE EMPLOYER IS: Address: Contact's Name: Telephone Number: (1) Employer's Tax Identification Number: (2) Business form of Employer (check one): (A) Corporation (D) Governmental (B) Sole proprietor or partnership (E) Tax-exempt organization (C) Subchapter S Corporation NOTE: A tax-exempt employer, a state or local government or political subdivision thereof, or any agency or instrumentality thereof, may not maintain a 401(k) plan. However, a 401(k) plan of a tax-exempt employer adopted before July 2, 1986, or of a state or local government adopted before May 7, 1986, is grandfathered and not subject to the restriction. (3) Employer's fiscal year end: (4) Date business commenced: (B) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S) (as defined in Section 2.01(a)(26)): 1.03 COVERAGE (A) ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW WILL BE ELIGIBLE TO PARTICIPATE IN THE PLAN: (1) SERVICE REQUIREMENT (check one): (A) no service requirement. (B) six consecutive months of service (no minimum number Hours of Service can be required). (C) one Year of Service (1,000 Hours of Service is required during the Eligibility Computation Period.) (2) AGE REQUIREMENT (check one): (A) no age requirement. (B) must have attained age ______ (not to exceed 21). (3) THE CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE IN THE PLAN (check one): (A) includes all Employees of the Employer. (B) includes all Employees of the Employer except for (check the appropriate box(es)): (I) Employees covered by a collective bargaining agreement. (II) Highly Compensated Employees as defined in Code Section 414(q). (III) Leased Employees as defined in Section 2.01(a)(18). (IV) Nonresident aliens who do not receive any earned income from the Employer which constitutes United States source income. (V) Other NOTE: No exclusion in this section may create a discriminatory class of employees. An Employer's plan must still pass the Internal Revenue Code coverage and participation requirements if one or more of the above groups of Employees have been excluded from the Plan. (B) THE ENTRY DATE(S) SHALL BE (check one): (1) the first day of each Plan Year (not if Section 1.03(a)(1)(C) is elected). (2) the first day of each Plan Year and the date six months later. (3) the first day of each Plan Year and the first day of the fourth, seventh, and tenth months. (C) DATE OF INITIAL PARTICIPATION - AN EMPLOYEE WILL BECOME A PARTICIPANT UNLESS EXCLUDED BY SECTION 1.03(A)(3) ABOVE ON THE ENTRY DATE IMMEDIATELY FOLLOWING THE DATE THE EMPLOYEE COMPLETES THE SERVICE AND AGE REQUIREMENT(S) IN SECTION 1.03(A), IF ANY, EXCEPT (check one): (1) No exceptions. (2) Employees employed on the Effective Date in Section 1.01(g) will become Participants on that date. (3) Employees who meet the age and service requirement(s) of Section 1.03(a) on the Effective Date in Section 1.01(g) will become Participants on that date. 1.04 COMPENSATION (A) FOR PURPOSES OF DETERMINING CONTRIBUTIONS UNDER THE PLAN, COMPENSATION SHALL BE AS DEFINED IN SECTION 2.01(A)(7), BUT EXCLUDING (check the appropriate box(es)): (1) Overtime Pay. (2) Bonuses. (3) Commissions. NOTE: These exclusions shall not apply for purposes of the "Top Heavy" requirements in Section 9.03). (4) No exclusions. (B) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION Contributions for the Plan Year in which an Employee first becomes a Participant shall be determined based on the Employee's Compensation (check one): (1) For the entire Plan Year. (2) For the portion of the Plan Year in which the Employee is eligible to participate in the Plan. 1.05 CONTRIBUTIONS (A) EMPLOYER CONTRIBUTIONS : (1) DISCRETIONARY FORMULA The Employer may decide each Plan Year whether to make a Discretionary Employer Contribution on behalf of eligible Participants in accordance with Section 4.06. Such contributions shall be allocated to eligible Participants based upon a nonintegrated allocation formula, in the ratio that each eligible Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. (2) ELIGIBILITY REQUIREMENT(S) A Participant shall be entitled to Employer Contributions for a Plan Year under this Subsection (a) if the Participant satisfies the following requirement(s) (Check the appropriate box(es) - Options (B) and (C) may not be elected together): (A) is employed by the Employer on the last day of the Plan Year. (B) earns at least 500 Hours of Service during the Plan Year. (C) earns at least 1,000 Hours of Service during the Plan Year. (D) no requirements. NOTE: If option (A), (B) or (C) above is selected then Employer Contributions can only be FUNDED by the Employer AFTER Plan Year end. Employer contributions funded during the Plan Year shall not be subject to the eligibility requirements of this section 1.05(a)(3). (B) DEFERRAL CONTRIBUTIONS (1) REGULAR CONTRIBUTIONS The Employer shall make a Deferral Contribution in accordance with Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the payroll period in question, not to exceed ___________% (NO MORE THAN 15%) of Compensation for that period. (A) A Participant may increase or decrease, on a prospective basis, his salary reduction agreement percentage as of the next Entry Date. (B) A Participant may revoke, on a prospective basis, a salary reduction agreement at any time upon proper notice to the Administrator but in such case may not file a new salary reduction agreement until any subsequent Entry Date. (2) BONUS CONTRIBUTIONS The Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of any Employer paid cash bonuses made for such Participants during the Plan Year. The Compensation definition elected by the Employer in Section 1.04(a) must include bonuses if bonus contributions are permitted. NOTE: A Participant's Contributions under (2) may not cause the Participant to exceed the percentage limit specified by the Employer in (1) after the Plan Year. The Employer has the right to restrict a Participant's right to make Deferral Contributions if they will adversely effect the Plan's ability to pass the Actual Deferral Percentage and/or the Actual Contribution Percentage test. (3) QUALIFIED DISCRETIONARY CONTRIBUTIONS The Employer may contribute an amount which it designates as a Qualified Discretionary Contribution to be included in the Actual Deferral Percentage or Actual Contribution Percentage test. Qualified Discretionary Contributions shall be allocated to Non-highly Compensated Employees (check one): (A) in the ratio which each such Participant's Compensation for the Plan Year bears to the total of all such Participants' Compensation for the Plan Year. (B) as a flat dollar amount for each such Participant for the Plan Year. (C) MATCHING CONTRIBUTIONS (only if Section 1.05(b) is checked) (1) THE EMPLOYER SHALL MAKE A MATCHING CONTRIBUTION ON BEHALF OF EACH PARTICIPANT IN AN AMOUNT EQUAL TO THE FOLLOWING PERCENTAGE OF A PARTICIPANT'S DEFERRAL CONTRIBUTIONS DURING THE PLAN YEAR (check one): (A) 50% (B) 100% (C) % (D) The percentage declared for the year, if any, by a Board of Directors' resolution. (2) MATCHING CONTRIBUTION LIMITS (check the appropriate box(es)): (A) Deferral Contributions in excess of ________% of the Participant's Compensation for the period in question shall not be considered for Matching Contributions. Note: If the Employer elects a percentage limit in (A) above and requests the Trustee to account separately for matched and unmatched Deferral Contributions, the Matching Contributions allocated to each Participant must be computed, and the percentage limit applied, based upon each payroll period. (B) Matching Contributions for each Participant for each Plan Year shall be limited to $___________. (3) ELIGIBILITY REQUIREMENT(S) (check the appropriate box(es)): A Participant who makes Deferral Contributions during the Plan Year under Section 1.05(b) shall be entitled to Matching Contributions for that Plan Year, unless the Participant: (A) Is a Highly Compensated Employee for the Plan Year. (B) Is a Partner of the Employer, if the Employer is a partnership. (C) Is not subject to any requirements. (D) EMPLOYEE AFTER-TAX CONTRIBUTIONS - FROZEN CONTRIBUTIONS Participants may not make voluntary non-deductible Employee Contributions but the Employer does maintain frozen Participant voluntary non-deductible Employee Contribution accounts. 1.06 RETIREMENT AGE(S) (A) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one): (1) age 65. (2) age ____ (specify between 55 and 64). (3) later of the age ___ (can not exceed 65) or the fifth anniversary of the Participant's Commencement Date. (B) THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER THE PARTICIPANT ATTAINS AGE (SPECIFY 55 OR GREATER) AND COMPLETES YEARS OF SERVICE FOR VESTING. (C) A PARTICIPANT IS ELIGIBLE FOR DISABILITY RETIREMENT IF HE/SHE (check the appropriate box(es)): (1) satisfies the requirements for benefits under the Employer's Long-Term Disability Plan. (2) satisfies the requirements for Social Security disability benefits. (3) is determined to be disabled by a physician approved by the Employer. 1.07 VESTING SCHEDULE (A) THE PARTICIPANT'S VESTED PERCENTAGE IN EMPLOYER CONTRIBUTIONS ELECTED IN SECTION 1.05(A) AND/OR MATCHING CONTRIBUTIONS ELECTED IN SECTION 1.05(C) SHALL BE BASED UPON THE SCHEDULE SELECTED BELOW. (1) EMPLOYER AND/OR MATCHING CONTRIBUTIONS (check one): (A) N/A - No Employer Contributions (B) 100% Vesting immediately (C) 3 year cliff (see C below) (D) 6 year graduated (see D below) (E) Other vesting (complete E below) YEARS OF VESTING SCHEDULE SERVICE FOR VESTING C D E 0 0% 0% ___ 1 0% 0% ___ 2 0% 20% ___ 3 100% 40% ___ 4 100% 60% ___ 5 100% 80% ___ 6 100% 100% 100% NOTE: A schedule elected under E above must be at least as favorable as one of the schedules in C or D above. 1.08 PREDECESSOR EMPLOYER SERVICE SERVICE FOR PURPOSES OF ELIGIBILITY IN SECTION 1.03(A)(1) AND VESTING IN SECTION 1.07(A) OF THIS PLAN SHALL INCLUDE SERVICE WITH THE FOLLOWING EMPLOYER(S): (A) (B) (C) (D) 1.09 PARTICIPANT LOANS PARTICIPANT LOANS (check (a) or (b)): (A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.09, SUBJECT TO A $1,000 MINIMUM AMOUNT AND WILL BE GRANTED (check (1) or (2)): (1) for any purpose. (2) for hardship withdrawal (as defined in Section 7.10) purposes only. (B) WILL NOT BE ALLOWED. 1.10 HARDSHIP WITHDRAWALS PARTICIPANT WITHDRAWALS FOR HARDSHIP PRIOR TO TERMINATION OF EMPLOYMENT (check one): (A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.10, SUBJECT TO A $1,000 MINIMUM AMOUNT. (B) WILL NOT BE ALLOWED. 1.11 DISTRIBUTIONS (A) SUBJECT TO ARTICLES 7 AND 8 AND (B) BELOW, DISTRIBUTIONS UNDER THE PLAN WILL BE PAID (check the appropriate box(es)): (1) as a lump sum. (2) under a systematic withdrawal plan (installments). (B) CHECK IF A PARTICIPANT WILL BE ENTITLED TO RECEIVE A DISTRIBUTION OF ALL OR ANY PORTION OF THE FOLLOWING ACCOUNTS WITHOUT TERMINATING EMPLOYMENT UPON ATTAINMENT OF AGE 59 1/2 (CHECK ONE): (1) Deferral Contribution Account (2) All vested Accounts (C) CHECK IF THE PLAN WAS CONVERTED (BY PLAN AMENDMENT) FROM ANOTHER DEFINED CONTRIBUTION PLAN, AND THE BENEFITS WERE PAYABLE AS (check the appropriate box(es)): (1) a form of single or joint and survivor life annuity. (2) an in-service withdrawal of vested Employer Contributions maintained in a Participant's Account (check (A) and/or (B)): (A) for at least (24 or more) months. (B) after the Participant has at least 60 months of participation. (3) NOTE TO EMPLOYER: Check this box if you have another distribution option that is a "protected benefit" under Section 411(d)(6) of the Internal Revenue Code. These additional forms of benefit may be provided for such plans under Articles 7 or 8. NOTE: Under Federal Law, distributions to Participants must generally begin no later than April 1 following the year in which the Participant attains age 70 1/2. 1.12 TOP HEAVY STATUS (A) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE 9 (check one): (1) for each Plan Year. (2) for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02. (3) Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.) (B) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY: (1) Interest rate: _____% per annum (2) Mortality table: _____________ (3) Not Applicable. (C) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR, EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST (3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE WITH SECTION 9.03 (check one): (1) under this Plan in any event. (2) under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer. (3) Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.) NOTE: Such minimum Employer contribution may be less than the percentage indicated in (c) above to the extent provided in Section 9.03(a). (D) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR AND SECTION 1.07(A)(1)(A) WAS ELECTED, THEN THE FOLLOWING VESTING SCHEDULE SHALL APPLY TO REQUIRED TOP-HEAVY EMPLOYER CONTRIBUTIONS FOR SUCH PLAN YEAR AND EACH PLAN YEAR THEREAFTER (CHECK ONE): (1) 100% vested after ________ (not in excess of 3) years of service for vesting. (2) YEARS OF SERVICE VESTING MUST BE AT LEAST FOR VESTING PERCENTAGE 0 ___ 0% 1 ___ 0% 2 ___ 20% 3 ___ 40% 4 ___ 60% 5 ___ 80% 6 ___ 100% (3) Not Applicable 1.13 TWO OR MORE PLANS - CODE SECTION 415 LIMITATION ON ANNUAL ADDITIONS If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could become a participant, the Employer must complete this section. The Employer must also complete this section if it maintains a welfare benefit fund, as defined in Section 419(e) of the Code, or an individual medical account, as defined in Section 415(l)(2) of the Code, under which amounts are treated as annual additions with respect to any Participant in this Plan. (A) IF THE EMPLOYER MAINTAINS, OR HAD MAINTAINED, ANY OTHER DEFINED CONTRIBUTION PLAN OR PLANS WHICH ARE NOT MASTER OR PROTOTYPE PLANS, ANNUAL ADDITIONS FOR ANY LIMITATION YEAR TO THIS PLAN WILL BE LIMITED (check one): (1) in accordance with Section 5.03 of this Plan. (2) in accordance with another method set forth on an attached separate sheet. (3) Not Applicable. (B) IF THE EMPLOYER MAINTAINS, OR HAD MAINTAINED, A DEFINED BENEFIT PLAN OR PLANS, THE SUM OF THE DEFINED CONTRIBUTION FRACTION AND DEFINED BENEFIT FRACTION FOR A LIMITATION YEAR MAY NOT EXCEED THE LIMITATION SPECIFIED IN CODE SECTION 415(E), MODIFIED BY SECTION 416(H)(1) OF THE CODE. THIS COMBINED PLAN LIMIT WILL BE MET AS FOLLOWS (check one): (1) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0. (2) another method of limiting Annual Additions or reducing projected annual benefits is set forth on an attached schedule. (3) Not Applicable. 1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS (A) INVESTMENT DIRECTIONS Participant Accounts will be invested in accordance with investment directions provided to the Trustee by each Participant for allocating his entire Account among the options listed in (b) below. (B) PLAN INVESTMENT OPTIONS The Employer hereby establishes a Trust under the plan in accordance with the provisions of Article 14, and the Trustee signifies acceptance of its duties under Article 14 by its signature below. Participant Accounts under the Trust will be invested among the Fidelity Funds listed below pursuant to Participant directions. Fund Name Fund Number (1) (2) (3) (4) (5) To the extent that the Employer selects as an investment option the Managed Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans (the "Group Trust"), the Employer hereby (A) agrees to the terms of the Group Trust and adopts said terms as a part of this Agreement and (B) acknowledges that it has received from the Trustee a copy of the Group Trust, the Declaration of Separate Fund for the Managed Income Portfolio of the Group Trust, and the Circular for the Managed Income Portfolio. NOTE: The method and frequency for change of investments will be determined under the rules applicable to the selected funds or, if applicable, the rules of the Employer adopted in accordance with Section 6.03. Information will be provided regarding expenses, if any, for changes in investment options. 1.15 RELIANCE ON OPINION LETTER An adopting Employer may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Section 401 of the Code. If the Employer wishes to obtain reliance that his or her plan(s) are qualified, application for a determination letter should be made to the appropriate Key District Director of the Internal Revenue Service. Failure to properly fill out the Adoption Agreement may result in disqualification of the Plan. This Adoption Agreement may be used only in conjunction with Fidelity Prototype Plan Basic Plan Document No. 10. The Prototype Sponsor shall inform the adopting Employer of any amendments made to the Plan or of the discontinuance or abandonment of the prototype plan document. 1.16 PROTOTYPE INFORMATION: Name of Prototype Sponsor: Fidelity Management & Research Co. Address of Prototype Sponsor: 82 Devonshire Street Boston, MA 02109 Questions regarding this prototype document may be directed to the following telephone number: 1-(800) 343-9184. EXECUTION PAGE (FIDELITY'S COPY) IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ________day of _______________, 19_______. Employer By Title Employer By Title Accepted by Fidelity Management Trust Company, as Trustee By Date Title EXECUTION PAGE (EMPLOYER'S COPY) IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ________day of _______________, 19_______. Employer By Title Employer By Title Accepted by Fidelity Management Trust Company, as Trustee By Date Title EX-99.B14 7 Exhibit 14(g) THE FIDELITY INVESTMENTS 401(a) PROTOTYPE PLAN FOR TAX-EXEMPT EMPLOYERS BASIC PLAN DOCUMENT NO. 03 MAY, 1995 THE FIDELITY INVESTMENTS 401(A) PROTOTYPE PLAN TABLE OF CONTENTS ARTICLE 1. INTRODUCTION 1 ARTICLE 2. DEFINITIONS 2 2.1. DEFINITIONS 2 ARTICLE 3. PLAN ADMINISTRATION 19 3.1. POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR 19 3.2. EFFECT OF INTERPRETATION OR DETERMINATION 20 3.3. CLAIMS AND REVIEW PROCEDURES 20 3.4. NAMED FIDUCIARY 21 3.5. COSTS OF ADMINISTRATION 21 ARTICLE 4. PARTICIPATION 22 4.1. DATE OF PARTICIPATION 22 4.2. PARTICIPATION REQUIREMENTS 22 4.3. REEMPLOYMENT OF PARTICIPANTS 23 4.4. PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES 23 ARTICLE 5. CONTRIBUTIONS 25 5.1. DISCRETIONARY CONTRIBUTIONS 25 5.2. ELECTIVE CONTRIBUTIONS 25 5.3. EMPLOYEE CONTRIBUTIONS 26 5.4. CONTRIBUTION AGREEMENTS 26 5.5. MATCHING CONTRIBUTIONS 26 5.6. QUALIFIED NONELECTIVE CONTRIBUTIONS 27 5.7. TIME OF MAKING CONTRIBUTIONS 27 5.8. RETURN OF CONTRIBUTIONS 27 5.9. ROLLOVER AND DIRECT TRANSFER CONTRIBUTIONS 28 ARTICLE 6. PARTICIPANTS' ACCOUNTS; LIMITATIONS ON CONTRIBUTIONS 29 6.1. INDIVIDUAL ACCOUNTS 29 6.2. VALUATION OF ACCOUNTS 29 6.3. CODE SECTION 415 LIMITATIONS 29 6.4. CODE SECTION 402(G) LIMITS 36 6.5. CODE SECTION 401(K)(3) LIMITS 39 6.6. CODE SECTION 401(M) LIMITS 45 ARTICLE 7. INVESTMENT OF CONTRIBUTIONS 52 7.1. ELIGIBLE INVESTMENTS; MANNER OF INVESTING 52 7.2. IDENTIFIED PLAN FIDUCIARY 52 7.3. TRUSTEE DUTIES LIMITED 52 7.4. ALTERNATE PAYEES 53 7.5. ACCOUNTING 53 7.6. NO INSTRUCTIONS RECEIVED 53 7.7. EXPENSES 53 ARTICLE 8. RIGHT TO BENEFITS 54 8.1. NORMAL RETIREMENT 54 8.2. LATE RETIREMENT 54 8.3. DISABILITY RETIREMENT 54 8.4. DEATH 54 8.5. OTHER TERMINATION OF EMPLOYMENT 55 8.6. SEPARATE ACCOUNT 55 8.7. FORFEITURES 56 8.8. ADJUSTMENT FOR INVESTMENT EXPERIENCE 57 8.9. EMPLOYEE CONTRIBUTIONS 57 8.10. HARDSHIP WITHDRAWALS 57 8.11. WITHDRAWALS AFTER AGE 59 1/2 59 ARTICLE 9. DISTRIBUTION OF BENEFITS 60 9.1. DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES. 60 9.2. PRIOR DISTRIBUTION ELECTIONS 60 9.3. ANNUITY DISTRIBUTIONS 62 9.4. JOINT AND SURVIVOR ANNUITIES 63 9.5. REQUIRED DISTRIBUTIONS 68 9.6. IMMEDIATE DISTRIBUTIONS 71 9.7. DETERMINATION OF METHOD OF DISTRIBUTION 71 9.8. NOTICE TO TRUSTEE 72 9.9. TIME OF DISTRIBUTION 72 9.10. WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES 73 9.11. DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS 73 ARTICLE 10. LOANS TO PARTICIPANTS 76 10.1. IN GENERAL 76 10.2. RULES AND PROCEDURES 76 10.3. MAXIMUM AMOUNT OF LOAN 76 10.4. MINIMUM AMOUNT OF LOAN 77 10.5. NOTE; SECURITY; INTEREST 77 10.6. REPAYMENT 77 10.7. REPAYMENT UPON DISTRIBUTION 78 10.8. DEFAULT 78 10.9. NOTE AS TRUST ASSET 78 10.10. NONDISCRIMINATION 79 10.11. DESIGNATION OF INVESTMENT FUNDS 79 10.12. SPOUSAL CONSENT 79 ARTICLE 11. TOP-HEAVY PROVISIONS 80 11.1. APPLICATION 80 11.2. DEFINITIONS 80 11.3. MINIMUM CONTRIBUTION 83 11.4. MINIMUM VESTING SCHEDULES 84 11.5. ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS 85 ARTICLE 12. AMENDMENT AND TERMINATION 86 12.1. AMENDMENT BY EMPLOYER 86 12.2. AMENDMENT BY SPONSOR 86 12.3. AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS 87 12.4. RETROACTIVE AMENDMENTS 87 12.5. TERMINATION 87 12.6. DISTRIBUTION UPON TERMINATION OF THE PLAN 88 12.7. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN 88 ARTICLE 13. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO OR FROM OTHER QUALIFIED PLANS 89 13.1. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN 89 13.2. TRANSFER OF FUNDS FROM AN EXISTING PLAN 90 13.3. ACCEPTANCE OF ASSETS BY TRUSTEE 90 13.4. TRANSFER OF ASSETS FROM TRUST 91 ARTICLE 14. MISCELLANEOUS 92 14.1. COMMUNICATION TO PARTICIPANTS 92 14.2. LIMITATION OF RIGHTS 92 14.3. NONALIENABILITY OF BENEFITS 92 14.4. FACILITY OF PAYMENT 92 14.5. INFORMATION BETWEEN EMPLOYER AND TRUSTEE 93 14.6. EFFECT OF FAILURE TO QUALIFY UNDER CODE 93 14.7. NOTICES 93 14.8. GOVERNING LAW 94 ARTICLE 1. INTRODUCTION. This Plan and the Trust are intended to comply with all requirements for qualification under the provisions of sections 401 and 501 of the Code as a discretionary contribution plan under section 401(a)(27)(A) of the Code. If a cash or deferral arrangement is elected in the Adoption Agreement, the arrangement is intended to qualify under section 401(k) of the Code. Subject to the provisions of Sections 5.6, 13.3 and 13.6 hereof, no part of the corpus or income of the Trust will be used for or diverted to purposes other than for the exclusive benefit of the Participants and their Beneficiaries and for the payment of expenses of administering the Plan and Trust. ARTICLE 2. DEFINITIONS. 2.1 DEFINITIONS. (a) Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context: (1) "Account" means each account established on the books of the Trust for the purpose of recording contributions made on behalf of a Participant and any income, expenses, gains or losses incurred thereon. References to a Participant's Elective Contribution Account, Employee Contribution Account, Matching Contribution Account, Discretionary Contribution Account and Rollover Contribution Account, respectively, refer to those Accounts established for a Participant to which the respective contributions are allocated. References to a Participant's QNEC Account refer to the Account to which Qualified Nonelective Contributions made on behalf of the Participants are allocated. (2) "Administrator" means the Employer. (3) "Adoption Agreement" means the separate agreement entered into between the Employer and the Trustee under which the Employer establishes and adopts, or amends, the Plan and Trust and designates the optional provisions selected by the Employer. The provisions of the Adoption Agreement shall be considered an integral part of the Plan as if set forth fully herein. (4) "Annuity Starting Date" means the first day of the first period for which an amount is payable as an annuity or in any other form. (5) "Beneficiary" means the person or persons entitled under Section 8.4 to receive benefits under the Plan upon the death of a Participant, provided that for purposes of Section 9.5 such term shall be applied in accordance with section 401(a)(9) of the Code and the regulations thereunder. (6) "Code" means the Internal Revenue Code of 1986, as amended from time to time. Reference to any section or subsection of the Code includes reference to any Regulation or other administrative notice, revenue procedure, revenue ruling, or the like issued by the Internal Revenue Service which may be relied upon in interpreting such Code, and also includes reference to any comparable or succeeding provisions of any legislation which amends, supplements or replaces such section or subsection. (7) "Compensation" means (A) For purposes of contributions: The amount that is paid to a Participant by the Employer as "W-2 compensation" or "basic compensation", whichever is selected by the Employer in the Adoption Agreement, for the Plan Year or the fiscal (or taxable) year ending with or within the Plan Year, as selected in the Adoption Agreement, provided, however, that if the Plan is a standardized plan "Compensation" pursuant to this subparagraph (7)(A) shall mean W-2 compensation paid to a Participant by the Employer during the Plan Year. For these purposes, "W-2 compensation" means wages within the meaning of section 3401(a) of the Code for purposes of income tax withholding at the source but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in section 3401(a)(2)), and "basic compensation" means amounts paid as base salary, wages and commissions, excluding overtime and bonuses. Compensation shall include or exclude, as selected by the Employer in the Adoption Agreement, amounts that are not includible in the gross income of a Participant under a salary reduction agreement by reason of the application of sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code. In the case of any Self-Employed Individual, Compensation shall include the Individual's Earned Income. (B) For purposes of Code section 415 limitations: The amount paid or made available during the Plan Year to the Employee as earned income, wages, salaries, fees for professional services and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan (including, but not limited to, commissions paid salesmen, *compensation for services on the basis of percentage of profits, commissions on insurance premiums, tips, bonuses) fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in Reg. (sub-section)1.62-2(c)). However, the term "Compensation" for the purposes stated in this Section 2.1(a)(8)(B) does not include -- (i) Contributions made by the Employer to a plan of deferred compensation to the extent that, before the application of the Code section 415 limitations to that plan, the contributions are not includable in the gross income of the Employee for the taxable year in which contributed. In addition, Employer contributions made on behalf of an Employee to a simplified employee pension described in section 408(k) of the Code are not considered as Compensation for the taxable year in which contributed to the extent such contributions are deductible by the Employee under section 219(b)(7) of the Code. Additionally, any distributions from a plan of deferred compensation are not considered as Compensation regardless of whether such amounts are includable in the gross income of the Employee when distributed. However, any amounts received by an Employee pursuant to an unfunded nonqualified plan may be considered as Compensation in the year such amounts are includable in the gross income of the Employee. (ii) Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by an Employee either becomes freely transferable or no longer subject to a substantial risk of forfeiture (see section 83 of the Code and the regulations thereunder). (iii) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option. (iv) Other amounts which receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includable in the gross income of the Employee), or contributions made by an Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403(b) (whether or not the contributions are excludable from the gross income of the Employee). (C) For purposes of determining the status of an individual as a Highly Compensated Employee or a Key Employee: The same as (B) above but increased by amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the gross income of the Employee under section 125, sections 402(3)(3), 402(h)(1)(B), or section 403(b) of the Code. (D) For Plan Years beginning on or after January 1, 1989, and before January 1, 1994, the annual compensation of each Participant taken into account for determining all benefits provided under the Plan for any Plan Year shall not exceed $200,000. This limitation shall be adjusted by the Secretary at the same time and in the same manner as under section 415(d) of the Code, except that the dollar increase in effect on January 1 of any calendar year is effective for Plan Years beginning in such calendar year and the first adjustment to the $200,000 limitation is effective on January 1, 1990. For Plan Years beginning on or after January 1, 1994, the annual compensation of each Participant taken into account for determining all benefits provided under the Plan for any Plan Year shall not exceed $150,000, as adjusted for increases in the cost-of-living in accordance with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. If a determination period consists of fewer than 12 months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is 12. In determining the Compensation of a Participant for purposes of this limitation, the rules of section 414(q)(6) of the Code shall apply, except that in applying such rules, the term "family" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the year. If the section 401(a)(17) limitation is exceeded as a result of the application of these rules, then (except, if the plan is integrated, for purposes of determining Compensation up to the Integration Level) the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation, determined without regard to such limitation. (8) "Computation Period" means each 12-consecutive month period beginning with the Employment Commencement Date and each anniversary thereof. (solid bullet)(9) "Contribution Agreement" means an agreement entered into between a Participant and his or her Employer pursuant to which Elective Contributions and/or Employee Contributions shall be made for the Participant's benefit. (10) "Discretionary Contribution" means a contribution (other than a Qualified Nonelective Contribution) made for the benefit of a Participant by the Employer in its discretion. (11) "Earned Income" means the net earnings of a Self-Employed Individual derived from the trade or business with respect to which the Plan is established and for which the personal services of such individual are a material income-providing factor, excluding any items not included in gross income and the deductions allocated to such items, except that for taxable years beginning after December 31, 1989 net earnings shall be determined with regard to the deduction allowed under section 164(f) of the Code, to the extent applicable to the Employer. Net earnings shall be reduced by contributions of the taxpayer to any qualified plan, to the extent a deduction is allowed to the taxpayer for such contributions under section 404 of the Code. (12) "Elective Contribution" means a contribution made to the Plan for the benefit of a Participant pursuant to a Salary Reduction Agreement. (13) "Eligible Investment" means Registered Investment Company Shares and any other investment medium permitted by the Trustee from time to time. (14) "Employee" means any individual employed by the Employer or a Related Employer, except that, if the Plan is a nonstandardized plan, such term shall not include any Self-Employed Individual or Owner-Employee. For purposes of the Plan, an individual shall be considered to become an Employee on the date on which he or she first completes an Hour of Service and he or she shall be considered to have ceased to be an Employee on the date on which he or she last completes an Hour of Service. All Employees employed by the Employer or a Related Employer shall be treated as employed by a single employer. The term also includes a Leased Employee, provided that contributions or benefits provided by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the Employer, and any individual considered an Employee pursuant to regulations issued under section 414(o) of the Code. Notwithstanding the above, a Leased Employee shall not be considered an Employee if Leased Employees do not constitute more than 20 percent of the Employer's non-highly compensated work force (taking into account all Related Employers) and the Leased Employee is covered by a money purchase pension plan maintained by the leasing organization which plan provides (i) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined for purposes of section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from gross income under section 125, section 402(e)(3), section 402(h)(1)(B) or section 403(b) of the Code, (ii) full and immediate vesting, and (iii) immediate participation by each Employee of the leasing organization, except Employees with compensation less than $1,000 in each Plan Year during the 4-year period ending with the current Plan Year. (15) "Employee Contribution" means a contribution made to the Plan on an after-tax basis pursuant to a Contribution Agreement. (16) "Employer" means the employer named in the Adoption Agreement. (17) "Employment Commencement Date" means the date on which the Employee first performs an Hour of Service. (18) "ERISA" means the Employee Retirement Income Security Act of 1974, as from time to time amended. (19) "Highly Compensated Employee" means an Employee of an Employer or Related Employer who is a "highly compensated Employee" within the meaning of Code section 414(q). The term Highly Compensated Employee includes highly compensated active Employees and highly compensated former Employees. (a) A highly compensated active Employee includes any Employee who performs service for an Employer or Related Employer during the determination year and who, during the look-back year: (i) received Compensation from the Employer or Related Employer in excess of $75,000 (as adjusted pursuant to Code section 415(d), (ii) received Compensation from the Employer and Related Employer in excess of $50,000 (as adjusted pursuant to Code section 415(d) and was a member of the top-paid group for such year, or (iii) was an officer of the Employer or Related Employer and received Compensation during such year that is greater than 50 percent of the dollar limitation in effect under Code section 415(b)(1)(A). (b) The term Highly Compensated Employee also includes: (i) Employees who are both described in paragraph (a) if the term "determination year" is substituted for the term "look-back-year" and the Employee is one of the 100 Employees who received the most Compensation from the Employer or Related Employer during the determination year; and (ii) Employees who are 5 percent owners at any time during the look-back year or determination year. If no officer has satisfied the compensation requirement of (a)(iii) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a Highly Compensated Employee. For this purpose, the determination year shall be the Plan Year. The look-back year shall be the 12-month period immediately preceding the determination year. (c) A highly compensated former Employee includes any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no service for the Employer or Related Employer during the determination year, and was a highly compensated active Employee for either the separation year or any determination year ending on or after the Employee's 55th birthday. (d) If an Employee is, during a determination year or look-back year, a family member of either a 5 percent owner who is an active or former Employee or a Highly Compensated Employee who is one of the 10 most Highly Compensated Employees ranked on the basis of Compensation paid by the Employer and Related Employers during such year, then the family member and the 5 percent owner or top 10 Highly Compensated Employee shall be aggregated. In such case, the family member and 5 percent owner or top 10 Highly Compensated Employee shall be treated as a single Employee receiving compensation and Plan contributions equal to the sum of such compensation and contributions of the family member and 5 percent owner or top-ten Highly Compensated Employee. For purposes of this section, family member includes the spouse, lineal ascendants and descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. (e) The top paid group shall consist of the top 20 percent of active Employees, ranked on the basis of Compensation received from the Employer and Related Employers during the year. The number of officers shall be limited to the lesser of (i) 50 Employees or (ii) the greater of 3 Employees or 10 percent of Employees. If there is not at least one officer whose Compensation is in excess of 50 percent of the Code section 415(b)(i)(A) limit, then the highest paid officer of the Employer and Related Employers shall be treated as a Highly Compensated Employee. The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees, the number of Employees treated as officers and the compensation that is considered, will be made in accordance with Code section 414(q). (20) "Hour of Service" means, with respect to any Employee, (A) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, for the performance of duties for the Employer or a Related Employer, each such hour to be credited to the Employee for the Computation Period in which the duties were performed; (B) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, by the Employer or Related Employer (including payments made or due from a trust fund or insurer to which the Employer contributes or pays premiums) on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty, or leave of absence, each such hour to be credited to the Employee for the Computation Period in which such period of time occurs, subject to the following rules: (i) No more than 501 Hours of Service shall be credited under this paragraph (B) on account of any single continuous period during which the Employee performs no duties; (ii) Hours of Service shall not be credited under this paragraph (B) for a payment which solely reimburses the Employee for medically-related expenses, or which is made or due under a plan maintained solely for the purpose of complying with applicable workmen's compensation, unemployment compensation or disability insurance laws; and (iii) If the period during which the Employee performs no duties falls within two or more Computation Periods and if the payment made on account of such period is not calculated on the basis of units of time, the Hours of Service credited with respect to such period shall be allocated between not more than the first two such Computation Periods on any reasonable basis consistently applied with respect to similarly-situated Employees; and (C) Each hour not counted under paragraph (A) or (B) for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to be paid by the Employer or a Related Employer, each such hour to be credited for the Computation Period to which the award or agreement for back pay pertains. For purposes of determining Hours of Service, Employees of the Employer and of all Related Employers will be treated as employed by a single employer. For purposes of paragraphs (B) and (C) above, Hours of Service will be calculated in accordance with the provisions of Section 2530.200b-2(b) of the Department of Labor regulations which are incorporated herein by reference. (21) "Integration Level" means the amount of Compensation determined as a percentage of the Social Security Taxable Wage Base, as selected by the Employer in the Adoption Agreement, at or below which the rate at which contributions are provided (expressed as a percentage) is less than the rate above such amount. (22) "Leased Employee" means any individual who provides services to the Employer or a Related Employer (the "recipient") but is not otherwise an Employee of the recipient if (i) such services are provided pursuant to an agreement between the recipient and any other person (the "leasing organization"), (ii) such individual has performed services for the recipient (or for the recipient and any related persons within the meaning of section 414(n)(6) of the Code) on a substantially full-time basis for at least one year, and (iii) such services are of a type historically performed by Employees in the business field of the recipient. (23) "Matching Contribution" means a contribution made for the benefit of a Participant under the Plan on account of an Elective Contribution, or other elective deferral, as selected by the Employer in the Adoption Agreement. (24) "Normal Retirement Age" means the normal retirement age specified in the Adoption Agreement. If the Employer enforces a mandatory retirement age, the normal retirement age is the lesser of that mandatory age or the age specified in the Adoption Agreement. (25) "One Year Period of Severance" means, in the case of each Participant who ceases to be an Employee, a 12-consecutive month period beginning on the Participant's severance from service date and ending on the first anniversary of such date if the Employer elects the elapsed time method of determining Years of Service for Vesting in the Adoption Agreement, provided that during such 12-consecutive month period, the Participant failed to perform an Hour of Service. For purposes of this paragraph, the date an Employee severs from service is the earlier of the date the Employee quits, is discharged, retires or dies, or the first anniversary of the date the Employee is absent from service for any other reason. If the Employer elects the hour of service method of determining Years of Service for Vesting in the Adoption Agreement, "One Year Period of Severance" means, in the case of each Participant who ceases to be an Employee, a Computation Period during which the Participant is not credited with more than 500 Hours of Service. In the case of a Participant who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a One Year Period of Severance. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (i) by reason of the pregnancy of the individual, (ii) by reason of the birth of a child of the individual, (iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. (26) "Owner-Employee" means, if the Employer is a sole proprietorship, the individual who is the sole proprietor, or if the Employer is a partnership, a partner who owns more than 10 percent of either the capital interest or the profits interest of the partnership. (27) "Participant" means any Employee who participates in the Plan in accordance with Article 4 hereof. (28) "Plan" means the Plan established by the Employer in the form of The Fidelity Investments 401(a) Prototype Plan as set forth herein and in the Adoption Agreement, together with any and all amendments and supplements hereto. (29) "Plan Year" means the 12-consecutive month period designated by the Employer in the Adoption Agreement. (30) "Qualified Nonelective Contribution" means a contribution made in the discretion of the Employer which is designated by the Employer as a Qualified Nonelective Contribution. (31) "Registered Investment Company" means any one or more corporations, partnerships or trusts registered under the Investment Company Act of 1940 for which Fidelity Management and Research Company serves as investment advisor, and any other such entity as is acceptable to the Trustee in its sole discretion. (32) "Registered Investment Company Shares" means the shares, trust certificates, partnership interests or other evidences of ownership in any Registered Investment Company. (33) "Regulation" means a final, temporary, or proposed regulation published by the U.S. Department of Treasury. (34) "Related Employer" means any employer other than the Employer, if the Employer and such other employer are members of a controlled group of corporations (as defined in section 414(b) of the Code) or an affiliated service group (as defined in section 414(m)), or are trades or businesses (whether or not incorporated) which are under common control (as defined in section 414(c)), or such other employer is required to be aggregated with the Employer pursuant to regulations issued under section 414(o). (35) "Required Beginning Date" for a Participant shall be determined as follows: (i) For a Participant who attains age 70 1/2 after December 31, 1987, the Required Beginning Date is April 1 following the calendar year in which the Participant attains age 70 1/2. (ii) For a Participant who attains age 70 1/2 before January 1, 1988 and is not a 5 percent owner, the Required Beginning Date is April 1 following the later of (A) the calendar year in which the Participant attains age 70 1/2, and (B) the calendar year in which the Participant retires. (iii) For a Participant who attains age 70 1/2 before January 1, 1988 and is a 5 percent owner, the Required Beginning Date is April 1 after the later of (A) the calendar year in which the Participant attains age 70 1/2, and (B) the earlier of the calendar year in which the Participant retires or the calendar with or within which ends the Plan Year in which the Participant becomes a 5 percent owner. (iv) For a Participant who filed an election pursuant to section 242(b) of the Tax Equity and Fiscal Responsibility Act, the date specified in such election. (v) For purposes of this definition, a Participant is treated as a 5 percent owner if such Participant is a 5 percent owner as defined in section 416(i) of the Code (determined in accordance with section 416 but without regard to whether the plan is top heavy) at any time during the Plan Year ending with or within the calendar year in which such owner attains age 66 1/2 or any subsequent Plan Year. (36) "Self-Employed Individual" means an individual who has Earned Income for the taxable year from the Employer or who would have had Earned Income but for the fact that the trade or business had no net profits for the taxable year. (37) "Social Security Taxable Wage Base" means, with respect to any individual for any Plan Year, the contribution and benefit base under section 230 of the Social Security Act at the beginning of the Plan Year. (38) "Sponsor" means Fidelity Management and Research Company, a Massachusetts corporation, or its successor. (39) "Trust" means the trust created by the Employer in accordance with the provisions of the Adoption Agreement. (40) "Trust Agreement" means the agreement between the Employer and the Trustee under which the assets of the Plan are held, administered, and managed. The provisions of the Trust Agreement shall be considered an integral part of this Plan as if set forth fully herein. (41) "Trust Fund" means the property held in Trust by the Trustee for the Accounts of the Participants and their Beneficiaries. (42) "Trustee" means the entity named as trustee in the Trust Agreement, or its successor. (43) "Year of Service for Participation" means, with respect to any Employee, a Computation Period during which the Employee has been credited with the required Hours of Service, if any, selected by the Employer in the Adoption Agreement. If the Plan maintained by the Employer is the plan of a predecessor employer, an Employee's Years of Service for Participation shall include years of service with such predecessor employer. In any case in which the Plan maintained by the Employer is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided by regulations, be treated as service for the Employer. (44) "Years of Service for Vesting" means, with respect to any Employee, either years of service as determined under the elapsed time method described in subsection (i) below or years of service as determined under the hours of service method described in subsection (ii) below, as selected by the Employer in the Adoption Agreement. (i) Elapsed Time Method. Years of Service for Vesting under the elapsed time method means, with respect to any Employee, the number of whole years of his or her periods of service with the Employer or a Related Employer, whether or not such periods of service were completed consecutively. In determining the number of whole years of an Employee's periods of service, nonsuccessive periods of service with the Employer or a Related Employer will be aggregated and less than whole year periods of service (whether or not consecutive) will be aggregated on the basis that 365 days of service equals a whole year of service. An Employee's period of service with the Employer or a Related Employer will include a period of severance if the Employee severs from the service of the Employer or a Related Employer by reason of a quit, discharge or retirement and the Employee then performs an Hour of Service within 12 months of the severance from service date, or, if the quit, discharge or retirement occurs during a period of absence from service for any other reason, within the first anniversary of the date on which the Employee was first absent for such other reason. (ii) Hours of Service Method. Years of Service for Vesting under the hours of service method means, with respect to any Employee, the number of Computation Periods during which the Employee has been credited with at least 1,000 Hours of Service. Notwithstanding the above, in the case of any Participant who incurs five consecutive One Year Periods of Severance, years of service after such five-year period shall not be taken into account in determining the nonforfeitable percentage of his or her Account derived from Employer contributions before such five-year period. If the Plan maintained by the Employer is the plan of a predecessor employer, an Employee's Years of Service for Vesting shall include years of service with such predecessor employer. In any case in which the plan maintained by the Employer is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided by regulations, be treated as service for the Employer. ARTICLE 3. PLAN ADMINISTRATION. 3.1 POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR. The Administrator has the full discretionary power and the full responsibility to administer the Plan in all of its details, subject, however, to the requirements of ERISA. The Administrator's powers and responsibilities include, but are not limited to, the following: (a) To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan; (b) To interpret the Plan; (c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan; (d) To administer the claims and review procedures specified in Section 3.3; (e) To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan; (f) To determine the person or persons to whom such benefits will be paid; (g) To authorize the payment of benefits; (h) To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA; (i) to appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan; (j) by written instrument, to allocate and delegate its fiduciary responsibilities in accordance with section 405 of ERISA. 3.2. EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation of the Plan or other determination with respect to the Plan by the Administrator shall be final and conclusive on all persons in the absence of clear and convincing evidence that the Administrator acted arbitrarily and capriciously. 3.3 CLAIMS AND REVIEW PROCEDURES. (A) CLAIMS PROCEDURE. If any person believes he or she is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and (iv) information as to the steps to be taken if the person wishes to submit a request for review. Such notification will be given within 90 days after the claim is received by the Administrator (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to such person within the initial 90-day period). If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his or her claim. (B) REVIEW PROCEDURE. Within 60 days after the date on which a person receives a written notice of a denied claim (or, if applicable, within 60 days after the date on which such denial is considered to have occurred), such person (or his or her duly authorized representative) may (i) file a written request with the Administrator for a review of his or her denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The decision on review will be made within 60 days after the request for review is received by the Administrator (or within 120 days, if special circumstances require an extension of time for processing the request, such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60-day period). If the decision on review is not made within such period, the claim will be considered denied. 3.4. NAMED FIDUCIARY. The Administrator and the Trustee are "named fiduciaries" for purposes of section 402(a)(1) of ERISA and have the powers and responsibilities with respect to the management and operation of the Plan and Trust described herein and in the Trust Agreement. 3.5. COSTS OF ADMINISTRATION. Unless paid by the Employer, all reasonable costs and expenses incurred by the Administrator and the Trustee in administering the Plan and Trust will be paid from the Trust Fund and will, unless allocable to the Accounts of particular Participants, be charged against the Accounts of all Participants in proportion to their respective Account balances. ARTICLE 4. PARTICIPATION. 4.1. DATE OF PARTICIPATION. All Employees who are in the service of the Employer on the day on which the Adoption Agreement is executed by the Employer and who, as of such date, qualify for participation in the Plan under Section 4.2 below will become Participants as of such date. Any Employee in the service of the Employer who does not become a Participant on such date and who thereafter meets the requirements of Section 4.2 will become a Participant in the Plan as of the first day of the calendar month next following the calendar month in which he or she first meets such requirements (or if he or she first meets such requirements on the first day of a calendar month, then as of such first day), provided he or she is an Employee in the service of the Employer on such day. 4.2. PARTICIPATION REQUIREMENTS. Any Employee in the service of the Employer who has completed the period of service for participation and who has attained the minimum age, if any, specified in the Adoption Agreement will be eligible to participate in the Plan. If the Employer has specified a period less than a whole Year of Service for Participation in the Adoption Agreement, an Employee shall not be required to complete any specified number of Hours of Service to be credited with such period of service. Notwithstanding the foregoing, an Employee included in a unit of Employees covered by a collective bargaining agreement between the Employer and Employee representatives where retirement benefits were the subject of good faith bargaining and of two percent or less of the Employees who are covered pursuant to that agreement are professionals as defined in section 1.410(b)-9 of the regulations shall be excluded from participation, if the Employer has so elected in the Adoption Agreement. For purposes of the preceding sentence, the term "Employee representatives" does not include any organization more than half of whose members are Employees who are owners, officers or executives of the Employer. If an Employee who is excluded from participation as described above satisfies the age and service requirements specified in the Adoption Agreement, he or she will begin to participate immediately upon becoming a member of a classification of Employees eligible to participate in the Plan. 4.3. REEMPLOYMENT OF PARTICIPANTS. If a Participant ceases to be an Employee and thereafter returns to the employ of the Employer, he or she will be treated as follows: (a) the individual will again become a Participant on the date on which he or she completes an Hour of Service for the Employer following reemployment; and (b) any distribution which the individual is receiving under the Plan will continue to be made in accordance with the provisions of the Plan. 4.4. PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES. If the Plan provides contributions or benefits for one or more Owner-Employees who control both the trade or business with respect to which the Plan is established and one or more other trades or businesses, the Plan and any plan established with respect to such other trades or businesses must, when looked at as a single plan, satisfy sections 401(a) and 401(d) of the Code with respect to the Employees of this and all such other trades or businesses. If the Plan provides contributions or benefits for one or more Owner-Employees who control one or more other trades or businesses, the Employees of each such other trade or business must be included in a plan which satisfies sections 401(a) and 401(d) of the Code and which provides contributions and benefits not less favorable than provided for Owner-Employees under the Plan. If an individual is covered as an owner-Employee under the plans of two or more trades or businesses which are not control and the individual controls a trade or business, then the contributions or benefits of the Employees under the plan of the trades or businesses which are controlled must be as favorable as those provided for him or her under the most favorable plan of the trade or business which is not controlled. For purposes of this Section, an Owner-Employee, or two or more Owner-Employees, shall be considered to control a trade or business if such Owner-Employee, or such Owner-Employees together, (i) own the entire interest in an unincorporated trade or business, or (ii) in the case of a partnership, own more than 50 percent of either the capital interest or the profits interest in such partnership. For this purpose, an Owner-Employee, or two or more Owner-Employees, shall be treated as owning any interest in a partnership which is owned, directly or indirectly, by a partnership controlled by such Owner-Employee or such Owner-Employees ARTICLE 5. CONTRIBUTIONS. 5.1. DISCRETIONARY CONTRIBUTIONS. For the Plan Year in which the Plan is adopted and for each Plan Year thereafter, the Employer will make Discretionary Contributions to the Trust in accordance with the contribution formula selected by the Employer under the Adoption Agreement on behalf of each Participant who is eligible to receive such contributions under the terms of the Adoption Agreement. If elected by the Employer in the Adoption Agreement, nonforfeitable contributions will be made on behalf of each disabled Participant or former Participant, as determined under Section 8.3, who is not a highly compensated Employee (within the meaning of section 414(q) of the Code). If the Plan is integrated, the percentage of Compensation contributed on behalf of each Participant with respect to Compensation in excess of the Integration Level shall not exceed the percentage of Compensation contributed on behalf of each Participant with respect to Compensation below the Integration Level by more than the lesser of (i) the percentage contributed with respect to Compensation below the Integration Level, or (ii)(I) if the Integration Level is the Social Security Taxable Wage Base, 5.7 percent, or (II) if the Integration Level is 80 percent or less of the Social Security Taxable Wage Base, 4.3 percent. The Social Security Taxable Wage Base used to determine the Integration Level shall be that in effect on the first day of the Plan Year. To the extent a deduction is available to the Employer under section 404 of the Code, contributions under the Plan are conditioned on their deductibility under section 404 and Employer contributions for the Plan Year will not exceed the maximum amount which is permitted to be deducted for federal income tax purposes for the Plan Year. 5.2. ELECTIVE CONTRIBUTIONS. If permitted under the Adoption Agreement, each Participant may enter into a Contribution Agreement with his or her Employer specifying Elective Contributions in an amount designated in the Contribution Agreement. By agreeing to Elective Contributions, the Participant agrees to a reduction in pay in the amount designated and the Employer agrees to contribute an equivalent amount to the Trust. The maximum amount of Elective Contributions that may be made for a period shall be the lesser of any limitations imposed by the Code as further described in the Plan or the percentage of Compensation specified by the Employer in the Adoption Agreement. 5.3. EMPLOYEE CONTRIBUTIONS. If permitted under the Adoption Agreement, each Participant may enter into a Contribution Agreement with his or her Employer specifying Employee Contributions in an amount designated in the Contribution Agreement. By agreeing to Employee Contributions, the Participant agrees to contribute the designated amount to the Trust out of after-tax pay and the Employer agrees to facilitate such contributions through payroll deductions. The maximum amount of Employee Contributions that may be made for a period shall be the lesser of any limitations imposed by the Code as further described in the Plan or the percentage of Compensation specified by the Employer in the Adoption Agreement. 5.4. CONTRIBUTION AGREEMENTS. Each Contribution Agreement shall be on a form prescribed or approved by the Administrator, and may be entered into, changed or revoked by the Participant, with such prior written notice as the Administrator may prescribe. A Contribution Agreement shall be effective with respect to Compensation payable on and after such date as may be specified on such form (but no earlier than the date the Agreement is entered into). A Participant who revokes a Contribution Agreement may not enter into a new Agreement until such time as the Administrator may prescribe following the revocation. The Administrator will prescribe the period, which must be at least once each calendar year, during which a Participant may elect to commence Elective Contributions, or terminate or modify the amount or frequency of Elective Contributions. 5.5. MATCHING CONTRIBUTIONS. If permitted under the Adoption Agreement, for each pay period, or such other period specified in the Adoption Agreement, the Employer will make a Matching Contribution to the Trust for the benefit of each Participant on whose behalf it made Elective Contributions or Employee Contributions (or both) for the period equal to the amount specified in the Adoption Agreement. If permitted under the Adoption Agreement, Matching Contributions may also be made for the benefit of each Participant on whose behalf it made an elective deferral (within the meaning of Code section 402(g)(3)) for the period under a defined contribution plan of the Employer that is intended to meet the requirements of Code section 403(b), equal to the amount specified in the Adoption Agreement. 5.6. QUALIFIED NONELECTIVE CONTRIBUTIONS. If permitted under the Adoption Agreement and to the extent necessary to satisfy the Code section 401(k)(3) limits with respect to Elective Contributions or the Code section 401(m) limits with respect to Matching Contributions, the Employer, in its discretion, may make a Qualified Nonelective Contribution to the Trust for a Plan Year. A Qualified Nonelective Contribution for a Plan Year shall be allocated among and credited to the QNEC Accounts of all Participants who are eligible to receive Elective Contributions for the Plan Year, in proportion to their relative amounts of Compensation for the Plan Year. Qualified Nonelective Contributions shall be fully vested and subject to the same distribution rules as Elective Contributions as of the time such Qualified Nonelective Contributions are made to the Plan. 5.7. TIME OF MAKING CONTRIBUTIONS. Contributions will be remitted by the Employer to the Trustee in accordance with the provisions of the Adoption Agreement. Elective and Employee Contributions will be paid in cash to the Trust as soon as such contributions can reasonably be segregated from the general assets of the Employer, but in any event within 90 days after the date on which the Compensation to which such contributions related is paid and, in the case of Employee Contributions, within 30 days after the end of the Plan Year. The Employer will pay its contribution for each Plan Year not later than the 15th day of the 6th calendar month following the close of the fiscal (or taxable) year with or within which such Plan Year ends. In addition, Qualified Nonelective Contributions for a Plan Year must be paid no later than the last day of the 12-month period immediately following the Plan Year. The Trustee will have no authority to inquire into the correctness of the amounts contributed and paid over to the Trustee, to determine whether any contribution is payable under this Article 5, or to enforce, by suit or otherwise, the Employer's obligation, if any, to make a contribution to the Trustee. 5.8. RETURN OF CONTRIBUTIONS. If a contribution by the Employer to the Trust is made by reason of a good faith mistake of fact, or, in the case of an Employer for which a deduction is available under section 404 of the Code, by reason of a good faith belief as to the deductibility of the contribution under section 404 for the Plan Year for which it is made, but the deduction is disallowed, the Trustee shall, upon request by the Employer, return to the Employer the excess of the amount contributed over the amount, if any, that would have been contributed had there not occurred a mistake of fact or mistake in determining the deduction. Such excess shall be reduced by amounts attributable thereto which have been credited to the Accounts of Participants who have since received distributions from the Trust, except to the extent such amounts continue to be credited to such Participants' Accounts at the time the excess is returned to the Employer. Such excess shall also be reduced by the losses of the Trust attributable thereto, if and to the extent such losses exceed the gains and income attributable thereto, but will not be increased by the gains and income of the Trust attributable thereto, if and to the extent such gains and income exceed the losses attributable thereto. In no event will the return of a contribution hereunder cause the balance of the individual Account of any Participant to be reduced to less than the balance which would have been credited to the Account had the mistaken amount not been contributed. No return of a contribution hereunder will be made more than one year after the mistaken payment of the contribution or the deduction as was disallowed. 5.9. ROLLOVER AND DIRECT TRANSFER CONTRIBUTIONS. If permitted under the Adoption Agreement, an Employee may make rollover or direct transfer contributions to the Plan upon demonstration satisfactory to the Administrator that the contribution is eligible for transfer to the Plan pursuant to the rollover or direct transfer provisions of the Code. If a transfer made under this Section 5.8 is later determined by the Administrator not to have met the requirements of this Section or of the Code or Treasury regulations, the Trustee shall, within a reasonable time after such determination is made, and on instructions from the Administrator, distribute to the Employee the amounts then held in the Trust attributable to the transferred amount. ARTICLE 6. PARTICIPANTS' ACCOUNTS; LIMITATIONS ON CONTRIBUTIONS. 6.1. INDIVIDUAL ACCOUNTS. The Administrator will establish and maintain for each Participant an Account for each type of contribution made on behalf of the Participant under the Plan which will also reflect earnings, expenses, gains and losses attributable thereto, and investments made with amounts in the Account. The Administrator will establish and maintain such other accounts and records as it decides in its discretion to be reasonably required or appropriate in order to discharge its duties under the Plan. 6.2. VALUATION OF ACCOUNTS. Participant Accounts will be valued at their fair market value at least annually as of a date specified by the Sponsor in accordance with a method consistently followed and uniformly applied, and on such date earnings, expenses, gains and losses on investments made with amounts in each Participant's Account will be allocated to such Account. Participants will be furnished statements of their Account values at least once each Plan Year. 6.3. CODE SECTION 415 LIMITATIONS. Notwithstanding any other provisions of the Plan: Subsections (a)(1) through (a)(4)--(These subsections apply to Employers who do not maintain any qualified plan including a Welfare Benefit Fund, an Individual Medical Account or a simplified employee pension in addition to this Plan.) (a)(1) If an Employer does not maintain any other qualified plan, Welfare Benefit Fund, Individual Medical Account or simplified employee pension, the amount of Annual Additions to a Participant's Account for a Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. (a)(2) Prior to the determination of the Participant's actual Compensation for a Limitation Year, the Maximum Permissible Amount may be determined on the basis of the Participant's estimated annual compensation for such Limitation Year. Such estimated annual compensation shall be determined on a reasonable basis and shall be uniformly determined for all Participants similarly situated. Any Employer contributions based on estimated annual compensation shall be reduced by any Excess Amounts carried over from prior years. (a)(3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for such Limitation Year shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (a)(4) If, pursuant to subsection (a)(3), there is an Excess Amount attributable to Employer Contributions (other than Elective Contributions) with respect to a Participant for a Limitation Year, such Excess Amount shall be disposed of as follows: (A) In the event that the Participant is in the service of the Employer which is covered by the Plan at the end of the Limitation Year, then such Excess Amount shall be reapplied to reduce future Employer contributions under this Plan for the next Limitation Year (and for each succeeding year, as necessary) for such Participant, so that in each such Year the sum of actual Employer contributions plus the reapplied amount shall equal the amount of Employer contributions which would otherwise be made to such Participant's Account. (B) In the event that the Participant is not in the service of the Employer which is covered by the Plan at the end of the Limitation Year, then such Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer contributions for all remaining Participants in the next Limitation Year and each succeeding Limitation Year if necessary. (C) If a suspense account is in existence at any time during the Limitation Year pursuant to this subsection, it will not participate in the allocation of the Trust Fund's investment gains and losses. All amounts in the suspense account must be allocated to the Accounts of Participants before any Employer contribution may be made for the Limitation Year. Excess Amounts may not be distributed to Participants or former Participants. Subsections (b)(1) through (b)(6)--(These subsections apply to Employers who, in addition to this Plan, maintain one or more plans, all of which are qualified Master or Prototype defined contribution Plans, any Welfare Benefit Fund, any Individual Medical Account or any simplified employee pension.) (b)(1) If, in addition to this Plan, the Employer maintains any other qualified defined contribution plans (all of which are qualified Master or Prototype Plans), any Welfare Benefit Fund, Individual Medical Account or simplified employee pension, the amount of Annual Additions to a Participant's Account for a Limitation Year, shall not exceed the lesser of: (A) the Maximum Permissible Amount, reduced by the sum of any Annual Additions to the Participant's accounts for the same Limitation Year under such other defined contribution plans and Welfare Benefit Funds; or (B) any other limitation contained in this Plan. (b)(2) Prior to the determination of the Participant's actual Compensation for the Limitation Year, the amounts referred to in (b)(1)(A) above may be determined on the basis of the Participant's estimated annual compensation for such Limitation Year. Such estimated annual compensation shall be determined on a reasonable basis and shall be uniformly determined for all Participants similarly situated. Any Employer contribution based on estimated annual compensation shall be reduced by any Excess Amounts carried over from prior years. (b)(3) As soon as is administratively feasible after the end of the Limitation Year, the amounts referred to in (b)(1)(A) shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (b)(4) If a Participant's Annual Additions under this Plan and all such other plans result in an Excess Amount, such Excess Amount shall be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a Welfare Benefit Fund, an Individual Medical Account or a simplified employee pension will be deemed to have been allocated first regardless of the actual allocation date. (b)(5) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of: (A) the total Excess Amount allocated as of such date (including any amount which would have been allocated but for the limitations of section 415 of the Code), times (B) the ratio of (i) the Annual Additions allocated to the Participant as of such date under this Plan, divided by (ii) the Annual Additions allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of section 415 of the Code). (b)(6) Any Excess Amounts attributed to this Plan shall be disposed of as provided in subsection (a)(4). Subsection (c)--(This subsection applies only to Employers who, in addition to this Plan, maintain one or more qualified plans which are qualified defined contribution plans other than Master or Prototype Plans.) (c) If the Employer also maintains another plan which is a qualified defined contribution plan other than a Master or Prototype Plan, Annual Additions allocated under this Plan on behalf of any Participant shall be limited in accordance with the provisions of (b)(1) through (b)(6), as though the other plan were a Master or Prototype Plan, unless the Employer provides other limitations in the Adoption Agreement. Subsection (d)--(This subsection applies only to Employers who, in addition to this Plan, maintain or at any time maintained a qualified defined benefit plan.) (d) If the Employer maintains, or at any time maintained, a qualified defined benefit plan, the sum of any Participant's Defined Benefit Fraction and Defined Contribution Fraction shall not exceed the combined plan limitation of 1.0 in any Limitation Year. The combined plan limitation will be met as provided by the Employer in the Adoption Agreement. Subsections (e) and (f) - (Applies to all Employers). (e)(1) Notwithstanding the foregoing provisions of this Section 6.3, any Excess Amounts that are attributable to Elective Contributions or Employee Contributions, including income thereon, shall first be returned to Participants to the extent that such return would reduce the Excess Amounts in the Participant's Account. Such amounts shall be disregarded for purposes of Code sections 402(g), 401(k)(3), and 401(m)(2). (f)(1) "Annual Additions" means the sum of the following amounts credited to a Participant for a Limitation Year: (A) all Employer Contributions (including, for this purpose, Elective Contributions), (B) all Employee contributions, (C) all forfeitures, and (D) allocations under a simplified employee pension. For purposes of this Section 6.3, amounts reapplied to reduce Employer contributions under subsection (a)(4) shall also be included as Annual Additions. Amounts allocated to an Individual Medical Account are treated as Annual Additions to a defined contribution plan. Also, amounts derived from contributions which are attributable to post-retirement medical benefits or life insurance benefits allocated to the separate account of a key Employee, as defined in section 419A(d)(2) of the Code, are treated as Annual Additions to a defined contribution plan. For plan years prior to January 1, 1987, Annual Additions shall not include Employee contributions under subsection (f)(1)(B) above, but shall include the lesser of (i) one-half of all nondeductible Employee contributions and (ii) the amount of nondeductible Employee contributions in excess of 6 percent of such Participant's actual Compensation. (f)(2) "Defined Benefit Fraction" means a fraction, the numerator of which is the sum of the Participant's annual benefits (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) under all the defined benefit plans (whether or not terminated) maintained by the Employer, each such annual benefit computed on the assumptions that the Participant will remain in employment until the normal retirement age under each such plan (or the Participant's current age, if later) and that all other factors used to determine benefits under such plan will remain constant for all future Limitation Years, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the Limitation Year under sections 415(b)(1)(A) and 415(d) of the Code or 140 percent of the Participant's average Compensation for the 3 highest consecutive calendar years of service during which the Participant was active in each such plan, including any adjustments under section 415(b) of the Code. However, if the Participant was a participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986 then the denominator of the Defined Benefit Fraction shall not be less than 125 percent of the Participant's total accrued benefit as of the close of the last Limitation Year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plan after May 5, 1986, under all such defined benefit plans as met, individually and in the aggregate, the requirements of section 415 of the Code for all Limitation Years beginning before January 1, 1987. (f)(3) "Defined Contribution Fraction" means a fraction, the numerator of which is the sum for the current and all prior Limitation Years of (A) all Annual Additions (if any) to the Participant's accounts under each defined contribution plan (whether or not terminated) maintained by the Employer, and (B) all Annual Additions attributable to the Participant's nondeductible Employee contributions to all defined benefit plans (whether or not terminated) maintained by the Employer, and the Participant's Annual Additions under each Welfare Benefit Fund, Individual Medical Account or simplified employee pension, and the denominator of which is the sum for the current and all prior Limitation Years during which the Participant was an Employee (regardless of whether the Employer maintained a defined contribution plan in any such year) of the lesser of 125 percent of the dollar limitation in effect under section 415(c)(1)(A) of the Code for each such year or 35 percent of the Participant's Compensation for each such year. If the Participant was a participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined contribution plans maintained by the Employer which were in existence on May 6, 1986 then the numerator of the Defined Contribution Fraction shall be adjusted if the sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment an amount equal to the product of (i) the excess of the sum of the fractions over 1.0 times (ii) the denominator of this fraction will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the plan made after May 6, 1986, but using the section 415 limitation applicable to the first Limitation Year beginning on or after January 1, 1987. (f)(4) "Employer" means the Employer and any Related Employer that adopts this Plan. In the case of a group of employers which constitutes a controlled group of corporations (as defined in section 414(b) of the Code as modified by section 415(h)) or which constitutes trades or businesses (whether or not incorporated) which are under common control (as defined in section 414(c) as modified by section 415(h)) or which constitutes an affiliated service group (as defined in section 414(m)) and any other entity required to be aggregated with the Employer pursuant to regulations issued under section 414(o) of the Code, all such employers shall be considered a single employer for purposes of applying the limitations of this Section 6.3. (f)(5) "Excess Amount" means the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount, less loading and other administrative charges allocable to such excess. (f)(6) "Individual Medical Account" means an individual medical account as defined in section 415(l)(2) of the Code. (f)(7) "Limitation Year" means the Plan Year. This period shall be the same for all qualified plans of the Employer. (f)(8) "Master or Prototype Plan" means a plan the form of which is the subject of a favorable opinion letter from the Internal Revenue Service. (f)(9) "Maximum Permissible Amount" means for a Limitation Year with respect to any Participant the lesser of (i) $30,000 or, if greater, 25 percent of the dollar limitation set forth in section 415(b)(1) of the Code, as in effect for the Limitation Year, or (ii) 25 percent of the Participant's Compensation for the Limitation Year. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12-consecutive month period, the Maximum Permissible Amount will not exceed the limitation in (f)(9)(i) multiplied by a fraction whose numerator is the number of months in the short Limitation Year and whose denominator is 12. The compensation limitation referred to in subsection (f)(9)(ii) shall not apply to any contribution for medical benefits within the meaning of section 401(h) or section 419A(f)(2) of the Code after separation from service which is otherwise treated as an Annual Addition under section 419A(d)(2) or section 415(l)(1) of the Code. (f)(10) "Welfare Benefit Fund" means a welfare benefit fund as defined in section 419(e) of the Code. 6.4. CODE SECTION 402(G) LIMITS. (A) IN GENERAL. The maximum amount of Elective Contributions made on behalf of any Participant for any calendar year, when added to the amount of elective deferrals under all other plans, contracts and arrangements of a Related Employer with respect to the Participant for the calendar year, shall in no event exceed the maximum applicable limit in effect for the calendar year under Regulation section 1.402(g)-1(d). For purposes of the Plan, an individual's elective deferrals for a taxable year are the sum of the following: (i) Any elective contribution under a qualified cash or deferred arrangement (as defined in Code section 401(k)) to the extent not includable in the individual's gross income for the taxable year on account of Code section 402(a)(8) (before applying the limits of Code section 401(g) or this section); (ii) Any employer contribution to a simplified employee pension (as defined in code section 408(k) to the extent not includable in the individual's gross income for the taxable year on account of Code section 402(h)(1)(B) (before applying the limits of Code section 402(g)); (iii) Any employer contribution to a custodial account or annuity contract under section 403(b) under a salary reduction agreement (within the meaning of Code section 3121(a)(5)(D)), and any elective contribution pursuant to an eligible deferred compensation plan under Code section 457, to the extent not includable in the individual's gross income for the taxable year on account of Code section 403(b) or 457 before applying the limits of Code section 402(g); and (iv) Any Employee contribution designated as deductible under a trust described in Code section 501(c)(19) (before applying the limits of Code section 402(g)). A Participant will be considered to have made "excess deferrals" for a taxable year to the extent that the Participant's elective deferrals for the taxable year exceed the applicable limit described above for the year. (B) DISTRIBUTION OF EXCESS DEFERRALS. In the event that an amount is included in a Participant's gross income for a taxable year as a result of an excess deferral under Code section 402(g), and the Participant notifies the Administrator on or before the March 1 following the taxable year that all or a specified part of an Elective Contribution made for his or her benefit represents an excess deferral, the Administrator shall make every reasonable effort to cause such excess deferral, adjusted for allocable income, to be distributed to the Participant no later than the April 15 following the calendar year in which such excess deferral was made. The income allocable to excess deferrals is equal to the allocable gain or loss for the taxable year of the individual, but not the allocable gain or loss for the period between the end of the taxable year and the date of distribution (the "gap period"). Income allocable to excess deferrals for the taxable year shall be determined by multiplying the gain or loss attributable to the Participant's Elective Contribution Account for the taxable year by a fraction, the numerator of which is the Participant's excess deferrals for the taxable year, and the denominator of which is the sum of the Participant's Elective Contribution Account balance as of the beginning of the taxable year plus the Participant's Elective Contributions for the taxable year. No distribution of an excess deferral shall be made during the taxable year of a Participant in which the excess deferral was made unless the correcting distribution is made after the date on which the Plan received the excess deferral and both the Participant and the Plan designates the distribution as a distribution of an excess deferral. The amount of any excess deferrals that may be distributed to a Participant for a taxable year shall be reduced by the amount of Elective Contributions that were excess contributions and were previously distributed to the Participant for the Plan Year beginning with or within such taxable year. (C) TREATMENT OF EXCESS DEFERRALS. For other purposes of the Code, including Code sections 401(a)(4), 401(k)(3), 404, 409, 411, 412, and 416), excess deferrals must be treated as employer contributions even if they are distributed in accordance with paragraph (b) above. However, excess deferrals of a non-Highly Compensated Employee are not to be taken into account for purposes of Code section 401(k)(3) (the actual deferral percentage test) to the extent the excess deferrals are prohibited under Code section 401(a)(30). Excess deferrals are also to be treated as employer contributions for purposes of Code section 415 unless distributed under paragraph (b) above. 6.5. CODE SECTION 401(K)(3) LIMITS. (A) IN GENERAL. Elective Contributions made under the Plan are subject to the limits of Code section 401(k)(3), as more fully described below. The Plan provisions relating to the 401(k)(3) limits are to be interpreted and applied in accordance with Code sections 401(k)(3) and 401(a)(4), which are hereby incorporated by reference, and in such manner as to satisfy such other requirements relating to Code section 401(k) as may be prescribed by the Secretary of the Treasury from time to time. (B) ACTUAL DEFERRAL RATIOS. For each Plan Year, the Administrator will determine the "actual deferral ratio" for each Participant who is eligible for Elective Contributions. The actual deferral ratio shall be the ratio, calculated to the nearest one-hundredth of one percent, as of the Elective Contributions (plus any Qualified Nonelective Contributions) made on behalf of the Participant for the Plan Year to the Participant's Compensation for the applicable period. For purposes of determining a Participant's actual deferral ratio, (i) Elective Contributions will be taken into account only if each of the following requirements are satisfied: (A) the Elective Contribution is allocated to the Participant's Elective Contribution Account as of a date within the Plan Year, is not contingent upon participation in the Plan or performance of services on any date subsequent to that date, and is actually paid to the Trust no later than the end of the 12-month period immediately following the Plan Year to which the contributions relates; and (B) the Elective Contribution relates to Compensation that either would have been received by the Participant in the Plan Year but for the Participant's election to defer under the Plan, or is attributable for services performed in the Plan Year and, but for the Participant's election to defer, would have been received by the Participant within 2 months after the close of the Plan Year. To the extent Elective Contributions which meet the requirements of (A) and (B) above constitute excess deferrals, they will be taken into account for each Highly Compensated Employee, but will not be taken into account for any non-Highly Compensated Employee. (ii) in the case of a Participant who is a Highly Compensated Employee for the Plan Year and is eligible to have elective deferrals (and qualified nonelective or qualified matching contributions, to the extent treated as elective deferrals) allocated to his or her accounts under two or more cash or deferred arrangements described in Code section 401(k) maintained by a Related Employer, the Participant's actual deferral ratio shall be determined as if such elective deferrals (as well as qualified nonelective or qualified matching contributions) are made under a single arrangement, and if two or more of the cash or deferred arrangements have different Plan Years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement; (iii) for purposes of determining the actual deferral ratio of a Participant who is a 5 percent owner or one of the 10 most highly paid Highly Compensated Employees, the Elective Contributions (and any Qualified Nonelective Contributions treated as Elective Contributions) and Compensation of such Participant shall include the Elective Contributions (and Qualified Nonelective Contributions treated as Elective Contributions) and Compensation for the Plan Year of the Participant's family members (as defined in Code section 414(q)(6)), such family members shall be disregarded as separate Employees for purposes of determining the actual deferral ratio of both Highly Compensated Employees and non-Highly Compensated Employees, and in the event that there are excess contributions with respect to such family members, the excess shall be allocated among such family members in proportion to their Elective Contributions; (iv) the applicable period for determining Compensation for each Participant for a Plan Year shall be the 12-month period ending on the last day of such Plan Year; provided, that to the extent permitted under Regulations, the Administrator may choose, on a uniform basis, to treat as the applicable period only that portion of the Plan Year during which the individual was a Participant; (v) Qualified Nonelective Contributions made on behalf of Participants who are eligible to receive Elective Contributions shall be treated as Elective Contributions to the extent permitted by Regulation section 1.401(k)-1(b)(5); (vi) in the event that the Plan satisfies the requirements of Code sections 401(k), 410(a)(4), or 410(b) only if aggregated with one or more other plans with the same plan year, or if one or more other plans with the same Plan Year satisfy such Code sections only if aggregated with this Plan, then this section shall be applied by determining the actual deferral ratios as if all such plans were a single plan; (vii) an Employee who would be a Participant but for the failure to make Elective Contributions shall be treated as a Participant on whose behalf no Elective Contributions are made; and (viii) Elective Contributions which are made on behalf of non-Highly Compensated Employees which could be used to satisfy the Code section 401(k)(3) limits but are not necessary to be taken into account in order to satisfy such limits, may instead be taken into account for purposes of the Code section 401(m) limits to the extent permitted by Regulation section 1.401(m)-1(b)(5). (C) ACTUAL DEFERRAL PERCENTAGES. The actual deferral ratios for all Highly Compensated Employees who are eligible for Elective Contributions for a Plan Year shall be averaged to determine the actual deferral percentage for the highly compensated group for the Plan Year, and the actual deferral ratios for all Employees who are not Highly Compensated Employees but are eligible for Elective Contributions for the Plan Year shall be averaged to determine the actual deferral percentage for the nonhighly compensated group for the Plan Year. The actual deferral percentages for any Plan Year must satisfy at least one of the following tests: (i) the actual deferral percentage for the highly compensated group does not exceed 125% of the actual deferral percentage for the nonhighly compensated group; or (ii) the excess of the actual deferral percentage for the highly compensated group over the actual deferral percentage for the nonhighly compensated group does not exceed two percentage points, and the actual deferral percentage for the highly compensated group does not exceed twice the actual deferral percentage of the nonhighly compensated group. (D) ADJUSTMENTS BY ADMINISTRATOR. If, prior to the time all Elective Contributions for a Plan Year have been contributed to the Trust, the Administrator determines that Elective Contributions are being made at a rate which will cause the Code section 401(k)(3) limits to be exceeded for the Plan Year, the Administrator may, in its sole discretion, limit the amount of Elective Contributions to be made with respect to one or more Highly Compensated Employees for the balance of the Plan Year by suspending or reducing Elective Contribution elections to the extent the Administrator deems appropriate. Any Elective Contributions which would otherwise be made to the Trust shall instead be paid to the affected Participant in cash. (E) EXCESS CONTRIBUTIONS. If the Code section 401(k)(3) limits have not been met for a Plan Year after all contributions for the Plan Year have been made, the Administrator will determine the amount of excess contributions with respect to Participants who are Highly Compensated Employees. To do so, the Administrator will reduce the actual deferral ratio of the Highly Compensated Employee with the highest actual deferral ratio to the extent necessary to (i) enable the Plan to satisfy the 401(k)(3) limits or (ii) cause such Employee's actual deferral ratio to equal the actual deferral ratio of the Highly Compensated Employee with the next highest actual deferral ratio, and will repeat this process until the Plan satisfies the Code section 401(k)(3) limits. The amount of excess contributions for each Highly Compensated Employee for the Plan Year shall equal the amount of Elective Contributions (plus Qualified Nonelective Contributions which are treated as Elective Contributions for purposes of the Code section 401(k)(3) limits) actually made to the Trust for the Plan Year, less the product of (i) the Highly Compensated Employee's reduced actual deferral ratio as determined under the preceding sentence, and (ii) his or her Compensation. Any excess contributions will be distributed or, if Employee Contributions are permitted, recharacterized, as provided below. In no event will excess contributions remain unallocated or be allocated to a suspense account for allocation in a future Plan Year. (F) DISTRIBUTION OF EXCESS CONTRIBUTIONS. Unless a Participant elects to have his or her excess contributions recharacterized, the Participant's excess contributions, adjusted for income, will be designated by the Employer as a distribution of excess contributions and distributed to the Participant. The income allocable to excess contributions is equal to the allocable gain or loss for the Plan Year, but not the allocable gain or loss for the period between the end of the Plan Year and the date of distribution (the "gap period"). Income allocable to excess contributions for the Plan Year shall be determined by multiplying the gain or loss attributable to the Participant's Elective Contribution Account and QNEC Account balances by a fraction, the numerator of which is the excess contributions for the Participant for the Plan Year, and the denominator of which is the sum of the Participant's Elective Contribution Account and QNEC Account balances as of the beginning of the Plan Year plus the Participant's Elective Contributions and Qualified Nonelective Contributions for the Plan Year. Distribution of excess contributions will be made after the close of the Plan Year to which the contributions relate, but within 12 months after the close of such Plan Year. Excess contributions shall be treated as annual additions under the Plan, even if distributed under this paragraph. (G) If Employee Contributions are permitted under the Adoption Agreement, then in lieu of receiving a distribution of excess contributions, a Highly Compensated Employee may elect, at such time and in such manner as the Administrator may prescribe, to have all or a portion of his or her excess contributions recharacterized as Employee Contributions. Excess contributions may be recharacterized only to the extent that additional Employee Contributions otherwise could have been contributed by the Highly Compensated Employee for the Plan Year under the Plan, and must be recharacterized no later than two and one-half months after the close of the Plan Year to which the recharacterization relates. If a Highly Compensated Employee elects recharacterization, the Administrator will (i) timely provide such forms to the Highly Compensated Employee and his or her Participating Employer, and take such other action, as the Internal Revenue Service shall require, and (ii) account for such recharacterized amounts as contributions by the Highly Compensated Employee for purposes of Code sections 72 and 6047. Recharacterized excess contributions shall continue to be treated as Elective Contributions for all purposes under the Plan other than determination of the Code section 401(k)(3) and 401(m) limits. (H) SPECIAL RULES. For purposes of recharacterizing or distributing excess contributions, (i) the amount of excess contributions that may be recharacterized or distributed with respect to a Highly Compensated Employee for a Plan Year shall be reduced by the amount of excess deferrals previously distributed to the Highly Compensated Employee for his or her taxable year ending with or within such Plan Year. (ii) The determination and correction of excess contributions with respect to a Highly Compensated Employee whose actual deferral ratio is determined pursuant to the family aggregation rules will be accomplished by reducing the actual deferral ratio as required above and allocating the excess contributions for the family group among family members in proportion to the Elective Contribution of each family member that is combined to determine the actual deferral ratio. (I) RECORDKEEPING REQUIREMENT. The Administrator shall maintain such records as are necessary to demonstrate compliance with the Code section 401(k)(3) limits including the extent to which Qualified Nonelective Contributions are taken into account in determining the actual deferral ratios. (J) EFFECT ON MATCHING CONTRIBUTIONS. A Participant's Elective Contributions which are returned or recharacterized as a result of the Code section 401(k)(3) limits for a Plan Year shall not be taken into account in determining the amount of any Matching Contributions to be made for the Participant's benefit for the Year. To the extent Matching Contributions have already been made with respect to the Elective Contributions at the time the Elective Contributions are determined to be excess contributions, such Matching Contributions shall be distributed to the Participant at the same time as the Elective Contributions are returned or recharacterized. (K) EXCISE TAX WHERE FAILURE TO CORRECT. If the excess contributions are not corrected within 2 1/2 months after the close of the Plan Year to which they relate, the Employer will be liable for a 10 percent excise tax on the amount of excess contributions attributable to them, to the extent provided by Code section 4979. Qualified Nonelective Contributions properly taken into account under this Section for the Plan Year may enable the Plan to avoid having excess contributions, even if the contributions are made after the close of the 2 1/2 month period. 6.6. CODE SECTION 401(M) LIMITS. (A) IN GENERAL. Employee and Matching Contributions made under the Plan are subject to the limits of Code section 401(m), as more fully described below. The Plan provisions relating to the 401(m) limits are to be interpreted and applied in accordance with Code sections 401(m) and 401(a)(4), which are hereby incorporated by reference, and in such manner as to satisfy such other requirements relating to Code section 401(m) as may be prescribed by the Secretary of the Treasury from time to time. (B) ACTUAL CONTRIBUTION RATIOS. For each Plan Year, the Administrator will determine the "actual contribution ratio" for each Participant who is eligible for Employee Contributions or Matching Contributions. The actual contribution ratio shall be the ratio, calculated to the nearest one-hundredth of one percent, of the sum of the Employee Contributions, Matching Contributions, and Qualified Nonelective Contributions which are not treated as Elective Contributions made on behalf of the Participant for the Plan Year, to the Participant's Compensation for the Plan Year. For purposes of determining a Participant's actual contribution ratio, (i) An Employee Contribution shall be taken into account for the Plan Year in which the Contribution is made to the Trust. A payment by the Participant to an agent of the Trustee (including the Employer) shall be treated as a contribution to the Trust at the time of payment to the agent if the funds are transmitted to the Trust within the time allotted by the Plan. A Matching Contribution will be taken into account only if the Contribution is allocated to a Participant's Account as of a date within the Plan Year, is actually paid to the Trust no later than 12 months after the close of the Plan Year, and is made on behalf of a Participant on account of the Participant's Elective Contributions for the Plan Year. (ii) For purposes of determining the actual contribution ratio of a Participant who is a 5 percent owner or one of the 10 most highly paid Highly Compensated Employees, the Matching Contributions and Compensation of such Participant shall include the Employee Contributions, Matching Contributions, Qualified Nonelective Contributions treated as Matching Contributions, and Compensation for the Plan Year of the Participant's family members (as defined in Code section 414(q)(6)), and such family members shall be disregarded as separate Employees for purposes of determining the actual contribution ratio of both Highly Compensated Employees and non-Highly Compensated Employees. (iii) In the case of a Participant who is a Highly Compensated Employee for the Plan Year and is eligible to have matching contributions or Employee contributions (including amount treated as matching contributions) allocated to his or her accounts under two or more plans maintained by a Related Employer which may be aggregated for purposes of Code sections 410(b) and 401(a)(4), the Participant's actual contribution ratio shall be determined as if such contributions are made under a single plan, and if two or more of the plans have different Plan Years, all plans ending with or within the same calendar year shall be treated as a single plan. (iv) The applicable period for determining Compensation for each Participant for a Plan Year shall be the 12-month period ending on the last day of such Plan Year; provided, that to the extent permitted under Regulations, the Administrator may choose, on a uniform basis, to treat as the applicable period only that portion of the Plan Year during which the individual was a Participant. (vi) In the event that the Plan satisfies the requirements of Code sections 401(k), 410(a)(4), or 410(b) only if aggregated with one or more other plans with the same plan year, or if one or more other plans with the same Plan Year satisfy such Code sections only if aggregated with this Plan, then this section shall be applied by determining the actual deferral ratios as if all such plans were a single plan. (v) Elective Contributions not applied to satisfy the Code section 401(k)(3) limits and Qualified Nonelective Contributions not treated as Elective Contributions may be treated as Matching Contributions to the extent permitted by Regulation section 1.401(m)-1(b)(5). (vii) Elective Contributions which are recharacterized as Employee Contributions shall be taken into account as Employee Contributions for the Plan Year that includes the time at which the excess contributions are includible in the gross income of the Participant. (viii) Any forfeitures under the Plan which are applied against Matching Contributions shall be treated as Matching Contributions. (C) ACTUAL CONTRIBUTION PERCENTAGES. The actual contribution ratios for all Highly Compensated Employees who are eligible for Employee Contributions or Matching Contributions for a Plan Year shall be averaged to determine the actual contribution percentage for the highly compensated group for the Plan Year, and the actual contribution ratios for all Employees who are not Highly Compensated Employees but are eligible for Employee Contributions or Matching Contributions for the Plan Year shall be averaged to determine the actual contribution percentage for the nonhighly compensated group for the Plan Year. The actual contribution percentages for any Plan Year must satisfy at least one of the following tests: (i) The actual contribution percentage for the highly compensated group does not exceed 125% of the actual contribution percentage for the nonhighly compensated group; or (ii) The excess of the actual contribution percentage for the highly compensated group over the actual contribution percentage for the nonhighly compensated group does not exceed two percentage points, and the actual contribution percentage for the highly compensated group does not exceed twice the actual contribution percentage of the nonhighly compensated group. (D) MULTIPLE USE TEST. In the event that (i) the actual deferral percentage and actual contribution percentage for the highly compensated group each exceed 125% of the respective actual deferral and actual contribution percentages for the nonhighly compensated group, and (ii) the sum of the actual deferral percentage and the actual contribution percentage for the highly compensated group exceeds the "aggregate limit" within the meaning of Regulation section 1.401(m)-2(b)(3), the Administrator shall reduce the actual contribution ratios of Highly Compensated Employees who had both an actual deferral ratio and an actual contribution ratio for the Plan Year to the extent required by such section and in the same manner as described in paragraph (f) below. (E) ADJUSTMENTS BY ADMINISTRATOR. If, prior to the time all Employee Contributions or Matching Contributions for a Plan Year have been contributed to the Trust, the Administrator determines that such Contributions are being made at a rate which will cause the Code section 401(m) limits to be exceeded for the Plan Year, the Administrator may, in its sole discretion, limit the amount of such Contributions to be made with respect to one or more Highly Compensated Employees for the balance of the Plan Year by limiting the amount of such Contributions to the extent the Administrator deems appropriate. (F) EXCESS AGGREGATE CONTRIBUTIONS. If the Code section 401(m) limits have not been satisfied for a Plan Year after all contributions for the Plan Year have been made, the excess of the aggregate amount of the Employee Contributions and Matching Contributions (and any Qualified Nonelective Contribution or elective deferral taken into account in computing the actual contribution percentages) actually made on behalf of Highly Compensated Employees for the Plan Year over the maximum amount of such contributions permitted under Code section 401(m)(2)(A) shall be considered to be "excess aggregate contributions". The Administrator shall determine the amount of excess aggregate contributions made with respect to each Participant who is a Highly Compensated Employee. To do so, the Administrator will reduce the actual contribution ratio of the Highly Compensated Employee with the highest actual contribution ratio to the extent necessary to (i) enable the Plan to satisfy the section 401(m) limits or (ii) cause such Employee's actual contribution ratio to equal the actual contribution ratio of the Highly Compensated Employee with the next highest actual contribution ratio, and will repeat this process until the Plan satisfies the Code section 401(m) limits. The amount of excess aggregate contributions for each Highly Compensated Employee for the Plan Year shall equal the amount of Employee Contributions and Matching Contributions (plus Elective Contributions and Qualified Nonelective Contributions for purposes of the Code section 401(m) limits) actually made to the Trust for the Plan Year, less the product of (i) the Highly Compensated Employee's reduced actual contribution ratio as determined under the preceding sentence, and (ii) his or her Compensation. Any excess aggregate contributions will be distributed as provided below to the Highly Compensated Employee to which they are attributable. In no event will excess aggregate contributions remain unallocated or be allocated to a suspense account for allocation in a future Plan Year. (G) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. A Participant's excess aggregate contributions, adjusted for income will be designated by the Employer as a distribution of excess aggregate contributions, and distributed to the Participant. The income allocable to excess aggregate contributions is equal to the allocable gain or loss for the taxable year of the individual, but not the allocable gain or loss for the period between the end of the taxable year and the date of distribution (the "gap period"). Income allocable to excess aggregate contributions for the taxable year shall be determined by multiplying the gain or loss attributable to the Participant's Employee Contribution Account and Matching Contribution Account balances by a fraction, the numerator of which is the excess aggregate contributions for the Participant for the Plan Year, and the denominator of which is the sum of the Participant's Employee Contribution Account and Matching Contribution Account balances as of the beginning of the Plan Year plus the Participant's Employee Contributions and Matching Contributions for the Plan Year. Distribution of excess aggregate contributions will be made after the close of the Plan Year to which the contributions relate, but within 12 months after the close of such Plan Year. Excess aggregate contributions shall be treated as employer contributions for purposes of Code sections 401(a)(4), 404, and 415 even if distributed from the Plan. (H) SPECIAL RULES. For purposes of distributing excess aggregate contributions, (i) The determination and distribution of excess aggregate contributions with respect to a Highly Compensated Employee whose actual contribution ratio is determined pursuant to the family aggregation rules will be accomplished by reducing the actual contribution ratio as required above and allocating the excess aggregate contributions for the family group among family members in proportion to the Employee Contributions and Matching Contributions of each family member that is combined to determine the actual contribution ratio. (ii) Distribution of excess aggregate contributions (in each case adjusted for income or loss) shall be accomplished in the following order: (1) unmatched Employee Contributions, (2) Matching Contributions attributable to Employee Contributions, simultaneously with such Employee Contributions; and (3) Matching Contributions attributable to Elective Contributions. (I) RECORDKEEPING REQUIREMENT. The Administrator shall maintain such records as are necessary to demonstrate compliance with the Code section 401(m) limits, including the extent to which Elective Contributions and Qualified Nonelective Contributions are taken into account in determining the actual contribution ratios. (J) EXCISE TAX WHERE FAILURE TO CORRECT. If the excess aggregate contributions are not corrected within 2 1/2 months after the close of the Plan Year to which they relate, the Participating Employers will be liable for a 10 percent excise tax on the amount of excess aggregate contributions attributable to them, to the extent provided by Code section 4979. Qualified Nonelective Contributions properly taken into account under this section for the Plan Year may enable the Plan to avoid having excess aggregate contributions, even if the contributions are made after the close of the 2 1/2 month period. ARTICLE 7. INVESTMENT OF CONTRIBUTIONS. 7.1. ELIGIBLE INVESTMENTS; MANNER OF INVESTing. The Accounts of Participants shall be invested and reinvested only in Eligible Investments selected by the Employer for purposes of the Plan. The Administrator may prescribe rules permitting a Participant to direct the investment of the contributions made for his or her benefit within or among Eligible Investments, and, at such times and in such manner as the Administrator may prescribe, change such investment directions. The Employer may determine that the Plan is to be an "ERISA section 404(c) plan" (within the meaning of ERISA section 404(c) and the regulations promulgated thereunder), in which event the Plan will provide Participants and Beneficiaries an opportunity to exercise control over assets in their individual Accounts, as well as an opportunity to choose, from a broad range of investment alternatives, the manner in which some or all of the assets in the Account are invested. In so doing, Participants will be given a reasonable opportunity to give investment instructions (in writing or otherwise, with an opportunity to obtain written confirmation of such instructions) to the Administrator who will be obligated to comply with such instructions except as otherwise provided under the ERISA section 404(c) regulations. To the extent required by the ERISA section 404(c) regulations, any writings, and any information described in paragraph (b)(2)(B) of such regulations, shall be deemed to be part of the Plan for purposes of such section and are incorporated by reference hereto. To the extent investment instructions are not to be made by Participants, Beneficiaries or alternate payees, they shall be made by the Administrator (or such other person as may be designated by the Employer). 7.2. IDENTIFIED PLAN FIDUCIARY. To the extent the plan is intended to be an ERISA section 404(c) plan, the "identified plan fiduciary" described in paragraphs (b)(2)(A) and (B) of the ERISA section 404(c) regulations who is responsible for complying with investment instructions and distributing the information described in paragraphs (b)(2)(B) of such regulations shall be the Administrator (or such person or persons as may be designated by the Employer). 7.3. TRUSTEE DUTIES LIMITED. The Trustee shall have no duty to inquire into the investment instructions with respect to any Account, and shall have no duty to advise any Employer, Participant, Beneficiary, or alternate payee or any other person regarding the purchase, retention or sale of assets credited to any Account hereunder. 7.4. ALTERNATE PAYEES. To the extent required by a qualified domestic relations order as defined in section 414(p) of the Code, an alternate payee shall make investment decisions with respect to a Participant's Account as though such alternate payee were the Participant. 7.5. ACCOUNTING. All dividends, interest, gains and distributions of any nature received in respect of Registered Investment Company Shares shall be reinvested in additional shares of that Registered Investment Company. Dividends, interest, gains and distributions of any nature received in respect of other Eligible Investments shall be invested in accordance with the investment instructions of the Participant. 7.6. NO INSTRUCTIONS RECEIVED. If the Trustee receives any contribution under the Plan as to which investment instructions have not been provided, the Trustee shall promptly notify the Administrator and the Administrator shall take steps to elicit instructions from the appropriate person. The Trustee shall credit any such contribution to the Participant's Account and such amount shall be invested in the Eligible Investment selected by the Employer until investment instructions have been received by the Trustee. 7.7. EXPENSES. Expenses attributable to the acquisition of investments shall be charged to the Account of the Participant for which such investment is made. ARTICLE 8. RIGHT TO BENEFITS. 8.1. NORMAL RETIREMENT. Each Participant who attains the Normal Retirement Age will have a nonforfeitable interest in his or her Account. If a Participant retires upon the attainment of Normal Retirement Age, such retirement is referred to as a normal retirement. Upon normal retirement the balance of the Participant's Account, plus any amounts thereafter credited to the Account, subject to the provisions of Section 8.8, will be distributed to the Participant in accordance with Article 9 below. 8.2. LATE RETIREMENT. If a Participant continues in the service of the Employer after attainment of Normal Retirement Age, the Participant will continue to have a nonforfeitable interest in his or her Account and will continue to participate in the Plan until the date established with the Employer for his or her late retirement. Upon the earlier of the Participant's late retirement or Required Beginning Date, the balance of Account, plus any amounts thereafter credited to the Account, subject to the provisions of Section 8.8, will be distributed to the Participant in accordance with Article 9 below. 8.3. DISABILITY RETIREMENT. If a Participant becomes disabled so that he or she cannot engage in any substantial, gainful activity because of a medically determinable physical or mental impairment likely to result in death or to be of a continuous period of not less than 12 months, and terminates employment with the Employer, the Participant will have a nonforfeitable interest in his or her Account, the balance of which Account, plus any amounts thereafter credited to the Participant's Account, subject to the provisions of Section 8.8, will be distributed to the Participant in accordance with Article 9 below. Such termination of employment is referred to as a disability retirement. Determinations with respect to disability shall be made by the Administrator on the basis of medical evidence satisfactory to the Administrator and shall be conclusive for purposes of the Plan. 8.4. DEATH. Subject, if applicable, to Section 9.4 below, if a Participant dies before the distribution of his or her Account has commenced, or before such distribution has been completed, the Participant's designated Beneficiary or Beneficiaries will be entitled to receive the balance or remaining balance of the Participant's Account, plus any amounts thereafter credited to the Participant's Account, subject to the provisions of Section 8.8. Distribution to the Beneficiary or Beneficiaries will be made in accordance with Article 9 below. A Participant may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries by giving notice to the Administrator on a form acceptable to the Trustee. The Administrator will file a copy of the completed designation form with the Trustee. If more than one person is designated as the Beneficiary, their respective interests shall be as indicated on the designation form. Unless otherwise indicated on the designation form, each Beneficiary's interest shall be contingent upon surviving the Participant. If Section 9.4(b) and (c) do not apply to the Participant, however, the designation of a Beneficiary who is not the Participant's spouse will be effective only if such designation satisfies the requirements of Section 9.4(d) below. If upon the death of the Participant there is, in the opinion of the Trustee, no designated Beneficiary for part or all of the Participant's Account, such amount will be paid to his or her surviving spouse or, if none, to his or her estate (such spouse or estate shall be deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies after benefits to such Beneficiary have commenced, but before they have been completed, and, in the opinion of the Trustee, no person has been designated to receive such remaining benefits, then such benefits shall be paid in a lump sum to the deceased Beneficiary's estate. 8.5. OTHER TERMINATION OF EMPLOYMENT. If a Participant terminates his or her employment for any reason other than death or normal, late, or disability retirement, the Participant will be entitled under this Section 8.5 to a termination benefit equal to (i) 100% of the value of his or her Elective Contribution Account, Employee Contribution Account, QNEC Account and Rollover Contribution Account and (ii) a percentage of the value of his or her Matching Contribution Account and Discretionary Contribution Account, such percentage determined in accordance with the vesting schedule selected by the Employer in the Adoption Agreement. The amount payable under this Section 8.5 will be subject to the provisions of Section 8.8 and will be distributed in accordance with Article 9 below. 8.6. SEPARATE ACCOUNT. If a distribution of a Participant's Account has been made at a time when he or she has a nonforfeitable right to less than 100 percent of the Account, the vesting schedule in Section 8.5 will thereafter apply only to amounts in the Account attributable to Employer contributions allocated after such distribution. The balance of the Account immediately after such distribution will be transferred to a separate account which will be maintained for the purpose of determining his or her interest therein according to the following provisions. At any relevant time prior to a forfeiture of any portion thereof under Section 8.7 a Participant's nonforfeitable interest in his or her Account held in a separate account described in the preceding paragraph will be equal to P(AB + D)-D, where P is the nonforfeitable percentage at the relevant time determined under Section 8.5; AB is the account balance of the separate account at the relevant time; and D is the amount of the distribution. Following a forfeiture of any portion of such separate account under Section 8.7 below, any balance in the Participant's separate account will remain fully vested and nonforfeitable. 8.7. FORFEITURES. If a Participant terminates employment, any portion of his or her Account (including any amounts credited after termination of employment) not payable to the Participant under Section 8.5 will be forfeited by him or her as of the earlier of (i) the date of the complete distribution to the Participant of the vested portion of his or her Account, if any, or (ii) the date on which he or she has five consecutive One Year Periods of Severance, subject to the possibility of reinstatement as described in the following paragraph. Such forfeitures will be applied to the Employer's Discretionary Contributions or Matching Contributions, as determined by the Employer for the next Plan Year. In the case of a terminated Participant whose vested portion of his or her Account is zero percent (0%), such terminated Participant shall be deemed to have received a distribution of his or her vested portion upon his or her termination of employment. If a Participant who has forfeited any portion of an Account under the preceding paragraph does not again become an Employee prior to the date on which he or she has five consecutive One Year Periods of Severance, then the amount so forfeited shall be permanently forfeited. If a Participant forfeits any portion of an Account under the preceding paragraph but does again become an Employee prior to such date, then the amount so forfeited, without any adjustment for the earnings, expenses, or losses or gains of the assets credited to an Account since the date forfeited, will be recredited to an Account (or to a separate account as described in Section 8.6, if applicable) as of the last day of the Plan Year in which he or she again becomes an Employee, but only if the Participant repays to the Plan within five years after the date of his or her reemployment the amount previously distributed to the Participant, without interest, under Section 8.5. The provisions of the Plan (including Section 8.6) will thereafter apply as if no forfeiture had occurred. The amount to be recredited pursuant to this paragraph will be derived first from the forfeitures, if any, which as of the date of recrediting have yet to be applied as provided in the preceding paragraph and, to the extent such forfeitures are insufficient, from a special Employer contribution to be made by the Employer. 8.8. ADJUSTMENT FOR INVESTMENT EXPERIENCE. All amounts held in an Account, until distributed, will be subject to adjustment until distributed to reflect the income and gain or loss on the investments in which such amount is invested and any expenses properly charged under the Plan and Trust to such amounts. 8.9. EMPLOYEE CONTRIBUTIONS. If (and to the extent) permitted under the Adoption Agreement, a Participant may make a withdrawal from his or her Employee Contribution Account for any reason, but with such prior notice as the Administrator may prescribe. Any such withdrawal shall be in the amount specified by the Participant up to the value of such Account, and shall be made as soon as practicable after notice of withdrawal is received by the Administrator. 8.10. HARDSHIP WITHDRAWALS. If permitted under the Adoption Agreement, a Participant may apply to the Administrator for a hardship withdrawal in accordance with the following rules. (A) IMMEDIATE AND HEAVY FINANCIAL NEED. A Participant who is an Employee may make a withdrawal from his or her Accounts in the event of an immediate and heavy financial need arising from (i) expenses for medical care described in Code section 213(d) previously incurred by the Participant, his or her spouse or any of his or her dependents (as defined in Code section 152) or necessary care for these persons to obtain such medical care; (ii) costs directly related to the purchase of a principal residence of the Participant (excluding mortgage payments); (iii) the payment of tuition and related educational fees for the next 12-months of post-secondary education for the Participant, his or her spouse, children or dependents (as defined in Code section 152); or (iv) payments necessary to prevent the eviction of the Participant from his or her principal residence or foreclosure on the mortgage on that principal residence. The Administrator's determination of whether there is an immediate and heavy financial need as defined above shall be made solely on the basis of written evidence furnished by the Participant. Such evidence must also indicate the amount of such need. Amounts attributable to integrated contributions under Section 5.1 may not be withdrawn for hardship reasons. (B) DISTRIBUTION OF AMOUNT NECESSARY TO MEET NEED. As soon as practicable after the Administrator's determination that an immediate and heavy financial need exists with respect to the Participant and that the Participant has obtained all other distributions (other than hardship distributions) and all nontaxable loans currently available under the Plan and all other plans maintained by the Related Employers, the Administrator will direct the Trustee to pay to the Participant the amount necessary to meet the need created by the hardship (but not in excess of the value of the vested portion of the Participant's Accounts). The amount necessary to meet the need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. Distribution from the Participant's Accounts in the event of a hardship will be made in the following order: (i) from his or her Rollover Account, (ii) from his or her Employee Contribution Account, (iii) from his or her Matching Contribution Account, (iv) from his or her Discretionary Contribution Account, (v) from his or her Elective Contribution Account (provided that no portion of an Elective Contribution Account attributable to income earned after December 31, 1988 may be distributed due to a financial hardship). In no event may a hardship withdrawal be made from a QNEC Account. (C) EFFECT OF HARDSHIP DISTRIBUTION. If a Participant receives a hardship distribution from his or her Elective Contribution Account, then any Elective Contribution election, Employee Contribution election, or any other cash-or-deferred or Employee contribution election in effect with respect to the Participant under the Plan or any other qualified plan maintained by a Related Employer shall be suspended for the 12-month period beginning with the amount of Elective Contributions made for the benefit of the Participant, together with any elective deferrals made on behalf of the Participant under any other plan maintained by the Related Employer for the calendar year immediately following the calendar year of the hardship distribution must not exceed the applicable limit under Code 402(g) for such next calendar year, less the amount of such contributions made on behalf of the Participant for the calendar year of the hardship distribution. 8.11. WITHDRAWALS AFTER AGE 59 1/2. If permitted under the Adoption Agreement, a Participant who is an Employee and has attained age 59 1/2 may make a withdrawal from any one or more of his or her Accounts for any reason, but with such prior notice as the Administrator may prescribe. Any such withdrawal shall be in the amount specified by the Participant, up to the value of the Participant's vested portion of the particular Account. ARTICLE 9. DISTRIBUTION OF BENEFITS. 9.1. DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES. Subject to Sections 9.4 and 9.5 below, distributions from the Trust to a Participant or to the Beneficiary of the Participant may be made in any of the following methods as the Participant selects: (a) if permitted under the Adoption Agreement, in a lump sum in cash or in kind; (b) if permitted under the Adoption Agreement, in substantially equal annual, or more frequent, installments, in cash or in kind, over a period certain which does not extend beyond the life expectancy of the Participant or the joint life expectancies of the Participant and his or her Beneficiary, or, if the Participant dies prior to the commencement of his or her benefits, the life expectancy of the Participant's Beneficiary; (c) if permitted under the Adoption Agreement, by purchase and delivery of an annuity contract described in Sections 9.3 or 9.4. Notwithstanding the foregoing provisions of this Section 9.1, (i) if a Participant's Account is, and at the time if any prior distribution was, $3,500 or less, or (ii) provided the Participant (and to the extent required by Code sections 401(a)(11) or 417, his or her spouse) consents in writing to such distribution in accordance with Section 9.6, if a Participant's Account exceeds, or at the time of any prior distribution exceeded, $3,500 but is $10,000 or less, the balance of such Account shall be distributed in a lump sum. 9.2. PRIOR DISTRIBUTION ELECTIONS. The requirements of this Article (other than Section 9.4) will not preclude distribution on behalf of a Participant at another time, in another form or over a different period if all of the following requirements are met: (a) The distribution by the Trust is one which would not have disqualified such Trust under section 401(a)(9) of the Internal Revenue Code as in effect prior to amendment by the Deficit Reduction Act of 1984. (b) The distribution is in accordance with a method of distribution designated by the Participant whose interest in the Trust is being distributed or, if the Participant is deceased, by a Beneficiary of such Participant. (c) The designation of method of distribution was in writing, was signed by the Participant or the Beneficiary, and was made before January 1, 1984. (d) The Participant had accrued a benefit under the Plan (or a predecessor plan) as of December 31, 1983. (e) The method of distribution designated by the Participant or the Beneficiary specifies the time at which distributions will be made, and in the case of any distribution upon the Participant's death, the Beneficiaries of the Participant listed in order of priority. A distribution upon death will not be covered by this Section unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the Participant. For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Participant, or the Beneficiary, to whom such distribution is being made, will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in subsections (a) and (e). If a designation of method of distribution is revoked, any subsequent distribution must satisfy the requirements of section 401(a)(9) of the Code and the regulations thereunder, including the minimum distribution incidental benefit requirement of Regulations section 1.401(a)(9)-2 or any successor regulations of similar import. If a designation is revoked after the date distributions are required to begin, the total amount not yet distributed which would have been required to be distributed under section 401(a)(9) of the Code and the regulations thereunder but for the prior distribution election shall be distributed by the close of the calendar year following the calendar year in which the revocation occurs. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another Beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, as long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life). If an amount is transferred or rolled over from a qualified plan to the Plan or from the Plan to another qualified plan, the rules in Q&A J-2 and Q&A J-3 of such Regulations shall apply. 9.3. ANNUITY DISTRIBUTIONS. The provisions of this Section apply to distributions made in whole or in part in the form of an annuity contract. (a) An annuity contract distributed under the Plan must be purchased from an insurance company and must be nontransferable. The terms of an annuity contract shall comply with the requirements of the Plan and distributions under such contract shall be made in accordance with section 401(a)(9) of the Code and the regulations thereunder. (b) The payment period of an annuity contract distributed to the Participant pursuant to Section 9.1 may be as long as the Participant lives. If the Participant is married, the payment period of an annuity contract may be for as long as either the Participant or his or her spouse lives, or, if the Participant has designated an individual as his or her Beneficiary in accordance with Section 8.4, for as long as either the Participant or such individual lives. Such an annuity may provide for an annuity certain feature for a period not exceeding the life expectancy of the Participant. If the annuity is payable to the Participant and his or her spouse such period may not exceed the joint life and last survivor expectancy of the Participant and his or her spouse, or, if the annuity is payable to the Participant and a designated Beneficiary, the joint life and last survivor expectancy of the Participant and such Beneficiary. If the Participant dies prior to the commencement of his or her benefits, the payment period of an annuity contract distributed to the Beneficiary of the Participant pursuant to Section 9.1 may be as long as the Participant's Beneficiary lives, and may provide for an annuity certain feature for a period not exceeding the life expectancy of the Beneficiary. Any annuity contract distributed under the Plan must provide for nonincreasing payments. 9.4. JOINT AND SURVIVOR ANNUITIES. (A) APPLICATION. The provisions of this Section supersede any conflicting provisions of the Plan. The provisions of subsections (b), (c) and (d) of this Section apply only to a Participant who is described in both paragraphs (1) and (2) below; the provisions of subsection (e) apply only to a Participant who is described in paragraph (3). However, neither subsections (b), (c) and (d) nor subsection (e) will apply if the Participant's Account does not exceed $3,500 prior to the commencement of a distribution of any benefits under the Plan. (1) A Participant is described in this paragraph (1) if (i) the Participant has elected distribution of his or her Account in the form of an annuity contract, or (ii) the Trustee has directly or indirectly received a transfer of assets from another plan (including a predecessor plan) to which Code section 401(a)(11) applies with respect to such Participant. (2) A Participant is described in this paragraph (2) if (i) he or she had completed at least one hour of service after August 22, 1984 under the Plan or a predecessor plan or (ii) he or she had completed at least one hour of service in a plan year beginning on or after January 1, 1976, and at least ten years of service for vesting purposes, under the Plan or a predecessor plan, provided such Participant was alive on August 23, 1984, had not commenced to receive his or her benefits under the Plan prior to August 23, 1984, and elects to have the provisions of subsections (b), (c) and (d) apply. (3) A Participant is described in this paragraph (3) if he or she had completed at least one hour of service after September 1, 1974 and he or she is not described in paragraph (2) above (including because he or she fails to elect to have the provisions of subsections (b), (c) and (d) apply), provided such Participant was alive on August 23, 1984 and had not commenced to receive his or her benefits under the Plan prior to August 23, 1984. (B) RETIREMENT ANNUITY. Unless the Participant elects to waive the application of this subsection in a manner satisfying the requirements of subsection (d) below, to the extent applicable to the Participant, within the 90-day period preceding his or her annuity starting date (which election may be revoked, and if revoked, remade, at any time in such period), the Account balance due any Participant to whom this subsection (b) applies will be paid to him or her by the purchase and delivery to him or her of an annuity contract described in Section 9.3 providing a life annuity only form of benefit or, if the Participant is married as of his or her Annuity Starting Date, providing an immediate annuity for the life of the Participant with a survivor annuity for the life of the Participant's spouse (determined as of the date of distribution of the contract) which is 50 percent of the amount of the annuity which is payable during the joint lives of the Participant and such spouse. The Participant may elect to receive distribution of his or her benefits in the form of such annuity as of the earliest date on which he or she could elect to receive retirement benefits under the Plan. Within the period beginning 90 days prior to the Participant's Annuity Starting Date and ending 30 days prior to such Date, the Administrator will provide such Participant with a written explanation of (i) the terms and conditions of the annuity contract described herein, (ii) the Participant's right to make and the effect of an election to waive application of this subsection, (iii) the rights of the Participant's spouse under subsection (d), and (iv) the right to revoke and the period of time effect of a revocation of the election to waive application of this subsection. (C) ANNUITY DEATH BENEFIT. Unless the Participant elects to waive the application of this subsection in a manner satisfying the requirements of subsection (d) below at any time within the applicable election period (which election may be revoked, and if revoked, remade, at any time in such period), if a married Participant to whom this Section applies dies before the Participant's Annuity Starting Date, then notwithstanding any designation of a Beneficiary to the contrary, 50 percent of the Participant's Account balance will be applied to purchase an annuity contract described in Section 9.3 providing an annuity for the life of the Participant's surviving spouse, which contract will then be promptly distributed to such spouse. In lieu of the purchase of such an annuity contract, the spouse may elect in writing to receive distributions under the Plan as if he or she had been designated by the Participant as the Participant's Beneficiary with respect to 50 percent of the Participant's Account. For purposes of this subsection, the applicable election period will commence on the first day of the Plan Year in which the Participant attains age 35 and will end on the date of the Participant's death, provided that in the case of a Participant who terminates his or her employment the applicable election period with respect to benefits accrued prior to the date of such termination will in no event commence later than the date of his or her termination of employment. A Participant may elect to waive the application of this subsection prior to the Plan Year in which he or she attains age 35, provided that any such waiver will cease to be effective as of the first day of the Plan Year in which the Participant attains age 35. The Administrator will provide a Participant to whom this subsection applies with a written explanation with respect to the annuity death benefit described in this subsection (c) comparable to that required under subsection (b) above. Such explanation shall be furnished within whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant reaches age 32 and ending with the end of the Plan Year preceding the Plan Year in which he or she reaches age 35, (ii) a reasonable period ending after the Employee becomes a Participant, (iii) a reasonable period ending after this Section 9.4 first becomes applicable to the Participant in accordance with Section 9.4(a), (iv) in the case of a Participant who separates from service before age 35, a reasonable period of time ending after separation from service. For purposes of the preceding sentence, the two-year period beginning one year prior to the date of the event described in clause (ii), (iii) or (iv), whichever is applicable, and ending one year after such date shall be considered reasonable, provided, that in the case of a Participant who separates from service under (iv) above and subsequently recommences employment with the Employer, the service under (iv) above and subsequently recommences employment with the Employer, the applicable period for such Participant shall be redetermined in accordance with this subsection. (D) REQUIREMENTS OF ELECTIONS. This subsection will be satisfied with respect to a waiver or designation which is required to satisfy this subsection if such waiver or designation is in writing and either (1) the Participant's spouse consents thereto in writing, which consent must acknowledge the effect of such waiver or designation and be witnessed by a notary public or Plan representative, or (2) the Participant establishes to the satisfaction of the Administrator that the consent of the Participant's spouse cannot be obtained because there is no spouse, because the spouse cannot be located or because of such other circumstances as the Secretary of Treasury may prescribe. Any consent by a spouse, or establishment that the consent of a spouse may not be obtained, will be effective only with respect to a specific Beneficiary (including any class of beneficiaries or any contingent beneficiaries) or form of benefits identified in the Participant's waiver or designation, unless the consent of the spouse expressly permits designations by the Participant without any requirement of further consent by the spouse. A consent which permits such designations by the Participant shall acknowledge that the spouse has the right to limit consent to a specific Beneficiary and form of benefits and that the spouse voluntarily elects to relinquish both such rights. A consent by a spouse shall be irrevocable once made. Any such consent, or establishment that such consent may not be obtained, will be effective only with respect to such spouse. For purposes of subsections (b) and (c) above, no consent of a spouse shall be valid unless the notice required by such subsection, whichever is applicable, has been provided to the Participant. (E) PRE-REA RETIREMENT ANNUITY. If distribution in the form of a life annuity becomes payable under the Plan to a married Participant to whom this subsection (e) applies and such Participant (i) begins to receive distribution of his or her Account on or after the Participant's Normal Retirement Age or qualified early retirement, (ii) dies on or after Normal Retirement Age while still an Employee or (iii) separates from service on or after attaining Normal Retirement Age (or the qualified early retirement age) and after satisfying the eligibility requirements for the distribution of his or her Account under the Plan and thereafter dies before beginning to receive such distribution, then such distribution will be made in the form of a nontransferable annuity contract providing a joint and survivor form of benefit (as described in subsection (b) above) unless the Participant has elected otherwise during the election period. For purposes of the preceding sentence, the election period shall begin six months prior to the date the Participant attains the qualified early retirement age and end 90 days prior to the date distribution of benefits to the Participant is made. In addition, if benefits could be payable to a married Participant to whom this subsection applies in a life annuity form, and such Participant remains an Employee subsequent to attaining the qualified early retirement age, then such Participant may elect, during the election period, to have a portion of his or her Account applied to purchase a nontransferable annuity contract providing the survivor portion of a joint and survivor form of benefit (as described in subsection (b) above) to the Participant's surviving spouse. For purposes of the preceding sentence, the election period shall begin on the 90th day before the Participant attains the qualified early retirement age (or on which he or she becomes a Participant, if later) and end on the date the Participant ceases to be an Employee. Either election under this subsection (e) must be in writing but may be changed by the Participant at any time. An election of the early survivor annuity shall supersede and invalidate any designation of a Beneficiary to the extent necessary to provide the survivor annuity benefit. For purposes of this subsection a Participant's "qualified early retirement age" is the latest of (1) the earliest date on which the Participant may elect to receive retirement benefits under the Plan, (2) the first day of the 120th month beginning before the Participant attains his or her Normal Retirement Age, and (3) the date the Participant becomes a Participant. (F) FORMER SPOUSE. For purposes of this Section 9.4, a former spouse of a Participant will be treated as the spouse or surviving spouse of the Participant, and a current spouse will not be so treated, to the extent required under a qualified domestic relations order, as defined in section 414(p) of the Code. 9.5. REQUIRED DISTRIBUTIONS. Subject to Section 9.4, the provisions of this Section shall supersede any conflicting provisions of the Plan. This Section shall be interpreted and applied in accordance with the regulations under section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirement of section 1.401(a)(9)-2 of the Regulations. (A) IN GENERAL. If a Participant's benefit is to be distributed in accordance with Section 9.1(b), the amount to be distributed for each calendar year for which a minimum distribution is required shall be at least an amount equal to the quotient obtained by dividing the Participant's interest in his or her Account by the life expectancy of the Participant or Beneficiary or the joint life and last survivor expectancy of the Participant and his or her Beneficiary, whichever is applicable. For calendar years beginning before January 1, 1989, if a Participant's Beneficiary is not his or her spouse, the method of distribution selected must insure that at least 50 percent of the present value of the amount available for distribution is paid within the life expectancy of the Participant. For calendar years beginning after January 1, 1989 the amount to be distributed for each calendar year shall not be less than an amount equal to the quotient obtained by dividing the Participant's interest in his or her Account by the lesser of (i) the applicable life expectancy under Section 9.1(b), or (ii) if a Participant's Beneficiary is not his or her spouse, the applicable divisor determined under section 1.401(a)(9)-2, Q&A 34 of the Regulations, or any successor regulations of similar import. Distributions after the death of the Participant shall be made using the applicable life expectancy under (i) above, without regard to section 1.401(a)(9)-2 of such regulations. For purposes of this subsection (a), life expectancy shall be recalculated annually in the case of the Participant or a Beneficiary who is the Participant's spouse unless the Participant irrevocably elects otherwise prior to the time distributions are required to begin. If not recalculated in accordance with the foregoing, life expectancy shall be calculated using the attained age of the Participant or Beneficiary, whichever is applicable, as of such individual's birth date in the first year for which a minimum distribution is required reduced by one for each elapsed calendar year since the date life expectancy was first calculated. For purposes of this Section, life expectancy and joint life and last survivor expectancy shall be computed by use of the return multiples in section 1.72-9 of the Treasury Regulations. The minimum distribution required under this subsection (a) for the calendar year immediately preceding the calendar year in which the Participant's required beginning date, as determined under Section 9.9(a)(2), occurs shall be made on or before the Participant's required beginning date, as so determined. Minimum distributions for other calendar years shall be made on or before the close of such calendar year. (b) Additional requirements for distributions after death of Participant. (1) If the Participant dies before distribution of his or her benefits has begun, distributions shall be made in accordance with the provisions of this paragraph. Distributions under Section 9.1(a) shall be completed by the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. Distributions under Section 9.1(b) shall commence, if the Beneficiary is not the Participant's spouse, not later than the close of the calendar year immediately following the calendar year in which the death of the Participant occurs. Distributions under Section 9.1(b) to a Beneficiary who is the Participant's surviving spouse shall commence not later than the close of the calendar year in which the Participant would have attained age 70 1/2 or, if later, the close of the calendar year immediately following the calendar year in which the death of the Participant occurs. In the event such spouse dies prior to the date distribution to him or her commences, he or she will be treated for purposes of this subsection (other than the preceding sentence) as if he or she were the Participant. If the Participant has not designated a Beneficiary, or the Participant or Beneficiary has not effectively selected a method of distribution, distribution of the Participant's benefit shall be completed by the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. Any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. For purposes of this subsection (b)(1), the life expectancy of a Beneficiary who is the Participant's surviving spouse shall be recalculated annually unless the Participant's spouse irrevocably elects otherwise prior to the time distributions are required to begin. Life expectancy shall be computed in accordance with the provisions of subsection (a) above. (2) If the Participant dies after distribution of his or her benefits has begun, distributions to the Participant's Beneficiary will be made at least as rapidly as under the method of distribution being used as of the date of the Participant's death. For purposes of this Section 9.5(b), distribution of a Participant's interest in his or her Account will be considered to begin as of the Participant's required beginning date, as determined under Section 9.9(a)(2). If distribution in the form of an annuity irrevocably commences prior to such date, distribution will be considered to begin as of the actual date distribution commences. A Participant's interest in his or her Account for purposes of this Section 9.5 shall be determined as of the last valuation date in the calendar year immediately preceding the calendar year for which a minimum distribution is required, increased by the amount of any contributions allocated to, and decreased by any distributions from, such Account after the valuation date. Any distribution for the first year for which a minimum distribution is required made after the close of such year shall be treated as if made prior to the close of such year. 9.6. IMMEDIATE DISTRIBUTIONS. If the Account balance distributable to a Participant exceeds, or at the time of any prior distribution exceeded, $3,500, no distribution will be made to the Participant before he or she reaches his or her Normal Retirement Age (or age 62, if later), unless the written consent of the participant has been obtained. Such consent shall be made in writing within the 90-day period ending on the Participant's Annuity Starting Date. Within the period beginning 90 days before the Participant's Annuity Starting Date and ending 30 days before such Date, the Administrator will provide such Participant with written notice comparable to the notice described in Section 9.4(b) containing a general description of the material features and an explanation of the relative values of the optional forms of benefit available under the Plan and informing the Participant of his or her right to defer receipt of the distribution until his or her Normal Retirement Age (or age 62, if later). The consent of the Participant's spouse must also be obtained in such circumstances unless subsection (b) of Section 9.4 does not apply to the Participant, or distribution will be made in the form of the applicable retirement annuity contract described in Section 9.4(b). A spouse's consent to early distribution, if required, must satisfy the requirements of Section 9.4(d). Notwithstanding the foregoing, a Participant's Account balance may be distributed without the consent of the Participant or the Participant's spouse to the extent that a distribution is required to satisfy section 401(a)(9) or section 415 of the Code. If the Plan does not provide for distribution of benefits in the form of an annuity, in the event of the termination of the Plan, a Participant's Account balance may be distributed without the consent of the Participant or, if the Employer (or a member of the same controlled group) maintains another defined contribution plan (other than an employee stock ownership plan, as defined in section 4975(e)(7) of the Code), may be transferred to such other plan without the consent of the Participant. Any notice or written waiver requirements may be reduced or waived by the Administrator or the distributee to the extent permitted by Code section 411(a)(11). 9.7. DETERMINATION OF METHOD OF DISTRIBUTION. The Participant will determine the method of distribution of benefits to himself and may determine the method of distribution to his or her Beneficiary. Such determination will be made prior to the time benefits become payable under the Plan. If the Participant does not determine the method of distribution to his or her Beneficiary or if the Participant permits his or her Beneficiary to override his or her determination, the Beneficiary, in the event of the Participant's death, will determine the method of distribution of benefits to himself as if he or she were the Participant. A determination by the Beneficiary must be made no later than the close of the calendar year in which distribution would be required to begin under Section 9.5(b) or, if earlier, the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. 9.8. NOTICE TO TRUSTEE. The Administrator will notify the Trustee in writing whenever any Participant or Beneficiary is entitled to receive benefits under the Plan. The Administrator's notice shall indicate the form of benefits that such Participant or Beneficiary shall receive and (in the case of distributions to a Participant) the name of any designated Beneficiary or Beneficiaries. 9.9. TIME OF DISTRIBUTION. (A) GENERAL RULE. Subject to the provisions of the following paragraphs, distributions will be made or will commence at the time specified in the Adoption Agreement, but in no event will distribution to a Participant be made later than the earlier of the dates described in (1) and (2) below: (1) is the 60th day after the close of the Plan Year in which occurs the later of the date on which the Participant attains age 65, or the date on which the Participant ceases to be employed by the Employer; and (B) DISTRIBUTIONS NOT IN EXCESS OF $3,500; DISTRIBUTIONS NOT IN EXCESS OF $10,000. (2) is the Participant's Required Beginning Date. (1) If the Account balance distributable to a Participant is, and at the time of any prior distribution was, $3,500 or less, distribution of such Account will be made as soon as practicable following the retirement, disability, death or other termination of employment of the Participant in accordance with the provisions of Sections 8.1, 8.2, 8.3, 8.4 or 8.5. (2) If the Account balance distributable to a Participant exceeds, or at the time of any prior distribution was, $3,500 but is $10,000 or less, such Account shall be distributed in accordance with the provisions of paragraph (1), provided the requirements of Section 9.6 have been satisfied. 9.10. WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES. The Administrator will at all times be responsible for determining the whereabouts of each Participant or Beneficiary who may be entitled to benefits under the Plan and will at all times be responsible for instructing the Trustee in writing as to the current address of each such Participant or Beneficiary. The Trustee will be entitled to rely on the latest written statement received from the Administrator as to such addresses. The Trustee will be under no duty to make any distributions under the Plan unless and until it has received written instructions from the Administrator satisfactory to the Trustee containing the name and address of the distributee, the time when the distribution is to occur, and the form which the distribution will take. Notwithstanding the foregoing, if the Trustee attempts to make a distribution in accordance with the Administrator's instructions but is unable to make such distribution because the whereabouts of the distributee is unknown, the Trustee will notify the Administrator of such situation and thereafter the Trustee will be under no duty to make any further distributions to such distributee until it receives further written instructions from the Administrator. 9.11. DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS. (A) IN GENERAL Notwithstanding any provision of the Plan to the contrary that may otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (B) DEFINITIONS For purposes of this Section, the following definitions shall apply: (1) An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives of the distributee and the distributee's Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9); and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (2) With respect to a distributee who is an Employee or former Employee, or an Employee's or former Employee's spouse or former spouse who is an alternate payee under a qualified domestic relations order, an "eligible retirement plan" is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section 401(a). With respect to a distributee who is an Employee's or former Employee's surviving spouse, an "eligible retirement plan" is an individual retirement account or an individual retirement annuity. (3) A "distributee" includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse, who is an alternate payee under a qualified domestic relations order as defined in section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (4) A "direct rollover" is a payment by the Plan to the eligible retirement plan specified by the distributee. ARTICLE 10. LOANS TO PARTICIPANTS 10.1. IN GENERAL. If permitted under the Adoption Agreement, upon the written request of an Eligible Borrower on a form acceptable to the Administrator, and subject to the conditions of this Article, the Administrator shall direct the Trustee to make a loan from the Trust to the Eligible Borrower. For purposes of this Article, an "Eligible Borrower" is 10.1(a). a Participant who is an Employee or is otherwise a "party in interest" within the meaning of ERISA section 3(14); or 10.1(b). a deceased Participant's Beneficiary who has not yet received the entire vested portion of the Participant's Accounts and who is a "party in interest" as described above. 10.1(c). Notwithstanding the foregoing, no loans will be made to any shareholder-employee or owner-employee. For purposes of this requirement, a shareholder-employee means an employee or officer of an electing small business (Subchapter S) corporation who owns (or is considered as owning within the meaning of section 318(a)(1) of the Code), on any day during the taxable year of such corporation, more thn 5% of the outstanding stock of the corporation. 10.2. RULES AND PROCEDURES. The Administrator shall promulgate such rules and procedures, not inconsistent with the express provisions of this Article, as it deems necessary to carry out the purposes of this Article. All such rules and procedures shall be deemed a part of the Plan for purposes of the Department of Labor regulation section 2550.408b-1(d). Loans shall not be made available to Eligible Borrowers who are Highly Compensated Employees in an amount (determined under Department of Labor regulation section 2550.408b-1(b)) greater than the amount made available to other Eligible Borrowers. Section 9.4(d) above shall apply to any request for a loan from an Eligible Borrower described in Section 9.4(a)(1). 10.3. MAXIMUM AMOUNT OF LOAN. The following limitations shall apply in determining the amount of any loan to an Eligible Borrower hereunder: 10.3(a). The amount of the loan, together with any other outstanding indebtedness of the Eligible Borrower under the Plan or any other qualified retirement plans of the Related Employers, shall not exceed $50,000 reduced by the excess of (i) the highest outstanding loan balance of the Eligible Borrower from such plans during the one-year period ending on the day prior to the date on which the loan is made, over (ii) the Eligible Borrower's outstanding loan balance from such plans immediately prior to the loan. 10.3(b). The amount of the loan shall not exceed 50% of the Eligible Borrower's vested interest in his or her Accounts. 10.3(c). An assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan under this section. 10.4. MINIMUM AMOUNT OF LOAN. The Administrator may establish a minimum amount for any single loan under the Plan, not to exceed $1,000. 10.5. NOTE; SECURITY; INTEREST. Each loan shall be evidenced by a note signed by the Eligible Borrower and shall be secured by 50% of the Eligible Borrower's vested interest in his or her Accounts, including in such security the note evidencing the loan. The loan shall bear interest at a reasonable annual percentage interest rate to be determined by the Administrator. In determining the interest rate, the Administrator shall take into consideration interest rates currently being charged by persons in the business of lending money with respect to loans made in similar circumstances. The Administrator shall made such determination through consultation with one or more lending institutions, as the Administrator deems appropriate. 10.6. REPAYMENT. Each loan made to an Eligible Borrower who is receiving regular payments of compensation from a Participating Employer shall be repayable by payroll deduction. Loans made to other Eligible Borrowers (and, in all events, where payroll deduction is no longer practicable) shall be repayable in such manner as the Administrator may from time to time determine. The documents evidencing a loan shall provide that payments shall be made not less frequently than quarterly and over a specified term as determined by the Administrator (but not to exceed five years unless the loan is being applied toward the purchase of a principal residence for the Eligible Borrower); such documents shall also require that the loan be amortized with level payments of principal and interest. 10.7. REPAYMENT UPON DISTRIBUTION. If, at the time benefits are to be distributed (or to commence being distributed) to an Eligible Borrower with respect to a separation from service, there remains any unpaid balance of a loan hereunder, such unpaid balance shall, to the extent consistent with Department of Labor regulations, become immediately due and payable in full. Such unpaid balance, together with any accrued but unpaid interest on the loan, shall be deducted from the Eligible Borrower's Accounts, subject to the default provisions below, before any distribution of benefits is made. Except as may be required in order to comply (in a manner consistent with continued qualification of the Plan under Code section 401(a)) with Department of Labor regulations, no loan shall be made or remain outstanding with respect to a Participant under this Article after the time distributions to the Participant with respect to a separation from service are to be paid or commence. 10.8. DEFAULT. In the event of a default in making any payment of principal or interest when due under the note evidencing any loan under this Article, if such default continues for more than 14 days after written notice of the default by the Trustee, the unpaid principal balance of the note shall immediately become due and payable in full. Such unpaid principal, together with any accrued but unpaid interest, shall thereupon be deducted from the Eligible Borrower's Accounts, subject to the further provisions of this section. The amount so deducted shall be treated as distributed to the Eligible Borrower and applied by the Eligible Borrower as a payment of the unpaid interest and principal (in that order) under the note evidencing such loan. In no event shall the Administrator apply the Eligible Borrower's Accounts to satisfy the Eligible Borrower's repayment obligation, whether or not he or she is in default, unless the amount so applied otherwise could be distributed in accordance with the Plan. 10.9. NOTE AS TRUST ASSET. The note evidencing a loan to an Eligible Borrower under this Article shall be an asset of the Trust which is allocated to the Account of such Eligible Borrower, and shall for purposes of the Plan be deemed to have a value at any given time equal to the unpaid principal balance of the note plus the amount of any accrued but unpaid interest. 10.10. NONDISCRIMINATION. Loans shall be made available under this Article to all Eligible Borrowers on a reasonably equivalent basis, except that the Administrator may make reasonable distinctions based on creditworthiness. 10.11. DESIGNATION OF INVESTMENT FUNDS. If Participants are able to direct the investment of their Accounts, an Eligible Borrower may designate the Accounts from which his or her loan is to be made and the Eligible Investments to be redeemed. In the absence of such a designation, the loan shall be made proportionately from all Accounts and Eligible Investments to which the Eligible Borrower's Accounts are allocated. 10.12. SPOUSAL CONSENT. A Participant must obtain the consent of his or her spouse, if any, to use of the Account as security for the loan. Spousal consent shall be obtained no earlier than the beginning of the 90-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that loan. A new consent shall be required if the Account is used for renegotiation, extension, renewal, or other revision of the loan. ARTICLE 11. TOP-HEAVY PROVISIONS. 11.1. APPLICATION. If the Plan is or becomes a Top-Heavy Plan in any Plan Year, the provisions of this Article 11 shall supersede any conflicting provision in the Plan. 11.2. DEFINITIONS. For purposes of this Article 11, the following terms have the meanings set forth below: (A) KEY EMPLOYEE. Any Employee or former Employee (and the Beneficiary of any such Employee) who at any time during the determination period was (i) an officer of the Employer whose annual Compensation exceeds 50 percent of the dollar limitation under section 415(b)(1)(A) of the Code, (ii) an owner (or considered an owner under section 318 of the Code) of one of the ten largest interests in the Employer if such individual's annual Compensation exceeds the dollar limitation under section 415(c)(1)(A) of the Code, (iii) a 5-percent owner of the Employer, or (iv) a 1-percent owner of the Employer who has annual Compensation of more than $150,000. For purposes of this paragraph, the determination period is the Plan Year containing the Determination Date and the four preceding Plan Years. The determination of who is a Key Employee shall be made in accordance with section 416(i)(1) of the Code and the regulations thereunder. (B) TOP-HEAVY PLAN. The Plan is a Top-Heavy Plan if any of the following conditions exists: (1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group; (2) the Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60 percent; or (3) the Plan is a part of a Required Aggregation Group and a Permissive Aggregation Group and the Top-Heavy Ratio for both Groups exceeds 60 percent. (C) TOP-HEAVY RATIO. (1) With respect to this Plan, or with respect to any Required Aggregation Group or Permissive Aggregation Group that consists solely of defined contribution plans (including any simplified employee pension plans), the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances of all Key Employees under the plans as of the Determination Date (including any part of any account balance distributed in the 5-year period ending on the Determination Date), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 5-year period ending on the Determination Date) of all participants under the plans as of the Determination Date. Both the numerator and denominator of the Top-Heavy Ratio shall be adjusted to reflect any contribution which is due but unpaid as of the Determination Date. (2) With respect to any Required Aggregation Group or Permissive Aggregation Group that includes one or more defined benefit plans which, during the 5-year period ending on the Determination Date, has covered or could cover a Participant in this Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances under the defined contribution plans for all Key Employees and the present value of accrued benefits under the defined benefit plans for all Key Employees, and the denominator of which is the sum of the account balances under the defined contribution plans for all participants and the present value of accrued benefits under the defined benefit plans for all participants. Both the numerator and denominator of the Top-Heavy Ratio shall be adjusted for any distribution of an account balance or an accrued benefit made in the 5-year period ending on the Determination Date and any contribution due but unpaid as of the Determination Date. (3) For purposes of (1) and (2) above, the value of account balances and the present value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in section 416 of the Code and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (i) who is not a Key Employee but who was a Key Employee in a prior year, or (ii) who has not been credited with at least one Hour of Service with the Employer at any time during the 5-year period ending on the Determination Date, will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account, shall be made in accordance with section 416 of the Code and the regulations thereunder. Deductible Employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits shall be calculated with reference to the Determination Dates that fall within the same calendar year. For purposes of determining if the Plan, or any other plan included in a Required Aggregation Group of which this Plan is a part, is a Top-Heavy Plan, the accrued benefit in a defined benefit plan of an Employee other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of section 411(b)(1)(C) of the Code. (D) PERMISSIVE AGGREGATION GROUP. The Required Aggregation Group plus any other qualified plans of the Employer or a Related Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of sections 401(a)(4) and 410 of the Code. (E) REQUIRED AGGREGATION GROUP. (1) Each qualified plan of the Employer or Related Employer in which at least one Key Employee participates, or has participated at any time during the determination period (regardless of whether the plan has terminated), and (2) any other qualified plan of the Employer or Related Employer which enables a plan described in (1) above to meet the requirements of sections 401(a)(4) or 410 of the Code. (F) DETERMINATION DATE. For any Plan Year of the Plan subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of that Plan Year. (G) VALUATION DATE. The Determination Date. (H) PRESENT VALUE. Present value shall be based only on the interest rate and mortality table specified in the Adoption Agreement. 11.3. MINIMUM CONTRIBUTION. (a) Except as otherwise provided in (b) and (c) below, the Employer contributions made on behalf of any Participant who is not a Key Employee shall not be less than the lesser of 3 percent of such Participant's Compensation or, in the case where the Employer has no defined benefit plan which designates this Plan to satisfy section 401 of the Code, the largest percentage of contributions (taking into account for this purpose only Elective Contributions, Qualified Nonelective Contributions, Matching Contributions, Discretionary Contributions and any forfeitures applied toward any such contributions), as a percentage of the Key Employee's Compensation, made on behalf of any Key Employee for that year. The minimum contribution under this Section 11.3 shall be determined without regard to any Social Security contribution, and shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive a contribution, or would have received a lesser contribution for the year, because (i) the Participant failed to complete 1,000 Hours of Service or any equivalent service requirement provided in the Adoption Agreement; or (ii) the Participant's Compensation was less than a stated amount. (b) The provisions of (a) above shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year. (c) The Employer contributions for the Plan Year made on behalf of each Participant who is not a Key Employee and who is a participant in a defined benefit plan maintained by the Employer shall not be less than 5 percent of such Participant's Compensation. (d) The minimum contribution required under (a) above (to the extent required to be nonforfeitable under section 416(b) of the Code) may not be forfeited under section 411(a)(3)(B) or 411(a)(3)(D) of the Code. (e) With respect to Plan Years beginning before January 1, 1989, for any Plan Year in which this Plan is a Top-Heavy Plan, only the first $200,000 (or such amount as may be prescribed by the Secretary of the Treasury or his or her delegate) of a Participant's annual Compensation shall be taken into account for purposes of determining Employer contributions under the Plan. (f) In determining whether Employer contributions on behalf of an Employee exceed the 3% (or 5%) minimums, all Employer contributions (including Elective Contributions) shall be taken into account with respect to Key Employees, but only Discretionary Contributions and Qualified Nonelective Contributions shall be taken into account with respect to individuals who are not Key Employees. 11.4. MINIMUM VESTING SCHEDULES. (a) With respect to a Plan which is adopted under a nonstandardized form of Adoption Agreement, for any Plan Year in which such Plan is a Top-Heavy Plan, each Participant who has been credited with at least three (3) Years of Service for Vesting and who does not already have a nonforfeitable right to 100 percent of his or her Account shall have such nonforfeitable right to his or her Account. A Plan which is adopted under a standardized form of Adoption Agreement shall, for any Plan Year in which such Plan is a Top-Heavy Plan, continue to have the vesting schedule selected by the Employer in the Adoption Agreement. The minimum vesting schedule specified in this subsection shall apply to all benefits within the meaning of section 411(a)(7) of the Code except those benefits that accrued before the Plan became a Top-Heavy Plan. No reduction in a Participant's nonforfeitable interest in his or her Account may occur in the event the Plan's status as a Top-Heavy Plan changes for any Plan Year. (b) This Section 11.4 does not apply to the Account balance of any Employee who does not have an Hour of Service after the Plan has initially become a Top-Heavy Plan, and such Employee's Account balance shall be determined without regard to this Article. 11.5. ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS. If this Plan is in Top-Heavy status, the number 100 shall be substituted for the number 125 in subsections (e)(2) and (e)(3) of Section 6.3. However, this substitution shall not take effect with respect to this Plan in any Plan Year in which the following requirements are satisfied: (a) The Employer contributions for such Plan Year made on behalf of each Participant who is not a Key Employee and who is a participant in a defined benefit plan maintained by the Employer is not less than 7 1/2 percent of such Participant's Compensation. (b) The sum of the present value as of the Determination Date of (i) the aggregate accounts of all Key Employees under all defined contribution plans of the Employer and (ii) the cumulative accrued benefits of all Key Employees under all defined benefit plans of the Employer does not exceed 90 percent of the same amounts determined for all participants under all plans of the Employer that are Top-Heavy Plans, excluding account values and accrued benefits for Employees who formerly were but are no longer Key Employees. The substitutions of the number 100 for 125 shall not take effect in any Limitation Year with respect to any Participant for whom no benefits are accrued or contributions made for such Year. ARTICLE 12. AMENDMENT AND TERMINATION. 12.1. AMENDMENT BY EMPLOYER. The Employer reserves the authority, subject to the provisions of Article 1 and Section 12.3, to amend the Plan: (A) CHANGING ELECTIONS CONTAINED IN THE ADOPTION AGREEMENT. By filing with the Trustee an amended Adoption Agreement, executed by the Employer only, on which said Employer has indicated a change or changes in provisions previously elected by it, such changes to be effective on the effective date of such amended Adoption Agreement (except that, any such change notwithstanding, no Participant's Account shall be reduced by such change below the amount to which the Participant would have been entitled if he or she had voluntarily left the employ of the Employer immediately prior to the date of the change). The Employer may from time to time make any amendment to the Plan that may be necessary to satisfy sections 415 or 416 of the Code because of the required aggregation of multiple plans by completing overriding Plan language in the Adoption Agreement. The Employer may also add certain model amendments published by the Internal Revenue Service which specifically provide that their adoption will not cause the Plan to be treated as an individually designed plan; or (B) OTHER CHANGES. By amending any provision of the Plan for any reason other than those specified in (a) above. However, upon making such amendment, the Employer may no longer participate in this prototype Plan arrangement and will be deemed to have an individually designed plan. Following such amendment, the Trustee will transfer the assets of the Trust to the trust forming part of such newly adopted plan upon receipt of sufficient evidence (such as a determination letter or opinion letter from the Internal Revenue Service or an opinion of counsel satisfactory to the Trustee) that such trust will be a qualified trust under the Code. 12.2. AMENDMENT BY SPONSOR. The Sponsor may in its discretion amend the Plan or the Adoption Agreement at any time, subject to the provisions of Article 1 and Section 12.3, and provided that the Sponsor mails a copy of such amendment to the Employer at its last known address as shown on the books of the Sponsor. 12.3. AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS. (a) Except as permitted by Section 12.4, no amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit with respect to benefits attributable to service before the amendment. Furthermore, if the vesting schedule of the Plan is amended, the nonforfeitable interest of a Participant in his or her Account, determined as of the later of the date the amendment is adopted or the date it becomes effective, will not be less than the Participant's nonforfeitable interest in his or her Account determined without regard to such amendment. (b) If the Plan's vesting schedule is amended, including any amendment resulting from a change to or from Top-Heavy Plan status, or the Plan is amended in any way that directly or indirectly affects the computation of a Participant's nonforfeitable interest in his or her Account, each Participant with at least three (3) Years of Service for Vesting with the Employer may elect, within a reasonable period after the adoption of the amendment, to have the nonforfeitable percentage of his or her Account computed under the Plan without regard to such amendment. The Participant's election may be made within 60 days from the latest of (i) the date the amendment is adopted; (ii) the date the amendment becomes effective; or (iii) the date the Participant is issued written notice of the amendment by the Employer or the Administrator. 12.4. RETROACTIVE AMENDMENTS. An amendment made by the sponsor in accordance with Section 12.2 may be made effective on a date prior to the first day of the Plan Year in which it is adopted if such amendment is necessary or appropriate to enable the Plan and Trust to satisfy the applicable requirements of the Code or to conform the Plan to any change in federal law, or to any regulations or ruling thereunder. Any retroactive amendment by the Employer shall be subject to the provisions of Section 12.1. 12.5. TERMINATION. The Employer has adopted the Plan with the intention and expectation that contributions will be continued indefinitely. However, said Employer has no obligation or liability whatsoever to maintain the Plan for any length of time and may discontinue contributions under the Plan or terminate the Plan at any time by written notice delivered to the Trustee without any liability hereunder for any such discontinuance or termination. 12.6. DISTRIBUTION UPON TERMINATION OF THE PLAN. Upon termination or partial termination of the Plan or complete discontinuance of contributions thereunder, each Participant (including a terminated Participant in respect of amounts not previously forfeited by him or her) who is affected by such termination or partial termination or discontinuance will have a fully vested interest in his or her Account, and, subject to Sections 9.4 and 9.6, the Trustee will distribute to each Participant or other person entitled to distribution the balance of the Participant's Account in a single lump sum payment. In the absence of such instructions, the Trustee will notify the Administrator of such situation and the Trustee will be under no duty to make any distributions under the Plan until it receives written instructions from the Administrator. Upon the completion of such distributions, the Trust will terminate, the Trustee will be relieved from all liability under the Trust, and no Participant or other person will have any claims thereunder, except as required by applicable law. For purposes of determining whether a Participant is affected by a termination or partial termination, any Participant who separated from the service of the Employer with a nonforfeitable interest in no portion of his or her Account will be deemed to have received a complete distribution of such nonforfeitable portion, with an immediate forfeiture of the forfeitable portion, upon such separation from service. 1 12.7.2.7. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In case of any merger or consolidation of the Plan with, or transfer of assets and liabilities of the Plan to, any other plan, provision must be made so that each Participant would, if the Plan then terminated, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he or she would have been entitled to receive immediately before the merger, consolidation or transfer if the Plan had then terminated. ARTICLE 13. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO OR FROM OTHER QUALIFIED PLANS. 13.1. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN. If the Adoption Agreement so provides, in the event the Employer has previously established a plan (the "predecessor plan") which is a defined contribution plan under the Code and which on the date of adoption of the Plan meets the applicable requirements of section 401(a) of the Code, the Employer may, in accordance with the provisions of the predecessor plan, amend and continue the predecessor plan in the form of the Plan and become the Employer hereunder, subject to the following: (a) Subject to the provisions of the Plan, each individual who was a participant or former participant in the predecessor plan immediately prior to the effective date of such amendment and continuation will become a Participant or former Participant in the Plan; (b) No election may be made under the vesting provisions of the Adoption Agreement if such election would reduce the benefits of a Participant under the Plan to less than the benefits to which he or she would have been entitled if he or she voluntarily separated from the service of the Employer immediately prior to such amendment and continuation; (c) No amendment to the Plan shall decrease a participant's accrued benefit or eliminate an optional form of benefit; (d) The amounts standing to the credit of a participant's account immediately prior to such amendment and continuation which represent the amounts properly attributable to (i) contributions by the participant and (ii) contributions by the Employer and forfeitures will constitute the opening balance of his or her Account or Accounts under the Plan; (e) Amounts being paid to a former participant or to a beneficiary in accordance with the provisions of the predecessor plan will continue to be paid in accordance with such provisions; (f) Any beneficiary designation in effect after August 23, 1984, under the predecessor plan immediately before such amendment and continuation will be deemed a valid designation of Beneficiary under Section 8.4 if such designation satisfies the requirements of Section 9.4(d), unless and until the Participant revokes such designation or designates a new Beneficiary under the Plan; and (g) Unless the Employer and the Trustee agree otherwise, all assets of the predecessor trust will be deemed to be assets of the Trust as of the effective date of such amendment. Such assets will be invested by the Trustee as soon as reasonably practicable pursuant to Sections 7.1 and 7.2. The Employer agrees to assist the Trustee in any way requested by the Trustee in order to facilitate the transfer of assets from the predecessor trust to the Trust Fund. 13.2. TRANSFER OF FUNDS FROM AN EXISTING PLAN. If the Plan is a nonstandardized plan, the Employer may from time to time direct the Trustee, in accordance with such rules as the Trustee may establish, to accept funds transferred for the benefit of Participants from a trust forming part of another qualified plan under the Code, provided such plan is a defined contribution plan. Such transferred assets will become assets of the Trust as of the date they are received by the Trustee. Such transferred amounts will be credited to Participants' Accounts in accordance with their respective interests immediately upon receipt by the Trustee. A Participant's interest under the Plan in transferred amounts which were fully vested and nonforfeitable under the transferring plan will be fully vested and nonforfeitable at all times. Such transferred assets will be invested by the Trustee in accordance with the provisions of paragraph (f) of Section 13.1 as if such assets were transferred from a predecessor plan. 13.3. ACCEPTANCE OF ASSETS BY TRUSTEE. The Trustee will not accept assets which are not either in a medium proper for investment under the Plan or in cash. Such assets shall be accompanied by written instructions showing separately the respective contributions by the prior employer and by the transferring Employee, and identifying the assets attributable to such contributions. The Trustee shall establish such accounts as may be necessary or appropriate to reflect such contributions under the Plan. The Trustee shall hold such assets for investment in accordance with the provisions of Article 7, and shall in accordance with the written instructions of the Employer make appropriate credits to the Accounts of the Participants for whose benefit assets have been transferred. 13.4. TRANSFER OF ASSETS FROM TRUST. The Employer may direct the Trustee to transfer all or a specified portion of the Trust assets to any other plan or plans maintained by the Employer or the employer or employers of a former Participant or Participants, provided that the Trustee has received evidence satisfactory to it that such other plan meets all applicable requirements of the Code. The assets so transferred shall be accompanied by written instructions from the Employer naming the persons for whose benefit such assets have been transferred, showing separately the respective contributions by the Employer and by each Participant, if any, and identifying the assets attributable to the various contributions. The Trustee shall have no further liabilities with respect to assets so transferred. ARTICLE 14. MISCELLANEOUS. 14.1. COMMUNICATION TO PARTICIPANTS. The Plan will be communicated to all Participants by the Employer promptly after the Plan is adopted. 14.2. LIMITATION OF RIGHTS. Neither the establishment of the Plan and the Trust, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to any Participant or other person any legal or equitable right against the Employer, Administrator or Trustee, except as provided herein; and in no event will the terms of employment or service of any Participant be modified or in any way affected hereby. It is a condition of the Plan, and each Participant expressly agrees by his or her participation herein, that each Participant will look solely to the assets held in the Trust for the payment of any benefit to which he or she is entitled under the Plan. 14.3. NONALIENABILITY OF BENEFITS. The benefits provided hereunder will not be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind, either voluntarily or involuntarily, and any attempt to cause such benefits to be so subjected will not be recognized, except to such extent as may be required by law. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a domestic relations order, unless such order is determined to be a qualified domestic relations order, as defined in section 414(p) of the Code, or any domestic relations order entered before January 1, 1985. A domestic relations order will not fail to be deemed a qualified domestic relations order merely because it requires the distribution or segregation of all or part of a Participant's Account with respect to an alternate payee before the Participant's death, disability, hardship or termination of employment, and distributions shall be made, or Accounts segregated, pursuant to the terms of any qualified domestic relations order. 14.4. FACILITY OF PAYMENT. In the event the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his or her affairs by reason of minority, illness, infirmity or other incapacity, the Administrator may direct the Trustee to disburse such payments to a person or institution designated by a court which has jurisdiction over such recipient or a person or institution otherwise having the legal authority under State law for the care and control of such recipient. The receipt by such person or institution of any such payments shall be complete acquittance therefor, and any such payment to the extent thereof, shall discharge the liability of the Trust for the payment of benefits hereunder to such recipient. 14.5. INFORMATION BETWEEN EMPLOYER AND TRUSTEE. The Employer agrees to furnish the Trustee, and the Trustee agrees to furnish the Employer with such information relating to the Plan and Trust as may be required by the other in order to carry out their respective duties hereunder, including without limitation information required under the Code and any regulations issued or forms adopted by the Treasury Department thereunder or under the provisions of ERISA and any regulations issued or forms adopted by the Labor Department thereunder. 14.6. EFFECT OF FAILURE TO QUALIFY UNDER CODE. Notwithstanding any other provision contained herein, if the Employer fails to obtain or retain approval of the Plan by the Internal Revenue Service as a qualified Plan under the Code, the Employer may no longer participate in this prototype Plan arrangement and will be deemed to have an individually designed plan. If it is determined by the Internal Revenue Service that the Plan does not initially qualify under section 401 of the Code, all assets then held under the Plan will be returned by the Trustee, as directed by the Administrator, to the Employer, but only if the application for determination is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan was adopted or such later date as may be prescribed by regulations. Such distribution will be made within one year after the date the initial qualification is denied. Upon such distribution the Plan will be considered to be rescinded and to be of no force or effect. 14.7. NOTICES. Any notice or other communication in connection with this Plan shall be deemed delivered in writing if addressed as provided below and if either actually delivered at said address or, in the case of a letter, three business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified: (a) If to the Employer or Administrator, to it at the address set forth in the Adoption Agreement, to the attention of the person specified to receive notice in the Adoption Agreement; (b) If to the Trustee, to it at the address set forth in the Adoption Agreement; or, in each case at such other address as the addressee shall have specified by written notice delivered in accordance with the foregoing to the addressor's then effective notice address. 14.8. 14.8. GOVERNING LAW. The Plan and the accompanying Adoption Agreement will be construed, administered and enforced according to ERISA, and to the extent not preempted thereby, the laws of the Commonwealth of Massachusetts. THE FIDELITY INVESTMENTS 401(A) PROTOTYPE PLAN ADOPTION AGREEMENT STANDARDIZED PROFIT-SHARING PLAN PLAN NO. 001 ADOPTION AGREEMENT STANDARDIZED PROFIT-SHARING PLAN PLAN NO. 001 I. GENERAL INFORMATION (a) Name of Employer: ___________________________ (b) Address and telephone number: _________________ _________________ _________________ (c) Employer identification number: _____________ (a) Name of principal contact: _______________ (b) Office to provide information to Participants: _____________________ (a) Name of Plan: ____________________ (b) Plan number: _____________________ (c) Plan Year ends: ___________________ (d) Employer's fiscal year ends: _______________ Employer [ ] maintains [ ] does not maintain a tax-sheltered annuity program under which Employees are required, as a condition of employment or under a one-time election, to make pre-tax contributions. II. ADOPTION The Employer hereby adopts a profit-sharing plan in the form of the Fidelity Investments 401(a) Prototype Plan. III. COVERAGE All Employees of the Employer who meet the conditions specified below will be covered by the Plan. 1. Service requirements - (a) date of employment (b) six months of service (c) one Year of Service Note: If you wish to check the following box, you must elect 100% immediate vesting under VI.1.(a) below and you cannot elect age 26 under III.3.(c) below. (d) two Years of Service 2. Hours of Service - (complete only if 1 or 2 Years of Service are required for coverage) To be credited with a Year of Service, (a) 1,000 or more Hours of Service are required (b) 500 or more Hours of Service are required (c) no Hours of Service are required (d) __ (specify Hours of Service required, must be less than 1,000) 3. Age requirements - (a) no age requirement (b) attain age 21 Note: If you wish to check the following box, you must be a tax-exempt educational institution and you may not elect a two Years of Service requirement under III.1.(d) above. (c) attain age 26 4. Employees covered by a collective bargaining agreement are: (a) included (b) excluded IV. EMPLOYER CONTRIBUTIONS 1. The Employer elects to contribute each year: (a) discretionary % of each Participant's Compensation (% to be determined each year by Employer and must be uniform) (b) __% of each Participant's Compensation (c) __% of each Participant's Compensation up to the Integration Level, plus __% of each Participant's Compensation in excess of the Integration Level Note: If the Plan becomes top-heavy, the contribution formula may be increased to three percent (3%) of Compensation for non-key employees in accordance with the top- 2. The Integration Level is: (a) the Social Security Taxable Wage Base (b) 80% of the Social Security Taxable Wage Base (c) 50% of the Social Security Taxable Wage Base 3. The Compensation to be used to determine contributions is W-2 compensation: (a) including salary reduction contributions under another tax-favored employee benefit plan (b) excluding salary reduction contributions under another tax-favored employee benefit plan 4. Contributions will be remitted to Fidelity: (a) monthly (b) quarterly (c) semi-annually (d) annually (e) other ________________________ (specify period, may not be less frequent than annually) Discretionary Contributions will be allocated: (a) to each Participant who is an active Employee at any time during the Plan Year (b) to each Participant who is either an active Employee on the last day of the Plan Year or is credited with more than 500 Hours of Service in the Plan Year V. NORMAL RETIREMENT AGE 1. The Normal Retirement Age under the Plan is: (a) age 65 (b) age __ (specify between 55 and 64) VI. VESTED PERCENTAGE 1. Participants' vested percentage upon termination prior to Normal Retirement Age: (a) 100% immediate (b) 100% after __ complete Years of Service for Vesting (not more than 3) (c) a percentage determined in accordance with the following schedule: Years of Service for Vesting Percentage less than 2 0 2 20 3 40 4 60 5 80 6 or more 100 2. To be credited with a Year of Service for Vesting: (a) 12 months of service are required (elapsed time method) (b) 1,000 Hours of Service are required (hour of service method) VII. HARDSHIP 1. Withdrawals for hardship prior to termination of employment: Note: You may elect (a) only if you have not elected an integrated contribution formula under IV.1.(c) above. (a) are permitted (b) are not permitted VIII. DISTRIBUTIONS AND PAYMENTS 1. Distributions under the Plan may be paid as (check one or more boxes as desired): (a) lump sum (b) under systematic withdrawal plan (installments) Note: Under the Plan, if a Participant's Account does not exceed $3,500 (and, if the Participant and (if applicable) his or her spouse consent, if his or her Account does not exceed $10,000) distribution will be made in a lump sum as soon as practicable following retirement or termination of employment. 2. Distributions will begin following termination of employment or retirement (check only one box): (a) as soon as practicable (b) at age 55 Note: You may not elect (c) unless you elected age 65 as the Normal Retirement Age under V.1.(a) above. (c) at age 65 Note: Under the law, distributions following termination of employment or retirement must start in any event within 60 days following the end of the Plan Year in which the Participant attains Normal Retirement Age. Distributions to active Employees must start no later than April 1 following the year in which the Participant attains age 70 1/2. IX. TWO OR MORE PLANS - Limitations on contributions or benefits 1. If the Employer maintains, or maintained, any other defined contribution plan or plans, which are not Master or Prototype Plans, or any welfare benefit fund (as defined in section 419(e) of the Code) or any individual medical account (as defined in section 415(l)(2) of the Code) with respect to Participants in this Plan, Annual Additions for any Limitation Year to this Plan: (a) will be limited in accordance with Section 6.03 of this Plan (b) other method for limiting contributions (attach separate sheet) 2. If the Employer maintains, or maintained, a defined benefit plan or plans, the sum of the Defined Contribution Fraction and Defined Benefit Fraction for a Limitation Year may not exceed the limitation specified in section 415(e), modified by section 416(h)(1) of the Code. This combined plan limit will be met as follows: (a) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0 (b) other method of limiting Annual Additions or reducing projected annual benefits (attach separate sheet) X. TOP-HEAVY PROVISIONS 1. If the Plan becomes a Top-Heavy Plan, minimum contributions: (a) will be provided in accordance with Article 10 of this Plan (b) other method of providing minimum contributions (attach separate sheet) Note: If the Plan becomes top-heavy, additional minimum contributions are required under the Plan on behalf of certain Participants who are also participants in a defined benefit plan maintained by the Employer. 2. If Participants in this Plan are covered under a defined benefit plan or plans of the Employer, for purposes of establishing present value to compute the Top-Heavy Ratio (as defined in Section 10.02 of the Plan), benefits under such plan or plans shall be discounted only for mortality and interest based on the following: Interest Rate ___% Mortality Table ____ XI. ESTABLISHMENT OF TRUST/INVESTMENTS The Employer hereby establishes a Trust under the Plan in the form of the Fidelity Investments 401(a) Trust Agreement; and the trustee indicated below hereby agrees to act as Trustee. Under the Plan, Participants' Accounts will be invested in accordance with Participant directions from among Fidelity funds and other Eligible Investments selected by the Employer. XII. PLAN SPONSOR The Sponsor of the Fidelity Investments 401(a) Prototype Plan is Fidelity Management and Research Company, 82 Devonshire Street, Boston, Massachusetts 02109, (617) 227-3694. Fidelity Management and Research Company will inform the Employer of any amendments to the Plan made by the Sponsor or of the discontinuance of the Plan. XIII. RELIANCE ON OPINION LETTER An Employer who maintains or has maintained, or who later adopts, any plan (including after December 31, 1985, a welfare benefit fund, as defined in section 419(e) of the Code, which provides post-retirement medical benefits allocated to separate accounts for key employees as defined in section 419A(d)(3) of the Code, or an individual medical account, as defined in section 415(l)(2) of the Code) in addition to this Plan may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under section 401 of the Code. If the Employer who adopts or maintains multiple plans wishes to obtain reliance that his or her plan(s) are qualified, application for a determination letter should be made to the appropriate Key District Director of Internal Revenue. The Employer may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under section 401 of the Code unless the terms of the Plan, as herein adopted or amended, that pertain to the requirements of sections 401(a)(4), 401(a)(17), 401(l), 401(a)(5), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986 or later laws, (a) are made effective retroactively to the first day of the first plan year beginning after December 31, 1988 (or such other date on which these requirements first become effective with respect to this plan); or (b) are made effective no later than the first day on which the Employer is no longer entitled, under regulations, to rely on a reasonable, good faith interpretation of these requirements, and the prior provisions of the Plan constitute such an interpretation. This Adoption Agreement may be used only in conjunction with Fidelity Investments 401(a) Prototype Plan Basic Plan Document No. 03. Please complete this Adoption Agreement carefully. Failure to properly fill out the Adoption Agreement could result in disqualification of the Plan. IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this __ day of ________, 19__. ______________________________ Employer By: __________________________ Accepted and Consented to by the Trustee By: ______________________ Date: _______________________ Trustee's Address: Fidelity Management Trust Company 82 Devonshire Street Boston, MA 02109 THE FIDELITY INVESTMENTS 401(A) PROTOTYPE PLAN ADOPTION AGREEMENT NONSTANDARDIZED DISCRETIONARY CONTRIBUTION PLAN PLAN NO. 002 ADOPTION AGREEMENT NONSTANDARDIZED DISCRETIONARY CONTRIBUTION PLAN PLAN NO. 002 I. GENERAL INFORMATION (a) Name of Employer: ___________________________ (b) Address and telephone number: _________________ _________________ _________________ (c) Employer identification number: _____________ (a) Name of principal contact: _______________ (b) Office to provide information to Participants: _____________________ (a) Name of Plan: ____________________ (b) Plan number: _____________________ (c) Plan Year ends: ___________________ (d) Employer's fiscal year ends: _______________ Employer [ ] maintains [ ] does not maintain a tax-sheltered annuity program under which Employees are required, as a condition of employment or under a one-time election, to make pre-tax contributions. II. ADOPTION The Employer hereby: (a) adopts a discretionary contribution plan in the form of the Fidelity Investments 401(a) Prototype Plan. (b) amends, restates and continues its existing qualified defined contribution plan(s) in the form of the Fidelity Investments 401(a) Prototype Plan, effective as of ______________, and transfers all qualified plan funds to the Plan. Note: If you maintain another qualified defined contribution plan you may transfer funds from the other plan to the Plan, regardless of whether you have checked (a) or (b) above. If all funds from the other qualified plan are transferred, the other plan will be considered amended and restated in the form of the Plan. III. COVERAGE All Employees of the Employer who meet the conditions specified below will be covered by the Plan. 1. Service requirements - (a) date of employment (b) six months of service (c) one Year of Service for Participation Note: If you wish to check the following box, the following three rules will apply: (1) you may not offer 401(k) Election Contributions, (2) you must elect 100% immediate vesting under XI.1.(a) and XII.1.(a) below, and (3) you may not elect age 26 under III.3.(c) below. (d) two Years of Service for Participation 2. Hours of Service - (complete only if 1 or 2 Years of Service for Participation is required for coverage) To be credited with a Year of Service, (a) 1,000 or more Hours of Service are required (b) 500 or more Hours of Service are required (c) no Hours of Service are required (d) __ (specify Hours of Service required, must be less than 1,000) 3. Age requirements - (a) no age requirement (b) attain age 21 Note: If you wish to check the following box, you must be a tax-exempt educational institution, and you may not elect two Years of Service for Participation as the eligibility requirement under III.1.(d) above. (c) attain age 26 4. Employees covered by a collective bargaining agreement are: (a) included (b) excluded IV. DISCRETIONARY EMPLOYER CONTRIBUTIONS 1. The Employer may, in its discretion, elect to contribute each year: (a) a uniform % of Compensation to be determined each year (b) __% of each Participant's Compensation (c) __% of each Participant's Compensation up to the Integration Level, plus __% of each Participant's Compensation in excess of the Integration Level Note: If the Plan becomes top-heavy, the contribution formula may be increased to three percent (3%) of Compensation for non-key employees in accordance with the top-heavy provisions of Article 10 of the Plan. 2. If IV.1.(c) is selected, the Integration Level is: (a) the Social Security Taxable Wage Base (b) 80% of the Social Security Taxable Wage Base (c) 50% of the Social Security Taxable Wage Base 3. The Compensation to be used to determine contributions is: Note: You may elect (a) only if you have not elected an integrated contribution formula under IV.1.(c) above. (a) basic compensation - no overtime, bonus, etc. (b) W-2 Compensation 4. Compensation under 3 above is Compensation paid during: (a) the Plan Year (b) the fiscal (or taxable) year ending with or within the Plan Year Compensation described under 3 above (selection of (a) or (b) must be consistent and uniform for all qualified plans of the Employer): (a) includes salary reduction contributions (b) excludes salary reduction contributions Discretionary Contributions on behalf of disabled employees: (a) will be made (b) will not be made Note: Contributions under (a) may be made only for nonhighly compensated employees, will be based on the rate of Compensation immediately prior to disability and will be nonforfeitable when made. Discretionary Contributions will be remitted to Fidelity: (a) monthly (b) quarterly (c) semi-annually (d) annually (e) other _______________________________________ (specify period, may not be less frequent than annually) Discretionary Contributions will be allocated to each Participant: (a) who is an active Employee at any time during the Plan Year (b) who is an active Employee as of the last day of the Plan Year V. 401(K) ELECTIVE CONTRIBUTIONS 1. 401(k) Elective Contributions under the Plan: (a) are permitted (b) are not permitted Note: The amount of 401(k) Elective Contributions for an Employee will be determined under the Contribution Agreement between the Employee and the Employer. 2. If permitted, the maximum amount of Elective Contributions for a given period, in addition to any limits imposed by the Code, will be ___% of Compensation. The percentage limit will based upon Compensation for each: (a) pay period (b) Plan Year 3. 401(k) Elective Contributions will be remitted to Fidelity: (a) at the end of each pay period (b) monthly (c) quarterly VI. EMPLOYEE CONTRIBUTIONS 1. Employee (after-tax) Contributions under the Plan: (a) are permitted (b) are not permitted (c) are no longer permitted; however, accounts reflecting prior Participant After-Tax Contributions will continue to be maintained 1. If permitted, the maximum amount of Employee Contributions for a given period, in addition to any limits imposed by the Code, will be ___% of Compensation. The percentage limit will based upon Compensation for each: (a) pay period (b) Plan Year 2. Employee Contributions will be remitted to Fidelity: (a) at the end of each pay period (b) monthly (c) quarterly VII. EMPLOYER MATCHING CONTRIBUTIONS 1. Employer Matching Contributions under the Plan: (a) are permitted (b) are not permitted 2. Matching Contributions will be based upon: (a) the Elective Contributions made under this Plan or (b) the Employee (after-tax) Contributions made under this Plan or (c) the salary reduction contributions made under a 403(b) arrangement maintained by the Employer 3. The amount of Employer Matching Contributions for an Employee will be determined as follows: (a) ___% of the contributions which do not exceed ___% of Compensation or (b) ___% of the contributions which do not exceed the first ___% of Compensation, plus ___% of the contributions which do not exceed the next ___% of Compensation, plus ___% of the contributions which do not exceed the next ___% of Compensation or (c) ___ (specify other matching formula): ______________________________________________ ______________________________________________ 4. Matching Contributions will be determined based on the contributions made for each (check one): (a) ___ pay period (b) ___ Plan Year (c) ___ other period (specify: _____________________ ____________________________________________) 5. Matching Contributions will be remitted to Fidelity: (a) monthly (b) quarterly (c) semi-annually (d) annually (e) other ________________________________ (specify period, may not be less frequent than annually) VIII. QUALIFIED NON-ELECTIVE CONTRIBUTIONS 1. Qualified Non-Elective Contributions under the Plan: (a) are permitted (b) are not permitted IX. ROLLOVER CONTRIBUTIONS 1. Rollover Contributions under the Plan: (a) are permitted (b) are not permitted X. NORMAL RETIREMENT AGE 1. The Normal Retirement Age under the Plan is: (a) age 65 (b) age __ (specify between 55 and 64) XI. VESTED PERCENTAGE OF CONTRIBUTIONS 1. Participants' vested percentage of their Discretionary Contribution Account upon termination prior to Normal Retirement Age: (a) N/A - No Discretionary Contributions (b) 100% immediate (c) 100% after __ complete Years of Service for Vesting (not more than 5) (d) a percentage determined in accordance with the following schedule: ___% after 1 Year of Service for Vesting ___% after 2 Years of Service for Vesting ___% (not less than 20%) after 3 Years of Service for Vesting ___% (not less than 40%) after 4 Years of Service for Vesting ___% (not less than 60%) after 5 Years of Service for Vesting ___% (not less than 80%) after 6 Years of Service for Vesting ___% (not less than 100%) after 7 Years of Service for Vesting Note: If the Plan becomes top-heavy, the vested percentage under the Plan for each Employee who is not already 100% vested will automatically become 100% after 3 Years of Service for Vesting. 2. Participants' vested percentage of their Matching Contribution Account upon termination prior to Normal Retirement Age: (a) N/A - No Matching Contributions (b) 100% immediate (c) 100% after __ complete Years of Service for Vesting (not more than 5) (d) a percentage determined in accordance with the following schedule: ___% after 1 Year of Service for Vesting ___% after 2 Years of Service for Vesting ___% (not less than 20%) after 3 Years of Service for Vesting ___% (not less than 40%) after 4 Years of Service for Vesting ___% (not less than 60%) after 5 Years of Service for Vesting ___% (not less than 80%) after 6 Years of Service for Vesting ___% (not less than 100%) after 7 Years of Service for Vesting Note: If the Plan becomes top-heavy, the vested percentage under the Plan for each Employee who is not already 100% vested will automatically become 100% after 3 Years of Service for Vesting. 3. To be credited with a Year of Service for Vesting: (a) 12 months of service are required (elapsed time method) (b) 1,000 Hours of Service are required (hour of service method) XII. EMPLOYEE CONTRIBUTION WITHDRAWALS 1. Withdrawals of Employee (after-tax) Contributions for any reason: (b) are permitted once per year (c) are not permitted XIII. HARDSHIP WITHDRAWALS 1. Withdrawals for hardship prior to termination of employment: (a) are permitted (b) are not permitted Note: Amounts attributable to integrated contributions made under IV.1.(c) above or income earned by Elective Contributions after 1988 may not be withdrawn for hardship reasons. XIV. POST AGE 59 1/2 WITHDRAWALS 1. Withdrawals after age 59 1/2 prior to termination of employment: (a) are permitted (b) are not permitted XV. DISTRIBUTIONS AND PAYMENTS 1. Distributions under the Plan may be paid as (check one or more boxes as desired): (a) lump sum (b) under systematic withdrawal plan (installments) (c) purchase of annuity contract Note: Under the Plan, if a Participant's Account does not exceed $3,500 (and, if the Participant and (if applicable) his or her spouse consent, if his or her Account does not exceed $10,000) distribution will be made in a lump sum as soon as practicable following retirement or termination of employment. 2. Distributions will begin following termination of employment or retirement (check only one box): (a) as soon as practicable (b) at age 55 Note: You may not elect (c) unless you elected age 65 as the Normal Retirement Age under VI.1.(a) above. (c) at age 65 Note: Under the law, distributions following termination of employment or retirement must start in any event within 60 days following the end of the Plan Year in which the Participant attains Normal Retirement Age. Distributions to active Employees must start no later than April 1 following the year in which the Participant attains age 70 1/2. XVI. TWO OR MORE PLANS - LIMITATIONS ON CONTRIBUTIONS OR BENEFITS 1. If the Employer maintains, or maintained, any other defined contribution plan or plans, which are not Master or Prototype Plans, or any welfare benefit fund (as defined in section 419(e) of the Code) or any individual medical account (as defined in section 415(l)(2) of the Code) with respect to Participants in this Plan, Annual Additions for any Limitation Year to this Plan: (a) will be limited in accordance with Section 6.3 of this Plan (b) other method for limiting contributions (attach separate sheet) 2. If the Employer maintains, or maintained, a defined benefit plan or plans, the sum of the Defined Contribution Fraction and Defined Benefit Fraction for a Limitation Year may not exceed the limitation specified in section 415(e), modified by section 416(h)(1) of the Code. This combined plan limit will be met as follows: (a) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0 (b) other method of limiting Annual Additions or reducing projected annual benefits (attach separate sheet) XVII. TOP-HEAVY PROVISIONS 1. If the Plan becomes a Top-Heavy Plan, minimum contributions: (a) will be provided in accordance with Article 10 of this Plan (b) other method of providing minimum contributions (attach separate sheet) Note: If the Plan becomes top-heavy, additional minimum contributions are required under the Plan on behalf of certain Participants who are also participants in a defined benefit plan maintained by the Employer. 2. If Participants in this Plan are covered under a defined benefit plan or plans of the Employer, for purposes of establishing present value to compute the Top-Heavy Ratio (as defined in Section 10.2 of the Plan), benefits under such plan or plans shall be discounted only for mortality and interest based on the following: Interest Rate ___% Mortality Table ____ XVIII. ESTABLISHMENT OF TRUST/INVESTMENTS The Employer hereby establishes a Trust under the Plan in the form of the Fidelity Investments 401(a) Trust Agreement; and the trustee indicated below hereby agrees to act as Trustee. Under the Plan, Participants' Accounts will be invested in accordance with Participant directions from among Fidelity funds and other Eligible Investments selected by Employer. XIX. PLAN SPONSOR The Sponsor of the Fidelity Investments 401(a) Prototype Plan is Fidelity Management and Research Company, 82 Devonshire Street, Boston, Massachusetts 02109, 1-800-343-0860. Fidelity Management and Research Company will inform the Employer of any amendments to the Plan made by the Sponsor or of the discontinuance of the Plan. XX. RELIANCE ON OPINION LETTER The Employer may not rely on an opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under section 401 of the Internal Revenue Code. In order to obtain reliance with respect to Plan qualification, the Employer must apply to the appropriate Key District Office for a determination letter. This Adoption Agreement may be used only in conjunction with Fidelity Investments 401(a) Prototype Plan Basic Plan Document No. 03. Please complete this Adoption Agreement carefully. Failure to properly fill out the Adoption Agreement could result in disqualification of the Plan. IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this __ day of ________, 19__. ______________________________ Employer By: _________________________ Accepted and Consented to by the Trustee By: _____________________ Date: _______________________ Trustee's Address: Fidelity Management Trust Company 82 Devonshire Street Boston, MA 02109 THE FIDELITY INVESTMENTS 401(A) PROTOTYPE PLAN ADOPTION AGREEMENT NONSTANDARDIZED DISCRETIONARY CONTRIBUTION PLAN PLAN NO. 003 ADOPTION AGREEMENT NONSTANDARDIZED DISCRETIONARY CONTRIBUTION PLAN PLAN NO. 003 I. GENERAL INFORMATION (a) Name of Employer: ___________________________ (b) Address and telephone number: _________________ _________________ _________________ (c) Employer identification number: _____________ (a) Name of principal contact: _______________ (b) Office to provide information to Participants: _____________________ (a) Name of Plan: ____________________ (b) Plan number: _____________________ (c) Plan Year ends: ___________________ (d) Employer's fiscal year ends: _______________ Employer [ ] maintains [ ] does not maintain a tax-sheltered annuity program under which Employees are required, as a condition of employment or under a one-time election, to make pre-tax contributions. II. ADOPTION The Employer hereby: (a) adopts a discretionary contribution plan in the form of the Fidelity Investments 401(a) Prototype Plan. (b) amends, restates and continues its existing qualified defined contribution plan(s) in the form of the Fidelity Investments 401(a) Prototype Plan, effective as of ______________, and transfers all qualified plan funds to the Plan. Note: If you maintain another qualified defined contribution plan you may transfer funds from the other plan to the Plan, regardless of whether you have checked (a) or (b) above. If all funds from the other qualified plan are transferred, the other plan will be considered amended and restated in the form of the Plan. III. COVERAGE All Employees of the Employer who meet the conditions specified below will be covered by the Plan. 1. Service requirements - (a) date of employment (b) six months of service (c) one Year of Service for Participation Note: If you wish to check the following box, the following three rules will apply: (1) you may not offer 401(k) Election Contributions, (2) you must elect 100% immediate vesting under XI.1.(a) and XII.1.(a) below, and (3) you may not elect age 26 under III.3.(c) below. (d) two Years of Service for Participation 2. Hours of Service - (complete only if 1 or 2 Years of Service for Participation is required for coverage) To be credited with a Year of Service, (a) 1,000 or more Hours of Service are required (b) 500 or more Hours of Service are required (c) no Hours of Service are required (d) __ (specify Hours of Service required, must be less than 1,000) 3. Age requirements - (a) no age requirement (b) attain age 21 Note: If you wish to check the following box, you must be a tax-exempt educational institution, and you may not elect two Years of Service for Participation as the eligibility requirement under III.1.(d) above. (c) attain age 26 4. Employees covered by a collective bargaining agreement are: (a) included (b) excluded IV. DISCRETIONARY EMPLOYER CONTRIBUTIONS 1. The Employer may, in its discretion, elect to contribute each year: (a) a uniform % of Compensation to be determined each year (b) __% of each Participant's Compensation (c) __% of each Participant's Compensation up to the Integration Level, plus __% of each Participant's Compensation in excess of the Integration Level Note: If the Plan becomes top-heavy, the contribution formula may be increased to three percent (3%) of Compensation for non-key employees in accordance with the top-heavy provisions of Article 10 of the Plan. 2. If IV.1.(c) is selected, the Integration Level is: (a) the Social Security Taxable Wage Base (b) 80% of the Social Security Taxable Wage Base (c) 50% of the Social Security Taxable Wage Base 3. The Compensation to be used to determine contributions is: Note: You may elect (a) only if you have not elected an integrated contribution formula under IV.1.(c) above. (a) basic compensation - no overtime, bonus, etc. (b) W-2 Compensation 4. Compensation under 3 above is Compensation paid during: (a) the Plan Year (b) the fiscal (or taxable) year ending with or within the Plan Year 5. Compensation described under 3 above (selection of (a) or (b) must be consistent and uniform for all qualified plans of the Employer): (a) includes salary reduction contributions (b) excludes salary reduction contributions 6. Discretionary Contributions on behalf of disabled employees: (a) will be made (b) will not be made Note: Contributions under (a) may be made only for nonhighly compensated employees, will be based on the rate of Compensation immediately prior to disability and will be nonforfeitable when made. 7. Discretionary Contributions will be remitted to Fidelity: (a) monthly (b) quarterly (c) semi-annually (d) annually (e) other _______________________________________ (specify period, may not be less frequent than annually) 8. Discretionary Contributions will be allocated to each Participant: (a) who is an active Employee at any time during the Plan Year (b) who is an active Employee as of the last day of the Plan Year V. 401(K) ELECTIVE CONTRIBUTIONS 1. 401(k) Elective Contributions under the Plan: (a) are permitted (b) are not permitted Note: The amount of 401(k) Elective Contributions for an Employee will be determined under the Contribution Agreement between the Employee and the Employer. 2. If permitted, the maximum amount of Elective Contributions for a given period, in addition to any limits imposed by the Code, will be ___% of Compensation. The percentage limit will based upon Compensation for each: (a) pay period (b) Plan Year 3. 401(k) Elective Contributions will be remitted to Fidelity: (a) at the end of each pay period (b) monthly (c) quarterly VI. EMPLOYEE CONTRIBUTIONS 1. Employee (after-tax) Contributions under the Plan: (a) are permitted (b) are not permitted (c) are no longer permitted; however, accounts reflecting prior Participant After-Tax Contributions will continue to be maintained 2. If permitted, the maximum amount of Employee Contributions for a given period, in addition to any limits imposed by the Code, will be ___% of Compensation. The percentage limit will based upon Compensation for each: (a) pay period (b) Plan Year 3. Employee Contributions will be remitted to Fidelity: (a) at the end of each pay period (b) monthly (c) quarterly VII. EMPLOYER MATCHING CONTRIBUTIONS 1. Employer Matching Contributions under the Plan: (a) are permitted (b) are not permitted 2. Matching Contributions will be based upon: (a) the Elective Contributions made under this Plan or (b) the Employee (after-tax) Contributions made under this Plan or (c) the salary reduction contributions made under a 403(b) arrangement maintained by the Employer 3. The amount of Employer Matching Contributions for an Employee will be determined as follows: (a) ___% of the contributions which do not exceed ___% of Compensation or (b) ___% of the contributions which do not exceed the first ___% of Compensation, plus ___% of the contributions which do not exceed the next ___% of Compensation, plus ___% of the contributions which do not exceed the next ___% of Compensation or (c) ___ (specify other matching formula): ________________________________________________ ________________________________________________ 4. Matching Contributions will be determined based on the contributions made for each (check one): (a) ___ pay period (b) ___ Plan Year (c) ___ other period (specify: _____________________ _____________________________________________) Matching Contributions will be remitted to Fidelity: (a) monthly (b) quarterly (c) semi-annually (d) annually (e) other ________________________________ (specify period, may not be less frequent than annually) VIII. QUALIFIED NON-ELECTIVE CONTRIBUTIONS 1. Qualified Non-Elective Contributions under the Plan: (a) are permitted (b) are not permitted IX. ROLLOVER CONTRIBUTIONS 1. Rollover Contributions under the Plan: (a) are permitted (b) are not permitted X. NORMAL RETIREMENT AGE 1. The Normal Retirement Age under the Plan is: (a) age 65 (b) age __ (specify between 55 and 64) XI. VESTED PERCENTAGE OF CONTRIBUTIONS 1. Participants' vested percentage of their Discretionary Contribution Account upon termination prior to Normal Retirement Age: (a) N/A - No Discretionary Contributions (b) 100% immediate (c) 100% after __ complete Years of Service for Vesting (not more than 5) (d) a percentage determined in accordance with the following schedule: ___% after 1 Year of Service for Vesting ___% after 2 Years of Service for Vesting ___% (not less than 20%) after 3 Years of Service for Vesting ___% (not less than 40%) after 4 Years of Service for Vesting ___% (not less than 60%) after 5 Years of Service for Vesting ___% (not less than 80%) after 6 Years of Service for Vesting ___% (not less than 100%) after 7 Years of Service for Vesting Note: If the Plan becomes top-heavy, the vested percentage under the Plan for each Employee who is not already 100% vested will automatically become 100% after 3 Years of Service for Vesting. 2. Participants' vested percentage of their Matching Contribution Account upon termination prior to Normal Retirement Age: (a) N/A - No Matching Contributions (b) 100% immediate (c) 100% after __ complete Years of Service for Vesting (not more than 5) (d) a percentage determined in accordance with the following schedule: ___% after 1 Year of Service for Vesting ___% after 2 Years of Service for Vesting ___% (not less than 20%) after 3 Years of Service for Vesting ___% (not less than 40%) after 4 Years of Service for Vesting ___% (not less than 60%) after 5 Years of Service for Vesting ___% (not less than 80%) after 6 Years of Service for Vesting ___% (not less than 100%) after 7 Years of Service for Vesting Note: If the Plan becomes top-heavy, the vested percentage under the Plan for each Employee who is not already 100% vested will automatically become 100% after 3 Years of Service for Vesting. 3. To be credited with a Year of Service for Vesting: (a) 12 months of service are required (elapsed time method) (b) 1,000 Hours of Service are required (hour of service method) XII. EMPLOYEE CONTRIBUTION WITHDRAWALS Withdrawals of Employee (after-tax) Contributions for any reason: (a) are permitted once per year (b) are not permitted XIII. HARDSHIP WITHDRAWALS 1. Withdrawals for hardship prior to termination of employment: 1. are permitted 2. are not permitted Note: Amounts attributable to integrated contributions made under IV.1.(c) above or income earned by Elective Contributions after 1988 may not be withdrawn for hardship reasons. XIV. POST AGE 59 1/2 WITHDRAWALS 1. Withdrawals after age 59 1/2 prior to termination of employment: (a) are permitted (b) are not permitted XV. LOANS 1. Loans to a Participant from his or her Account: (a) are permitted (b) are not permitted XVI. DISTRIBUTIONS AND PAYMENTS 1. Distributions under the Plan may be paid as (check one or more boxes as desired): (a) lump sum (b) under systematic withdrawal plan (installments) (c) purchase of annuity contract Note: Under the Plan, if a Participant's Account does not exceed $3,500 (and, if the Participant and (if applicable) his or her spouse consent, if his or her Account does not exceed $10,000) distribution will be made in a lump sum as soon as practicable following retirement or termination of employment. 2. Distributions will begin following termination of employment or retirement (check only one box): (a) as soon as practicable (b) at age 55 Note: You may not elect (c) unless you elected age 65 as the Normal Retirement Age under VI.1.(a) above. (c) at age 65 Note: Under the law, distributions following termination of employment or retirement must start in any event within 60 days following the end of the Plan Year in which the Participant attains Normal Retirement Age. Distributions to active Employees must start no later than April 1 following the year in which the Participant attains age 70 1/2. XVII. TWO OR MORE PLANS - LIMITATIONS ON CONTRIBUTIONS OR BENEFITS 1. If the Employer maintains, or maintained, any other defined contribution plan or plans, which are not Master or Prototype Plans, or any welfare benefit fund (as defined in section 419(e) of the Code) or any individual medical account (as defined in section 415(l)(2) of the Code) with respect to Participants in this Plan, Annual Additions for any Limitation Year to this Plan: (a) will be limited in accordance with Section 6.3 of this Plan (b) other method for limiting contributions (attach separate sheet) 2. If the Employer maintains, or maintained, a defined benefit plan or plans, the sum of the Defined Contribution Fraction and Defined Benefit Fraction for a Limitation Year may not exceed the limitation specified in section 415(e), modified by section 416(h)(1) of the Code. This combined plan limit will be met as follows: (a) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0 (b) other method of limiting Annual Additions or reducing projected annual benefits (attach separate sheet) XVIII. TOP-HEAVY PROVISIONS 1. If the Plan becomes a Top-Heavy Plan, minimum contributions: (a) will be provided in accordance with Article 10 of this Plan (b) other method of providing minimum contributions (attach separate sheet) Note: If the Plan becomes top-heavy, additional minimum contributions are required under the Plan on behalf of certain Participants who are also participants in a defined benefit plan maintained by the Employer. 2. If Participants in this Plan are covered under a defined benefit plan or plans of the Employer, for purposes of establishing present value to compute the Top-Heavy Ratio (as defined in Section 10.2 of the Plan), benefits under such plan or plans shall be discounted only for mortality and interest based on the following: Interest Rate ___% Mortality Table ____ XIX. ESTABLISHMENT OF TRUST/INVESTMENTS The Employer hereby establishes a Trust under the Plan in the form of the Fidelity Investments 401(a) Trust Agreement; and the trustee indicated below hereby agrees to act as Trustee. Under the Plan, Participants' Accounts will be invested in accordance with Participant directions from among Fidelity funds and other Eligible Investments selected by Employer. XX. PLAN SPONSOR The Sponsor of the Fidelity Investments 401(a) Prototype Plan is Fidelity Management and Research Company, 82 Devonshire Street, Boston, Massachusetts 02109, 1-800-343-0860. Fidelity Management and Research Company will inform the Employer of any amendments to the Plan made by the Sponsor or of the discontinuance of the Plan. XXI. RELIANCE ON OPINION LETTER The Employer may not rely on an opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under section 401 of the Internal Revenue Code. In order to obtain reliance with respect to Plan qualification, the Employer must apply to the appropriate Key District Office for a determination letter. This Adoption Agreement may be used only in conjunction with Fidelity Investments 401(a) Prototype Plan Basic Plan Document No. 03. Please complete this Adoption Agreement carefully. Failure to properly fill out the Adoption Agreement could result in disqualification of the Plan. IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this __ day of ________, 19__. ______________________________ Employer By: ___________________________ Accepted and Consented to by the Trustee By: _____________________ Date: _______________________ Trustee's Address: Fidelity Management Trust Company 82 Devonshire Street Boston, MA 02109 EX-99.B14 8 Exhibit 14(o) THE INSTITUTIONAL PROTOTYPE PLAN FIDELITY BASIC PLAN DOCUMENT NO. 08 11/28/94 DRAFT THE INSTITUTIONAL PROTOTYPE PLAN ARTICLE 1 ADOPTION AGREEMENT ARTICLE 2 DEFINITIONS ARTICLE 3 PARTICIPATION 3.01 - DATE OF PARTICIPATION 3.02 - REEMPLOYMENT OR RETURN TO ELIGIBLE CLASS OF PARTICIPANTS 3.03 - PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES ARTICLE 4 CONTRIBUTIONS 4.01 - DEFERRAL CONTRIBUTIONS 4.02 - ADDITIONAL LIMIT ON DEFERRAL CONTRIBUTIONS 4.03 - MATCHING CONTRIBUTIONS 4.04 - LIMIT ON MATCHING CONTRIBUTIONS AND EMPLOYEE CONTRIBUTIONS 4.05 - SPECIAL RULES 4.06 - FIXED OR DISCRETIONARY EMPLOYER CONTRIBUTIONS 4.07 - TIME OF MAKING EMPLOYER CONTRIBUTIONS 4.08 - RETURN OF EMPLOYER CONTRIBUTIONS 4.09 - EMPLOYEE CONTRIBUTIONS 4.10 - ROLLOVER CONTRIBUTIONS ARTICLE 5 PARTICIPANTS' ACCOUNTS 5.01 - INDIVIDUAL ACCOUNTS 5.02 - VALUATION OF ACCOUNTS 5.03 - CODE SECTION 415 LIMITATIONS ARTICLE 6 INVESTMENT OF CONTRIBUTIONS 6.01 - MANNER OF INVESTMENT 6.02 - INVESTMENT DECISIONS 6.03 - DIRECTION TO TRUSTEE 6.04 - TRUSTEE INVESTMENT ADVICE ARTICLE 7 RIGHT TO BENEFITS 7.01 - NORMAL OR EARLY RETIREMENT 7.02 - LATE RETIREMENT 7.03 - DISABILITY RETIREMENT 7.04 - DEATH 7.05 - OTHER TERMINATION OF EMPLOYMENT 7.06 - SEPARATE ACCOUNT 7.07 - FORFEITURES 7.08 - ADJUSTMENT FOR INVESTMENT EXPERIENCE 7.09 - PARTICIPANT LOANS 7.10 - HARDSHIP DISTRIBUTIONS 7.11 - IN-SERVICE DISTRIBUTION RULES ARTICLE 8 DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE 8.01 - DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES 8.02 - ANNUITY DISTRIBUTIONS 8.03 - JOINT AND SURVIVOR ANNUITIES 8.04 - INSTALLMENT DISTRIBUTIONS 8.05 - IMMEDIATE DISTRIBUTIONS 8.06 - DETERMINATION OF METHOD OF DISTRIBUTION 8.07 - NOTICE TO TRUSTEE 8.08 - TIME OF DISTRIBUTION 8.09 - WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES ARTICLE 9 TOP-HEAVY PROVISIONS 9.01 - APPLICATION 9.02 - DEFINITIONS 9.03 - MINIMUM CONTRIBUTION 9.04 - ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS ARTICLE 10 AMENDMENT AND TERMINATION 10.01 - AMENDMENT BY EMPLOYER 10.02 - AMENDMENT BY FIDELITY 10.03 - AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS 10.04 - RETROACTIVE AMENDMENTS 10.05 - TERMINATION 10.06 - DISTRIBUTION UPON TERMINATION OF THE PLAN 10.07 - MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS ARTICLE 11 AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO OR FROM OTHER QUALIFIED PLANS 11.01 - AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN 11.02 - TRANSFER OF FUNDS FROM AN EXISTING PLAN 11.03 - ACCEPTANCE OF ASSETS BY TRUSTEE 11.04 - TRANSFER OF ASSETS FROM TRUST ARTICLE 12 MISCELLANEOUS 12.01 - COMMUNICATION TO PARTICIPANTS 12.02 - LIMITATION OF RIGHTS 12.03 - NONALIENABILITY OF BENEFITS 12.04 - FACILITY OF PAYMENT 12.05 - INFORMATION BETWEEN EMPLOYER AND TRUSTEE 12.06 - EFFECT OF FAILURE TO QUALIFY UNDER CODE 12.07 - NOTICES 12.08 - GOVERNING LAW ARTICLE 13 PLAN ADMINISTRATION 13.01 - POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR 13.02 - NONDISCRIMINATORY EXERCISE OF AUTHORITY 13.03 - CLAIMS AND REVIEW PROCEDURES 13.04 - NAMED FIDUCIARY 13.05 - COSTS OF ADMINISTRATION ARTICLE 14 TRUST AGREEMENT 14.01 - ACCEPTANCE OF TRUST RESPONSIBILITIES 14.02 - ESTABLISHMENT OF TRUST FUND 14.03 - EXCLUSIVE BENEFIT 14.04 - POWERS OF TRUSTEE 14.05 - ACCOUNTS 14.06 - APPROVING OF ACCOUNTS 14.07 - DISTRIBUTION FROM TRUST FUND 14.08 - TRANSFER OF AMOUNTS FROM QUALIFIED PLAN 14.09 - TRANSFER OF ASSETS FROM TRUST 14.10 - VOTING; DELIVERY OF INFORMATION 14.11 - COMPENSATION AND EXPENSES OF TRUSTEE 14.12 - RELIANCE BY TRUSTEE ON OTHER PERSONS 14.13 - TRUSTEE'S RESPONSIBILITIES AND INDEMNIFICATION 14.14 - CONSULTATION BY TRUSTEE WITH COUNSEL 14.15 - PERSONS DEALING WITH THE TRUSTEE 14.16 - RESIGNATION OR REMOVAL OF TRUSTEE 14.17 - FISCAL YEAR OF THE TRUST 14.18 - DISCHARGE OF DUTIES BY FIDUCIARIES 14.19 - AMENDMENT 14.20 - PLAN TERMINATION 14.21 - PERMITTED REVERSION OF FUNDS TO EMPLOYER 14.22 - GOVERNING LAW Article 1. Adoption Agreement. Article 2. Definitions. 2.01. Definitions. (a) Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context: (1) "Account" means an account established on the books of the Trust for the purpose of recording contributions made on behalf of a Participant and any income, expenses, gains or losses incurred thereon. (2) "Administrator" means the Employer, or other person designated by the Employer in the Adoption Agreement. (3) "Adoption Agreement" means Article 1 under which the Employer establishes and adopts, or amends, the Plan and Trust and designates the optional provisions selected by the Employer, and the Trustee accepts its responsibilities under Article 14. The provisions of the Adoption Agreement shall be an integral part of the Plan. (4) "Annuity Starting Date" means the first day of the first period for which an amount is payable as an annuity or in any other form. (5) "Beneficiary" means the person or persons (within the meaning of Code Section 7701(a)(1)) entitled under Section 7.04 to receive benefits under the Plan upon the death of a Participant, provided that for purposes of Section 7.04 such term shall be applied in accordance with Section 401(a)(9) of the Code and the regulations thereunder. (6) "Code" means the Internal Revenue Code of 1986, as amended from time to time. (7) "Compensation" shall mean compensation as that term is defined in Section 5.03(e)(2) of the Plan. Compensation shall include only that compensation which is actually paid to the Participant as an Employee during the Plan Year or, for purposes of Article 4 if so elected by the Employer in Section 1.04(e), during that portion of the Plan Year during which the Employee is eligible to participate; however, for purposes of Section 5.03, Compensation shall include that compensation which is actually paid or made available during the Limitation Year. In addition, except for purposes of Section 5.03 (relating to Code Section 415 limitations) or Article 9 (relating to top-heavy plans), the term "Compensation" shall include amounts that are not includible in the gross income of a Participant under a salary reduction agreement by reason of the application of Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code. In the case of any Self-Employed Individual, Compensation shall include the Individual's Earned Income. The annual Compensation of each Participant taken into account under the Plan shall not exceed the limit on Compensation under Code Section 401(a)(17), which is: (i) $200,000 for any year beginning after December 31, 1988 but before January 1, 1994, as adjusted by the Secretary at the same time and in the same manner as under Section 415(d) of the Code, and (ii) $150,000 for any year beginning after December 31, 1993, as adjusted in accordance with Code Section 401(a)(17)(B). If a plan determines Compensation on a period of time that contains fewer than 12 calendar months, the annual Compensation limit is an amount equal to the annual Compensation limit for the calendar year in which the Compensation period begins multiplied by the ratio obtained by dividing the number of full months in the period by 12. If Compensation for any prior Plan Year is taken into account in determining an Employee's contributions or benefits for the current year, the Compensation for such prior year is subject to the applicable annual Compensation limit in effect for that prior year. For this purpose, for periods beginning before the first day of the first Plan Year beginning on or after January 1, 1994, such limit shall be $150,000. In determining the Compensation of a Participant for purposes of this limitation, the rules of Section 414(q)(6) of the Code shall apply, except that in applying such rules, the term "family" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the year. If the annual Compensation limitation is exceeded as a result of the application of these rules, then the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section prior to the application of this limitation. (8) "Earned Income" means the net earnings of a Self-Employed Individual derived from the trade or business with respect to which the Plan is established and for which the personal services of such individual are a material income-producing factor, excluding any items not included in gross income and the deductions allocated to such items, except that for taxable years beginning after December 31, 1989 net earnings shall be determined with regard to the deduction allowed to the taxpayer under Section 164(f) of the Code, to the extent applicable to the Employer. Net earnings shall be reduced by contributions of the Employer to any qualified plan, to the extent a deduction is allowed to the Employer for such contributions under Section 404 of the Code. (9) "Eligibility Computation Period" means each 12-consecutive month period beginning with the Employment Commencement Date and each anniversary thereof. (10) "Employee" means any individual employed by the Employer. For purposes of the Plan, an individual shall be considered to become an Employee on the date on which he first completes an Hour of Service and he shall be considered to have ceased to be an Employee on the date on which he last completes an Hour of Service. The term also includes a Leased Employee, such that contributions or benefits provided by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the Employer. Notwithstanding the above, a Leased Employee shall not be considered an Employee if Leased Employees do not constitute more than 20 percent of the Employer's non-highly compensated work force (taking into account all Related Employers) and the Leased Employee is covered by a money purchase pension plan maintained by the leasing organization which plan provides (i) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined for purposes of Section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludible from gross income under Section 125, Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code, (ii) full and immediate vesting, and (iii) immediate participation by each employee of the leasing organization. (11) "Employer" means the employer named in the Section 1.02(a), and any Related Employers designated by Section 1.02(b). (12) "Employment Commencement Date" means the date on which the Employee first performs an Hour of Service. (13) "ERISA" means the Employee Retirement Income Security Act of 1974, as from time to time amended. (14) "Fidelity" means Fidelity Management and Research Company, or its successor, which is the mass submitter of this institutional prototype plan. (15) "Fidelity Fund" means any Registered Investment Company for which Fidelity Management and Research Company serves as investment adviser [OPTIONAL: , and the Managed Income Portfolio I of the Fidelity Group Trust for Employee Benefit Plans or any other group trust for which Fidelity or an affiliate serves as investment manager or discretionary trustee and that has been made available as an investment under this Plan]. (16) "Fund Share" means the share, unit, or other evidence of ownership in a Fidelity Fund, [OPTIONAL: or] in any other Registered Investment Company [OPTIONAL: , or in a commingled fund for investment by qualified plans maintained by a bank or trust company (including the Trustee, if applicable)]. (17) "Highly Compensated Employee" means both highly compensated active Employees and highly compensated former Employees. A highly compensated active Employee includes any Employee who performs service for the Employer or a Related Employer during the determination year and who, during the look-back year: (i) received compensation from the Employer or Related Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (ii) received compensation from the Employer or a Related Employer in excess of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a member of the top-paid group for such year; or (iii) was an officer of the Employer or a Related Employer and received compensation during such year that is greater than 50 percent of the dollar limitation in effect under Section 415(b)(1)(A) of the Code. The term highly compensated Employee also includes: (i) Employees who are both described in the preceding sentence if the term "determination year" is substituted for the term "look-back year" and the Employee is one of the 100 Employees who received the most compensation from the Employer or a Related Employer during the determination year; and (ii) Employees who are 5 percent owners at any time during the look-back year or determination year. If no officer has reached or exceeded the compensation threshold of (iii) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a highly compensated Employee. For this purpose, the determination year shall be the Plan Year. The look-back year shall be the twelve-month period immediately preceding the determination year. A highly compensated former Employee includes any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no service for the Employer or a Related Employer during the determination year, and was a highly compensated active Employee for either the separation year or any determination year ending on or after the Employee's 55th birthday. If an Employee is, during a determination year or look-back year, a family member of either a 5 percent owner who is an active or former Employee or a highly compensated Employee who is one of the 10 most highly compensated Employees ranked on the basis of compensation paid by the Employer or a Related Employer during such year, then the family member and the 5 percent owner or top-ten highly compensated Employee shall be aggregated. In such case, the family member and 5 percent owner or top-ten highly compensated Employee shall be treated as a single Employee receiving compensation and plan contributions or benefits equal to the sum of such compensation and contributions or benefits of the family member and 5 percent owner or top-ten highly compensated Employee. For purposes of this Section, family member includes the spouse, lineal ascendants and descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. The determination of who is a highly compensated Employee, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees, the number of Employees treated as officers and the compensation that is considered, will be made in accordance with Section 414(q) of the Code and the regulations thereunder. (18) "Hour of Service" means, with respect to any Employee, (A) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, for the performance of duties for the Employer or a Related Employer, each such hour to be credited to the Employee for the Eligibility Computation Period in which the duties were performed; (B) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, by the Employer or Related Employer (including payments made or due from a trust fund or insurer to which the Employer contributes or pays premiums) on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty, or leave of absence, each such hour to be credited to the Employee for the Eligibility Computation Period in which such period of time occurs, subject to the following rules: (i) No more than 501 Hours of Service shall be credited under this paragraph (B) on account of any single continuous period during which the Employee performs no duties; (ii) Hours of Service shall not be credited under this paragraph (B) for a payment which solely reimburses the Employee for medically-related expenses, or which is made or due under a plan maintained solely for the purpose of complying with applicable workmen's compensation, unemployment compensation or disability insurance laws; and (iii) If the period during which the Employee performs no duties falls within two or more Eligibility Computation Periods and if the payment made on account of such period is not calculated on the basis of units of time, the Hours of Service credited with respect to such period shall be allocated between not more than the first two such Eligibility Computation Periods on any reasonable basis consistently applied with respect to similarly situated Employees; and (C) Each hour not counted under paragraph (A) or (B) for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to be paid by the Employer or a Related Employer, each such hour to be credited for the Eligibility Computation Period to which the award or agreement for back pay pertains. For purposes of determining Hours of Service, Employees of the Employer and of all Related Employers will be treated as employed by a single employer. For purposes of paragraphs (B) and (C) above, Hours of Service will be calculated in accordance with the provisions of Section 2530.200b-2(b) of the Department of Labor regulations which are incorporated herein by reference. (19) "Leased Employee" means any individual who provides services to the Employer or a Related Employer (the "recipient") but is not otherwise an employee of the recipient if (i) such services are provided pursuant to an agreement between the recipient and any other person (the "leasing organization"), (ii) such individual has performed services for the recipient (or for the recipient and any related persons within the meaning of Section 414(n)(6) of the Code) on a substantially full-time basis for at least one year, and (iii) such services are of a type historically performed by employees in the business field of the recipient. (20) "Normal Retirement Age" means the normal retirement age specified in Section 1.05(a) of the Adoption Agreement. If the Employer enforces a mandatory retirement age, the Normal Retirement Age is the lesser of that mandatory age or the age specified in Section 1.05(a). (21) "Owner-Employee" means, if the Employer is a sole proprietorship, the individual who is the sole proprietor, or if the Employer is a partnership, a partner who owns more than 10 percent of either the capital interest or the profits interest of the partnership. (22) "Participant" means any Employee who participates in the Plan in accordance with Article 3 hereof. (23) "Plan" means the plan established by the Employer in the form of the prototype plan as set forth herein as a new plan or as an amendment to an existing plan, by executing the Adoption Agreement, together with any and all amendments hereto. (24) "Plan Year" means the 12-consecutive month period designated by the Employer in Section 1.01(f). (25) "Registered Investment Company" means any one or more corporations, partnerships or trusts registered under the Investment Company Act of 1940, as amended. (26) "Related Employer" means any employer other than the Employer named in Section 1.02(a), if the Employer and such other employer are members of a controlled group of corporations (as defined in Section 414(b) of the Code) or an affiliated service group (as defined in Section 414(m)), or are trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c)), or such other employer is required to be aggregated with the Employer pursuant to regulations issued under Section 414(o). (27) "Self-Employed Individual" means an individual who has Earned Income for the taxable year from the Employer or who would have had Earned Income but for the fact that the trade or business had no net profits for the taxable year. (28) "Sponsoring Organization" means Fidelity [OPTIONAL: any entity that has become a sponsoring organization of this Fidelity mass submitter institutional prototype plan may substitute its name here for that of Fidelity]. (29) "Trust" means the trust created by the Employer in accordance with the provisions of Section 14.01. (30) "Trust Agreement" means the agreement set forth in Article 14, under which the assets of the Plan are held, administered, and managed by the Trustee. (31) "Trust Fund" means the property held in Trust by the Trustee for the Accounts of the Participants and their Beneficiaries. (32) "Trustee" means the person designated as such in the Adoption Agreement. (33) "Year of Service for Participation" means, with respect to any Employee, an Eligibility Computation Period during which the Employee has been credited with at least 1,000 Hours of Service. If the Plan maintained by the Employer is the plan of a predecessor employer, an Employee's Years of Service for Participation shall include years of service with such predecessor employer. In any case in which the Plan maintained by the Employer is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided by regulations, be treated as service for the Employer. (34) "Years of Service for Vesting" means, with respect to any Employee, the number of whole years of his periods of service with the Employer or a Related Employer, subject to any exclusions elected by the Employer in Section 1.06(c) or (d). An Employee will receive credit for the aggregate of all time period(s) commencing with the Employee's first day of employment or reemployment and ending on the date a break in service begins, except to the extent any such period(s) are excluded under Section 1.06(c) or (d). The first day of employment or reemployment is the first day the Employee performs an Hour of Service. An Employee will also receive credit for any period of severance of less than 12 consecutive months. Fractional periods of a year will be expressed in terms of days. In the case of a Participant who has 5 consecutive 1-year breaks in service, all years of service after such breaks in service will be disregarded for the purpose of vesting the employer-derived account balance that accrued before such breaks, but both pre-break and post-break service will count for the purposes of vesting the employer-derived account balance that accrues after such breaks. Both accounts will share in the earnings and losses of the fund. In the case of a Participant who does not have 5 consecutive 1-year breaks in service, both the pre-break and post-break service will count in vesting both the pre-break and post-break employer-derived account balance. A break in service is a period of severance of at least 12 consecutive months. Period of severance is a continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the 12 month anniversary of the date on which the Employee was otherwise first absent from service. In the case of an individual who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a break in service. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. If the Plan maintained by the Employer is the plan of a predecessor employer, an Employee's Years of Service for Vesting shall include years of service with such predecessor employer. In any case in which the Plan maintained by the Employer is not the plan maintained by a predecessor employer, service for such predecessor shall be treated as service for the Employer to the extent provided in Section 1.06(c). (b) Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the context clearly indicates otherwise. Article 3. Participation. 3.01. Date of Participation. All eligible Employees who are in the service of the Employer on the Effective Date will become Participants on the date elected by the Employer in Section 1.03(b)(1). Any other Employee will become a Participant in the Plan as of the first Entry Date coincident with or immediately following the date on which he first satisfies the eligibility requirements set forth in Section 1.03(a)(1), (a)(2) and (a)(3). If an Employee who was not a member of an eligible class of Employees becomes a member of an eligible class, such Employee will become a Participant immediately if such Employee has satisfied the age and service requirements and would have otherwise previously become a Participant. 3.02. Reemployment or Return to Eligible Class of Participants. If a Participant ceases to be an Employee and thereafter returns to the employ of the Employer, he will be treated as follows: (a) he will again become a Participant on the date on which he completes an Hour of Service for the Employer following his reemployment; and (b) any distribution which he is receiving under the Plan will continue to be made to him in accordance with the provisions of the Plan. If a Participant ceases to be a member of an eligible class of Employees and becomes ineligible to participate, such Employee will participate again immediately upon returning to an eligible class of Employees. 3.03. Participation by Owner-Employee; Controlled Businesses. If the Plan provides contributions or benefits for one or more Owner-Employees who control both the trade or business with respect to which the Plan is established and one or more other trades or businesses, the Plan and any plan established with respect to such other trades or businesses must, when looked at as a single plan, satisfy Sections 401(a) and 401(d) of the Code with respect to the employees of this and all such other trades or businesses. If the Plan provides contributions or benefits for one or more Owner-Employees who control one or more other trades or businesses, the employees of each such other trade or business must be included in a plan which satisfies Sections 401(a) and 401(d) of the Code and which provides contributions and benefits not less favorable than provided for Owner-Employees under the Plan. If an individual is covered as an Owner-Employee under the plans of two or more trades or businesses which are not controlled and the individual controls a trade or business, then the contributions or benefits of the employees under the plan of the trades or businesses which are controlled must be as favorable as those provided for him under the most favorable plan of the trade or business which is not controlled. For purposes of this Section, an Owner-Employee, or two or more Owner-Employees, shall be considered to control a trade or business if such Owner-Employee, or such Owner-Employees together, (i) own the entire interest in an unincorporated trade or business, or (ii) in the case of a partnership, own more than 50 percent of either the capital interest or the profits interest in such partnership. For this purpose, an Owner-Employee, or two or more Owner-Employees, shall be treated as owning any interest in a partnership which is owned, directly or indirectly, by a partnership controlled by such Owner-Employee or such Owner-Employees. Article 4. Contributions. 4.01. Deferral Contributions. (a) If and to the extent provided by the Employer in Section 1.04(a), each Participant may elect at any time to execute a salary reduction agreement with the Employer to reduce his Compensation by a specified percentage equal to a whole number multiple of one (1) percent. Such agreement shall become effective on the first day of the first payroll period for which the Employer can reasonably process the request. The Employer shall make a contribution (hereinafter "Deferral Contribution") on behalf of the Participant corresponding to the amount of said reduction, subject to the restrictions set forth below. Under no circumstances may a salary reduction agreement be adopted retroactively. (b) A Participant may elect at any time to change or discontinue the percentage by which his Compensation is reduced by notice to the Employer. Any such change or discontinuance shall be effective the first pay period for which the Employer can reasonably process the request. After a Participant's discontinuance of salary reduction, a Participant may execute a new salary reduction agreement, but such new agreement shall not be effective until the first day of the first payroll period for which the Employer can reasonably process the request. (c) No participant shall be permitted to have Deferral Contributions made under this Plan, or any other qualified plan maintained by the Employer, during the taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code in effect at the beginning of such taxable year. A Participant may assign to this Plan any Excess Deferrals made during the taxable year of the Participant by notifying the Administrator on or before March 15 following the taxable year of the amount of the Excess Deferrals to be assigned to the Plan. Notwithstanding any other provision of the Plan, Excess Deferrals, plus any income and minus any loss allocable thereto, shall be distributed no later than April 15 to any Participant to whose account Excess Deferrals were so assigned for the preceding year and who claims Excess Deferrals for such taxable year. A Participant is deemed to notify the Plan Administrator of any Excess Deferrals that arise by taking into account only those Elective Deferrals made under the plan or plans of this Employer. "Excess Deferrals" shall mean those Deferral Contributions that are includible in a Participant's gross income under Section 402(g) of the Code to the extent such Participant's Deferral Contributions for a taxable year exceed the dollar limitation under such Code section. For purposes of determining Excess Deferrals, the term "Deferral Contributions" shall include the sum of all employer contributions made on behalf of such Participant pursuant to an election to defer under any qualified CODA as described in Section 401(k) of the Code, any simplified employee pension cash or deferred arrangement as described in Section 402(h)(1)(B), any eligible deferred compensation plan under Section 457, any plan as described under Section 501(c)(18), and any employer contributions made on the behalf of a participant for the purchase of an annuity contract under Section 403(b) pursuant to a salary reduction agreement. Deferral Contributions shall not include any deferrals properly distributed as excess annual additions. Excess Deferrals shall be treated as annual additions under the Plan, unless such amounts are distributed no later than the first April 15 following the close of the Participant's taxable year. Excess Deferrals shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Deferrals is the sum of income or loss allocable to the Participant's Deferral Contributions account for the taxable year multiplied by a fraction, the numerator of which is such Participant's Excess Deferrals for the year and the denominator is the Participant's account balance attributable to Deferral Contributions without regard to any income or loss occurring during such taxable year. Income or loss allocable to the period between the end of the Participant's taxable year and the date of distribution will be disregarded in determining income or loss. (d) In order for the Plan to comply with the requirements of Sections 401(k), 402(g) and 415 of the Code and the regulations promulgated thereunder, at any time in a Plan Year the Administrator may reduce the rate of Deferral Contributions to be made on behalf of any Participant, or class of Participants, for the remainder of that Plan Year, or the Administrator may require that all Deferral Contributions to be made on behalf of a Participant be discontinued for the remainder of that Plan Year. Upon the close of the Plan Year or such earlier date as the Administrator may determine, any reduction or discontinuance in Deferral Contributions shall automatically cease until the Administrator again determines that such a reduction or discontinuance of Deferral Contributions is required. 4.02. Additional Limit on Deferral Contributions. (a) The Actual Deferral Percentage (hereinafter "ADP") for Participants who are Highly Compensated Employees for each Plan Year and the ADP for Participants who are Non-highly Compensated Employees for the same Plan Year must satisfy one of the following tests: (1) The ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Participants who are Non-highly Employees for the same Plan Year multiplied by 1.25; or (2) The ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by 2.0, provided that the ADP for Participants who are Highly Compensated Employees does not exceed the ADP for Participants who are Non-highly Compensated Employees by more than two (2) percentage points. (b) The following special rules apply for the purposes of this Section: (1) The ADP for any Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to have Deferral Contributions (and Qualified Discretionary Contributions if treated as Deferral Contributions for purposes of the ADP test) allocated to his or her accounts under two or more arrangements described in Section 401(k) of the Code, that are maintained by the employer, shall be determined as if such Deferral Contributions (and, if applicable, such Qualified Discretionary Contributions) were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Section 401(k) of the Code. (2) In the event that this Plan satisfies the requirements of Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the ADP of employees as if all such plans were a single plan. For Plan Years beginning after December 31, 1989, plans may be aggregated in order to satisfy section 401(k) of the Code only if they have the same plan year. (3) For purposes of determining the ADP of a Participant who is a 5-percent owner or one of the ten most highly-paid Highly Compensated Employees, the Deferral Contributions (and Qualified Discretionary Contributions if treated as Deferral Contributions for purposes of the ADP test) and Compensation of such Participant shall include the Deferral Contributions (and, if applicable, Qualified Discretionary Contributions) and Compensation for the Plan Year of Family Members (as defined in Section 414(q)(6) of the Code). Family Members, with respect to such Highly Compensated Employees, shall be disregarded as separate employees in determining the ADP both for Participants who are Non-highly Compensated Employees and for Participants who are Highly Compensated Employees. (4) For purposes of determining the ADP test, Deferral Contributions and Qualified Discretionary Contributions must be made before the last day of the twelve-month period immediately following the Plan Year to which contributions relate. (5) The Employer shall maintain records sufficient to demonstrate satisfaction of the ADP test and the amount of Qualified Discretionary Contributions used in such test. (6) The determination and treatment of the ADP amounts of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. (c) The following definitions shall apply for purposes of this Section: (1) "Actual Deferral Percentage" shall mean, for a specified group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of (1) the amount of employer contributions actually paid over to the trust on behalf of such Participant for the Plan Year to (2) the Participant's Compensation for such Plan Year (whether or not he or she was a Participant for the entire Plan Year). Employer contributions on behalf of any Participant shall include: (1) any Deferral Contributions made pursuant to the Participant's deferral election (including Excess Deferrals of Highly Compensated Employees), but excluding (a) Excess Deferrals of Non-Highly Compensated Employees that arise solely from Deferred Contributions made under a plan of the employer and (b) Deferral Contributions that are taken into account in the Contribution Percentage test (provided the ADP test is satisfied both with and without exclusion of these Deferral Contributions); and (2) at the election of the employer, Qualified Discretionary Contributions. For purposes of computing Actual Deferral Percentages, an Employee who would be a Participant but for the failure to make Deferral Contributions shall be treated as a Participant on whose behalf no Deferral Contributions are made. (2) "Excess Contributions" shall mean, with respect to any Plan Year, the excess of: (a) The aggregate amount of employer contributions actually taken into account in computing the ADP of Highly Compensated Employees for such Plan Year, over (b) The maximum amount of such contributions permitted by the ADP test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of the ADPs, beginning with the highest of such percentages). (3) "Qualified Discretionary Contributions" shall mean contributions made by the Employer as elected in Section 1.04(d) in order to satisfy the ADP tests, and allocated to Participants' Accounts that the Participants may not elect to receive in cash until distributed from the plan; that are nonforfeitable when made; and that are distributable only in accordance with the distribution provisions that are applicable to Deferral Contributions. (d) Notwithstanding any other provision of this Plan, Excess Contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each Plan Year to Participants to whose accounts such Excess Contributions were allocated for the preceding Plan Year. If such excess amounts are distributed more than 2-1/2 months after the last day of the Plan Year in which such excess amounts arose, a ten (10) percent excise tax will be imposed on the employer maintaining the plan with respect to such amounts. Such distributions shall be made to Highly Compensated Employees on the basis of the respective portions of the Excess Contributions attributable to each of such employees. Excess Contributions of Participants who are subject to the family member aggregation rules shall be allocated among the family members in proportion to the Deferral Contributions (and amounts treated as Deferral Contributions) of each family member that is combined to determine the combined ADP. Excess Contributions shall be treated as annual additions under the Plan. Excess Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Contributions is the sum of income or loss allocable to the Participant's Deferral Contribution account (and, if applicable, the Qualified Discretionary Contribution account) for the Plan Year multiplied by a fraction, the numerator of which is such Participant's Excess Contributions of the year and the denominator is the Participant's account balance attributable to Deferral Contributions (and Qualified Discretionary Contributions if any of such contributions are included in the ADP test) without regard to any income or loss occurring during such Plan Year. Income or loss allocable to the period between the end of the Plan Year and the date of distribution will be disregarded in determining income or loss. Excess Contributions shall be distributed from the Participant's Qualified Discretionary Contribution account only to the extent that such Excess Contributions exceed the balance in the Participant's Deferral Contributions account. 4.03. Matching Contributions. If so provided by the Employer in Section 1.04(b), the Employer shall make a contribution (hereinafter "Matching Contribution") on behalf of each Participant who had Deferral Contributions made on his behalf during the year. The amount of the Matching Contribution shall be determined in accordance with Section 1.04(b), subject to the limitations set forth in Section 4.04. 4.04. Limit on Matching Contributions and Employee Contributions. (a) The ACP for Participants who are Highly Compensated Employees for each Plan Year and the ACP for Participants who are Non-highly Compensated Employees for the same Plan Year must satisfy one of the following tests: (1) The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by 1.25; or (2) The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Participants who are Non-highly Compensated Employees for the same Plan Year multiplied by two (2), provided that the ACP for Participants who are Highly Compensated Employees does not exceed the ACP for Participants who are Non-highly Compensated Employees by more than two (2) percentage points. (b) The following special rules apply for purposes of this section: (1) If one or more Highly Compensated Employees participate in both a CODA and a plan subject to the ACP test maintained by the employer and the sum of the ADP and ACP of those Highly Compensated Employees subject to either or both tests exceeds the Aggregate Limit, then the ACP of those Highly Compensated Employees who also participate in a CODA will be reduced (beginning with such Highly Compensated Employee whose ACP is the highest) so that the limit is not exceeded. The amount by which each Highly Compensated Employee's Contribution Percentage Amounts is reduced shall be treated as an Excess Aggregate Contribution. The ADP and ACP of the Highly Compensated Employees are determined after any corrections required to meet the ADP and ACP tests. Multiple use does not occur if either the ADP or ACP of the Highly Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP of the Non-highly Compensated Employees. (2) For purposes of this section, the Contribution Percentage for any Participant who is a Highly Compensated Employee and who is eligible to have Contribution Percentage Amounts allocated to his or her account under two or more plans described in section 401(a) of the Code, or arrangements described in section 401(k) of the Code that are maintained by the employer, shall be determined as if the total of such Contribution Percentage Amounts was made under each plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Section 401(m) of the Code. (3) In the event that this Plan satisfies the requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the Contribution Percentage of employees as if all such plans were a single plan. For plan years beginning after December 31, 1989, plans may be aggregated in order to satisfy Section 401(m) of the Code only if they have the same plan year. (4) For purposes of determining the Contribution percentage of a Participant who is a five-percent owner or one of the ten most highly-paid Highly Compensated Employees, the Contribution Percentage Amounts and Compensation of such Participant shall include the Contribution Percentage Amounts and Compensation for the Plan Year of Family Members (as defined in Section 414(q)(6) of the Code). Family Members, with respect to Highly Compensated Employees, shall be disregarded as separate employees in determining the Contribution Percentage both for Participants who are Non-highly Compensated Employees and for Participants who are Highly Compensated Employees. (5) For purposes of determining the Contribution Percentage test, Employee Contributions made pursuant to Section 1.04(f) are considered to have been made in the Plan Year in which contributed to the Trust. Matching Contributions and Qualified Discretionary Contributions may be considered made for a Plan Year if made no later than the end of the twelve-month period beginning on the day after the close of the Plan Year. (6) The Employer shall maintain records sufficient to demonstrate satisfaction of the ACP test and the amount of Qualified Discretionary Contributions or Qualified Matching Contributions, or both, used in such test. (7) The determination and treatment of the Contribution Percentage of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of Treasury. (c) The following definitions shall apply for purposes of this Section: (1) "Aggregate Limit" shall mean the sum of (i) 125 percent of the greater of the ADP of the Non-highly Compensated Employees for the Plan Year or the ACP of Non-highly Compensated Employees under the plan subject to Code Section 401(m) for the Plan Year beginning with or within the Plan Year of the CODA and (ii) the lesser of 200% or two plus the lesser of such ADP or ACP. "Lesser" is substituted for "greater" in "(i)", above, and "greater" is substituted for "lesser" after "two plus the" in "(ii)" if it would result in a larger Aggregate Limit. (2) "Average Contribution Percentage" shall mean the average of the Contribution Percentages of the Eligible Participants in a group. (3) "Contribution Percentage" shall mean the ratio (expressed as a percentage) of the Participant's Contribution Percentage Amounts to the Participant's Compensation for the Plan Year (whether or not he or she was a Participant for the entire Plan Year). (4) "Contribution Percentage Amounts" shall mean the sum of the Employee Contributions and Matching Contributions made under the Plan on behalf of the Participant for the Plan Year. Such Contribution Percentage Amounts shall not include Matching Contributions that are forfeited either to correct Excess Aggregate Contributions or because the contributions to which they relate are Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions. The Employer also may elect to use Deferral Contributions in the Contribution Percentage Amounts so long as the ADP test is met before the Deferral Contributions are used in the ACP test and continues to be met following the exclusion of those Deferral Contributions that are used to meet the ACP test. (5) "Eligible Participant" shall mean any employee who is eligible to make an Employee Contribution or a Deferral Contribution (if the employer takes such contributions into account in the calculation of the Contribution Percentage), or to receive a Matching Contribution (including forfeitures). (6) "Employee Contribution" shall mean any voluntary nondeductible contribution made to the plan by or on behalf of a participant that is included in the participant's gross income in the year in which made and that is maintained in a separate account to which earnings and losses are allocated. (7) "Matching Contribution" shall mean an Employer contribution made to this or any other defined contribution plan on behalf of a participant on account of a participant's Deferral Contribution. (8) "Excess Aggregate Contributions" shall mean, with respect to any Plan Year, the excess of: (a) The aggregate Contribution Percentage Amounts taken into account in computing the numerator of the Contribution Percentage actually made on behalf of Highly Compensated Employees for such Plan Year, over (b) The maximum Contribution Percentage Amounts permitted by the ACP test (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their Contribution Percentages beginning with the highest of such percentages). Such determination shall be made after first determining Excess Deferrals pursuant to Section 4.01 and then determining Excess Contributions pursuant to Section 4.02. (d) Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed no later than the last day of each Plan Year to Participants to whose accounts such Excess Aggregate Contributions were allocated for the preceding Plan Year. Excess Aggregate Contributions of Participants who are subject to the family member aggregation rules shall be allocated among the family members in proportion to the Employee and Matching Contributions (or amounts treated as Matching Contributions) of each family member that is combined to determine the combined ACP. If such Excess Aggregate Contributions are distributed more than 2 1/2 months after the last day of the Plan Year in which such excess amounts arose, a ten (10) percent excise tax will be imposed on the employer maintaining the plan with respect to those amounts. Excess Aggregate Contributions shall be treated as annual additions under the Plan. Excess Aggregate Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Contributions is the sum of income or loss allocable to the Participant's Employee Contribution account, Matching Contribution account (if any, and if all amounts therein are not used in the ADP test) and, if applicable, Qualified Discretionary Contribution account and Deferral Contribution account for the Plan Year multiplied by a fraction, the numerator of which is such Participant's Excess Aggregate Contributions for the year and the denominator is the Participant's account balance(s) attributable to Contribution Percentage Amounts without regard to any income or loss occurring during such Plan Year. Income or loss allocable to the period between the end of the Plan Year and the date of distribution will be disregarded in determining income or loss. Forfeitures of Excess Aggregate Contributions shall be applied to reduce Employer contributions; the forfeitures shall be held in the money market fund, if any, listed in Section 1.12(b) pending such application. Excess Aggregate Contributions shall be forfeited, if forfeitable, or distributed from the Participant's Matching Contribution account and (if applicable, the Participant's Qualified Discretionary Contribution account on a pro rata basis). 4.05. Special Rules. Deferral Contributions and Qualified Discretionary Contributions and income allocable to each are not distributable to a Participant or his or her Beneficiary or Beneficiaries, in accordance with such Participant's or Beneficiary's or Beneficiaries' election, earlier than upon separation from service, death, or disability, except as otherwise provided in Section 7.10, 7.11 or 10.06. The Participant's accrued benefit derived from Deferral Contributions, Qualified Discretionary Contributions, and Employee Contributions is always nonforfeitable. 4.06. Fixed or Discretionary Employer Contributions. If so provided by the Employer in Section 1.04(c)(1) or (2), for the Plan Year in which the Plan is adopted and for each Plan Year thereafter, the Employer will make Fixed or Discretionary Employer Contributions to the Trust in accordance with Section 1.04(c) to be allocated in accordance with the applicable subsection below. Regardless of the Employer's election in Section 1.01(b), the Employer may also be required to make Employer Contributions to the Trust in accordance with Sections 9.01 and 9.03. Fixed Employer Contributions or Discretionary Employer Contributions shall be allocated among eligible Participants, as determined in accordance with Section 1.04(c)(1)(ii) or Section 1.04(c)(2), respectively, as follows: (a) If the Non-Integrated Formula is elected in Section 1.04(c)(1)(ii)(A) or Section 1.04(c)(2)(i), such contributions shall be allocated to eligible Participants in the ratio that each Participant's Compensation bears to the total Compensation paid to all Participants for the Plan Year; and (b) If the Integrated Formula is elected in Section 1.04(c)(1)(ii)(B) or Section 1.04(c)(2)(ii), such Contributions shall be allocated in the following steps: (1) First, to each eligible Participant in the same ratio that the sum of the Participant's Compensation plus Excess Compensation for the Plan Year bears to the sum of the Compensation plus Excess Compensation of all Participants for the Plan Year. This allocation as a percentage of the sum of each Participant's Compensation plus Excess Compensation shall not exceed 5.75%. For purposes of this step, if an eligible Participant has exceeded the "cumulative permitted disparity limit", described below, two times the Participant's Compensation for the Plan Year shall be taken into account. (2) Any remaining Employer Contributions shall be allocated in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. Notwithstanding the preceding provisions of this Section, if for any Plan Year this Plan benefits any Participant who also benefits under another plan qualified under Code Section 401(a) or simplified employee pension plan within the meaning of Code Section 408(k) maintained by the Employer that provides for permitted disparity (or imputes disparity), Employer Contributions and forfeitures will be allocated to the account of each eligible Participant who either is credited with more than 500 Hours of Service during the Plan Year or who is an Employee on the last day of the Plan Year in the ratio that such eligible Participant's total compensation bears to the total compensation of all eligible Participants. For purposes of this Section, "Excess Compensation" means Compensation in excess of the taxable wage base, as determined under Section 230 of the Social Security Act, as in effect on the first day of the Plan Year. For purposes of this Section, effective for Plan Years beginning after December 31, 1994, the "cumulative permitted disparity limit" for an eligible Participant is 35 total cumulative permitted disparity years. Total cumulative permitted disparity years means the number of years credited to the Participant for allocation or accrual purposes under this Plan, any other plan qualified under Code Section 401(a), or any simplified employee pension plan (whether or not terminated) ever maintained by the Employer. For purposes of determining a Participant's cumulative permitted disparity limit, all plan years ending in the same calendar year shall be treated as the same year. If the Participant has not benefited under a defined benefit or target benefit plan for any plan year beginning after December 31, 1994, the Participant shall have no cumulative disparity limit. 4.07. Time of Making Employer Contributions. The Employer will pay its contribution for each Plan Year not later than the time prescribed by law for filing the Employer's federal income tax return for the fiscal (or taxable) year with or within which such Plan Year ends (including extensions thereof). The Trustee will have no authority to inquire into the correctness of the amounts contributed and paid over to the Trustee, to determine whether any contribution is payable under this Article 4, or to enforce, by suit or otherwise, the Employer's obligation, if any, to make a contribution to the Trustee. 4.08. Return of Employer Contributions. The Trustee shall, upon request by the Employer, return to the Employer the amount (if any) determined under Section 14.21. Such return amount shall be reduced by amounts attributable thereto which have been credited to the Accounts of Participants who have since received distributions from the Trust, except to the extent such amounts continue to be credited to such Participants' Accounts at the time the amount is returned to the Employer. Such return amount shall also be reduced by the losses of the Trust attributable thereto, if and to the extent such losses exceed the gains and income attributable thereto, but will not be increased by the gains and income of the Trust attributable thereto, if and to the extent such gains and income exceed the losses attributable thereto. In no event will the return of a contribution hereunder cause the balance of the individual Account of any Participant to be reduced to less than the balance which would have been credited to the Account had the mistaken amount not been contributed. 4.09. Employee Contributions. If the Employer elected to permit Deferral Contributions in Section 1.04(a) and if so provided by the Employer in Section 1.04(f), each Participant may elect to make Employee Contributions to the Plan in accordance with the rules and procedures established by the Employer and in an amount not less than one percent (1%) and not greater than ten percent (10%) of such Participant's Compensation for the Plan Year. Such contributions and all Employee Contributions for Plan Years beginning after December 31, 1986 shall be subject to the nondiscrimination requirements of Section 401(m) of the Code as set forth in Section 4.04. For purposes of this Plan, "Employee Contributions" shall mean any voluntary nondeductible contribution made to a plan by or on behalf of a Participant that is or was included in the Participant's gross income in the year in which made and that is maintained under a separate account to which applicable earnings and losses are allocated. Excess Contributions may not be recharacterized as Employee Contributions. Employee Contributions shall be paid over to the Trustee not later than thirty (30) days following the end of the month in which the Participant makes the contribution. A Participant shall have a fully vested 100% nonforfeitable right to his Employee Contributions and the earnings or losses allocated thereto. Distributions of Employee Contributions shall be made in accordance with Section 7.11. 4.10. Rollover Contributions. (a) Rollover of Distributed Property. (1) An Employee who was formerly a participant of an employees' trust described in Section 501(a) of the Code (the "Distributing Trust"), and who receives a distribution from the Distributing Trust or from an individual retirement account funded by a distribution from the Distributing Trust (the "Distribution") may transfer the Distribution to the Trust either in a direct rollover (within the meaning of Section 401(a)(31) of the Code) or within sixty (60) days, to the extent that the Distribution qualifies as an eligible rollover distribution within the meaning of Section 402(c) of the Code. (b) Treatment of Rollover Amount. (1) An account will be established for the transferring Employee under Article 6, the rollover amount will be credited to the account and such amount will be subject to the terms of the Plan, including Section 8.01, except as otherwise provided in this Section 4.10. (2) The Rollover Account will at all times be fully vested in and nonforfeitable by the Employee. (c) Entry into Plan by Transferring Employee. Although an amount may be transferred to the Trust Fund under this Section 4.10 by an Employee who has not yet become a Participant in accordance with Article 3, and such amount is subject to the terms of the Plan as described in paragraph (b) above, the Employee will not become a Participant entitled to share in Employer contributions until he has satisfied the requirements for eligibility to participate in the Plan. (d) Monitoring of Rollovers. (1) The Administrator shall develop such procedures and require such information from transferring Employees as it deems necessary to insure that amounts transferred under this Section 4.10 meet the requirements for eligible rollover distributions established by such Section and by Section 402(c) of the Code. No such amount may be transferred until approved by the Administrator. (2) If a transfer made under this Section 4.10 is later determined by the Administrator not to have met the requirements of this Section or of the Code or Treasury regulations, the Trustee shall, within a reasonable time after such determination is made, and on instructions from the Administrator, distribute to the Employee the amounts then held in the Trust attributable to the Transferred Amount. Article 5. Participants' Accounts. 5.01. Individual Accounts. The Administrator will establish and maintain an Account for each Participant which will reflect Employer and Employee contributions made on behalf of the Participant and earnings, expenses, gains and losses attributable thereto, and investments made with amounts in the Participant's Account. The Administrator will establish and maintain such other accounts and records as it decides in its discretion to be reasonably required or appropriate in order to discharge its duties under the Plan. Separate accounts for Deferral Contributions, Fixed or Discretionary Employer Contributions, Qualified Discretionary Contributions, Matching Contributions, Employee Contributions, Rollover Contributions and Transfers will be maintained for each Participant. Each such account will be credited with the applicable contributions and earnings (or losses) thereon. 5.02. Valuation of Accounts. Participant Accounts will be valued at their fair market value at least annually as of a date specified by the Administrator in accordance with a method consistently followed and uniformly applied, and on such date earnings, expenses, gains and losses on investments made with amounts in each Participant's Account will be allocated to such Account. Participants will be furnished statements of their Account values at least once each Plan Year. 5.03. Code Section 415 Limitations. Notwithstanding any other provisions of the Plan: Subsections (a)(1) through (a)(4)--(These subsections apply to Employers who do not maintain any qualified plan including a Welfare Benefit Fund or an Individual Medical Account in addition to this Plan.) (a) (1) If the Participant does not participate in, and has never participated in any other qualified plan, simplified employee pension plan, Welfare Benefit Fund or Individual Medical Account maintained by the Employer, the amount of Annual Additions to a Participant's Account for a Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer contribution that would otherwise be contributed or allocated to the Participant's account would cause the annual additions for the limitation year to exceed the maximum permissible amount, the amount contributed or allocated will be reduced so that the annual additions for the limitation year will equal the maximum permissible amount. (a) (2) Prior to the determination of the Participant's actual Compensation for a Limitation Year, the Maximum Permissible Amount may be determined on the basis of a reasonable estimation of the Participant's compensation for such Limitation Year, uniformly determined for all Participants similarly situated. (a) (3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for such Limitation Year shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (a) (4) If, pursuant to subsection (a)(3) or as a result of the allocation of forfeitures, there is an Excess Amount with respect to a Participant for a Limitation Year, such Excess Amount shall be disposed of as follows: (A) In the event that the Participant is in the service of the Employer which is covered by the Plan at the end of the Limitation Year, then such Excess Amount shall be reapplied to reduce future Employer contributions under this Plan for the next Limitation Year (and for each succeeding year, as necessary) for such Participant, so that in each such Year the sum of actual Employer contributions plus the reapplied amount shall equal the amount of Employer contributions which would otherwise be made to such Participant's Account. (B) In the event that the Participant is not in the service of the Employer which is covered by the Plan at the end of a Limitation Year, then such Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer contributions for all remaining Participants in the next Limitation Year and each succeeding Limitation Year if necessary. (C) If a suspense account is in existence at any time during the Limitation Year pursuant to this subsection, it will not participate in the allocation of the Trust Fund's investment gains and losses. All amounts in the suspense account must be allocated to the Accounts of Participants before any Employer contribution may be made for the Limitation Year. Excess Amounts may not be distributed to Participants or former Participants. Subsections (b)(1) through (b)(6)--(These subsections apply to Employers who, in addition to this Plan, maintain one or more plans, all of which are qualified Master or Prototype defined contribution Plans, any Welfare Benefit Fund, any Individual Medical Account or any simplified employee pension plan.) (b) (1) If, in addition to this Plan, the Participant is covered under any other qualified defined contribution plans (all of which are qualified Master or Prototype Plans) maintained by the Employer, the amount of Annual Additions to a Participant's Account for a Limitation Year, shall not exceed the lesser of: (A) the Maximum Permissible Amount, reduced by the sum of any Annual Additions to the Participant's accounts for the same Limitation Year under such other defined contribution plans, Welfare Benefit Funds, individual medical accounts and simplified employee pension plans; or (B) any other limitation contained in this Plan. If the Annual Additions with respect to the participant under other defined contribution plans, welfare benefit funds, individual medical accounts, or simplified employee pension plans maintained by the Employer and any Related Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the participant under such other defined contribution plans, welfare benefit funds, individual medical accounts, and simplified employee pension plans in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed or allocated to the Participant's account under this Plan for the Limitation Year. (b) (2) Prior to the determination of the Participant's actual Compensation for the Limitation Year, the amounts referred to in (b)(1)(A) above may be determined on the basis of a reasonable estimation of the Participant's compensation for such Limitation Year, uniformly determined for all Participants similarly situated. Any Employer contribution based on estimated annual compensation shall be reduced by any Excess Amounts carried over from prior years. (b) (3) As soon as is administratively feasible after the end of the Limitation Year, the amounts referred to in (b)(1)(A) shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (b) (4) If, pursuant to (b)(3) or as a result of the allocation of forfeitures, a Participant's Annual Additions under this Plan and all such other plans result in an Excess Amount, such Excess Amount shall be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a Welfare Benefit Fund or Individual Medical Account will be deemed to have been allocated first regardless of the actual allocation date. (b) (5) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of: (A) the total Excess Amount allocated as of such date (including any amount which would have been allocated but for the limitations of Section 415 of the Code), times (B) the ratio of (i) the Annual Additions allocated to the Participant as of such date under this Plan, divided by (ii) the Annual Additions allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Section 415 of the Code). (b) (6) Any Excess Amounts attributed to this Plan shall be disposed of as provided in subsection (a)(4). Subsection (c)--(This subsection applies only to Employers who, in addition to this Plan, maintain one or more qualified plans which are qualified defined contribution plans other than Master or Prototype Plans.) (c) If the Employer also maintains another plan which is a qualified defined contribution plan other than a Master or Prototype Plan, Annual Additions allocated under this Plan on behalf of any Participant shall be limited in accordance with the provisions of (b)(1) through (b)(6), as though the other plan were a Master or Prototype Plan, unless the Employer provides other limitations in the Adoption Agreement. Subsection (d)--(This subsection applies only to Employers who, in addition to this Plan, maintain or at any time maintained a qualified defined benefit plan.) (d) If the Employer maintains, or at any time maintained, a qualified defined benefit plan, the sum of any Participant's Defined Benefit Fraction and Defined Contribution Fraction shall not exceed the combined plan limitation of 1.0 in any Limitation Year. The combined plan limitation will be met as provided by the Employer in the Adoption Agreement. Subsections (e)(1) through (e)(9)--(Definitions.) (e) (1) "Annual Additions" means the sum of the following amounts credited to a Participant for a Limitation Year: (A) all Employer contributions, (B) all Employee contributions, and (C) all forfeitures. For purposes of this Section 5.03, amounts reapplied to reduce Employer contributions under subsection (a)(4) shall also be included as Annual Additions. Amounts allocated, after March 31, 1984, to an Individual Medical Account which is part of a pension or annuity plan maintained by the Employer are treated as Annual Additions to a defined contribution plan. Also, amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key employee, as defined in Section 419A(d)(3) of the Code, under a Welfare Benefit Fund maintained by the Employer are treated as Annual Additions to a defined contribution plan. Finally, amounts allocated to an Employee's account under a simplified employee pension plan maintained by the Employer are treated as Annual Additions to a defined contribution plan. (e) (2) "Compensation" means wages, as defined in Section 3401(a) for the purposes of income tax withholding at the source but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2)), paid by the Employer or a Related Employer. For any self-employed individual compensation shall mean Earned Income. For purposes of applying the limitations of this Article, compensation for any Limitation Year beginning after December 31, 1991, is the compensation actually paid or includible in gross income during such Limitation Year. (e) (3) "Defined Benefit Fraction" means a fraction, the numerator of which is the sum of the Participant's annual retirement benefits adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) under all the defined benefit plans (whether or not terminated) maintained by the Employer, each such annual benefit computed on the assumptions that the Participant will remain in employment until the normal retirement age under each such plan (or the Participant's current age, if later), that the Compensation earned by the Participant for Limitation Year will remain constant until Normal Retirement Age, and that all other factors used to determine benefits under such plan will remain constant for all future Limitation Years, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the Limitation Year under Sections 415(b)(1)(A) and 415(d) of the Code or 140 percent of the Participant's average Compensation for the 3 highest consecutive calendar years of service during which the Participant was active in each such plan, including any adjustments under Section 415(b) of the Code. However, if the Participant was a participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986 then the denominator of the Defined Benefit Fraction shall not be less than 125 percent of the Participant's total accrued benefit as of the close of the last Limitation Year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plan after May 5, 1986, under all such defined benefit plans as met, individually and in the aggregate, the requirements of Section 415 of the Code for all Limitation Years beginning before January 1, 1987. The annual addition for any Limitation Year beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as annual additions. (e) (4) "Defined Contribution Fraction" means a fraction, the numerator of which is the sum for the current and all prior Limitation Years of (A) all Annual Additions (if any) to the Participant's accounts under each defined contribution plan (whether or not terminated) maintained by the Employer, and (B) all Annual Additions attributable to the Participant's nondeductible employee contributions to all defined benefit plans (whether or not terminated) maintained by the Employer, and the Participant's Annual Additions attributable to each Welfare Benefit Fund, Individual Medical Account, and simplified employee pension plan and the denominator of which is the sum for the current and all prior Limitation Years during which the Participant was an Employee (regardless of whether the Employer maintained a defined contribution plan in any such year). The maximum aggregate amount in any Limitation Year is the lesser of 125 percent of the dollar limitation in effect under Section 415(c)(1)(A) of the Code for each such year or 35 percent of the Participant's Compensation for each such year. If the Participant was a participant as of the first day of the first Limitation Year beginning after December 31, 1986 in one or more defined contribution plans maintained by the Employer which were in existence on May 6, 1986 then the numerator of the Defined Contribution Fraction shall be adjusted if the sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment an amount equal to the product of (i) the excess of the sum of the fractions over 1.0 times (ii) the denominator of this fraction will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last Limitation Year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the plan made after May 5, 1986, but using the Section 415 limitation applicable to the first Limitation Year beginning on or after January 1, 1987. The annual addition for any Limitation Year beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as annual additions. (e) (5) "Employer" means the Employer and any Related Employer that adopts this Plan. In the case of a group of employers which constitutes a controlled group of corporations (as defined in Section 414(b) of the Code as modified by Section 415(h)) or which constitutes trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) as modified by Section 415(h)) or which constitutes an affiliated service group (as defined in Section 414(m)) and any other entity required to be aggregated with the Employer pursuant to regulations issued under Section 414(o) of the Code, all such employers shall be considered a single employer for purposes of applying the limitations of this Section 5.03. (e) (6) "Excess Amount" means the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount, less loading and other administrative charges allocable to such excess. (e) (7) "Individual Medical Account" means an individual medical account as defined in Section 415(l)(2) of the Code. (e) (8) "Limitation Year" means the calendar year, or other 12-month consecutive month period elected by the Employer in Section 1.01(d). All qualified plans of the Employer must use the same Limitation Year. If the Limitation Year is amended to a different 12-consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made. (e) (9) "Master or Prototype Plan" means a plan the form of which is the subject of a favorable opinion letter from the Internal Revenue Service. (e) (10) "Maximum Permissible Amount" means for a Limitation Year with respect to any Participant the lesser of (i) $30,000 or, if greater, 25 percent of the dollar limitation set forth in Section 415(b)(1) of the Code, as in effect for the Limitation Year, or (ii) 25 percent of the Participant's Compensation for the Limitation Year. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12-consecutive month period, the Maximum Permissible Amount will not exceed the limitation in (e)(9)(i) multiplied by a fraction whose numerator is the number of months in the short Limitation Year and whose denominator is 12. The compensation limitation referred to in subsection (e)(9)(ii) shall not apply to any contribution for medical benefits within the meaning of Section 401(h) or Section 419A(f)(2) of the Code after separation from service which is otherwise treated as an Annual Addition under Section 419A(d)(2) or Section 415(l)(1) of the Code. (e) (11) "Welfare Benefit Fund" means a welfare benefit fund as defined in Section 419(e) of the Code. Article 6. Investment of Contributions. 6.01. Manner of Investment. All contributions made to the Accounts of Participants shall be held for investment by the Trustee. The Accounts of Participants shall be invested and reinvested only in Fund Shares of the funds selected by the Employer in Section 1.12(b) of the Adoption Agreement; one hundred percent (100%) of the funds so selected by the Employer shall be Fidelity Funds, except to the extent that Fidelity or its authorized affiliate specifically agrees in writing to a lesser percentage. 6.02. Investment Decisions. (a) Each Participant or the Employer (or agent or designee thereof independent of the Trustee of whose authority the Trustee has received notice satisfactory to the Trustee) shall direct the investment of his Account or all Accounts, respectively, among the types of Fund Shares properly listed in Section 1.12(b). Pursuant to Section 14.04, the Trustee shall have no discretionary authority, and shall render no investment advice and make no recommendations, except as provided in Section 6.04, with respect to the investment of the Trust Fund. If the Participant is directing the investment of his Account, the Participant shall file initial investment instructions with the Administrator, on such form as the Administrator may provide, selecting the Fund Shares in which amounts credited to his Account will be invested. While any balance remains in the Account of a Participant after his death, the Beneficiary of the Participant shall make decisions as to the investment of the Account to the same extent as if the Beneficiary were the Participant. To the extent required by a qualified domestic relations order as defined in Section 414(p) of the Code, an alternate payee shall make investment decisions with respect to a Participant's Account to the same extent as if such alternate payee were the Participant. All dividends, interest, gains and distributions of any nature received in respect of Fund Shares shall be reinvested in additional shares of that Fund. (b) If the Trustee receives any contribution under the Plan as to which investment instructions have not been provided, the Trustee shall promptly notify the Administrator and the Administrator shall take steps to elicit investment instructions. The Trustee shall credit any such contribution to the Account(s) of the applicable Participant(s) and such amount shall be invested in the Fund selected by the Employer for such purposes until investment instructions have been received by the Trustee. (c) Expenses attributable to the acquisition of investments shall be charged to the Account of the Participant for which such investment is made. 6.03. Direction to Trustee. All Participant, Employer or agent investment instructions and changes thereto filed with the Administrator pursuant to the provisions of Section 6.02 shall be promptly transmitted by the Administrator to the Trustee. The Trustee shall have no duty to inquire into the investment decision of a Participant, Employer or agent or to advise such person regarding the purchase, retention or sale of assets credited to any Participant's Account. 6.04. Trustee Investment Advice. Notwithstanding Section 6.02 and Section 14.04, the Trustee may be given discretionary authority with respect to the investment of the Trust Fund and may provide investment advice or recommendations with respect to the investment of the Trust Fund by entering into a written agreement with the Employer to provide such investment services, provided that the Trustee promptly notify Fidelity thereof by providing a copy of such agreement to Fidelity. If the Trustee provides such investment services, the Trustee shall not be entitled to receive any payments pursuant to any 12b-1 plan maintained by any Fidelity Fund or to receive any other consideration whatsoever from any Fidelity Fund or other fund for which Fidelity or any of its affiliates serves as trustee or investment manager. Article 7. Right to Benefits. 7.01. Normal or Early Retirement. Each Participant who attains his Normal Retirement Age or, if so provided by the Employer in Section 1.05(b), Early Retirement Age will have a 100 percent nonforfeitable (vested) interest in his Account regardless of any vesting schedule elected in Section 1.06. If a Participant retires upon the attainment of Normal or Early Retirement Age, such retirement is referred to as a normal retirement. Upon his normal retirement the balance of the Participant's Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08, will be distributed to him in accordance with Article 8 below. If a Participant separates from service before satisfying the age requirements for early retirement, but has satisfied the service requirement, the Participant will be entitled to elect an early retirement distribution upon satisfaction of such age requirement. 7.02. Late Retirement. If a Participant continues in the service of the Employer after attainment of Normal Retirement Age, he will continue to have a 100 percent nonforfeitable interest in his Account and will continue to participate in the Plan until the date he establishes with the Employer for his late retirement. Upon his late retirement, the balance of his Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08, will be distributed to him in accordance with Article 8 below. Upon the distribution date required under Section 8.08, should such date precede the Participant's retirement, death, or other termination of employment, the Participant shall begin receiving a distribution of the minimum distribution amount required pursuant to Section 8.04 only, which distribution shall be made in accordance with Section 8.04 and Section 8.08. 7.03. Disability Retirement. If so provided by the Employer in Section 1.05(c), a Participant who becomes disabled so that he cannot engage in any substantial, gainful activity because of a medically determinable physical or mental impairment likely to result in death or to be of a continuous period of not less than 12 months, and terminates his employment with the Employer, will have a 100 percent nonforfeitable interest in his Account, the balance of which Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08, will be distributed to him in accordance with Article 8 below. Such termination of employment is referred to as a disability retirement. Determinations with respect to disability shall be made by the Administrator on the basis set forth in Section 1.05(c). 7.04. Death. Subject, if applicable, to Sections 8.03 and 8.04 below, if a Participant dies before the distribution of his Account has commenced, or before such distribution has been completed, his designated Beneficiary or Beneficiaries will be entitled to receive the balance or remaining balance of his Account, plus any amounts thereafter credited to his Account, subject to the provisions of Section 7.08. Distribution to the Beneficiary or Beneficiaries will be made in accordance with Article 8 below. A Participant may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries by giving notice to the Administrator on a form designated by the Administrator. If more than one person is designated as the Beneficiary, their respective interests shall be as indicated on the designation form. In the case of a married Participant the Participant's spouse shall be deemed to be the designated Beneficiary unless the Participant's spouse has consented to another designation in the manner described in Section 8.03(d). If upon the death of the Participant there is, in the opinion of the Administrator, no designated Beneficiary for part or all of the Participant's Account, such amount will be paid to his surviving spouse or, if none, to his estate (such spouse or estate shall be deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies after benefits to such Beneficiary have commenced, but before they have been completed, and, in the opinion of the Administrator, no person has been designated to receive such remaining benefits, then such benefits shall be paid in a lump sum to the deceased Beneficiary's estate. 7.05. Other Termination of Employment. If a Participant's employment terminates for any reason other than death or normal, late, or disability retirement, he will be entitled to a termination benefit equal to (i) the vested percentage of the value of the Matching and Fixed or Discretionary Employer Contributions to his Account, as adjusted for income, expense, gain, or loss, such percentage determined in accordance with the applicable vesting schedule selected by the Employer in Section 1.06, and (ii) the value of the Transfer, Qualified Discretionary, Deferral, Rollover and Employee Contributions to his Account as adjusted for income, expense, gain or loss. The amount payable under this Section 7.05 will be subject to the provisions of Section 7.08 and will be distributed in accordance with Article 8 below. 7.06. Separate Account. If an in-service distribution from a Participant's Account has been made to him at a time when he has a nonforfeitable right to less than 100 percent of his Account attributable to Fixed or Discretionary Employer Contributions and Matching Contributions, the vesting schedules in Section 1.06 will thereafter apply only to amounts in his Account attributable to such Employer contributions allocated after such distribution. The balance of his Account immediately after such distribution will be transferred to a separate account for Fixed or Discretionary Employer Contributions and another separate account for Matching Contributions, which will be maintained for the purpose of determining his interest therein according to the following provisions. At any relevant time prior to a forfeiture of any portion thereof under Section 7.07 a Participant's nonforfeitable interest in his Account attributable to Fixed or Discretionary Employer Contributions and Matching Contributions held in separate accounts described in the preceding paragraph will be equal to P(AB + (RxD))-(RxD), where P is the nonforfeitable percentage at the relevant time determined under Section 7.05; AB is the account balance of the separate account at the relevant time; D is the amount of the distribution; and R is the ratio of the account balance at the relevant time to the account balance after distribution. Following a forfeiture of any portion of such separate account under Section 7.07 below, any balance in the Participant's separate account will remain fully vested and nonforfeitable. 7.07. Forfeitures. If a Participant's employment terminates, any portion of his Account (including any amounts credited after his termination of employment) not payable to him under Section 7.05 will be forfeited by him upon the complete distribution to him of the vested portion of his Account, if any, subject to the possibility of reinstatement as described in the following paragraph. For purposes of this paragraph, if the value of an Employee's vested account balance is zero, the Employee shall be deemed to have received a distribution of his vested interest immediately following termination of employment. Such forfeitures either will be applied to reduce the contributions of the Employer next payable under the Plan (or administrative expenses of the Plan) or will be allocated in accordance with Section 4.06 to the Accounts of all other remaining Participants who are eligible to share in Employer Contributions under Section 1.04(c)(3), as designated by the Employer in Section 1.09(e); the forfeitures shall be held in the money market fund, if any, listed in Section 1.12(b) pending such application. If a Participant forfeits any portion of his Account under the preceding paragraph but does again become an Employee after such date, then the amount so forfeited, without any adjustment for the earnings, expenses, or losses or gains of the assets credited to his Account since the date forfeited, will be recredited to his Account (or to a separate account as described in Section 7.06, if applicable) as of the last day of the Plan Year in which he again becomes an Employee, but (in case of a Participant who had received an actual distribution in accordance with the previous paragraph) only if he repays to the Plan within five years after the date of his reemployment the amount previously distributed to him, without interest, under Section 7.05. The provisions of the Plan (including Section 7.06) will thereafter apply as if no forfeiture had occurred. The amount to be recredited pursuant to this paragraph will be derived first from the forfeitures, if any, which as of the date of recrediting have yet to be applied as provided in the preceding paragraph and, to the extent such forfeitures are insufficient, from a special Employer contribution to be made by the Employer. If a Participant elects not to receive the nonforfeitable portion of his Account following his termination of employment, the non-vested portion of his Account shall be forfeited after the Participant has incurred five consecutive breaks in service as defined in Section 2.01(a)(34). No forfeitures will occur solely as a result of an Employee's withdrawal of Employee contributions. 7.08. Adjustment for Investment Experience. If any distribution under Sections 7.01, 7.02, 7.03, 7.04 or 7.05 is not made in a single payment, the amount retained by the Trustee after the distribution will be subject to adjustment until distributed to reflect the income and gain or loss on the investments in which such amount is invested and any expenses properly charged under the Plan and Trust to such amounts. 7.09. Participant Loans. If permitted under Section 1.07, the Administrator shall allow Participants to apply for a loan from the Plan, subject to the following: (a) Loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis. (b) Loans shall not be made available to highly compensated employees (as defined in section 414(q) of the Code) in an amount greater than the amount made available to other Employees. (c) Loans must be secured by the Participant's accounts, must not exceed 50 percent of the Participant's vested Account balance, and must bear a reasonable interest rate. (d) All loans shall by their terms require that repayment (principal and interest) be amortized in level payments, not less than quarterly, over a period not extending beyond five years from the date of the loan or, if such loan is for the purchase of a Participant's primary residence, over a period not extending beyond thirty (30) years or such shorter period of time as the Administrator specifies in properly adopted plan loan procedures from time to time. (e) A Participant must obtain the consent of his or her spouse, if any, to use as security for the loan that portion (if any) of his Account which was transferred from another plan (including a predecessor plan) to which Code Section 401(a)(11) applies with respect to such Participant, if so required under Article 8. Spousal consent shall be obtained no earlier than the beginning of the 90-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that loan. A new consent shall be required if the account balance is used for renegotiation, extension, renewal, or other revision of the loan. (f) In the event of a default, the Administrator shall take appropriate action; however, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. (g) No loans will be made to any shareholder-employee or Owner-Employee. For purposes of this requirement, a shareholder-employee means an employee or officer of an electing small business (Subchapter S) corporation who owns (or is considered as owning within the meaning of section 318(a)(1) of the Code), on any day during the taxable year of such corporation, more than 5% of the outstanding stock of the corporation. Notwithstanding any other provision of this Plan and subject to (e) above, the portion of the Participant's vested account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. If less than 100% of the Participant's vested account balance (determined without regard to the preceding sentence) is payable to the surviving spouse, then the account balance shall be adjusted by first reducing the vested account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. No loan to any Participant or Beneficiary can be made to the extent that such loan when added to the outstanding balance of all other loans to the Participant or Beneficiary would exceed the lesser of (a) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans during the one year period ending on the day before the loan is made over the outstanding balance of loans from the Plan on the date the loan is made, or (b) one-half the present value of the nonforfeitable accrued benefit of the Participant. For the purpose of the above limitation, all loans from all plans of the Employer and Related Employers are aggregated. An assignment or pledge of any portion of the Participant's interest in the Plan will be treated as a loan under this paragraph. 7.10. Hardship Distributions. If permitted under Section 1.08, a Participant may apply to the Administrator to withdraw some or all or his Deferral Contributions (and earnings thereon accrued as of December 31, 1988) and, if applicable, Rollover Contributions in the event of hardship. For purposes of this Section, "hardship" is defined as an immediate and heavy financial need of the Employee where such Employee lacks other available resources. Determinations with respect to hardship shall be made by the Administrator and shall be conclusive for purposes of the Plan, and shall be based on the following special rules: (a) The following are the only financial needs considered immediate and heavy: deductible medical expenses (within the meaning of section 213(d) of the Code) of the Employee, the Employee's spouse, children, or dependents; the purchase (excluding mortgage payments) of a principal residence for the Employee; payment of tuition and related educational fees for the next 12 months of post-secondary education for the Employee, the Employee's spouse, children or dependents; or the need to prevent the eviction of the Employee from, or a foreclosure on the mortgage of, the Employee's principal residence. (b) A distribution will be considered as necessary to satisfy an immediate and heavy financial need of the Employee only if: (1) The Employee has obtained all distributions, other than the hardship distributions, and all nontaxable loans under all plans maintained by the Employer and Related Employers; (2) All plans maintained by the Employer and Related Employers, or otherwise legally enforceable agreements, provide that the Employee's Elective Deferrals (and Employee Contributions) will be suspended for twelve months after the receipt of the hardship distribution; (3) The distribution is not in excess of the amount of an immediate and heavy financial need (including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution); and (4) All plans maintained by the Employer and Related Employers provide that the Employee may not make Elective Deferrals for the Employee's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under section 402(g) of the Code for such taxable year less the amount of such Employee's Elective Deferrals for the taxable year of the hardship distribution. (c) A Participant must obtain the consent of his or her spouse, if any, to obtain a hardship withdrawal from a Transferred Account if so required under Article 8. 7.11. In-Service Distribution Rules. If so designated by the Employer in Section 1.09(d), a Participant shall be entitled to withdraw all or a portion of his Account balance upon the attainment of age 59-1/2. If so designated by the Employer in Section 1.09(c), a Participant shall be entitled to withdraw all or a portion of his Matching Contributions Account and Employer Contributions Account upon attainment of age 55. Further, if so designated by the Employer in Section 1.09(e), a Participant shall be entitled to withdraw, in cash, up to 100% of the amount then credited to his Employee Contribution account and/or Rollover Account; such withdrawals shall be limited to one per Plan Year unless this prototype plan document is an amendment of a prior plan document, in which case the rules and restrictions governing employee contribution withdrawals, if any, are incorporated herein by reference. In all cases, such withdrawal shall be subject to the provisions of Section 8.05. Article 8. Distribution of Benefits Payable after Termination of Service. 8.01. Distribution of Benefits to Participants and Beneficiaries. (a) Distributions from the Trust to a Participant or to the Beneficiary of the Participant shall be made in a lump sum in cash upon retirement, death, or other termination of employment, unless another form of distribution is permitted in accordance with Section 1.09(b) and Sections 8.02, 8.03 or 8.04 or in accordance with Section 11.02. In the event a Participant is required to begin receiving minimum required distributions in accordance with Section 8.04 and Section 8.08 prior to the Participant's retirement, death, or other termination of employment, a distribution of such minimum required distribution amount only shall be made in accordance with Section 8.04 and Section 8.08. A distribution may be made in Fund Shares, at the election of the Participant, pursuant to the qualifying rollover of such distribution to a Fidelity Investments individual retirement account. (b) In the event that the Plan was adopted by amendment from another defined contribution plan, the following are among the forms of benefit that may also be available: (1) if permitted under Section 1.09(b)(1) of the Adoption Agreement, in substantially equal annual, or more frequent, installments, in cash, over a period certain which does not extend beyond the life expectancy of the Participant or the joint life expectancies of the Participant and his Beneficiary, or, if the Participant dies prior to the commencement of his benefits, the life expectancy of the Participant's Beneficiary, as further described in Section 8.04. (2) if permitted under Section 1.09(b)(2) of the Adoption Agreement, by the purchase and delivery of an annuity contract described in Sections 8.02 or 8.03. (c) Notwithstanding the provisions of Section 8.01(b) above, if a Participant's Account is, and at the time of any prior distribution was, $3,500 or less, the balance of such Account shall be distributed in a lump sum as soon as practicable following retirement, disability, death or other termination of employment. (d) Notwithstanding any provisions of the Plan to the contrary that would otherwise limit a distributee's election under this subsection, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution made after December 31, 1992 paid directly to the trustee or custodian of an eligible retirement plan specified by the distributee in a direct rollover. For purposes of this subsection: (1) An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives(or joint life expectancies) of the distributee and the distributee's designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (2) An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (3) A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (4) A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. 8.02. Annuity Distributions. If so provided in Section 1.09(b)(2), a Participant may elect distributions made in whole or in part in the form of an annuity contract subject to the provisions of Section 8.03. (a) An annuity contract distributed under the Plan must be purchased from an insurance company and must be nontransferable. The terms of an annuity contract shall comply with the requirements of the Plan and distributions under such contract shall be made in accordance with section 401(a)(9) of the Code and the regulations thereunder. (b) The payment period of an annuity contract distributed to the Participant pursuant to this Section may be as long as the Participant lives. If the annuity is payable to the Participant and his spouse or designated Beneficiary, the payment period of an annuity contract may be for as long as either the Participant or his spouse or designated Beneficiary lives. Such an annuity may provide for an annuity certain feature for a period not exceeding the life expectancy of the Participant. If the annuity is payable to the Participant and his spouse such period may not exceed the joint life and last survivor expectancy of the Participant and his spouse, or, if the annuity is payable to the Participant and a designated Beneficiary, the joint life and last survivor expectancy of the Participant and such Beneficiary. If the Participant dies prior to the commencement of his benefits, the payment period of an annuity contract distributed to the Beneficiary of the Participant may be as long as the Participant's Beneficiary lives, and may provide for an annuity certain feature for a period not exceeding the life expectancy of the Beneficiary. Any annuity contract distributed under the Plan must provide for nonincreasing payments. 8.03. Joint and Survivor Annuities. (a) Application. The provisions of this Section supersede any conflicting provisions of the Plan; provided, however, that this Section shall not apply if the Participant's Account does not exceed $3,500 prior to the commencement of a distribution of any benefits under the Plan. A Participant is described in this Section only if (i) the Participant has elected distribution of his Account in the form of an annuity contract in accordance with Section 8.02, or (ii) the Trustee has directly or indirectly received a transfer of assets from another plan (including a predecessor plan) to which Code section 401(a)(11) applies with respect to such Participant. The provisions of this Section shall be applied to comply with the requirements of Code Section 401(a)(9), to the extent not inconsistent with the requirements of Code Sections 401(a)(11) and 417. (b) Retirement Annuity. Unless the Participant elects to waive the application of this subsection in a manner satisfying the requirements of subsection (d) below, to the extent applicable to the Participant, within the 90-day period preceding his Annuity Starting Date (which election may be revoked, and if revoked, remade, at any time in such period), the vested Account balance due any Participant to whom this subsection (b) applies will be paid to him by the purchase and delivery to him of an annuity contract described in Section 8.02 providing a life annuity only form of benefit or, if the Participant is married as of his Annuity Starting Date, providing an immediate annuity for the life of the Participant with a survivor annuity for the life of the Participant's spouse (determined as of the date of distribution of the contract) which is 50 percent of the amount of the annuity which is payable during the joint lives of the Participant and such spouse. The Participant may elect to receive distribution of his benefits in the form of such annuity as of the earliest date on which he could elect to receive retirement benefits under the Plan. Within the period beginning 90 days prior to the Participant's Annuity Starting Date and ending 30 days prior to such Date, the Administrator will provide such Participant with a written explanation of (i) the terms and conditions of the annuity contract described herein, (ii) the Participant's right to make and the effect of an election to waive application of this subsection, (iii) the rights of the Participant's spouse under subsection (d), and (iv) the right to make, and the effect of a revocation of a previous election to waive the qualified joint and survivor annuity. (c) Annuity Death Benefit. Unless the Participant elects to waive the application of this subsection in a manner satisfying the requirements of subsection (d) below at any time within the applicable election period (which election may be revoked, and if revoked, remade, at any time in such period), if a married Participant to whom this Section applies dies before his Annuity Starting Date, then notwithstanding any designation of a Beneficiary to the contrary, 50 percent of his vested Account (including a pro rata share of his Employee Contributions if any, and income thereon) will be applied to purchase an annuity contract described in Section 8.03 providing an annuity for the life of the Participant's surviving spouse, which contract will then be promptly distributed to such spouse. In lieu of the purchase of such an annuity contract, the spouse may elect in writing to receive distributions under the Plan as if he or she had been designated by the Participant as his Beneficiary with respect to 50 percent of his Account. For purposes of this subsection, the applicable election period will commence on the first day of the Plan Year in which the Participant attains age 35 and will end on the date of the Participant's death, provided that in the case of a Participant who terminates his employment the applicable election period with respect to benefits accrued prior to the date of such termination will in no event commence later than the date of his termination of employment. A Participant may elect to waive the application of this subsection prior to the Plan Year in which he attains age 35, provided that any such waiver will cease to be effective as of the first day of the Plan Year in which the Participant attains age 35. The remaining 50 percent of a deceased Participant's Account shall be payable in accordance with Sections 7.04 and 8.01. The Administrator will provide a Participant to whom this subsection applies with a written explanation with respect to the annuity death benefit described in this subsection (c) comparable to that required under subsection (b) above. Such explanation shall be furnished within whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant reaches age 32 and ending with the end of the Plan Year preceding the Plan Year in which he reaches age 35, (ii) a reasonable period ending after the Employee becomes a Participant, (iii) a reasonable period ending after this Section 8.03 first becomes applicable to the Participant in accordance with Section 8.04(a), (iv) in the case of a Participant who separates from service before age 35, a reasonable period of time ending after separation from service. For purposes of the preceding sentence, the two-year period beginning one year prior to the date of the event described in clause (ii), (iii) or (iv), whichever is applicable, and ending one year after such date shall be considered reasonable, provided, that in the case of a Participant who separates from service under (iv) above and subsequently recommences employment with the Employer, the applicable period for such Participant shall be redetermined in accordance with this subsection. (d) Requirements of Elections. This subsection will be satisfied with respect to a waiver or designation which is required to satisfy this subsection if such waiver or designation is in writing and either (1) the Participant's spouse consents thereto in writing, which consent must acknowledge the effect of such waiver or designation and be witnessed by a notary public or Plan representative, or (2) the Participant establishes to the satisfaction of the Administrator that the consent of the Participant's spouse cannot be obtained because there is no spouse, because the spouse cannot be located or because of such other circumstances as the Secretary of Treasury may prescribe. Any consent by a spouse, or establishment that the consent of a spouse may not be obtained, will be effective only with respect to a specific Beneficiary (including any class of beneficiaries or any contingent beneficiaries) or form of benefits (for which the Participant is otherwise eligible in accordance with Section 8.01) identified in the Participant's waiver or designation, unless the consent of the spouse expressly permits designations by the Participant without any requirement of further consent by the spouse. A consent which permits such designations by the Participant shall acknowledge that the spouse has the right to limit consent to a specific Beneficiary and form of benefits and that the spouse voluntarily elects to relinquish both such rights. A consent by a spouse shall be irrevocable once made. Any such consent, or establishment that such consent may not be obtained, will be effective only with respect to such spouse. For purposes of subsections (b) and (c) above, no consent of a spouse shall be valid unless the notice required by such subsection, whichever is applicable, has been provided to the Participant. (e) Former Spouse. For purposes of this Section 8.03, a former spouse of a Participant will be treated as the spouse or surviving spouse of the Participant, and a current spouse will not be so treated, to the extent required under a qualified domestic relations order, as defined in section 414(p) of the Code. (f) Vested Account Balance. For purposes of this Section, vested Account balance shall include the aggregate value of the Participant's vested Account balance derived from Employer and Employee Contributions (including rollovers), whether vested before or upon death. The provisions of this Section shall apply to a Participant who is vested in amounts attributable to Employer contributions, Employee Contributions, or both, at the time of death or distribution. A Participant's vested Account balance shall not include deductible voluntary employee contributions. 8.04. Installment Distributions. This Section shall be interpreted and applied in accordance with the regulations under section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirement of section 1.401(a)(9)-2 of the regulations. (a) In General. If a Participant's benefit may be distributed in accordance with Section 8.01(b)(1), the amount to be distributed for each calendar year for which a minimum distribution is required shall be at least an amount equal to the quotient obtained by dividing the Participant's interest in his Account by the life expectancy of the Participant or Beneficiary or the joint life and last survivor expectancy of the Participant and his Beneficiary, whichever is applicable. For calendar years beginning before January 1, 1989, if a Participant's Beneficiary is not his spouse, the method of distribution selected must insure that at least 50 percent of the present value of the amount available for distribution is paid within the life expectancy of the Participant. For calendar years beginning after December 31, 1988 the amount to be distributed for each calendar year shall not be less than an amount equal to the quotient obtained by dividing the Participant's interest in his Account by the lesser of (i) the applicable life expectancy under Section 8.01(b), or (ii) if a Participant's Beneficiary is not his spouse, the applicable divisor determined under section 1.401(a)(9)-2, Q&A 4 of the Proposed Treasury Regulations, or any successor regulations of similar import. Distributions after the death of the Participant shall be made using the applicable life expectancy under (i) above, without regard to section 1.401(a)(9)-2 of such regulations. The minimum distribution required under this subsection (a) for the calendar year immediately preceding the calendar year in which the Participant's required beginning date, as determined under Section 8.09(a)(2), occurs shall be made on or before the Participant's required beginning date, as so determined. Minimum distributions for other calendar years shall be made on or before the close of such calendar year. The maximum payout period under this subsection may not exceed the life expectancy of the Participant and his Beneficiary. (b) Additional Requirements for Distributions After Death of Participant. (1) Distribution beginning after Death. If the Participant dies before distribution of his benefits has begun, distributions shall be made in accordance with the provisions of this paragraph. Distributions under Section 8.01(a) shall be completed by the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. Distributions under Section 8.01(b) shall commence, if the Beneficiary is not the Participant's spouse, not later than the close of the calendar year immediately following the calendar year in which the death of the Participant occurs. Distributions under Section 8.01(b) to a Beneficiary who is the Participant's surviving spouse shall commence not later than the close of the calendar year in which the Participant would have attained age 70 1/2 or, if later, the close of the calendar year immediately following the calendar year in which the death of the Participant occurs. In the event such spouse dies prior to the date distribution to him or her commences, he or she will be treated for purposes of this subsection (other than the preceding sentence) as if he or she were the Participant. If the Participant has not designated a Beneficiary, or the Participant or Beneficiary has not effectively selected a method of distribution, distribution of the Participant's benefit shall be completed by the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. Any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. For purposes of this subsection (b)(1), the life expectancy of a Beneficiary who is the Participant's surviving spouse shall be recalculated annually unless the Participant's spouse irrevocably elects otherwise prior to the time distributions are required to begin. Life expectancy shall be computed in accordance with the provisions of subsection (a) above. (2) Distribution beginning before Death. If the Participant dies after distribution of his benefits has begun, distributions to the Participant's Beneficiary will be made at least as rapidly as under the method of distribution being used as of the date of the Participant's death. For purposes of this Section 8.04(b), distribution of a Participant's interest in his Account will be considered to begin as of the Participant's required beginning date, as determined under Section 8.08(b). If distribution in the form of an annuity irrevocably commences prior to such date, distribution will be considered to begin as of the actual date distribution commences. Distributions under Section 8.04(b) shall be subject to the spousal consent requirements set forth in Section 7.04 or, if applicable, Section 8.03(d). (c) Life Expectancy. For purposes of this Section, life expectancy shall be recalculated annually in the case of the Participant or a Beneficiary who is the Participant's spouse unless the Participant or Beneficiary irrevocably elects otherwise prior to the time distributions are required to begin. If not recalculated in accordance with the foregoing, life expectancy shall be calculated using the attained age of the Participant or Beneficiary, whichever is applicable, as of such individual's birth date in the first year for which a minimum distribution is required reduced by one for each elapsed calendar year since the date life expectancy was first calculated. For purposes of this Section, life expectancy and joint life and last survivor expectancy shall be computed by use of the expected return multiples in Table V and VI of section 1.72-9 of the income tax Regulations. A Participant's interest in his Account for purposes of this Section 8.04 shall be determined as of the last valuation date in the calendar year immediately preceding the calendar year for which a minimum distribution is required, increased by the amount of any contributions allocated to, and decreased by any distributions from, such Account after the valuation date. Any distribution for the first year for which a minimum distribution is required made after the close of such year shall be treated as if made prior to the close of such year. 8.05. Immediate Distributions. If the Account balance distributable to a Participant exceeds, or at the time of any prior distribution exceeded, $3,500, no distribution will be made to the Participant before he reaches his Normal Retirement Age (or age 62, if later), unless the written consent of the Participant has been obtained. Such consent shall be made in writing within the 90-day period ending on the Participant's Annuity Starting Date. Within the period beginning 90 days before the Participant's Annuity Starting Date and ending 30 days before such Date, the Administrator will provide such Participant with written notice comparable to the notice described in Section 8.04(b) containing a general description of the material features and an explanation of the relative values of the optional forms of benefit available under the Plan and informing the Participant of his right to defer receipt of the distribution until his Normal Retirement Age (or age 62, if later). The consent of the Participant's spouse must also be obtained if the Participant is subject to the provisions of Section 8.03(a), unless the distribution will be made in the form of the applicable retirement annuity contract described in Section 8.03(b). A spouse's consent to early distribution, if required, must satisfy the requirements of Section 8.03(d). Neither the consent of the Participant nor the Participant's spouse shall be required to the extent that a distribution is required to satisfy Section 401(a)(9) or Section 415 of the Code. In addition, upon termination of this Plan, if the Plan does not offer an annuity option (purchased from a commercial provider) and if the Employer or entity within the same controlled group as the Employer does not maintain another defined contribution plan (other than an employee stock ownership plan as defined in Section 4975(e)(7) of the Code), the Participant's account balance will, without the Participant's consent, be distributed to the Participant. However, if any entity within the same controlled group as the Employer maintains another defined contribution plan (other than an employee stock ownership plan as defined in Section 4975(e)(7) of the Code) then the Participant's account balance will be transferred, without the Participant's consent, to the other plan if the Participant does not consent to an immediate distribution. 8.06. Determination of Method of Distribution. The Participant will determine the method of distribution of benefits to himself and may determine the method of distribution to his Beneficiary. Such determination will be made prior to the time benefits become payable under the Plan. If the Participant does not determine the method of distribution to his Beneficiary or if the Participant permits his Beneficiary to override his determination, the Beneficiary, in the event of the Participant's death, will determine the method of distribution of benefits to himself as if he were the Participant. A determination by the Beneficiary must be made no later than the close of the calendar year in which distribution would be required to begin under Section 8.04(b) or, if earlier, the close of the calendar year in which the fifth anniversary of the death of the Participant occurs. 8.07. Notice to Trustee. The Administrator will notify the Trustee in writing whenever any Participant or Beneficiary is entitled to receive benefits under the Plan. The Administrator's notice shall indicate the form of benefits that such Participant or Beneficiary shall receive and (in the case of distributions to a Participant) the name of any designated Beneficiary or Beneficiaries. 8.08. Time of Distribution. In no event will distribution to a Participant be made later than the earlier of the dates described in (a) and (b) below: (a) Absent the consent of the Participant (and his spouse, if appropriate), the 60th day after the close of the Plan Year in which occurs the latest of the date on which the Participant attains age 65 (or normal retirement age, if earlier), the date on which the Participant ceases to be employed by the Employer, or the 10th anniversary of the year in which the Participant commenced participation in the Plan; provided, the failure of a Participant and his spouse, if appropriate, to consent to a distribution after the Participant's Account becomes distributable but prior to the later of the Participant's normal retirement age or age 62 shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy this section; and (b) April 1 of the calendar year first following the calendar year in which the Participant attains age 70 1/2 or, in the case of a Participant who had attained age 70 1/2 before January 1, 1988, the required beginning date determined in accordance with (1) or (2) below: (1) The required beginning date of a Participant who is not a 5-percent owner is the first day of April of the calendar year following the calendar year in which the later of retirement or attainment of age 70-1/2 occurs. (2) The required beginning date of a Participant who is a 5-percent owner during any year beginning after December 31, 1979, is the first day of April following the later of: (i) the calendar year in which the Participant attains age 70-1/2, or (ii) the earlier of the calendar year with or within which ends the Plan Year in which the Participant becomes a 5-percent owner, or the calendar year in which the Participant retires. Notwithstanding the foregoing, in the case of a Participant who attained age 70 1/2 during 1988 and who had not retired prior to January 1, 1989, the required beginning date described in this paragraph shall be April 1, 1990. Notwithstanding (a) above, the failure of a Participant (and spouse) to consent to a distribution while a benefit is immediately distributable, within the meaning of Section 8.05, shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy (a) above. Once distributions have begun to a 5-percent owner under (b) above, they must continue to be distributed, even if the Participant ceases to be a 5-percent owner in a subsequent year. For purposes of (b) above, a Participant is treated as a 5-percent owner if such Participant is a 5-percent owner as defined in section 416(i) of the Code (determined in accordance with section 416 but without regard to whether the Plan is top-heavy) at any time during the Plan Year ending with or within the calendar year in which such owner attains age 66-1/2 or any subsequent Plan Year. 8.09. Whereabouts of Participants and Beneficiaries. The Administrator will at all times be responsible for determining the whereabouts of each Participant or Beneficiary who may be entitled to benefits under the Plan and will at all times be responsible for instructing the Trustee in writing as to the current address of each such Participant or Beneficiary. The Trustee will be entitled to rely on the latest written statement received from the Administrator as to such addresses. The Trustee will be under no duty to make any distributions under the Plan unless and until it has received written instructions from the Administrator satisfactory to the Trustee containing the name and address of the distributee, the time when the distribution is to occur, and the form which the distribution will take. Notwithstanding the foregoing, if the Trustee attempts to make a distribution in accordance with the Administrator's instructions but is unable to make such distribution because the whereabouts of the distributee is unknown, the Trustee will notify the Administrator of such situation and thereafter the Trustee will be under no duty to make any further distributions to such distributee until it receives further written instructions from the Administrator. If a benefit is forfeited because the Participant or Beneficiary cannot be found, such benefit will be reinstated if a claim is made by the Participant or Beneficiary. Article 9. Top-Heavy Provisions. 9.01. Application. If the Plan is or becomes a Top-Heavy Plan in any Plan Year or is automatically deemed to be Top-Heavy in accordance with the Employer's election in Section 1.10(a)(1) of the Adoption Agreement, the provisions of this Article 9 shall supersede any conflicting provision in the Plan. 9.02. Definitions. For purposes of this Article 9, the following terms have the meanings set forth below: (a) Key Employee. Any Employee or former Employee (and the Beneficiary of any such Employee) who at any time during the determination period was (i) an officer of the Employer or a Related Employer whose annual compensation exceeds 50 percent of the dollar limitation under section 415(b)(1)(A) of the Code, (ii) an owner (or considered an owner under section 318 of the Code) of one of the ten largest interests in the Employer or a Related Employer if such individual's annual compensation exceeds the dollar limitation under section 415(c)(1)(A) of the Code, (iii) a 5-percent owner of the Employer, or (iv) a 1-percent owner of the Employer who has annual compensation of more than $150,000. For purposes of this paragraph, the determination period is the Plan Year containing the Determination Date and the four preceding Plan Years. The determination of who is a Key Employee shall be made in accordance with section 416(i)(1) of the Code and the regulations thereunder. Annual compensation means compensation as defined in Section 415(c)(3) of the Code, but including amounts contributed by the Employer pursuant to a salary reduction agreement which are excludible from the Employee's gross income under Section 125, Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code. (b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following conditions exists: (1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group; (2) the Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60 percent; or (3) the Plan is a part of a Required Aggregation Group and a Permissive Aggregation Group and the Top-Heavy Ratio for both Groups exceeds 60 percent. (c) Top-Heavy Ratio. (1) With respect to this Plan, or with respect to any Required Aggregation Group or Permissive Aggregation Group that consists solely of defined contribution plans (including any simplified employee pension plans) and the Employer has not maintained any defined benefit plan which during the 5-year period ending on the determination date(s) has or has had accrued benefits, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances of all Key Employees under the plans as of the Determination Date (including any part of any account balance distributed in the 5-year period ending on the Determination Date), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 5-year period ending on the Determination Date) of all participants under the plans as of the Determination Date, both computed in accordance with Code Section 416 and the regulations thereunder. Both the numerator and denominator of the Top-Heavy Ratio shall be increased, to the extent required by Code Section 416, to reflect any contribution which is due but unpaid as of the Determination Date. (2) With respect to any Required Aggregation Group or Permissive Aggregation Group that includes one or more defined benefit plans which, during the 5-year period ending on the Determination Date, has covered or could cover a Participant in this Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances under the defined contribution plans for all Key Employees and the present value of accrued benefits under the defined benefit plans for all Key Employees, and the denominator of which is the sum of the account balances under the defined contribution plans for all participants and the present value of accrued benefits under the defined benefit plans for all participants. Both the numerator and denominator of the Top-Heavy Ratio shall be increased for any distribution of an account balance or an accrued benefit made in the 5-year period ending on the Determination Date and any contribution due but unpaid as of the Determination Date. (3) For purposes of (1) and (2) above, the value of account balances and the present value of accrued benefits will be determined as of the Valuation Date, except as provided in section 416 of the Code and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (i) who is not a Key Employee but who was a Key Employee in a prior year, or (ii) who has not been credited with at least one Hour of Service with the Employer at any time during the 5-year period ending on the Determination Date, will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account, shall be made in accordance with section 416 of the Code and the regulations thereunder. Deductible employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits shall be calculated with reference to the Determination Dates that fall within the same calendar year. For purposes of determining if the Plan, or any other plan included in a Required Aggregation Group of which this Plan is a part, is a Top-Heavy Plan, the accrued benefit in a defined benefit plan of an employee other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of section 411(b)(1)(C) of the Code. (d) Permissive Aggregation Group. The Required Aggregation Group plus any other qualified plans of the Employer or a Related Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of sections 401(a)(4) and 410 of the Code. (e) Required Aggregation Group. (1) Each qualified plan of the Employer or Related Employer in which at least one Key Employee participates, or has participated at any time during the determination period (regardless of whether the plan has terminated), and (2) any other qualified plan of the Employer or Related Employer which enables a plan described in (1) above to meet the requirements of sections 401(a)(4) or 410 of the Code. (f) Determination Date. For any Plan Year of the Plan subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of that Plan Year. (g) Valuation Date. The Determination Date. (h) Present Value. Present value shall be based only on the interest rate and mortality table specified in the Adoption Agreement. 9.03. Minimum Contribution. (a) Except as otherwise provided in (b) and (c) below, the Fixed and/or Discretionary Employer Contributions made on behalf of any Participant who is not a Key Employee shall not be less than the lesser of 3 percent (or other percent elected in Section 1.10(c)) of such Participant's Compensation or, in the case where the Employer has no defined benefit plan which designates this Plan to satisfy section 401 of the Code, the largest percentage of Employer contributions, as a percentage of the Key Employee's Compensation, as limited by Code Section 401(a)(17), made on behalf of any Key Employee for that year. If the Employer selected the Integrated Formula in Section 1.04(c)(1)(ii)(B) or Section 1.04(c)(2)(ii), the minimum contribution shall be determined under subsection (e) of this Section. Further, the minimum contribution under this Section 9.03 shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive a contribution, or would have received a lesser contribution for the year, because (i) the Participant failed to complete 1,000 Hours of Service or any equivalent service requirement provided in the Adoption Agreement; or (ii) the Participant's Compensation was less than a stated amount. (b) With respect to a Plan using the Non-standardized Adoption Agreement, the provisions of (a) above and (c) below shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year. (c) The Employer contributions for the Plan Year made on behalf of each Participant who is not a Key Employee and who is a participant in a defined benefit plan maintained by the Employer shall not be less than 5 percent of such Participant's Compensation. (d) The minimum contribution required under (a) above (to the extent required to be nonforfeitable under Section 416(b) of the Code) may not be forfeited under section 411(a)(3)(B) or 411(a)(3)(D) of the Code. (e) If the Employer elected an Integrated Formula in Section 1.04(c)(1)(ii)(B) or Section 1.04(c)(2)(ii), "2.7%" shall be substituted for "5.7%" in Section 4.06(b)(1), and the allocation steps in Section 4.06(b) shall be preceded by the following steps: (1) The Discretionary Employer Contribution will be allocated to each eligible Participant (as determined under this Section 9.03) in the ratio that the Participant's Compensation bears to all Participants' Compensation, but not in excess of 3% (or such other percent elected by the Employer in Section 1.10(c). (2) Any Discretionary Employer Contributions remaining after (e)(1) above will be allocated to each eligible Participant in the ratio that the Participant's Excess Compensation for the Plan Year bears to the Excess Compensation of all eligible Participants, but not in excess of 3% (or such other percent elected by the Employer in Section 1.10(c). 9.04. Adjustment to the Limitation on Contributions and Benefits. If this Plan is in Top-Heavy status, the number 100 shall be substituted for the number 125 in subsections (e)(3) and (e)(4) of Section 5.03. However, this substitution shall not take effect with respect to this Plan in any Plan Year in which the following requirements are satisfied: (a) The Employer contributions for such Plan Year made on behalf of each Participant who is not a Key Employee and who is a participant in a defined benefit plan maintained by the Employer is not less than 7 1/2 percent of such Participant's Compensation. (b) The sum of the present value as of the Determination Date of (i) the aggregate accounts of all Key Employees under all defined contribution plans of the Employer and (ii) the cumulative accrued benefits of all Key Employees under all defined benefit plans of the Employer does not exceed 90 percent of the same amounts determined for all participants under all plans of the Employer that are Top-Heavy Plans, excluding account values and accrued benefits for Employees who formerly were but are no longer Key Employees. The substitutions of the number 100 for 125 shall not take effect in any limitation Year with respect to any Participant for whom no benefits are accrued or contributions made for such Year. Article 10. Amendment and Termination. 10.01. Amendment by Employer. The Employer reserves the authority, subject to the provisions of Article 1 and Section 10.03, to amend the Plan: (a) Changing Elections Contained in the Adoption Agreement. By filing with the Trustee an amended Adoption Agreement, executed by the Employer only, on which said Employer has indicated a change or changes in provisions previously elected by it, such changes to be effective on the effective date of such amended Adoption Agreement except that retroactive changes to a previous election or elections pursuant to the regulations issued under Section 401(a)(4) of the Code shall be permitted. Any such change notwithstanding, no Participant's Account shall be reduced by such change below the amount to which the Participant would have been entitled if he had voluntarily left the employ of the Employer immediately prior to the date of the change. The Employer may from time to time make any amendment to the Plan that may be necessary to satisfy sections 415 or 416 of the Code because of the required aggregation of multiple plans by completing overriding Plan language in the Adoption Agreement. The Employer may also add certain model amendments published by the Internal Revenue Service which specifically provide that their adoption will not cause the Plan to be treated as an individually designed plan; or (b) Other Changes. By amending any provision of the Plan for any reason other than those specified in (a) above. However, upon making such amendment, including a waiver of the minimum funding requirement under Section 412(d) of the Code, the Employer may no longer participate in this prototype plan arrangement and will be deemed to have an individually designed plan. Following such amendment, the Trustee will transfer the assets of the Trust to the trust forming part of such newly adopted plan upon receipt of sufficient evidence (such as a determination letter or opinion letter from the Internal Revenue Service or an opinion of counsel satisfactory to the Trustee) that such trust will be a qualified trust under the Code. 10.02. Amendment by Fidelity. Fidelity may in its discretion amend the Plan or the Adoption Agreement at any time, subject to the provisions of Article 1 and Section 10.03, and provided that Fidelity mails a copy of such amendment to the Employer at its last known address as shown on the books of Fidelity. For purposes of Sponsoring Organization amendments, Fidelity shall be recognized as the agent of the Sponsoring Organization. If the Sponsoring Organization does not adopt the amendments made by Fidelity, the plan will no longer be identical to or contain only minor modifications to Fidelity's mass submitter institutional prototype plan. 10.03. Amendments Affecting Vested and/or Accrued Benefits. (a) Except as permitted by Section 10.04, no amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit with respect to benefits attributable to service before the amendment. Furthermore, if the vesting schedule of the Plan is amended, the nonforfeitable interest of a Participant in his Account, determined as of the later of the date the amendment is adopted or the date it becomes effective, will not be less than the Participant's nonforfeitable interest in his Account determined without regard to such amendment. (b) If the Plan's vesting schedule is amended, including any amendment resulting from a change to or from Top-Heavy Plan status, or the Plan is amended in any way that directly or indirectly affects the computation of a Participant's nonforfeitable interest in his Account, each Participant with at least three (3) Years of Service for Vesting with the Employer may elect, within a reasonable period after the adoption of the amendment, to have the nonforfeitable percentage of his Account computed under the Plan without regard to such amendment. The Participant's election may be made within 60 days from the latest of (i) the date the amendment is adopted; (ii) the date the amendment becomes effective; or (iii) the date the Participant is issued written notice of the amendment by the Employer or the Administrator. 10.04. Retroactive Amendments. An amendment made by Fidelity (or by Fidelity as agent of the Sponsoring Organization) in accordance with Section 10.02 may be made effective on a date prior to the first day of the Plan Year in which it is adopted if such amendment is necessary or appropriate to enable the Plan and Trust to satisfy the applicable requirements of the Code or to conform the Plan to any change in federal law, or to any regulations or ruling thereunder. Any retroactive amendment by the Employer shall be subject to the provisions of Section 10.01. 10.05. Termination. The Employer has adopted the Plan with the intention and expectation that contributions will be continued indefinitely. However, said Employer has no obligation or liability whatsoever to maintain the Plan for any length of time and may discontinue contributions under the Plan or terminate the Plan at any time by written notice delivered to the Trustee without any liability hereunder for any such discontinuance or termination. 10.06. Distribution upon Termination of the Plan. Upon termination or partial termination of the Plan or complete discontinuance of contributions thereunder, each Participant (including a terminated Participant in respect of amounts not previously forfeited by him) who is affected by such termination or partial termination or discontinuance will have a fully vested interest in his Account, and, subject to Sections 8.03 and 8.04, the Trustee will distribute to each Participant or other person entitled to distribution the balance of the Participant's Account in a single lump sum payment. In the absence of such instructions, the Trustee will notify the Administrator of such situation and the Trustee will be under no duty to make any distributions under the Plan until it receives written instructions from the Administrator. Upon the completion of such distributions, the Trust will terminate, the Trustee will be relieved from all liability under the Trust, and no Participant or other person will have any claims thereunder, except as required by applicable law. 10.07. Merger or Consolidation of Plan; Transfer of Plan Assets. In case of any merger or consolidation of the Plan with, or transfer of assets and liabilities of the Plan to, any other plan, provision must be made so that each Participant would, if the Plan then terminated, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation or transfer if the Plan had then terminated. Article 11. Amendment and Continuation of Predecessor Plan; Transfer of Funds to or from Other Qualified Plans. 11.01. Amendment and Continuation of Predecessor Plan. In the event the Employer has previously established a plan (the "predecessor plan") which is a defined contribution plan under the Code and which on the date of adoption of the Plan meets the applicable requirements of section 401(a) of the Code, the Employer may, in accordance with the provisions of the predecessor plan, amend and continue the predecessor plan in the form of the Plan and become the Employer hereunder, subject to the following: (a) Subject to the provisions of the Plan, each individual who was a participant or former participant in the predecessor plan immediately prior to the effective date of such amendment and continuation will become a Participant or former Participant in the Plan; (b) No election may be made under the vesting provisions of the Adoption Agreement if such election would reduce the benefits of a Participant under the Plan to less than the benefits to which he would have been entitled if he voluntarily separated from the service of the Employer immediately prior to such amendment and continuation; (c) No amendment to the plan shall decrease a participant's accrued benefit or eliminate an optional form of benefit; (d) The amounts standing to the credit of a participant's account immediately prior to such amendment and continuation which represent the amounts properly attributable to (i) contributions by the participant and (ii) contributions by the Employer and forfeitures will constitute the opening balance of his Account or Accounts under the Plan; (e) Amounts being paid to a former participant or to a beneficiary in accordance with the provisions of the predecessor plan will continue to be paid in accordance with such provisions; (f) Any beneficiary designation in effect after August 23, 1984, under the predecessor plan immediately before such amendment and continuation will be deemed a valid designation of Beneficiary under Section 8.04 if such designation satisfies the requirements of Section 8.04(d), unless and until the Participant revokes such designation or designates a new Beneficiary under the Plan; and (g) Unless the Employer and the Trustee agree otherwise, all assets of the predecessor trust will be deemed to be assets of the Trust as of the effective date of such amendment. Such assets will be invested by the Trustee as soon as reasonably practicable pursuant to Article 6. The Employer agrees to assist the Trustee in any way requested by the Trustee in order to facilitate the transfer of assets from the predecessor trust to the Trust Fund. 11.02. Transfer of Funds from an Existing Plan. The Employer may from time to time direct the Trustee, in accordance with such rules as the Trustee may establish, to accept funds transferred for the benefit of Participants from a trust forming part of another qualified plan under the Code, provided such plan is a defined contribution plan. Such transferred assets will become assets of the Trust as of the date they are received by the Trustee. Such transferred amounts will be credited to Participants' Accounts in accordance with their respective interests immediately upon receipt by the Trustee in accordance with the provisions in paragraph (d) of Section 11.01 as if such assets were transferred from a predecessor plan. A Participant's interest under the Plan in transferred amounts which were fully vested and nonforfeitable under the transferring plan will be fully vested and nonforfeitable at all times. Such transferred assets will be invested by the Trustee in accordance with the provisions of paragraph (g) of Section 11.01 as if such assets were transferred from a predecessor plan. Forms of benefit available under the transferee plan shall continue to be offered under the Plan with respect to such transferred assets. 11.03. Acceptance of Assets by Trustee. The Trustee will not accept assets which are not either in a medium proper for investment under the Plan, as set forth in Section 1.12(b), or in cash. Such assets shall be accompanied by written instructions showing separately the respective contributions by the prior employer and by the employee, and identifying the assets attributable to such contributions. The Trustee shall establish such accounts as may be necessary or appropriate to reflect such contributions under the Plan. The Trustee shall hold such assets for investment in accordance with the provisions of Article 6, and shall in accordance with the written instructions of the Employer make appropriate credits to the Accounts of the Participants for whose benefit assets have been transferred. 11.04. Transfer of Assets from Trust. The Employer may direct the Trustee to transfer all or a specified portion of the Trust assets to any other plan or plans maintained by the Employer or the employer or employers of a former Participant or Participants, provided that the Trustee has received evidence satisfactory to it that such other plan meets all applicable requirements of the Code and that spousal consent to such benefit transfer has been obtained if such consent is legally required. The assets so transferred shall be accompanied by written instructions from the Employer naming the persons for whose benefit such assets have been transferred, showing separately the respective contributions by the Employer and by each Participant, if any, and identifying the assets attributable to the various contributions. The Trustee shall have no further liabilities with respect to assets so transferred. Article 12. Miscellaneous. 12.01. Communication to Participants. The Plan will be communicated to all Participants by the Employer promptly after the Plan is adopted. 12.02. Limitation of Rights. Neither the establishment of the Plan and the Trust, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to any Participant or other person any legal or equitable right against the Employer, Administrator or Trustee, except as provided herein; and in no event will the terms of employment or service of any Participant be modified or in any way affected hereby. It is a condition of the Plan, and each Participant expressly agrees by his participation herein, that each Participant will look solely to the assets held in the Trust for the payment of any benefit to which he is entitled under the Plan. 12.03. Nonalienability of Benefits. The benefits provided hereunder will not be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind, either voluntarily or involuntarily, and any attempt to cause such benefits to be so subjected will not be recognized, except to such extent as may be required by law. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a domestic relations order, unless such order is determined by the Plan Administrator to be a qualified domestic relations order, as defined in section 414(p) of the Code, or any domestic relations order entered before January 1, 1985. A domestic relations order will not fail to be deemed a qualified domestic relations order merely because it requires the distribution or segregation of all or part of a Participant's Account with respect to an alternate payee before the Participant's death, disability, hardship or termination of employment, and distributions shall be made, or Accounts segregated, pursuant to the terms of any qualified domestic relations order. 12.04. Facility of Payment. In the event the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his affairs by reason of minority, illness, infirmity or other incapacity, the Administrator may direct the Trustee to disburse such payments to a person or institution designated by a court which has jurisdiction over such recipient or a person or institution otherwise having the legal authority under State law for the care and control of such recipient. The receipt by such person or institution of any such payments shall be complete acquittance therefor, and any such payment to the extent thereof, shall discharge the liability of the Trust for the payment of benefits hereunder to such recipient. 12.05. Information between Employer and Trustee. The Employer agrees to furnish the Trustee, and the Trustee agrees to furnish the Employer with such information relating to the Plan and Trust as may be required by the other in order to carry out their respective duties hereunder, including without limitation information required under the Code and any regulations issued or forms adopted by the Treasury Department thereunder or under the provisions of ERISA and any regulations issued or forms adopted by the Labor Department thereunder. 12.06. Effect of Failure to Qualify under Code. Notwithstanding any other provision contained herein, if the Employer fails to obtain or retain approval of the Plan by the Internal Revenue Service as a qualified plan under the Code, the Employer may no longer participate in this prototype Plan arrangement and will be deemed to have an individually designed plan. 12.07. Notices. Any notice or other communication in connection with this Plan shall be deemed delivered in writing if addressed as provided below and if either actually delivered at said address or, in the case of a letter, three business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified: (a) If to the Employer or Administrator, to it at the address set forth in the Adoption Agreement, to the attention of the person specified to receive notice in the Adoption Agreement; (b) If to the Trustee, to it at the address set forth in the Adoption Agreement; or, in each case at such other address as the addressee shall have specified by written notice delivered in accordance with the foregoing to the addressor's then effective notice address. 12.08. Governing Law. The Plan and the accompanying Adoption Agreement will be construed, administered and enforced according to ERISA, and to the extent not preempted thereby, the laws of the Trustee's state of domicile. Article 13. Plan Administration. 13.01. Powers and Responsibilities of the Administrator. The Administrator has the full discretionary power and the full responsibility to administer the Plan in all of its details, subject, however, to the requirements of ERISA. The Administrator's powers and responsibilities include, but are not limited to, the following: (a) To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan; (b) To interpret the Plan, its interpretation thereof in good faith to be final and conclusive on all persons claiming benefits under the Plan; (c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan; (d) To administer the claims and review procedures specified in Section 13.03; (e) To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan; (f) To determine the person or persons to whom such benefits will be paid; (g) To authorize the payment of benefits and to provide for the distribution of rollover notices in accordance with Code Section 402(f); (h) To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA; (i) To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan; (j) By written instrument, to allocate and delegate its fiduciary responsibilities in accordance with Section 405 of ERISA; (k) To take any and all other actions the Administrator determines to be necessary or appropriate to effect its responsibilities as such. 13.02. Nondiscriminatory Exercise of Authority. Whenever, in the administration of the Plan, any discretionary action by the Administrator is required, the Administrator shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment. 13.03. Claims and Review Procedures. (a) Claims Procedure. If any person believes he is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and (iv) information as to the steps to be taken if the person wishes to submit a request for review. Such notification will be given within 90 days after the claim is received by the Administrator (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to such person within the initial 90-day period). If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his claim. (b) Review Procedure. Within 60 days after the date on which a person receives a written notice of a denied claim (or, if applicable, within 60 days after the date on which such denial is considered to have occurred), such person (or his duly authorized representative) may (i) file a written request with the Administrator for a review of his denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The decision on review will be made within 60 days after the request for review is received by the Administrator (or within 120 days, if special circumstances require an extension of time for processing the request, such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60-day period). If the decision on review is not made within such period, the claim will be considered denied. 13.04. Named Fiduciary. The Administrator is a "named fiduciary" for purposes of Section 402(a)(1) of ERISA and has the powers and responsibilities with respect to the management and operation of the Plan described herein. 13.05. Costs of Administration. Unless paid by the Employer, all reasonable costs and expenses incurred by the Administrator and the Trustee in administering the Plan and Trust will be paid from the Trust Fund and will, unless allocable to the Accounts of particular Participants, be charged against the Accounts of all Participants on a pro rata basis. ARTICLE 14. Trust Agreement. 14.01. Acceptance of Trust Responsibilities. By executing the Adoption Agreement, the Employer establishes a trust to hold the assets of the Plan. By executing the Adoption Agreement, the Trustee agrees to accept the rights, duties and responsibilities set forth in this Article 14. 14.02. Establishment of Trust Fund. A trust is hereby established under the Plan and the Trustee will open and maintain a Trust account for the Plan and, if so agreed with the Administrator, Participants' Accounts for such individuals as the Employer shall from time to time give written notice to the Trustee are Participants in the Plan. The Trustee will accept and hold in the Trust Fund such contributions on behalf of Participants as it may receive from time to time from the Employer. The Trust Fund shall be fully invested and reinvested in accordance with the applicable provisions of the Plan in Fidelity Funds or, to the extent permitted, in other Fund Shares, except as provided in Section 14.04. 14.03. Exclusive Benefit. The Trustee shall hold the assets of the Trust Fund for the exclusive purpose of providing benefits to Participants and Beneficiaries and defraying the reasonable expenses of administering the Plan. No assets of the Plan shall revert to the Employer except as specifically permitted by the terms of the Plan. 14.04. Powers of Trustee. In addition to and not in limitation of such powers as the Trustee has by law or under any other provisions of the Plan, the Trustee shall have the following powers: (a) to deal with all or any part of the Trust Fund and to invest all or a part of the Trust Fund in investments available under the Plan, without regard to the law of any state regarding proper investment; (b) to retain uninvested such cash as may be deemed necessary or advisable, without liability for interest thereon, for the administration of the Trust; (c) to sell, convert, redeem, exchange, or otherwise dispose of all or any part of the assets constituting the Trust Fund; (d) to enforce by suit or otherwise, or to waive, its rights on behalf of the Trust, and to defend claims asserted against it or the Trust, provided that the Trustee is indemnified to its satisfaction against liability and expenses; (e) to compromise, adjust and settle any and all claims against or in favor of it or the Trust; (f) to oppose, or participate in and consent to the reorganization, merger, consolidation, or readjustment of the finances of any enterprise, to pay assessments and expenses in connection therewith, and to deposit securities under deposit agreements; (g) to apply for or purchase annuity contracts in accordance with Section 8.02; (h) to employ such agents and counsel as may be reasonably necessary in carrying out its duties hereunder and to pay them reasonable compensation; (i) to hold securities unregistered, or to register them in its own name or in the name of nominees; (j) to appoint custodians to hold investments within the jurisdiction of the district courts of the United States and to deposit securities with stock clearing corporations or depositories or similar organizations; (k) to make, execute, acknowledge and deliver any and all investments that it deems necessary or appropriate to carry out the powers herein granted; and (l) generally to exercise any of the powers of an owner with respect to all or any part of the Trust Fund. Except to the extent authorized in accordance with Section 6.04, the Trustee shall serve as a directed trustee and shall not have any discretionary authority with respect to the Trust Fund, nor shall the Trustee have any authority to provide any investment advice or recommendations with respect to the Trust Fund. The Trustee may only be authorized to exercise discretionary investment authority or render investment advice or recommendations with respect to the Trust Fund in accordance with the requirements of Section 6.04. In no event shall the Trustee exercise any of its powers in any manner inconsistent with the provisions of the Plan or ERISA. The Employer specifically acknowledges and authorizes that affiliates of the Trustee may act as its agent in the performance of ministerial, nonfiduciary duties under the Trust. The expenses and compensation of such agent shall be paid by the Trustee. 14.05. Accounts. The Trustee will keep full accounts of all receipts and disbursements and other transactions hereunder. Within 60 days after the close of each Plan Year, within 60 days after termination of the Trust, and at such other times as may be appropriate, the Trustee will determine the then net fair market value of the Trust Fund as of the close of the Plan Year, as of the termination of the Trust, or as of such other time, whichever is applicable, and will render to the Employer and Plan Administrator an account of its administration of the Trust during the period since the last such accounting, including all allocations made by it during such period. 14.06. Approving of Accounts. To the extent permitted by law, the written approval of any account by the Employer or Plan Administrator will be final and binding, as to all matters and transactions stated or shown therein, upon the Employer, Plan Administrator, Participants and all persons who then are or thereafter become interested in the Trust. The failure of the Employer or Plan Administrator to notify the Trustee within six (6) months after the receipt of any account of its objection to the account will, to the extent permitted by law, be the equivalent of written approval. If the Employer or Plan Administrator files any objections within such six (6) month period with respect to any matters or transactions stated or shown in the account, and the Employer or Plan Administrator and the Trustee cannot amicably settle the question raised by such objections, the Trustee will have the right to have such questions settled by judicial proceedings. Nothing herein contained will be construed so as to deprive the Trustee of the right to have judicial settlement of its accounts. In any proceeding for a judicial settlement of any account or for instructions, the only necessary parties will be the Trustee, the Employer and the Plan Administrator. 14.07. Distribution from Trust Fund. The Trustee shall make such distribution from the Trust Fund as the Employer or Plan Administrator may in writing direct, as provided by the terms of the Plan, upon certification by the Employer or Plan Administrator that the same is for the exclusive benefit of Participants or their Beneficiaries, or for the payment of expenses of administering the Plan. 14.08. Transfer of Amounts from Qualified Plan. If the Plan provides that amounts may be transferred to the Plan from another qualified plan or trust under section 401(a) of the Code, such transfer shall be made in accordance with the provisions of the Plan and with such rules as may be established by the Trustee. The Trustee shall not be responsible to ascertain whether the transfer of amounts to this Plan in accordance with this Section 14.08 qualifies as a nontaxable trustee-to-trustee transfer under the Code and regulations thereto. The Trustee will not accept assets which are not either in a medium proper for investment under this Agreement or in cash. Such amounts shall be accompanied by written instructions showing separately the respective contributions by the prior employer and the transferring Employee, and identifying the assets attributable to such contributions. The Trustee shall hold such assets for investment in accordance with the provisions of this Agreement. 14.09. Transfer of Assets from Trust. Subject to the provisions of the Plan, the Employer may direct the Trustee to transfer all or a specified portion of the Trust assets to any other plan or plans maintained by the Employer or the employer or employers of a former Participant or Participants, provided that the Trustee has received evidence satisfactory to it that such other plan meets all applicable requirements of the Code. The Trustee shall not be responsible to ascertain whether the transfer of amounts to another plan in accordance with this Section 14.09 qualifies as a nontaxable trustee-to-trustee transfer under the Code and regulations thereto. The assets so transferred shall be accompanied by written instructions from the Employer naming the persons for whose benefit such assets have been transferred, showing separately the respective contributions by the Employer and by each Participant, if any, and identifying the assets attributable to the various contributions. The Trustee shall have no further liabilities with respect to assets so transferred. 14.10. Voting; Delivery of Information. The Trustee shall deliver, or cause to be executed and delivered, to the Employer or Plan Administrator all notices, prospectuses, financial statements, proxies and proxy soliciting materials received by the Trustee relating to securities held by the Trust, and the Employer or Plan Administrator shall deliver these to the appropriate Participant or the Beneficiary of a deceased Participant. The Trustee shall undertake to deliver such materials directly to Participants and Beneficiaries if so agreed with the Administrator. The Trustee shall not vote any securities held by the Trust except in accordance with the written instructions of the Participant or the Beneficiary of the Participant, if the Participant is deceased; provided, however, that the Trustee may, in the absence of instructions, vote "present" for the sole purpose of allowing such shares to be counted for establishment of a quorum at a shareholders' meeting. 14.11. Compensation and Expenses of Trustee. The Trustee's fee for performing its duties hereunder will be such reasonable amounts as the Trustee may from time to time specify by written agreement with the Employer. Such fee, any taxes of any kind which may be levied or assessed upon or in respect of the Trust Fund and any and all expenses, including without limitation legal fees and expenses of administrative and judicial proceedings, reasonably incurred by the Trustee in connection with its duties and responsibilities hereunder will, unless paid by said Employer, be paid from the Trust Fund and will, unless allocable to the Accounts of particular Participants, be charged against the respective Accounts of all Participants, in such reasonable manner as the Trustee may determine. 14.12. Reliance by Trustee on Other Persons. The Trustee may rely upon and act upon any writing from any person authorized by the Employer or Plan Administrator to give instructions concerning the Plan and may conclusively rely upon and be protected in acting upon any written order from the Employer or Plan Administrator or upon any other notice, request, consent, certificate, or other instructions or paper reasonably believed by it to have been executed by a duly authorized person, so long as it acts in good faith in taking or omitting to take any such action. The Trustee need not inquire as to the basis in fact of any statement in writing received from the Employer or Plan Administrator. The Trustee will be entitled to rely on the latest certificate it has received from the Employer or Plan Administrator as to any person or persons authorized to act for the Employer or Plan Administrator hereunder and to sign on behalf of the Employer or Plan Administrator any directions or instructions, until it receives from the Employer or Plan Administrator written notice that such authority has been revoked. Notwithstanding any provision contained herein, the Trustee will be under no duty to take any action with respect to any Participant's Account (other than as specified herein) unless and until the Employer or Plan Administrator furnishes the Trustee with written instructions on a form acceptable to the Trustee, and the Trustee agrees thereto in writing. The Trustee will not be liable for any action taken pursuant to the Employer or Plan Administrator's written instructions (nor for the collection of contributions under the Plan, nor the purpose or propriety of any distribution made thereunder). 14.13 Trustee's Responsibilities and Indemnification. (a) The Trustee shall discharge its duties hereunder solely in the interest of Participants and Beneficiaries and with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims, and the Trustee shall be subject to all applicable requirements of ERISA. The Trustee shall have no duty to take any action to ensure the tax qualified status of the Plan under the Code. (b) The Trustee shall have no responsibility for the collection of, or authority to determine, the amounts of any contributions to be paid to it under this Plan, nor shall the Trustee be in any way responsible for the correctness of the computation of the amount of any contributions to be made by the Employer. The Trustee shall not have a duty to bring any action or proceeding to enforce the collection of any contribution by the Employer. (c) The Trustee shall not be liable for or under any duty to inquire as to the proper application of any part of the Trust Fund if distributions are made to the Participants or Beneficiaries in accordance with directions of the Administrator, nor shall the Trustee be responsible for the adequacy of the Trust Fund to meet and discharge any and all distributions and liabilities under the Plan. (d) The Employer shall indemnify and hold harmless the Trustee and its agents and employees or any of them ("Indemnified Persons") from and against all claims, damages, losses and expenses, including but not limited to attorneys' fees, arising from any and all claims, demands, suits or proceedings that may be brought against the Trustee in connection with the Plan or Trust by the Employer's employees or former employees, participants or legal representatives of any of them, or by any other person, entity, government or agency thereof, provided, however, that such indemnification shall not apply to any Indemnified Person for such Person's negligence or intentional misconduct in connection with the Plan. 14.14. Consultation by Trustee with Counsel. The Trustee may consult with legal counsel (who may be but need not be counsel for the Employer or the Plan Administrator) concerning any question which may arise with respect to its rights and duties under the Plan and Trust, and the opinion of such counsel will, to the extent permitted by law, be full and complete protection in respect of any action taken or omitted by the Trustee hereunder in good faith and in accordance with the opinion of such counsel. 14.15. Persons Dealing with the Trustee. No person dealing with the Trustee will be bound to see to the application of any money or property paid or delivered to the Trustee or to inquire into the validity or propriety of any transactions. 14.16. Resignation or Removal of Trustee. The Trustee may resign at any time by written notice to the Employer, which resignation shall be effective 60 days after delivery to the Employer. The Trustee may be removed by the Employer by written notice to the Trustee, which removal shall be effective 60 days after delivery of notice to the Trustee or such earlier date as may be approved by the Trustee. Upon resignation or removal of the Trustee, the Employer shall appoint a successor trustee. Any such successor trustee will, upon written acceptance of his appointment, become vested with the estate, rights, powers, discretion, duties and obligations of the Trustee hereunder as if he had been originally named as Trustee in this Agreement. The appointment of a successor trustee shall be accomplished by delivery to the Trustee of written notice that the Employer has appointed such successor trustee, and written acceptance of such appointment by the successor trustee. The Trustee may, upon transfer and delivery of the Trust Fund to a successor trustee, reserve such reasonable amount as it shall deem necessary to provide for its fees, compensation, costs and expenses, or for the payment of any other liabilities chargeable against the Trust Fund for which it may be liable. The Trustee shall not be liable for the acts or omissions of any successor trustee. 14.17. Fiscal Year of the Trust. The fiscal year of the Trust will coincide with the Plan Year. 14.18. Discharge of Duties by Fiduciaries. The Trustee and the Employer and any other fiduciary shall discharge their duties under the Plan and this Trust Agreement solely in the interests of Participants and their Beneficiaries in accordance with the requirements of ERISA. 14.19. Amendment. In accordance with provisions of the Plan, and subject to the limitations set forth therein, this Trust Agreement may be amended by an instrument in writing signed by the Employer and the Trustee. No amendment to this Trust Agreement shall divert any part of the Trust Fund to any purpose other than as provided in Section 2 hereof. 14.20. Plan Termination. Upon termination or partial termination of the Plan or complete discontinuance of contributions thereunder, the Trustee will make distributions to the Participants or other persons entitled to distributions as the Employer or Plan Administrator directs in accordance with the provisions of the Plan. In the absence of such instructions and unless the Plan otherwise provides, the Trustee will notify the Employer or Plan Administrator of such situation and the Trustee will be under no duty to make any distributions under the Plan until it receives written instructions from the Employer or Plan Administrator. Upon the completion of such distributions, the Trust will terminate, the Trustee will be relieved from all liability under the Trust, and no Participant or other person will have any claims thereunder, except as required by applicable law. 14.21. Permitted Reversion of Funds to Employer. If it is determined by the Internal Revenue Service that the Plan does not initially qualify under section 401 of the Code, all assets then held under the Plan will be returned by the Trustee, as directed by the Plan Administrator, to the Employer, but only if the application for determination is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan was adopted or such later date as may be prescribed by regulations. Such distribution will be made within one year after the date the initial qualification is denied. Upon such distribution the Plan will be considered to be rescinded and to be of no force or effect. Contributions under the Plan are conditioned on their deductibility under Section 404 of the Code. In the event the deduction of a contribution made by the Employer is disallowed under Section 404 of the Code, such contribution (to the extent disallowed) must be returned to the Employer within one year of the disallowance of the deduction. Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the disallowance of the deduction. 14.22. Governing Law. This Trust Agreement will be construed, administered and enforced according to ERISA and, to the extent not preempted thereby, the laws of the Trustee's state of domicile. u:\smc\fidelity\bankplan.009 11.28.94 THE INSTITUTIONAL PROTOTYPE PLAN A Fidelity Prototype Plan Non-Standardized Adoption Agreement Basic Plan No. 08 THE INSTITUTIONAL PROTOTYPE PLAN NON-STANDARDIZED ADOPTION AGREEMENT ARTICLE 1 1.01. PLAN INFORMATION (a) Name of Plan: This is the _______________________________________ Plan (the "Plan"). (b) Type of Plan (check one): 401(k) and profit sharing 401(k) only (not if Section 1.04(c) elected below) (Note: Employer contributions under Section 1.04(c) will be required for a top-heavy plan) discretionary employer contribution/profit sharing only (Section 1.04(c)((2) elected below and Section 1.04(a) not elected) fixed employer contribution/profit sharing only (Section 1.04(c)(1) elected below and Section 1.04(a) not elected) (Note: Employers that are governmental units or tax-exempt organizations (other than rural cooperatives) are not permitted to maintain a 401(k) arrangement) (c) Name of Plan Administrator, if not the Employer: _________________________________________________ Address: _________________________________________________ Phone Number: ___________________________________________ The Plan Administrator is the agent for service of legal process for the Plan. (d) Name of Trustee: _________________________________________________ Address: _________________________________________________ Phone Number: ___________________________________________ (e) Limitation Year (check one): Calendar Year Plan Year Other: __________________________ (f) Plan Number: __________________________ (g) Plan Year End: __________________________ (h) Plan Status (check one): (1) Effective Date of new Plan: _________________________ (2) Effective Date of amendment of Adoption Agreement or conversion from another plan document: ____________________________ Original Effective Date of Plan: _____________________ The substantive provisions of the Plan shall apply prior to the Effective Date to the extent required by the Tax Reform Act of 1986 or other applicable law. 1.02. EMPLOYER (i) The Employer is: __________________________________________________ Address: __________________________________________________ __________________________________________________ Contact Name: __________________________________________________ Phone Number: __________________________________________________ (1) Employer Identification Number: ______________________________ (2) Business form of Employer: __ Corporation __ Governmental __ Sole proprietor or partnership __ Tax-exempt organization __ Subchapter S Corporation (3) Employer's Fiscal Year End: __________________________________ (4) Date business commenced: ____________________________________ (j) The term "Employer" includes the following Related Employers (as defined in Section 2.01(a)(26)): ______________________________________________ ______________________________________________ ______________________________________________ (Note: The employees of Related Employers not participating in the Plan must still be considered in applying the coverage requirements of Code section 410(b) and 401(a)(26).) 1.03. COVERAGE (k) All Employees who meet the conditions specified below will be eligible to participate in the Plan: (1) Service Requirement (check one): (i) no service requirement (ii) ___ months (not less than 1 or more than 11) of service (no minimum number Hours of Service required) (iii) one year of service (2) Age requirement (check one): (i) no age requirement (ii) must have attained age ______ (not to exceed 21) (3) The class of Employees eligible to participate in the Plan (check one): (i) includes all Employees of the Employer. (ii) includes all employees of the Employer, except for (check each item that applies): i) Employees covered by a collective bargaining agreement between the Employer and employee representatives, if retirement benefits were the subject of good faith bargaining and if two percent or less of the employees of the Employer who are covered pursuant to that agreement are professionals as defined in Section 1.410(b)-9(g) of the proposed regulations. For this purpose, the term "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers or executives of the Employer. ii) Employees who are nonresident aliens (within the meaning of Code section 7701(b)(1)(B)) and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)). iii) Other ______________________________________________ (l) (1) All Employees who are in the service of the Employer on the Effective Date may become Participants (check one): (i) on the Effective Date. (ii) on the first Entry Date or, if earlier, the Effective Date on which the Employee satisfies the eligibility requirements set forth in Section 1.03(a). (2) The Entry Date(s) in each year shall be (check one): (i) the first day of each Plan Year (not if more than six months of service or more than age 20 1/2 is selected in (a)(1) or (a)(2) above, respectively, for eligibility to participate). (ii) the first day of each Plan Year and the date six months later. (iii) the first day of each Plan Year and the first day of the fourth, seventh, and tenth months. (iv) the first day of each month of the Plan Year (Note: the Plan Year must begin on the first day of a month for this option to be used). (v) 1.04. CONTRIBUTIONS (m) Deferral Contributions: (n) (1) Ongoing Contributions: If checked above, the Employer shall make a Deferral Contribution in accordance with Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the payroll period in question, not to exceed _________% (no more than 15%) of Compensation for that period. (2) Catch-Up Contributions (optional, if 1.04(a) checked above): If (a) is checked above, the Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of their Compensation for one or more payroll periods in the final month of the Plan Year (but see note below). (3) Annual Bonus Contributions (optional, if 1.04(a) checked above): If (a) is checked above, the Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of their annual bonus. If the Employer pays bonuses more frequently than annually then the Employer may designate the last bonus paid in the Plan Year as the annual bonus for purposes of this Section. Note: For purposes of (2) and (3) above, such contributions may not cause a Participant's Deferral Contributions for the Plan Year to exceed his Compensation in Section 1.04(e) times the Plan's maximum allowable deferral percentage or the maximum dollar amount permitted under Section 402(g) of the Code. The Employer has the right to refuse to allow a Participant to make contributions described in (2) or (3) if they would adversely affect the Plan's ability to pass the Actual Deferral Percentage and/or the Actual Contribution Percentage test. (n) Matching Contributions (optional if 1.04(a) checked above): If checked above, the Employer shall make a Matching Contribution on behalf of each Participant in accordance with Section 4.03, in an amount equal to (check one of (1) through (4)): (1) 50% of each Participant's Deferral Contribution (2) 100% of each Participant's Deferral Contribution (not if Deferral Contribution formula exceeds 12 1/2% of compensation) (3) _______% of each Participant's Deferral Contribution (4) the same percentage of each Participant's Deferral Contribution to be determined by the Employer on an annual basis (Optional) If so elected, the Matching Contribution shall be made only with respect to each Participant's Deferral Contribution not in excess of ______% of the Participant's Compensation, which is made on behalf of the Participant for the payroll period in question. (Optional) If so elected, the Matching Contribution for each Participant for each Plan Year shall be limited to $____________. (o) Fixed or Discretionary Employer Contributions (Select either (1) or (2)): (1) Fixed Employer Contributions (Select either (A) or (B) in each of (i) and (ii)): (i) Contribution Formula: (A) Percentage Contribution: For each Plan Year, the Employer will contribute for each eligible Participant an amount equal to ______% (not to exceed 15%) of such Participant's Compensation. (B) Flat Dollar Contribution: For each Plan Year, the Employer will contribute for each eligible Participant an amount equal to $____________. (ii) Allocation of Contribution Formula: (A) Nonintegrated Formula: Contributions will be allocated to each eligible Participant's account in the ratio that that Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. (B) Integrated Formula: Contributions will be allocated to each eligible Participant's account in accordance with Section 4.06. Note: An Employer who maintains any other plan that provides for Social Security integration (permitted disparity) may not elect (1)(ii)(B). (2) Discretionary Employer Contributions (Select either (i) or (ii)): If checked, the Employer may decide each Plan Year whether to make a Discretionary Employer Contribution on behalf of eligible Participants in accordance with Section 4.05. Such contributions may only be funded by the Employer after Plan Year End and shall be allocated to eligible Participants based upon the following: (i) Nonintegrated Formula: In the ratio that each eligible Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. (ii) Integrated Formula: In accordance with Section 4.06. Note: An Employer who maintains any other plan that provides for Social Security integration (permitted disparity) may not elect (2)(ii). (3) Eligibility Requirement(s) for Employer Contributions A Participant shall be entitled to the Employer Contribution in Section 1.04(c)(1) or (2) for a Plan Year if the Participant satisfies the following requirement(s) (Options (ii) and (iii) may not be elected together): (i) is employed by the Employer on the last day of the Plan Year. (ii) earns at least 500 Hours of Service during the Plan Year. (iii) earns at least 1,000 Hours of Service during the Plan Year. (iv) is employed by the Employer on the last day of the Plan Year or earns at least 500 Hours of Service during the Plan Year. (v) no requirements. (p) Qualified Discretionary Contributions (if applicable): If checked above, the Employer may make Qualified Discretionary Contributions for Non-highly Compensated Employees under this Plan, for any Plan Year in which the Plan would otherwise fail the ADP test. Qualified Discretionary Contributions shall be allocated (check one): (1) in the ratio which each Participant's Compensation for the Plan Year bears to the total Participant Compensation for the year. (2) in the ratio to which each Participant's Compensation not in excess of $___________ for the Plan Year bears to the total Compensation for the Plan Year of all such Participants not in excess of $____________. (q) (Optional) Compensation Exclusions: If checked above, the determination of contributions shall be based on a Participant's Compensation excluding (check one or more): (1) overtime pay. (2) bonuses. (3) commissions. The above exclusions shall not apply for purposes of the "top heavy" requirements in Section 9.03 or for purposes of allocating Discretionary Employer Contributions under an Integrated Formula, if elected in Section 1.04. (4) For purposes of Section 4, Compensation for a Participant's first year of participation shall include only Compensation earned on and after the Entry Date on which the Participant first becomes eligible to participate in the Plan. (r) (Optional) Employee Contributions If checked above, Participants may make voluntary nondeductible Employee Contributions pursuant to Section 4.09 of the Plan. This option may only be elected if the Employer has elected to permit Deferral Contributions under Section 1.04(a) above. Matching Contributions by the Employer are not allowed on any voluntary nondeductible Employee Contributions. Withdrawals are limited to one per year unless employee contributions were allowed under a previous plan document which authorized more frequent withdrawals. 1.05. RETIREMENT AGE(S) (s) The Normal Retirement Age under the Plan is (check one): (1) age 65 (2) age _______ (specify between 55 and 64) (t) (Optional) The Early Retirement Age is the first day of the month after the Participant attains age ______ (specify 55 or greater) and completes ______ years of service. (u) (Optional) A Participant is eligible for Disability Retirement if he/she: (1) satisfies the requirements for benefits under the Employer's Long-term Disability Plan. (2) satisfies the requirements for Social Security disability benefits. (3) is determined to be disabled by a physician approved by the Employer. (4) 1.06. VESTING SCHEDULE (v) In the event of termination of service prior to retirement or death, the Participant's vested percentage for Matching Contributions and Fixed or Discretionary Employer Contributions shall be: (1) Top Heavy Vesting Schedule. The Employer must select a Top Heavy vesting schedule. The Employer may elect to have the selected Top Heavy schedule apply at all times or, if the Plan is not Top Heavy, may also select a non-Top Heavy schedule in (2) below. However, if the Plan becomes Top Heavy in any Plan Year, the Top Heavy schedule will apply for that and all subsequent Plan Years. (i) 100% vested immediately. (ii) 100% vested after ______ (not more than 3) complete Years of Service for Vesting. (iii) a vested percentage determined in accordance with the following schedule: Years of Service for Vesting Percentage less than 2 0 2 20 3 40 4 60 5 80 6 or more 100 (iv) a vested percentage determined in accordance with the following schedule: Years of Service for Vesting Percentage Must Be At Least 0 _____ 0% 1 _____ 0% 2 _____ 20% 3 _____ 40% 4 _____ 60% 5 _____ 80% 6 _____ 100% (Each year of the schedule entered above must vest Participants at least as rapidly as each year under (iii) above). (2) Non-Top Heavy Vesting Schedule (optional, but only if Plan is not Top Heavy). If the Plan is not Top Heavy, the Employer may select a non-Top Heavy vesting schedule. However, if the Plan becomes Top Heavy in any Plan Year, the Top Heavy schedule selected in (1) above will apply for that and all subsequent Plan Years. (i) Five year cliff schedule: Years of Service for Vesting Vesting Percentage 0 0 1 0 2 0 3 0 4 0 5 100 (ii) Three to seven year schedule: Years of Service for Vesting Vesting Percentage 0 0 1 0 2 0 3 20 4 40 5 60 6 80 7 100 (iii) A vested percentage determined in accordance with the following schedule: Years of Service for Vesting Vesting Percentage Must Be At Least 0 _____ 0% 1 _____ 0% 2 _____ 0% 3 _____ 20% 4 _____ 40% 5 _____ 60% 6 _____ 80% 7 _____ 100% (w) (Optional) Years of Service for Vesting shall include service with the following employer(s): (1) _________________________________________ (2) _________________________________________ (x) (Optional) Years of Service for Vesting shall exclude a Participant's service prior to the Effective Date in the case of a new plan, or prior to the Original Effective Date in the case of an amendment and restatement. (y) (Optional) Years of Service for Vesting shall exclude a Participant's service prior to attainment of age 18. (z) 1.07. PARTICIPANT LOANS Participant Loans: (z) will be permitted in accordance with Section 7.09, subject to such other procedures as may be adopted from time to time by the Administrator. (aa) will not be permitted under the Plan. (bb) 1.08. HARDSHIP WITHDRAWALS Withdrawals for hardship prior to termination of employment: (bb) will be permitted in accordance with Section 7.10, subject to a $________ (may be $0 but not more than $1,000) minimum amount. (cc) will not be permitted. (dd) 1.09. DISTRIBUTIONS (dd) Subject to Article 8 and (b) below, distributions under the Plan will be paid as a lump sum in cash. (ee) Check if the Plan was converted (by plan amendment) from another defined contribution plan, and check below whether benefits were payable: (1) under a systematic withdrawal plan (installments) (2) as a form of single or joint and survivor life annuity Note: If (b) is checked, there also may be other distribution options that are "protected benefits" under the Internal Revenue Code. See Sections 11.02 and 8.01 of the Plan. (ff) A Participant will be entitled to withdraw all or any portion of his Matching Contributions Account and/or Employer Contributions Account upon attainment of age 55 (optional). (gg) A Participant will be entitled to withdraw all or any portion of his Account upon attainment of age 59 1/2 (optional). (hh) A Participant will be entitled to withdraw all or any portion of his Employee Contributions Account and/or Rollover Account at any time (optional). (ii) Forfeitures. Any portion of a Participant's Account that is forfeited upon termination of employment will be: (1) applied to reduce the contributions of the Employer next payable under the Plan (or administrative expenses of the Plan) (2) allocated in accordance with Section 4.06 to the Accounts of all other Participants who are eligible to share in Employer Contributions under Section 1.04(c)(3) Note:Under Federal Law, distributions to Participants must generally begin in a minimum required amount no later than April 1 following the year in which the Participant attains age 70 1/2. The Plan provides for automatic distribution of such minimum required amounts only to in-service Participants. 1.10. TOP HEAVY STATUS (jj) The Plan shall be subject to the Top-Heavy Plan requirements of Article 9 (check one): (1) for each Plan Year. (2) for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02. (kk) In determining Top-Heavy status, if necessary, for an employer with at least one defined benefit plan, the following assumptions shall apply: (1) Interest rate: ______% per annum (2) Mortality table: ____________ (3) Not Applicable (ll) In the event that the Plan is treated as Top-Heavy for a Plan Year, each non-key Employee shall receive an Employer Contribution (as described in Section 1.04(c)) of at least ____________ (3, 4, 5, or 7 1/2)% of Compensation for the Plan Year in accordance with Section 9.03 (check one): (1) under this Plan in any event. (2) under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer. Note: Such minimum Employer contribution may be less than the percentage indicated in (c) above to the extent provided in Section 9.03(a). 1.11. TWO OR MORE PLANS - Code Section 415 limitation on annual additions If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could become a participant, the Employer must complete this section. The Employer must also complete this section if it maintains a welfare benefit fund, as defined in Section 419(e) of the Code, or an individual medical account, as defined in Section 415(l)(2) of the Code, under which amounts are treated as annual additions with respect to any Participant in this Plan. (mm) If the Employer maintains, or had maintained, any other defined contribution plan or plans which are not Master or Prototype Plans, Annual Additions for any Limitation Year to this Plan will be limited (check one): (1) in accordance with Section 5.03 of this Plan. (2) in accordance with another method set forth on an attached separate sheet. (3) Not Applicable (nn) If the Employer maintains, or had maintained, a defined benefit plan or plans, the sum of the Defined Contribution Fraction and Defined Benefit Fraction for a Limitation Year may not exceed the limitation specified in Code Section 415(e), modified by section 416(h)(1) of the Code. This combined plan limit will be met as follows: (1) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0 (2) another method of limiting Annual Additions or reducing projected annual benefits is set forth on an attached schedule (3) Not Applicable (4) 1.12. ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS (oo) The Employer hereby establishes a Trust under the plan inaccordance with the provisions of Article 14, and the Trustee signifies acceptance of its duties under Article 14 by its signature below. Under the Plan, Participants' Accounts will be invested in accordance with Participant directions. (pp) Participants' Accounts may be invested among the Funds (as defined in Section 2.01(a)(16)) designated on the properly executed Exhibit A attached hereto, which is incorporated herein and made a part hereof by this reference. 1.13. RELIANCE ON OPINION LETTER An adopting Employer may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Section 401 of the Code. If the Employer wishes to obtain reliance that his or her plan(s) are qualified, application for a determination letter should be made to the appropriate Key District Director of the Internal Revenue Service. Failure to properly fill out the Adoption Agreement may result in disqualification of the Plan. This Adoption Agreement may be used only in conjunction with Fidelity Prototype Plan Basic Plan Document No. 08. The Prototype Sponsor shall inform the adopting Employer of any amendments made to the Plan or of the discontinuance o abandonment of the prototype plan document. 1.14. PROTOTYPE INFORMATION: Name of Prototype Sponsor: Fidelity Management & Research Co. Address of Prototype Sponsor: 82 Devonshire Street Boston, MA 02109 Questions regarding this prototype document may be directed to the following telephone number: 1-(800) 343-9184. IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ______ day of _____________, 19____. Employer_________________________________________ (Print Name) By_______________________________________________ (Signature) _________________________________________________ (Print Name) Title_____________________________________________ (Print Title) Accepted by Trustee_________________________________ (Print Name) By_____________________________________ (Signature) _______________________________________ (Print Name if Different from First Line) Title___________________________________ Date:____________________________________________ (Print Title if Applicable) THE INSTITUTIONAL PROTOTYPE PLAN NONSTANDARDIZED ADOPTION AGREEMENT EXHIBIT A TO ARTICLE 1 Funds Made Available for Investment (Section 1.12(b)) Participants' Accounts may be invested in the following Funds (as defined in Section 2.01(a)(16)): (1) __________________________________________________ (2) __________________________________________________ (3) __________________________________________________ (4) __________________________________________________ (5) __________________________________________________ (6) __________________________________________________ (7) __________________________________________________ (8) __________________________________________________ (9) __________________________________________________ (10) __________________________________________________ (11) __________________________________________________ (12) __________________________________________________ (13) __________________________________________________ (14) __________________________________________________ Note:100% of the funds selected must be Fidelity Funds, except to the extent that Fidelity or its authorized affiliate specifically agrees in writing to a lesser percentage. [OPTIONAL: To the extent that the Employer selects as an investment option the Managed Income Portfolio I of the Fidelity Group Trust for Employee Benefit Plans or any other group trust for which Fidelity or an affiliate serves as investment manager or discretionary trustee and that has been made available as an investment hereunder (a "Group Trust"), the Employer hereby (A) agrees to the terms of the Group Trust and adopts said terms as a part of this Agreement and (B) acknowledges that it has received from Fidelity or an authorized affiliate of Fidelity a copy of the Group Trust, of the declaration or other instrument evidencing or relating to any separate fund or portfolio of such Group Trust, any offering circular or other similar disclosure materials relating to the Group Trust or portfolio thereof, and/or such other documents that constitute a part of the Group Trust. To the extent that the Employer selects as an investment option a commingled trust maintained by a bank (including the Trustee, if applicable) for qualified plans (the "Commingled Trust"), the Employer hereby (A) agrees to the Terms of the Commingled Trust and adopts said terms as a part of this Agreement and (B) acknowledges that it has received from the Trustee or other bank a copy of all legal documents relating to the Commingled Trust.] Note:The method and frequency for change of investments will be determined under the rules applicable to the selected funds. Participants will be furnished with information regarding expenses, if any, for changes in investments. IN WITNESS WHEREOF, the Employer has caused this Exhibit A to the Adoption Agreement to be executed this ______ day of ____________________, 19____. Employer_________________________________________ (Print Name) By_______________________________________________ (Signature) _________________________________________________ (Print Name) Title_____________________________________________ (Print Title) Accepted by Trustee_________________________________ (Print Name) By_____________________________________ (Signature) _______________________________________ (Print Name if Different from First Line) Title___________________________________ Date:____________________________________________ (Print Title if Applicable) U:\SMC\FIDELITY\BANKNSAA.006 11.28.94 THE INSTITUTIONAL PROTOTYPE PLAN A Fidelity Prototype Plan Standardized Adoption Agreement Basic Plan No. 08 THE INSTITUTIONAL PROTOTYPE PLAN STANDARDIZED ADOPTION AGREEMENT ARTICLE 1 1.01. PLAN INFORMATION (a) Name of Plan: This is the _______________________________________ Plan (the "Plan"). (b) Type of Plan (check one): 401(k) and profit sharing 401(k) only (not if Section 1.04(c) elected below) (Note: Employer contributions under Section 1.04(c) will be required for a top-heavy plan) discretionary employer contribution/profit sharing only (Section 1.04(c)(2) elected below and Section 1.04(a) not elected) fixed employer contribution/profit sharing only (Section 1.04(c)(1) elected below and Section 1.04(a) not elected) (Note: Employers that are governmental units or tax-exempt organizations (other than rural cooperatives) are not permitted to maintain a 401(k) arrangement) (c) Name of Plan Administrator, if not the Employer: _________________________________________________ Address: _________________________________________________ Phone Number: ___________________________________________ The Plan Administrator is the agent for service of legal process for the Plan. (d) Name of Trustee: _________________________________________________ Address: _________________________________________________ Phone Number: ___________________________________________ (e) Limitation Year (check one): Calendar Year Plan Year Other: __________________________ (f) Plan Number: __________________________ (g) Plan Year End: __________________________ (h) Plan Status (check one): (1) Effective Date of new Plan: _________________________ (2) Effective Date of amendment of Adoption Agreement or conversion from another plan document: ____________________________ Original Effective Date of Plan: _____________________ The substantive provisions of the Plan shall apply prior to the Effective Date to the extent required by the Tax Reform Act of 1986 or other applicable law. 1.02. EMPLOYER (i) The Employer is: __________________________________________________ Address: __________________________________________________ __________________________________________________ Contact Name: __________________________________________________ Phone Number: __________________________________________________ (1) Employer Identification Number: ______________________________ (2) Business form of Employer: Corporation Governmental Sole proprietor or partnership Tax-exempt organization Subchapter S Corporation (3) Employer's Fiscal Year End: __________________________________ (4) Date business commenced: ____________________________________ (j) The term "Employer" includes all Related Employers (as defined in Section 2.01(a)(26)), which may be listed below for purposes of reference: ______________________________________________ ______________________________________________ ______________________________________________ 1.03. COVERAGE (k) All Employees who meet the conditions specified below will be eligible to participate in the Plan: (1) Service Requirement (check one): (i) no service requirement (ii) ____ months (not less than 1 or more than 11) of service (no minimum number Hours of Service required) (iii) one year of service (2) Age requirement (check one): (i) no age requirement (ii) must have attained age ______ (not to exceed 21) (3) The class of Employees eligible to participate in the Plan (check one): (i) includes all Employees of the Employer. (ii) includes all employees of the Employer, except for (check each item that applies): i) Employees covered by a collective bargaining agreement between the Employer and employee representatives, if retirement benefits were the subject of good faith bargaining and if two percent or less of the employees of the Employer who are covered pursuant to that agreement are professionals as defined in Section 1.410(b)-9(g) of the proposed regulations. For this purpose, the term "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers or executives of the Employer. ii) Employees who are nonresident aliens (within the meaning of Code section 7701(b)(1)(B)) and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)). (l) (1) All Employees who are in the service of the Employer on the Effective Date may become Participants (check one): (i) on the Effective Date. (ii) on the first Entry Date or, if earlier, the Effective Date on which the Employee satisfies the eligibility requirements set forth in Section 1.03(a). (2) The Entry Date(s) in each year shall be (check one): (i) the first day of each Plan Year (not if more than six months of service or more than age 20 1/2 is selected in (a)(1) or (a)(2) above, respectively, for eligibility to participate). (ii) the first day of each Plan Year and the date six months later. (iii) the first day of each Plan Year and the first day of the fourth, seventh, and tenth months. (iv) the first day of each month of the Plan Year (Note: the Plan Year must begin on the first day of a month for this option to be used). (v) 1.04. CONTRIBUTIONS (m) Deferral Contributions: (1) Ongoing Contributions: If checked above, the Employer shall make a Deferral Contribution in accordance with Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the payroll period in question, not to exceed _________% (no more than 15%) of Compensation for that period. (2) Catch-Up Contributions (optional, if 1.04(a) checked above): If (a) is checked above, the Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of their Compensation for one or more payroll periods in the final month of the Plan Year (but see note below). (3) Annual Bonus Contributions (optional, if 1.04(a) checked above): If (a) is checked above, the Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of their annual bonus. If the Employer pays bonuses more frequently than annually then the Employer may designate the last bonus paid in the Plan Year as the annual bonus for purposes of this Section. Note: For purposes of (2) and (3) above, such contributions may not cause a Participant's Deferral Contributions for the Plan Year to exceed his Compensation in Section 1.04(e) times the Plan's maximum allowable deferral percentage or the maximum dollar amount permitted under Section 402(g) of the Code. The Employer has the right to refuse to allow a Participant to make contributions described in (2) or (3) if they would adversely affect the Plan's ability to pass the Actual Deferral Percentage and/or the Actual Contribution Percentage test. (n) Matching Contributions (optional if 1.04(a) checked above): If checked above, the Employer shall make a Matching Contribution on behalf of each Participant in accordance with Section 4.03, in an amount equal to (check one of (1) through (4)): (1) 50% of each Participant's Deferral Contribution (2) 100% of each Participant's Deferral Contribution (not if Deferral Contribution formula exceeds 12 1/2% of compensation) (3) _______% of each Participant's Deferral Contribution (4) the same percentage of each Participant's Deferral Contribution to be determined by the Employer on an annual basis (Optional) If so elected, the Matching Contribution shall be made only with respect to each Participant's Deferral Contribution not in excess of ______% of the Participant's Compensation, which is made on behalf of the Participant for the payroll period in question. (Optional) If so elected, the Matching Contribution for each Participant for each Plan Year shall be limited to $____________. (o) Fixed or Discretionary Employer Contributions (Select either (1) or (2)): (1) Fixed Employer Contributions (Select either (A) or (B) in each of (i) and (ii)): (i) Contribution Formula: (A) Percentage Contribution: For each Plan Year, the Employer will contribute for each eligible Participant an amount equal to ______% (not to exceed 15%) of such Participant's Compensation. (B) Flat Dollar Contribution: For each Plan Year, the Employer will contribute for each eligible Participant an amount equal to $____________. (ii) Allocation of Contribution Formula: (A) Nonintegrated Formula: Contributions will be allocated to each eligible Participant's account in the ratio that that Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. (B) Integrated Formula: Contributions will be allocated to each eligible Participant's account in accordance with Section 4.06. Note: An Employer who maintains any other plan that provides for Social Security integration (permitted disparity) may not elect (1)(ii)(B). (2) Discretionary Employer Contributions (Select either (i) or (ii)): If checked, the Employer may decide each Plan Year whether to make a Discretionary Employer Contribution on behalf of eligible Participants in accordance with Section 4.05. Such contributions may only be funded by the Employer after Plan Year End and shall be allocated to eligible Participants based upon the following: (i) Nonintegrated Formula: In the ratio that each eligible Participant's Compensation bears to the total Compensation paid to all eligible Participants for the Plan Year. (ii) Integrated Formula: In accordance with Section 4.06. Note: An Employer who maintains any other plan that provides for Social Security integration (permitted disparity) may not elect (2)(ii). (3) The Employer Contribution in Section 1.04(c)(1) or (2), if any, by the Employer for the Plan Year, shall be made for each Participant who is either employed by the Employer on the last day of the Plan Year or earns more than 500 Hours of Service during the Plan Year. (p) Qualified Discretionary Contributions (if applicable): If checked above, the Employer may make Qualified Discretionary Contributions for Non-highly Compensated Employees under this Plan, for any Plan Year in which the Plan would otherwise fail the ADP test. Qualified Discretionary Contributions shall be allocated (check one): (1) in the ratio which each Participant's Compensation for the Plan Year bears to the total Participant Compensation for the year. (2) in the ratio to which each Participant's Compensation not in excess of $___________ for the Plan Year bears to the total Compensation for the Plan Year of all such Participants not in excess of $____________. (q) (Optional) Compensation for First Year of Participation For purposes of Section 4, Compensation for a Participant's first year of participation shall include only Compensation earned on and after the Entry Date on which the Participant first becomes eligible to participate in the Plan. (r) (Optional) Employee Contributions If checked above, Participants may make voluntary nondeductible Employee Contributions pursuant to Section 4.09 of the Plan. This option may only be elected if the Employer has elected to permit Deferral Contributions under Section 1.04(a) above. Matching Contributions by the Employer are not allowed on any voluntary nondeductible Employee Contributions. Withdrawals are limited to one per year unless employee contributions were allowed under a previous plan document which authorized more frequent withdrawals. 1.05. RETIREMENT AGE(S) (s) The Normal Retirement Age under the Plan is (check one): (1) age 65 (2) age _______ (specify between 55 and 64) (t) (Optional) The Early Retirement Age is the first day of the month after the Participant attains age ______ (specify 55 or greater) and completes ______ years of service. (u) (Optional) A Participant is eligible for Disability Retirement if he/she: (1) satisfies the requirements for benefits under the Employer's Long-term Disability Plan. (2) satisfies the requirements for Social Security disability benefits. (3) is determined to be disabled by a physician approved by the Employer. (4) 1.06. VESTING SCHEDULE (v) In the event of termination of service prior to retirement or death, the Participant's vested percentage for Matching Contributions and Fixed or Discretionary Employer Contributions shall be: (1) Top Heavy Vesting Schedule. The Employer must select a Top Heavy vesting schedule. The Employer may elect to have the selected Top Heavy schedule apply at all times or, if the Plan is not Top Heavy, may also select a non-Top Heavy schedule in (2) below. However, if the Plan becomes Top Heavy in any Plan Year, the Top Heavy schedule will apply for that and all subsequent Plan Years. (i) 100% vested immediately. (ii) 100% vested after ______ (not more than 3) complete Years of Service for Vesting. (iii) a vested percentage determined in accordance with the following schedule: Years of Service for Vesting Percentage less than 2 0 2 20 3 40 4 60 5 80 6 or more 100 (iv) a vested percentage determined in accordance with the following schedule: Years of Service for Vesting Percentage Must Be At Least 0 _____ 0% 1 _____ 0% 2 _____ 20% 3 _____ 40% 4 _____ 60% 5 _____ 80% 6 _____ 100% (Each year of the schedule entered above must vest Participants at least as rapidly as each year under (iii) above). (2) Non-Top Heavy Vesting Schedule (optional, but only if Plan is not Top Heavy). If the Plan is not Top Heavy, the Employer may select a non-Top Heavy vesting schedule. However, if the Plan becomes Top Heavy in any Plan Year, the Top Heavy schedule selected in (1) above will apply for that and all subsequent Plan Years. (i) Five year cliff schedule: Years of Service for Vesting Vesting Percentage 0 0 1 0 2 0 3 0 4 0 5 100 (ii) Three to seven year schedule: Years of Service for Vesting Vesting Percentage 0 0 1 0 2 0 3 20 4 40 5 60 6 80 7 100 (iii) A vested percentage determined in accordance with the following schedule: Years of Service for Vesting Vesting Percentage Must Be At Least 0 _____ 0% 1 _____ 0% 2 _____ 0% 3 _____ 20% 4 _____ 40% 5 _____ 60% 6 _____ 80% 7 _____ 100% (w) (Optional) Years of Service for Vesting shall include service with the following employer(s): (1) _________________________________________ (2) _________________________________________ (x) (Optional) Years of Service for Vesting shall exclude a Participant's service prior to the Effective Date in the case of a new plan, or prior to the Original Effective Date in the case of an amendment and restatement. (y) (Optional) Years of Service for Vesting shall exclude a Participant's service prior to attainment of age 18. (z) 1.07. PARTICIPANT LOANS Participant Loans: (z) will be permitted in accordance with Section 7.09, subject to such other procedures as may be adopted from time to time by the Administrator. (aa) will not be permitted under the Plan. (bb) 1.08. HARDSHIP WITHDRAWALS Withdrawals for hardship prior to termination of employment: (bb) will be permitted in accordance with Section 7.10, subject to a $________ (may be $0 but not more than $1,000) minimum amount. (cc) will not be permitted. (dd) 1.09. DISTRIBUTIONS (dd) Subject to Article 8 and (b) below, distributions under the Plan will be paid as a lump sum in cash. (ee) Check if the Plan was converted (by plan amendment) from another defined contribution plan, and check below whether benefits were payable: (1) under a systematic withdrawal plan (installments) (2) as a form of single or joint and survivor life annuity Note: If (b) is checked, there also may be other distribution options that are "protected benefits" under the Internal Revenue Code. See Sections 11.02 and 8.01 of the Plan. (ff) A Participant will be entitled to withdraw all or any portion of his Matching Contributions Account and/or Employer Contributions Account upon attainment of age 55 (optional). (gg) A Participant will be entitled to withdraw all or any portion of his Account upon attainment of age 59 1/2 (optional). (hh) A Participant will be entitled to withdraw all or any portion of his Employee Contributions Account and/or Rollover Account at any time (optional). (ii) Forfeitures. Any portion of a Participant's Account that is forfeited upon termination of employment will be: (1) applied to reduce the contributions of the Employer next payable under the Plan (or administrative expenses of the Plan) (2) allocated in accordance with Section 4.06 to the Accounts of all other Participants who are eligible to share in Employer Contributions under Section 1.04(c)(3) Note:Under Federal Law, distributions to Participants must generally begin in a minimum required amount no later than April 1 following the year in which the Participant attains age 70 1/2. The Plan provides for automatic distribution of such minimum required amounts only to in-service Participants. 1.10. TOP HEAVY STATUS (jj) The Plan shall be subject to the Top-Heavy Plan requirements of Article 9 (check one): (1) for each Plan Year. (2) for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02. (kk) In determining Top-Heavy status, if necessary, for an employer with at least one defined benefit plan, the following assumptions shall apply: (1) Interest rate: ______% per annum (2) Mortality table: ____________ (3) Not Applicable (ll) In the event that the Plan is treated as Top-Heavy for a Plan Year, each non-key Employee shall receive an Employer Contribution (as described in Section 1.04(c)) of at least ____________ (3, 4, 5, or 7 1/2)% of Compensation for the Plan Year in accordance with Section 9.03 (check one): (1) under this Plan in any event. (2) under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer. Note: Such minimum Employer contribution may be less than the percentage indicated in (c) above to the extent provided in Section 9.03(a). 1.11. TWO OR MORE PLANS - Code Section 415 limitation on annual additions If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could become a participant, the Employer must complete this section. The Employer must also complete this section if it maintains a welfare benefit fund, as defined in Section 419(e) of the Code, or an individual medical account, as defined in Section 415(l)(2) of the Code, under which amounts are treated as annual additions with respect to any Participant in this Plan. (mm) If the Employer maintains, or had maintained, any other defined contribution plan or plans which are not Master or Prototype Plans, Annual Additions for any Limitation Year to this Plan will be limited (check one): (1) in accordance with Section 5.03 of this Plan. (2) in accordance with another method set forth on an attached separate sheet. (3) Not Applicable (nn) If the Employer maintains, or had maintained, a defined benefit plan or plans, the sum of the Defined Contribution Fraction and Defined Benefit Fraction for a Limitation Year may not exceed the limitation specified in Code Section 415(e), modified by section 416(h)(1) of the Code. This combined plan limit will be met as follows: (1) Annual Additions to this Plan are limited so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does not exceed 1.0 (2) another method of limiting Annual Additions or reducing projected annual benefits is set forth on an attached schedule (3) Not Applicable (4) 1.12. ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS (oo) The Employer hereby establishes a Trust under the plan in accordance with the provisions of Article 14, and the Trustee signifies acceptance of its duties under Article 14 by its signature below. Under the Plan, Participants' Accounts will be invested in accordance with Participant directions. (pp) Participants' Accounts may be invested among the Funds (as defined in Section 2.01(a)(16) designated on the properly executed Exhibit A attached hereto, which is incorporated herein and made a part hereof by this reference. 1.13. RELIANCE ON OPINION LETTER An adopting Employer who has ever maintained or who later adopts any plan (including a welfare benefit fund, as defined in Code Section 419(e), which provides post- retirement medical benefits allocated to separate accounts for key employees, as defined in Code Section 419A(d)(3), or an individual medical account, as defined in Code Section 415(l)(2)) in addition to this Plan may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Section 401 of the Code. If the Employer who adopts or maintains multiple plans wishes to obtain reliance that his or her plan(s) are qualified, application for a determination letter should be made to the appropriate Key District Director of the Internal Revenue Service. Failure to properly fill out the Adoption Agreement may result in disqualification of the Plan. An adopting Employer may not rely on the opinion letter issued by the National Office of the Internal Revenue Service as evidence that this Plan is qualified under Section 401 of the Code unless the terms of the Plan, as herein adopted or amended, that pertain to the requirements of Sections 401(a)(4), 401(a)(17), 401(l), 401(a)(5), 410(b), and 414(s) of the Code, as amended by the Tax Reform Act of 1986 or later laws (a) are made effective retroactively to the first day of the first plan year beginning after December 31, 1988 (or such other date on which these requirements first became effective with respect to this Plan); or (b) are made effective no later than the first day on which the Employer is no longer entitled, under regulations, to rely on a reasonable, good faith interpretation of these requirements, and the prior provisions of the Plan constitute such an interpretation. This Adoption Agreement may be used only in conjunction with Fidelity Prototype Plan Basic Plan Document No. 08. The Prototype Sponsor shall inform the adopting Employer of any amendments made to the Plan or of the discontinuance or abandonment of the prototype plan document. 1.14. PROTOTYPE INFORMATION: Name of Prototype Sponsor: Fidelity Management & Research Co. Address of Prototype Sponsor: 82 Devonshire Street Boston, MA 02109 Questions regarding this prototype document may be directed to the following telephone number: 1-(800) 343-9184. IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ______ day of ____________________, 19____. Employer_________________________________________ (Print Name) By_______________________________________________ (Signature) _________________________________________________ (Print Name) Title_____________________________________________ (Print Title) Accepted by Trustee________________________________ (Print Name) By_____________________________________ (Signature) _______________________________________ (Print Name if Different from First Line) Title___________________________________ Date:____________________________________________ (Print Title if Applicable) THE INSTITUTIONAL PROTOTYPE PLAN NONSTANDARDIZED ADOPTION AGREEMENT EXHIBIT A TO ARTICLE 1 Funds Made Available for Investment (Section 1.12(b)) Participants' Accounts may be invested in the following Funds (as defined in Section 2.01(a)(16)): (1) __________________________________________________ (2) __________________________________________________ (3) __________________________________________________ (4) __________________________________________________ (5) __________________________________________________ (6) __________________________________________________ (7) __________________________________________________ (8) __________________________________________________ (9) __________________________________________________ (10) __________________________________________________ (11) __________________________________________________ (12) __________________________________________________ (13) __________________________________________________ (14) __________________________________________________ Note:100% of the funds selected must be Fidelity Funds, except to the extent that Fidelity or its authorized affiliate specifically agrees in writing to a lesser percentage. [OPTIONAL: To the extent that the Employer selects as an investment option the Managed Income Portfolio I of the Fidelity Group Trust for Employee Benefit Plans or any other group trust for which Fidelity or an affiliate serves as investment manager or discretionary trustee and that has been made available as an investment hereunder (a "Group Trust"), the Employer hereby (A) agrees to the terms of the Group Trust and adopts said terms as a part of this Agreement and (B) acknowledges that it has received from Fidelity or an authorized affiliate of Fidelity a copy of the Group Trust, of the declaration or other instrument evidencing or relating to any separate fund or portfolio of such Group Trust, any offering circular or other similar disclosure materials relating to the Group Trust or portfolio thereof, and/or such other documents that constitute a part of the Group Trust. To the extent that the Employer selects as an investment option a commingled trust maintained by a bank (including the Trustee, if applicable) for qualified plans (the "Commingled Trust"), the Employer hereby (A) agrees to the Terms of the Commingled Trust and adopts said terms as a part of this Agreement and (B) acknowledges that it has received from the Trustee or other bank a copy of all legal documents relating to the Commingled Trust.] Note:The method and frequency for change of investments will be determined under the rules applicable to the selected funds. Participants will be furnished with information regarding expenses, if any, for changes in investments. IN WITNESS WHEREOF, the Employer has caused this Exhibit A to the Adoption Agreement to be executed this ______ day of ____________________, 19____. Employer_________________________________________ (Print Name) By_______________________________________________ (Signature) _________________________________________________ (Print Name) Title_____________________________________________ (Print Title) Accepted by Trustee_________________________________ (Print Name) By_____________________________________ (Signature) _______________________________________ (Print Name if Different from First Line) Title___________________________________ Date:____________________________________________ (Print Title if Applicable) U:\SMC\FIDELITY\BANKS-AA.007 11.28.94 EX-99.B14 9 Exhibit 14(p) FIDELITY INVESTMENTS 403(b) SAMPLE PLAN TABLE OF CONTENTS ARTICLE 1 - INTRODUCTION 1 ARTICLE 2 - DEFINITIONS 1 2.1 "Administrator" 1 2.2 "Adoption Agreement" 1 2.3 "Affiliated Employer" 1 2.4 "Annuity Contracts" 1 2.5 "Annuity Starting Date" 1 2.6 "Code" 2 2.7 "Compensation" 2 2.8 "Custodial Account" or "Account" 2 2.9 "Custodial Agreements" 2 2.10 "Eligibility Computation Period" 2 2.11 "Employee" 2 2.12 "Employer" 2 2.13 "Employment Commencement Date" 2 2.14 "ERISA" 3 2.15 "Hour of Service" 3 2.16 "Integration Level" 4 2.17 "Normal Retirement Age" 4 2.18 "One Year Period of Severance" 4 2.19 "Participant" 5 2.20 "Participating Employer" 5 2.21 "Participating Employer Matching Contributions" 5 2.22 "Plan" 5 2.23 "Plan Year" 5 2.24 "Salary Reduction Agreement" 5 2.25 "Salary Reduction Contribution" 5 2.26 "Social Security Taxable Wage Base" 6 2.27 "Year of Service for Participation" 6 2.28 "Years of Service for Vesting" 6 ARTICLE 3 - PARTICIPATION 7 3.1 Participation 7 3.2 Duration of participation. 7 ARTICLE 4 - CONTRIBUTIONS; INVESTMENT OPTIONS 7 4.1 Salary Reduction Contributions 7 4.2 Participating Employer Matching Contributions 9 4.3 Participating Employer Non-Matching Contributions 13 4.4 Code Sections 403(b) and 415 Limitations; Separate Accounting 14 4.5 Timing of contributions 14 4.6 Rollover Contributions 14 4.7 Plan to Plan Transfers 15 4.8 Vesting 15 4.9 Forfeitures. 15 4.10 After-Tax Contributions 16 4.11 Investment options 17 ARTICLE 5 - IN-SERVICE WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE 18 5.1 In general. 18 5.2 Hardship withdrawals. 18 5.3 Loans 19 5.4 Withdrawals after 59 1/2 20 5.5 Spousal Consent 20 ARTICLE 6 - DISTRIBUTIONS AFTER SEPARATION FROM SERVICE 20 6.1 Separations from service other than death. 20 6.2 Death Benefits 22 6.3 Statutory distribution rules 24 6.4 Optional direct transfer of eligible rollover distributions 25 6.5 Forfeitures 25 ARTICLE 7 - CLAIMS AND REVIEW PROCEDURES 26 7.1 Claims procedure 26 7.2 Review procedure 26 ARTICLE 8 - ADMINISTRATION 27 8.1 Powers and responsibilities of the Administrator 27 8.2 Named fiduciary 27 8.3 Expenses of administration 27 ARTICLE 9 - MISCELLANEOUS 28 9.1 Amendment and termination 28 9.2 Limitation of rights. 28 9.3 Benefits not alienable 28 (This Sample 403(b) Plan and Adoption Agreement are for use by Tax Exempt Employers. These documents are samples only and must be reviewed by Employer's legal counsel or other employee benefit plan advisor. They may be tailored to Employer's specific requirements. These documents have not been filed as a prototype plan with the Internal Revenue Service.) ARTICLE 1 - INTRODUCTION The Employer intends that contributions under the Plan will be used to purchase one or more Annuity Contracts or Custodial Accounts for the benefit of Participants and their beneficiaries and that contributions under the Plan will be excluded from the gross income of the Participants in accordance with section 403(b) of the Code. To the extent any provision of the Plan is inconsistent with any provision of an Annuity Contract or Custodial Account, the provision of the Plan will control. It is understood that this Plan is subject to ERISA even if it is adopted by a 501(c)(3) organization (which is not a church or government) for a salary-reduction only arrangement. ARTICLE 2 - DEFINITIONS Wherever used herein, the following terms have the following meanings: 2.1 "ADMINISTRATOR" means the Employer. 2.2 "ADOPTION AGREEMENT" means the separate Agreement entered into between the Employer and the Custodian under which the Employer establishes the Plan and the Custodial Account and designates the options and provisions selected by the Employer. The provisions of the Adoption Agreement shall be considered an integral part of the Plan and as is set forth fully herein. 2.3 "AFFILIATED EMPLOYER" means each Participating Employer or every other employer who, under Code sections 414(b), (c), (m) or (o), is required to be considered as a single employer with a Participating Employer, but only for periods during which the other employer is required to be considered as such under the applicable Code provisions. 2.4 "ANNUITY CONTRACTS" means the non-transferable annuity contracts, if any, as defined in Code section 403(b), selected by the Employer to which contributions under the Plan may be made. 2.5 "ANNUITY STARTING DATE" means, with respect to a Participant, the first day of the first period for which a benefit is payable as an annuity or any other form. 2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to time. Reference to any section of the Code includes a reference to regulations issued by the Department of Treasury and notices and other releases issued by the Internal Revenue Service which interpret and implement such Code section. 2.7 "COMPENSATION" means total or basic Compensation, whichever is selected by the Employer in the Adoption Agreement, paid by a Participating Employer to a Participant after the date on which he or she becomes a Participant. Compensation shall be determined with or without regard to any salary reduction agreement with a Participating Employer under a Code section 125 or 403(b) arrangement, whichever is selected by the Employer in the Adoption Agreement. Compensation for any Plan Year will be limited to such limit as may apply under Code sections 403(b)(12) and 401(a)(17)). 2.8 "CUSTODIAL ACCOUNT" or "ACCOUNT" means the custodial account or accounts, as defined in Code section 403(b)(7), established for each Participant by the Employer, or by each Participant individually, under one or more Custodial Agreements. 2.9 "CUSTODIAL AGREEMENTS" means (i) the agreement between Fidelity Management Trust Company and its successors and the Employer or a Participant and (ii) any other agreement between a custodian other than Fidelity Management Trust Company and the Employer or a Participant, under which the assets of the Plan are held in Custodial Accounts for Participants and invested in shares of regulated investment companies, as defined in Code section 403(b)(7)(C). 2.10 "ELIGIBILITY COMPUTATION PERIOD" means each 12-consecutive month period beginning with the Employment Commencement Date and each anniversary thereof. 2.11 "EMPLOYEE" means any individual employed by a Participating Employer. 2.12 "EMPLOYER" means the Employer named in the Adoption Agreement. 2.13 "EMPLOYMENT COMMENCEMENT DATE" means the date on which the Employee first performs an Hour of Service. 2.14 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. 2.15 "HOUR OF SERVICE" means, with respect to any Employee, (A) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, for the performance of duties for the Employer or Affiliated Employer, each such hour to be credited to the Employee for the Eligibility Computation Period in which the duties were performed; (B) Each hour for which the Employee is directly or indirectly paid, or entitled to payment, by the Employer or Affiliated Employer (including payments made or due from a trust fund or insurer to which the Employer contributes or pays premiums) on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty, or leave of absence, each such hour to be credited to the Employee for the Eligibility Computation Period in which such period of time occurs, subject to the following rules: (i) No more than 501 Hours of Service shall be credited under this paragraph (B) on account of any single continuous period during which the Employee performs no duties; (ii) Hours of Service shall not be credited under this paragraph (b) for a payment which solely reimburses the Employee for medically-related expenses, or which is made or due under a plan maintained solely for the purpose of complying with applicable workmen's compensation, unemployment compensation or disability insurance laws; and (iii) If the period during which the Employee performs no duties falls within two or more Eligibility Computation Periods and if the payment made on account of such period is not calculated on the basis of units of time, the Hours of Service credited with respect to such period shall be allocated between not more than the first two such Eligibility Computation Periods on any reasonable basis consistently applied with respect to similarly situated Employees; and (C) Each hour not counted under paragraph (A) or (B) for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to be paid by the Employer or an Affiliated Employer, each such hour to be credited for the Eligibility Computation Period to which the award or agreement for back pay pertains. For purposes of determining Hours of Service, Employees of the Employer and of all Affiliated Employers will be treated as employed by a single employer. For purposes of paragraphs (B) and (C) above, Hours of Service will be calculated in accordance with the provisions of Section 2530.200b-2(b) of the Department of Labor regulations which are incorporated herein by reference. 2.16 "INTEGRATION LEVEL" means the amount of Salary or wages determined as a percentage of the Social Security Taxable Wage Base, as selected by the Employer in the Adoption Agreement, at or below which the rate at which contributions are provided (expressed as a percentage) is less than the rate above such amount. 2.17 "NORMAL RETIREMENT AGE" means the normal retirement age specified in the Adoption Agreement. 2.18 "ONE YEAR PERIOD OF SEVERANCE" means, in the case of each Participant who ceases to be an Employee, a 12-consecutive month period beginning on the Participant's severance from service date and ending on the first anniversary of such date, provided that during such 12-consecutive month period, the Participant failed to perform an Hour of Service. For purposes of this paragraph, the date an Employee severs from service is the earlier of the date the Employee quits, is discharged, retires or dies, or the first anniversary of the date the Employee is absent from service for any other reason. In the case of a Participant who is absent from work for maternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a One Year Period of Severance. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (i) by reason of the pregnancy of the individual, (ii) by reason of the birth of a child of the individual, (iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. 2.19 "PARTICIPANT" means each Employee who participates in the Plan in accordance with Article 3. 2.20 "PARTICIPATING EMPLOYER" means the Employer and any Affiliated Employer which has adopted this Plan. 2.21 "PARTICIPATING EMPLOYER MATCHING CONTRIBUTIONS" means contributions made by a Participating Employer on account of Salary Reduction Contributions. 2.22 "PLAN" means the Plan established by the Employer in the form of The Fidelity Investments 403(b) Sample Plan as set forth herein and in the Adoption Agreement, together with any and all amendments and supplements hereto. 2.23 "PLAN YEAR" means the 12 consecutive month period designated by the Employer in the Adoption Agreement. 2.24 "SALARY REDUCTION AGREEMENT" means a written agreement between a Participant and a Participating Employer, satisfying the conditions described in Article 4, pursuant to which the Participant's Salary or wages is reduced and the amount of the reduction is contributed by the Participating Employer under this Plan. 2.25 "SALARY REDUCTION CONTRIBUTION" means a contribution made to the Plan pursuant to a Salary Reduction Agreement. 2.26 "SOCIAL SECURITY TAXABLE WAGE BASE" means, with respect to any individual for any Plan Year, the maximum amount of the individual's earnings which may be considered wages for such Plan Year under section 3121(a)(1) of the Code. 2.27 "YEAR OF SERVICE FOR PARTICIPATION" means, with respect to any Employee, an Eligibility Computation Period during which the Employee has been credited with the required Hours of Service, if any, selected by the Employer in the Adoption Agreement. 2.28 "YEARS OF SERVICE FOR VESTING" means, with respect to any Employee, the number of whole years of his periods of service with the Employer or Affiliated Employer, whether or not such periods of service were completed consecutively. In determining the number of whole years of an Employee's periods of service, nonsuccessive periods of service with the Employer or Affiliated Employer will be aggregated and less than whole year periods of service (whether or not consecutive) will be aggregated on the basis that 365 days of service equals a whole year of service. An Employee's period of service with the Employer or Affiliated Employer will include a period of severance if the Employee severs from the service of the Employer or Affiliated Employer by reason of a quit, discharge or retirement and the Employee then performs an Hour of Service within 12 months of the severance from service date, or, if the quit, discharge or retirement occurs during a period of absence from service for any other reason, within the first anniversary of the date on which the Employee was first absent for such other reason. Notwithstanding the above, in the case of any Participant who incurs five consecutive One Year Periods of Severance, years of service after such five-year period shall not be taken into account in determining the nonforfeitable percentage of his benefit derived from Participating Employer contributions before such five-year period. If the Plan maintained by the Employer is the plan of a predecessor employer, an Employee's Years of Service for Vesting shall include years of service with such predecessor employer. In any case in which the Plan maintained by the Employer is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided by regulations, be treated as service for the Employer. ARTICLE 3 - PARTICIPATION 3.1 PARTICIPATION. Each Employee who is eligible to enter into a Salary Reduction Agreement in accordance with the Adoption Agreement shall become a Participant on the date on which he or she enters into a Salary Reduction Agreement. 3.2 DURATION OF PARTICIPATION. An individual who has become a Participant under the Plan will remain a Participant for as long as an Annuity Contract or Custodial Account is maintained under the Plan for his or her benefit, or until his or her death, if earlier. Notwithstanding the preceding sentence, no contributions shall be made with respect to a Participant who is not an eligible Employee or for whom a Salary Reduction Agreement is not in effect. ARTICLE 4 - CONTRIBUTIONS; INVESTMENT OPTIONS 4.1 SALARY REDUCTION CONTRIBUTIONS (a) Salary Reduction Agreement Defined. A Salary Reduction Agreement shall: (1) be in writing, on a form provided by the Administrator, and signed by the Participant prior to the first pay period for which the Agreement is to be effective; (2) provide for a reduction in the salary or wages paid to the Participant by the Participating Employer in exchange for the contribution of a like amount by the Participating Employer to the Plan on behalf of the Participant; (3) specify the amount of Salary Reduction Contributions; (4) be binding upon the Participant with respect to salary or wages earned while it is in effect; (5) be terminable at any time, with respect to salary or wages not yet earned, with any termination effected by filing written notice with the Administrator; (6) not require an amount of contribution which would exceed the Participant's maximum "exclusion allowance" under Code section 403(b) (generally, 20% of compensation) or the limitation on "annual additions" under Code section 415, each of which are hereby incorporated by reference into the Plan; (7) not permit an aggregate amount of contributions under this Section 4.1 which, when added to elective deferrals made on the Participant's behalf under another 403(b) annuity or 401(k) plan maintained by a Participating Employer for a Participant's taxable year, exceeds $9,500 (or such higher limit as may be in effect for the year under Code section 402(g)(1)); and (8) apply only to salary or wages earned after the Agreement is in effect. A Participant shall not be permitted to enter into or change more than one Salary Reduction Agreement with a Participating Employer during a taxable year. For purposes of this once-per-year rule, a complete revocation under Section 4.1(a)(5) above shall not be considered a "change". (b) Salary Reduction Contributions. Each Participant shall specify in his or her Salary Reduction Agreement the amount of Salary Reduction Contributions to be contributed to the Plan on his or her behalf by his or her Participating Employer. (d) Excess deferrals under Code section 402(g). The Plan does not permit Salary Reduction Contributions in excess of the limits on elective deferrals under Code section 402(g) for any particular year. However, in the event that an amount is included in a Participant's gross income for a taxable year as a result of an excess deferral under Code section 402(g), and the Participant notifies the Administrator on or before the March 1 following the taxable year that all or a specified part of a Salary Reduction Contribution made for his or her benefit represents an excess deferral, the Administrator shall make every reasonable effort to cause such excess deferral, adjusted for allocable income or loss in accordance with Code section 402(g)(2), to be distributed to the Participant no later than the April 15 following the calendar year in which such excess deferral was made. No distribution of an excess deferral shall be made during the taxable year of a Participant in which the excess deferral was made unless the correcting distribution is made after the date on which the Plan received the excess deferral and both the Participant and the Plan designates the distribution as a distribution of an excess deferral. All distributions of excess deferrals are subject to the terms of the Annuity Contract or Custodial Account in which such deferrals are invested. 4.2 PARTICIPATING EMPLOYER MATCHING CONTRIBUTIONS. (a) In general. For each Plan Year a Participating Employer will contribute, on behalf of each Participant employed by the Participating Employer who is eligible to receive a Participating Employer Matching Contribution as determined under the Adoption Agreement, and for whom a Salary Reduction Contribution has been made during the Year, a Participating Employer Matching Contribution equal to the amount specified in the Adoption Agreement. (b) Code section 401(m) limits. (1) Actual contribution ratios. For each Plan Year, the Administrator will determine the "actual contribution ratio" for each Participant who receives a Participating Employer Matching Contribution or who would have received a Participating Employer Matching Contribution if he or she had made a Salary Reduction Contribution. The actual contribution ratio shall be the ratio, calculated to the nearest one-hundredth of one percent, of (A) the sum of Participating Employer Matching Contributions made on behalf of such Participant for the Plan Year, to (B) such Participant's 401(m) compensation (as hereinafter defined) for the applicable period. For purposes of determining such Participant's actual contribution ratio, (i) Contributions will be taken into account only to the extent permitted by Department of Treasury regulation section 1.401(m)-1(b)(5); (ii) If a highly compensated Participant is subject to the family aggregation rules of Code section 414(q)(6) (for example, because such Participant is one of the ten most highly compensated Eligible Employees), the family group shall be treated as a single highly compensated Participant with an actual contribution ratio determined by combining the Participating Employer Matching Contributions and compensation of all the eligible family members; (iii) A "highly compensated Participant" means a Participant who, during the Plan Year in question or the preceding Plan Year, (A) received compensation in excess of $75,000, (as adjusted under Code section 414(q)), (B) received compensation in excess of $50,000 (as adjusted under Code section 414(q)) and was in the top-paid group of employees (as defined in Code section 414(q)), based upon the exclusion of all employees excludable under Code section 414(q)(8) for the Year, or (C) was at any time an officer of the Participating Employer and received compensation greater than 50% of the amount described in Code section 415(b)(1)(A). An individual who was not described in (A), (B), or (C) of the previous sentence for the preceding Plan Year shall be a highly compensated Participant for the current Plan Year only if he is among the 100 employees of the Participating Employer with the greatest compensation for the Plan Year; (iv) "401(m) compensation" means for purposes of these 401(m) limits, the Participant's wages, salaries, fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Participating Employer to the extent that the amounts are includable in gross income, plus any such amounts that would have been received by the Participant but for a salary reduction agreement with a Participating Employer under a Code section 125 or 403(b) arrangement, but not including those items excludable from the definition of compensation under Department of Treasury regulations section 1.415-2(d)(2); (v) The "applicable period" for each Participant for a given Plan Year shall be the 12 month period ending on the last day of such Plan Year; provided, that to the extent permitted under Code section 401(m), the Administrator may choose, on a uniform basis, to treat as the applicable period only that portion of the Plan Year during which the individual was a Participant. (2) Actual contribution percentages. The actual contribution ratios for highly compensated Participants shall be averaged to determine the actual contribution percentage for the highly compensated group for the Plan Year, and the actual contribution ratios for Participants who are not highly compensated Participants shall be averaged to determine the actual contribution percentage for the nonhighly compensated group for the Plan Year. The actual contribution percentages for any Plan Year must satisfy at least one of the following tests, which shall be interpreted and applied by the Administrator in a manner consistent with Department of Treasury regulation sections 1.401(m)-1 and 1.401(m)-2. (i) The actual contribution percentage for the highly compensated group does not exceed 125 percent of the actual contribution percentage for the nonhighly compensated group; or (ii) The excess of the actual contribution percentage for the highly compensated group over the actual contribution percentage for the nonhighly compensated group does not exceed two percentage points, and the actual contribution percentage for the highly compensated group does not exceed twice the actual contribution percentage of the nonhighly compensated group. (3) Adjustments by Administrator. If, prior to the time all Participating Employer Matching Contributions for a Plan Year have been contributed, the Administrator determines that such Contributions are being made at a rate which will cause the Code section 401(m) limits to be exceeded for the Plan Year, the Administrator may, in its sole discretion, limit the amount of such Contributions to be made with respect to one or more highly compensated Participants for the balance of the Plan Year to the extent the Administrator deems appropriate. (4) Excess aggregate contributions. If the Code section 401(m) limits have not been met for a Plan Year after all contributions for the Plan Year have been made, the Administrator shall determine the amount of excess aggregate contributions with respect to highly compensated Participants. To do so, the Administrator will reduce the actual contribution ratio of the highly compensated Participant with the highest actual contribution ratio to the extent necessary to (i) enable the Plan to satisfy the 401(m) limits or (ii) cause such Participant's actual contribution ratio of the highly compensated Participant with the next highest actual contribution ratio, and will repeat this process until the Plan satisfies the Code section 401(m) limits. The amount of excess aggregate contributions for each highly compensated Participant for the Plan Year shall equal the amount of Participating Employer Matching Contributions actually made under the Plan for the Plan Year, less the product of (i) the highly compensated Participant's reduced actual contribution ratio as determined under the preceding sentence, and (ii) his or her compensation. Any excess aggregate contributions will be distributed as provided below. In no event will excess aggregate contributions remain unallocated or be allocated to a suspense account for allocation in a future Plan Year. (5) Distribution of excess aggregate contributions. The Participating Employer shall cause a Participant's excess aggregate contributions, adjusted for income or loss pursuant to Department of Treasury regulation section 1.401(m)-1(e)(3)(ii), to be distributed to the Participant. Distribution of excess aggregate contributions will be designated as such and made after the close of the Plan Year to which the contributions relate, but within 12 months after the close of such Plan Year. The determination and distribution of excess aggregate contributions with respect to a highly compensated Participant whose actual contribution ratio is determined pursuant to the family aggregation rules will be accomplished pursuant to Department of Treasury regulation section 1.401(m)-1(e)(4)(iii). (6) Recordkeeping requirement. The Administrator, on behalf of each Participating Employer, shall maintain such records as are necessary to demonstrate compliance with the Code section 401(m) limits. 4.3 PARTICIPATING EMPLOYER NON-MATCHING CONTRIBUTIONS. For each Plan Year, a Participating Employer will contribute, on behalf of each Participant employed by the Participating Employer who is eligible to receive a Participating Employer Non-Matching Contribution as determined under the Adoption Agreement, the amount of Participating Employer Non-Matching Contribution specified in the Adoption Agreement. If the Plan is integrated, the percentage of Compensation contributed on behalf of each Participant with respect to Compensation in excess of the Integration Level shall not exceed the percentage of Compensation contributed on behalf of each Participant with respect to Compensation below the Integration Level by more than the lesser of (i) the percentage contributed with respect to Compensation below the Integration Level, or (ii)(I) if the Integration Level is the Social Security Taxable Wage Base, 5.7 percent, or (II) if the Integration Level is 80 percent or less of the Social Security Taxable Wage Base, 4.3 percent. The Social Security Taxable Wage Base used to determine the Integration Level shall be that in effect on the first day of the Plan Year. 4.4 CODE SECTIONS 403(B) AND 415 LIMITATIONS; SEPARATE ACCOUNTING. Notwithstanding Sections 4.1, 4.2 and 4.3, the total contribution required to be made for a Participant in any Plan Year under such Sections may not exceed the Participant's "exclusion allowance" for the Plan Year under Code section 403(b) or the limitations under Code section 415 on the Participant's "annual addition" for the Plan Year (which shall be the "limitation year" for such purposes under Code section 415). All of the applicable requirements of Code sections 403(b) and 415 are incorporated herein by reference. It shall be the responsibility of each Participant to determine and inform the Administrator of (a) his or her maximum exclusion allowance, and (b) any contributions by an employer other than an Affiliated Employer which are to be aggregated with contributions under the Plan in determining the Code section 415 limits with respect to the Participant. Amounts contributed under Sections 4.1, 4.2 and 4.3 above shall be separately accounted for. 4.5 TIMING OF CONTRIBUTIONS. In accordance with Department of Labor Regulations section 2510.3-102, Salary Reduction Contributions will be paid in cash to the Annuity Contract issuer or Custodial Account Custodian, as the case may be, as soon after the applicable pay period as such contributions can reasonably be segregated from the general assets of the Participating Employer, but in any event within 90 days after the date on which the Compensation to which such contributions relate is paid. Participating Employer Matching Contributions and Participating Employer Non-Matching Contributions for a Plan Year will be contributed in cash to the Annuity Contract issuer or Custodial Account custodian, as the case may be, with such frequency as the Adoption Agreement shall specify, but in any event no less frequent than annually and no later than the 15th day of the 6th calendar month following the close of the Participating Employer's fiscal year with or within which the Plan Year ends. 4.6 ROLLOVER CONTRIBUTIONS. If permitted under the Adoption Agreement and to the extent provided under an Annuity Contract or Custodial Account, an Employee may make a rollover contribution to the Annuity Contract issuer or Custodian Account Custodian for his or her account under the Plan upon demonstration to the Administrator that the contribution is eligible for transfer to the Plan pursuant to the rollover provisions of the Code. 4.7 PLAN TO PLAN TRANSFERS. If permitted under the Adoption Agreement and to the extent provided under an Annuity Contract or Custodial Account, and pursuant to, and subject to the terms of Revenue Ruling 90-24 issued by the Internal Revenue Service, an Employee may transfer to the Annuity Contract issuer or Custodial Account Custodian for his or her account under the Plan, any funds invested in another custodial account or annuity contract described in Code section 403(b). 4.8 VESTING. Each Participant will at all times have a fully vested and nonforfeitable interest in the portion of his or her accumulations under his or her Annuity Contracts and/or Custodial Accounts attributable to his or her Salary Reduction Contributions and any After-Tax Contributions and Rollover Contributions. Each Participant will have a vested percentage interest in the portion of his or her accumulations under his or her Annuity Contracts and/or Custodial Accounts attributable to his or her Participating Employer Matching Contributions and Participating Employer Non-Matching Contributions, determined in accordance with the vested percentage provisions of the Adoption Agreement. 4.9 FORFEITURES. (a) In general. Any portion of a Participant's interest in his or her Annuity Contracts or Custodial Accounts in which he or she is not vested upon separation from service for any reason will be forfeited as of the earlier of (i) the expiration of 5 consecutive One Year Periods of Severance, or (ii) the distribution of the vested portion of his or her Annuity Contracts or Custodial Accounts if such distribution is made as a result of the Participant's separation from service. (b) Certain Restorations. Notwithstanding the preceding paragraph, if a Participant forfeits any portion of his or her interest or his or her Annuity Contracts or Custodial Accounts as a result of the complete distribution of the vested portion of his or her Annuity Contracts or Custodial Accounts but thereafter returns to the employ of a Participating Employer, the amount forfeited will be recredited to the Participant's Annuity Contract or Custodial Account from which it was forfeited if he or she repays to the Plan the entire amount previously distributed, without interest, prior to the earlier of (i) the close of the fifth consecutive One Year Period of Severance or (ii) the fifth anniversary of the date on which the Participant is reemployed. The Participant's vested percentage in the amount so recredited will thereafter be determined under the terms of the Plan as if no forfeiture had occurred. The money required to effect the restoration of a Participant's Account shall come from other amounts forfeited during the Plan Year of restoration, and to the extent such funds are inadequate, from a special contribution by the Participant's Participating Employer. (c) Application of forfeitures. Any forfeitures occurring in a Plan Year with respect to an Employee of a Participating Employer (i) first, will be applied to the restoration of any accounts of Employees of the Participating Employer as required for such Year; and (ii) to the extent amounts remain after the application of (i) above, will be applied against the Participating Employer's Matching Contributions for the Plan Year in which the forfeitures occurred, and to the extent any forfeitures remain after such application, they will be applied against the Participating Employer's Matching Contributions for the next Plan Year. 4.10 AFTER-TAX CONTRIBUTIONS. If permitted under the Adoption Agreement and to the extent provided under an Annuity Contract or Custodial Account, Participants may make contributions to the Plan on an after-tax basis. After-Tax Contributions made to the Plan are subject to the Code section 401(m) limits, Code section 415 limitations and the timing of contribution rules under Department of Labor Regulations section 2510.3-102. These After-Tax Contributions are to be included under Section 4.2(b) for testing (and correction) purposes. For correction purposes, After-Tax Contributions will be distributed before Participating Employer Matching Contributions. 4.11 INVESTMENT OPTIONS. All contributions made for the benefit of a Participant shall be invested in such one or more Annuity Contracts and/or Custodial Accounts as the Administrator shall make available from time to time. The Administrator may prescribe rules permitting a Participant to direct the investment of the contributions made for his or her benefit within or among such Annuity Contracts and/or Custodial Accounts, and, at such times as the Administrator may prescribe, change such investment directions. The Administrator may prescribe that the Plan is to be an ERISA section 404(c) plan, in which event Participants will be given a reasonable opportunity (within the meaning of ERISA section 404(c) and the regulations promulgated thereunder) to give investment instructions (in writing or otherwise, with an opportunity to obtain written confirmation of such instructions) to the Administrator who will be obligated to comply with such instructions except as otherwise provided under section 404(c) regulations. ARTICLE 5 - IN-SERVICE WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE 5.1 IN GENERAL. Except as provided in this Article 5, in-service withdrawals are not permitted. 5.2 HARDSHIP WITHDRAWALS. (a) Immediate and heavy financial need. If permitted under the Adoption Agreement and to the extent provided in an Annuity Contract or Custodial Account, and subject to Section 5.5, a Participant may make a withdrawal from his or her vested interest in the Annuity Contract or Custodial Account (excluding any income attributable to Salary Reduction Contributions which is allocated after December 31, 1988 and any amounts attributable to Participating Employer Matching Contributions and Participating Employer Non-Matching made to a Custodial Account after December 31, 1988), in the event of an immediate and heavy financial need arising from (i) uninsured medical expenses described in Internal Revenue Service Publication 502 (as in effect for the year of withdrawal) incurred by the Participant, his or her spouse or any of his or her dependents (as defined in Code section 152); (ii) costs directly related to the purchase of a principal residence of the Participant (excluding mortgage payments); (iii) the payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant, his or her spouse, children or dependents (as defined in Code section 152); or (iv) payments necessary to prevent the eviction of the Participant from his or her principal residence or foreclosure on the mortgage on that principal residence. (b) Distribution of amount necessary to meet need. As soon as practicable after (i) the Administrator's determination that an immediate and heavy financial need exists with respect to the Participant, and (ii) all other distributions and nontaxable loans currently available under the Plan and all other plans maintained by the Affiliated Employers have been made, the Administrator will direct the Annuity Contract issuer or Account custodian to pay to the Participant the amount necessary to meet the need created by the hardship (but not in excess of the value of the Participant's vested interest in an Annuity Contract or Custodial Account). The amount necessary to meet the need may include the amount of any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal. (c) Effect of hardship distribution. If a Participant receives a hardship distribution under this Section, then any Salary Reduction Contribution election shall be suspended for 12 months, beginning with the pay period after the hardship withdrawal is approved. In addition, the maximum amount of Salary Reduction Contributions which may be made on behalf of the Participant for the Plan Year in which the suspension ends shall be the elective deferral limit in effect under Code section 402(g) for that Plan Year, less the amount of Salary Reduction Contributions made on behalf of the Participant for the Plan Year in which the suspension took effect. 5.3 LOANS. If permitted under the Adoption Agreement and to the extent provided by an Annuity Contract or Custodial Account, and subject to Section 5.5, a Participant may borrow against his or her vested interest in the Annuity Contract or Custodial Account, as the case may be. Loans from an Annuity Contract or Custodial Account will be made only in accordance with the terms of such Contract or Account, and only in the event that: (d) the loans (i) are available to all Participants on a reasonably equivalent basis, (ii) are not made available to highly compensated employees (within the meaning of Code section 414(q)) in an amount (determined under Department of Labor regulation section 2550.408b-1(d)) greater than the amount made available to other employees, (iii) are made in accordance with specific written procedures, (iv) bear a reasonable rate of interest, (v) are adequately secured, (vi) are amortized evenly and at least quarterly, and (except in the case of a loan used to acquire a principal residence) (vi) are repayable within 5 years; and (e) the loan amount does not exceed the lesser of (i) 50% of the aggregate amount of Salary Reduction Contributions, vested Participating Employer Matching Contributions and vested Participating Employer Non-Matching Contributions, plus allocable earnings, or (ii) $50,000 (reduced by the highest outstanding loan balance during the year which ends on the date before the loan is made). The Administrator shall promulgate such rules and procedures, not inconsistent with the express provisions of this Section, as it deems necessary to carry out the purpose of this Section. In addition, the Annuity Contract or Custodial Account from which a loan is made may contain additional rules and procedures. All such rules and procedures shall be deemed a part of the Plan for purposes of the Department of Labor regulation section 2550.408b-1(d). 5.4 WITHDRAWALS AFTER 59 1/2. If permitted under the Adoption agreement and to the extent provided in an Annuity Contract or Custodial Account, and subject to Section 5.5, a Participant who has attained age 59 1/2 may make a withdrawal of his or her vested interest in the Annuity Contract or Custodial Account. As soon as reasonably practicable after the Participant's request, the Administrator will direct the Annuity Contract issuer or Custodial Account Custodian to pay the Participant the amount requested. 5.5 SPOUSAL CONSENT. If the distribution is subject to the joint and survivor annuity requirements of Code sections 401(a)(11) and 417 and ERISA section 205, no withdrawal or loan under this Article 5 may be made to a Participant who is married on the date of a withdrawal or loan unless the Participant's spouse consents thereto within 90 days prior to such withdrawal or loan. Such consent must be made in the same manner as provided under Article 6 below for distributions after separation from service. ARTICLE 6 - DISTRIBUTIONS AFTER SEPARATION FROM SERVICE 6.1 SEPARATIONS FROM SERVICE OTHER THAN DEATH. In the case of a Participant's separation from the service of the Affiliated Employers for reasons other than death, vested benefits will be paid in accordance with this Section 6.1, subject to the statutory distribution rules under Section 6.3. (a) Participants who are not married on their Annuity Starting Date. A Participant who is not married on his or her Annuity Starting Date will be entitled to elect to receive vested distributions from his or her Annuity Contracts and/or Custodial Accounts upon the Participant's separation from service (for reasons other than death) in the form or forms provided under, and subject to, the terms of the Adoption Agreement as well as the applicable Annuity Contract or Custodial Account. Notwithstanding the foregoing, and where an Annuity Contract or Custodial Account so provides, in the case of a Participant whose entire vested balances under the Plan do not exceed (and, at the time of any prior distribution, had not exceeded) $3,500, such balance will be distributed as soon as practicable in a single sum. (b) Participants who are married on their Annuity Starting Date. In the case of a Participant who is married on his or her Annuity Starting Date, vested distributions on account of the Participant's separation from service (for reasons other than death) from the Affiliated Employers will be made as provided in Section 6.1(a) above, provided, however, if the distribution is one to which Code sections 401(a)(11) and 417 and ERISA section 205 apply, the following additional rules apply: (i) In the case of a Participant whose total vested balances under the Plan exceed $3,500, benefits payable to a Participant who is married on his or her Annuity Starting Date shall be paid in the form of a qualified joint and survivor annuity. A qualified joint and survivor annuity is an annuity that pays a lifetime periodic benefit to the Participant, and after the Participant's death pays a periodic benefit to the Participant's surviving spouse during the spouse's remaining lifetime in an amount that is at least 50% but not more than 100% of the periodic benefit payable during the Participant's lifetime. (ii) A Participant who is married on his or her Annuity Starting Date may waive the qualified joint and survivor annuity and elect any other form of benefit available under an Annuity Contract or Custodial Account as described in Section 6.1(a) above, or designate a joint annuitant other than the Participant's spouse, if the Participant's spouse consents to the election in the manner described in paragraph (iii). Any such election must be executed and filed during the 90 day period ending on the Annuity Starting Date. The Administrator will provide such information to Participants in connection with the waiver and consent as may be required from time to time under ERISA section 205. (iii) Spousal consent as required under this Section must be in writing, must specify the optional form of benefit elected and any non-spouse beneficiaries, must acknowledge the effect of the election or action to which the consent applies, and must be witnessed by a notary public or Plan representative. Unless the consent form expressly provides that the Participant may make further elections without further consent of the spouse, the consent will be effective only with respect to the specific election of form of benefit or beneficiary, or both, to which the consent relates. Spousal consent will be effective only with respect to that spouse, but shall be irrevocable once made. Spousal consent will not be required if it is established to the satisfaction of the Plan representative that there is no spouse, that the spouse cannot be located, or that such other circumstances exist as the Secretary of the Treasury may by regulations prescribe. 6.2 DEATH BENEFITS. Benefits payable upon the death of a Participant will be paid only as provided in this Section 6.2, subject to the statutory distribution rules under Section 6.3. (a) Death prior to Annuity Starting Date: Unmarried Participants. In the case of a Participant who dies prior to his or her Annuity Starting Date and is not married on the date of death, amounts held in an Annuity Contract or Custodial Account for his or her benefit will be paid to the beneficiary designated by the Participant in accordance with the terms of such Annuity Contract or Custodial Account. Distribution will be made in the form or forms as provided in such Annuity Contract or Custodial Account. (b) Death prior to Annuity Starting Date: Married Participants. In the case of a Participant who dies prior to his or her Annuity Starting Date and is married on the date of death, distributions on account of the Participant's death will be made as provided in Section 6.2(a) to the Participant's beneficiary. The Participant's beneficiary will be his or her surviving spouse unless, prior to the Participant's death, the surviving spouse had consented to permit the Participant to name another beneficiary. Such spousal consent must be done in a manner consistent with the requirements of Code section 401(a)(11) for distributions to which Code sections 401(a)(11) and 417 do not apply. Notwithstanding the foregoing provisions of this paragraph, if the distributions are ones to which Code sections 401(a)(11) and 417 and ERISA section 205 apply, the following rules apply: (i) The Participant's surviving spouse will be entitled to receive an annuity during the spouse's lifetime having a present value, at the time of the Participant's death, equal to a percentage (no less than 50%, and no more than 100%) of the present value of the Participant's Annuity Contracts and Custodial Accounts as may be specified in such Annuity Contracts and Custodial Accounts. In the event that no such percentage is specified in any particular Annuity Contract or Custodial Account, the percentage shall be 50%. Any portion of an Annuity Contract or Custodial Account not payable to the Participant's surviving spouse as provided in this paragraph (b) will be paid to the beneficiary designated by the Participant pursuant to the terms of such Annuity Contract or Custodial Account (or, where no such beneficiary is designated, the Participant's surviving spouse). The form of distribution available to a nonspouse beneficiary, and any optional forms available to a surviving spouse, will be as provided in the particular Annuity Contract(s) or Custodial Account(s) in which contributions made on behalf of the Participant are held. (ii) To the extent provided in an Annuity Contract or Custodial Account, a married Participant may waive the preretirement death benefit for his or her surviving spouse described in paragraph (b) above and name a beneficiary entitled to receive benefits in the event the Participant dies before his or her Annuity Staring Date in lieu of the Participant's surviving spouse. Any such waiver must be made within the period beginning on the first day of the Plan Year in which the Participant attains age 35 and ending on the earlier of the Annuity Starting Date or the date of the Participant's death. In addition, the Participant's spouse must consent to the waiver in writing and as otherwise described in Section 6.1(b)(iii) above. The Administrator will provide such information to Participants in connection with the preretirement survivor benefits and the Participant's right to waive those benefits as may be required from time to time under ERISA section 205. (c) Death on or after Annuity Starting Date. In the case of a Participant who dies on or after his or her Annuity Starting Date, no benefits will be payable to a surviving spouse or other beneficiary after the Participant's death except to the extent provided in the form or forms of distribution in effect with respect to the Participant pursuant to Section 6.1. 6.3 STATUTORY DISTRIBUTION RULES. A Participant whose balances under the Plan exceed $3,500 may not have his or her balances immediately distributed without his or her consent. To the extent required by the Code and ERISA, all vested amounts held in an Annuity Contract or Custodial Account shall become payable beginning no later than the earlier of the applicable date specified in (i) ERISA section 206(a) or (ii) Code sections 403(b)(10) and 401(a)(9) (which in general is April 1 following the calendar year in which the Participant attains age 70 1/2). Benefits payable to the Participant in accordance with these statutory distribution rules will be paid over the life of the Participant or the joint lives of the Participant and his or her beneficiary, or over a period not extending beyond the life expectancy of the Participant or the joint life expectancy of the Participant and his or her beneficiary, all as determined under Code sections 403(b)(10) and 401(a)(9). In accordance with Code section 401(a)(9)(B), benefits payable upon the death of the Participant prior to his or her Annuity Starting Date will be distributed in full within five years after the death of the Participant unless an exemption specified in Code section 401(a)(9)(B) applies, in which case benefits may be payable over the period (and starting at such time) as specified in Code section 401(a)(9)(B). Benefits payable upon the death of the Participant after his or her Annuity Starting Date will be distributed at least as rapidly as under the method of distribution in effect for the Participant at the time of his or her death. All amounts held in an Annuity Contract or Custodial Account will be payable in accordance with the incidental benefit rules as determined under proposed Treasury Regulation section 1.403(b)-2 (and its successors). As required by the Code and ERISA, a Participant shall be furnished all required distribution notices at least 30 days but not more than 90 days prior to distribution under the Plan. If a distribution is one to which Code sections 401(a)(11) and 417 and ERISA section 205 do not apply, however, the distribution may commence less than 30 days after the notice required by law is given, if (1) the Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision whether or not to elect a distribution and, if applicable, a particular distribution option, and (2) the Participant, after receiving the notice, affirmatively elects a distribution. 6.4 OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS. A Participant who is entitled to receive an eligible rollover distribution within the meaning of sections 403(b)(10) and 401(a)(31) of the Code may elect to have the distribution paid directly, in whole or in part, to (i) an individual retirement account or annuity described in section 408 of the Code, or (ii) a tax-sheltered annuity plan described in section 403(b) of the Code which is a defined contribution plan and which permits the acceptance of rollover distributions. 6.5 FORFEITURES. If a Participant terminates his employment, any portion of his benefit not payable to him under Section 6.1 will be forfeited by him as of the earlier of (i) the date of the complete distribution to him of the vested portion of his benefit, if any, or (ii) the date on which he has five consecutive One Year Periods of Severance, subject to the possibility of reinstatement as described in the following paragraph. Such forfeitures will be applied to reduce the contributions of the Participating Employer. If a Participant who has forfeited any portion of his benefit under the preceding paragraph does not again become an Employee prior to the date on which he has five consecutive One Year Periods of Severance, then the amount so forfeited shall be permanently forfeited. If a Participant forfeits any portion of his benefit under the preceding paragraph but does again become an Employee prior to such date, then the amount so forfeited, without any adjustment for the earnings, expenses, or losses or gains of the assets credited to his benefit since the date forfeited, will be recredited to his account as of the last day of the Plan Year in which he again becomes an Employee, but only if he repays to the Plan within five years after the date of his reemployment the amount previously distributed to him, without interest, under Section 6.1. The provisions of the Plan will thereafter apply as if no forfeiture had occurred. The amount to be recredited pursuant to this paragraph will be derived first from the forfeitures, if any, which as of the date of recrediting have yet to be applied as provided in the preceding paragraph, and, to the extent such forfeitures are insufficient, from a special Participating Employer Contribution. ARTICLE 7 - CLAIMS AND REVIEW PROCEDURES 7.1 CLAIMS PROCEDURE. If any person believes he or she is being denied any rights or benefits with respect to the terms of an Annuity Contract or Custodial Account, such person shall contact the Annuity Contract issuer or Account custodian, and shall proceed with such claim under the applicable claim provisions of the Annuity Contract or Custodial Account. If any person believes he or she is being denied any rights or benefits relating to the amount of contributions, or any other Plan provision, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing, giving the specific reasons for the decision, specific reference to pertinent Plan provisions, a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and information as to the steps to be taken if the person wishes to submit a request for review. If notification of the decision on the claim is not made within 90 days after the claim is received by the Administrator (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to such person within the initial 90-day period) the claim will be considered denied and the person may request a review of his or her claim. 7.2 REVIEW PROCEDURE. A request for review must be made in writing to the Administrator within 60 days after the Administrator's notice of denial. A person (or his or her authorized representative) may file a written request with the Administrator for a review of his or her denied claim and of pertinent documents, submit written issues and comments to the Administrator and request a hearing. The decision on review will be given within 60 days (or 120 days if a hearing is held) after the request for review is received by the Administrator. The decision on review will be in writing and will include specific reasons, including specific references to pertinent Plan provisions. ARTICLE 8 - ADMINISTRATION 8.1 POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR. The Administrator will have discretionary authority to administer the Plan in all of its details, subject, however, to ERISA. The Administrator will have all those discretionary powers necessary to carry out the terms of the Plan including, but not limited to, the power: to make and enforce such rules as it deems necessary or proper for the efficient administration of the Plan; to interpret the Plan, to decide all questions concerning the Plan and the eligibility of any person to participate in the Plan; to decide which Annuity Contracts and Custodial Accounts will be available for contribution, from time to time; to authorize the payment of benefits; to appoint such agents, counsel, and consultants as it deems necessary to assist in administering the Plan; and to allocate and delegate, by written instrument, its duties and responsibilities. Any interpretation of the Plan or other determination with respect to the Plan by the Administrator or its delegate shall be final and conclusive on all persons in the absence of clear and convincing evidence that the Administrator or its delegate acted arbitrarily and capriciously. 8.2 NAMED FIDUCIARY. The Administrator will be a "named fiduciary" for purposes of section 402(a)(1) of ERISA. The Administrator will have authority to control and manage the operation and administration of the Plan and will be responsible for complying with all of the reporting and disclosure requirements of Part I of Subtitle B of Title I of ERISA. 8.3 EXPENSES OF ADMINISTRATION. Any reasonable expense of administering the Plan or of any Annuity Contract or Custodial Account, unless paid by a Participating Employer, shall be apportioned among and charged against the individual Annuity Contracts and Custodial Accounts of the Participants in such manner as the Administrator may direct, except that expenses allocable to specific Annuity Contracts or Custodial Accounts shall be charged against such Contracts or Accounts. ARTICLE 9 - MISCELLANEOUS 9.1 AMENDMENT AND TERMINATION. The Employer shall at all times have the power to amend or terminate the Plan, any such amendment or termination to take effect retroactively if the Employer so provides. No such amendment or termination, however, will adversely affect the rights of Participants and their beneficiaries to benefits attributable to contributions made prior to the amendment or termination. 9.2 LIMITATION OF RIGHTS. Neither the establishment of the Plan nor any amendment thereof will be construed as giving to any Participant or other person any legal or equitable right against a Participating Employer or the Administrator except as provided in this document. In no event will the terms of employment or service of any Participant be modified or in any way be affected by the existence of the Plan. 9.3 BENEFITS NOT ALIENABLE. Benefits under the Plan may not be assigned or alienated, except in the case of a qualified domestic relations order within the meaning of Code section 414(p) and ERISA section 206. FIDELITY INVESTMENTS 403(B) SAMPLE PLAN ADOPTION AGREEMENT (The Sample 403(b) Plan and Adoption Agreement are for use by Tax Exempt Employers. These documents are samples only and must be reviewed by Employer's legal counsel or other employee benefit plan advisor. They may be tailored to Employer's specific requirements. These documents have not been filed as a prototype plan with the Internal Revenue Service.) ADOPTION AGREEMENT FIDELITY INVESTMENTS 403(B) SAMPLE PLAN I. GENERAL INFORMATION 1. (a) Name of Employer: (b) Address and telephone number: (c) Employer identification number: (d) Business of Employer: __________________________ 2. (a) Name of principal contact: _______________________ (b) Office to provide information to Participants: 3. (a) Name of Plan: (b) Plan Year ends: (c) Plan number: (d) Employer's fiscal year ends: II. ADOPTION The Employer hereby (a) ___ adopts a 403(b) plan in the form of the Fidelity Investments 403(b) Sample Plan (b) ___ amends, restates and continues its existing 403(b) Plan in the form of The Fidelity Investments 403(b) Sample Plan (c) ___ Permits ___ does not permit Affiliated Employers to adopt the Plan with the approval of the Employer III. SALARY REDUCTION PRE-TAX CONTRIBUTIONS A. Eligibility - Except as indicated below, all Employees of the Employer are eligible to elect to have Salary Reduction Pre-Tax Contributions made to the Plan. Exceptions (check each applicable exclusion) (a) ___ Employees who normally work less than 20 hours per week (b) ___ Non resident aliens (c) ___ Students performing services described in section 3121(b)(10) of the Internal Revenue Code (d) ___ Employees who wish to contribute $200 or less B. Amount - The amount of Salary Reduction Pre-Tax Contributions for an Employee will be determined under the Salary Reduction Agreement between the Employee and the Employer. IV. EMPLOYER CONTRIBUTIONS A. Eligibility - Employees of the Employer who meet the conditions specified below are eligible to receive an Employer Contribution. 1. Length of Service Requirements (a) date of employment (b) six months of service (c) one Year of Service Note: If you wish to check the following, you cannot elect age 26 under IV.A.3.(c) below and you must elect 100% immediate vesting under V.A.(a) below. (d) ___ two Years of Service 2. Hours of Service (complete only if 1 or 2 Years of Service for Participation are required) To be credited with a Year of Service for Participation, (a) ___ 1,000 or more Hours of Service are required (b) ___ 500 or more Hours of Service are required (c) ___ no Hours of Service are required (d) ___ specify Hours of Service required, must be less than 1,000) 3. Age requirements - (a) ___ no age requirement (b) ___ attain age 21 (c) ___ attain age ___ (specify between 18 and 20) Note: If you wish to check the following, you must be a tax-exempt educational institution and you may not elect a two Years of Service requirement under IV.A.1.(d) above. (d) ___ attain age 26 4. The following categories of employees are excluded (check each applicable exclusion) (a) ___ Employees who normally work less than 20 hours per week (b) ___ Non resident aliens (c) ___ Students performing services described in section 3121(b)(10) of the I.R.C. (d) ___ Union Employees (e) ___ Other (specify) B. Amount - The amount of Employer Contributions for an eligible Employee will be determined as follows: 1. Matching Contributions (Insert your desired formula) 2. Non-Matching Contributions (a) ___ discretionary % of each Participant's Compensation (% to be determined each year by Employer and must be uniform) (b) ___% of each Participant's Compensation (c) ___% of each Participant's Compensation up to the Integration Level, plus % of each Participant's Compensation in excess of the Integration Level 3. For Non-Matching Contributions, the Integration Level is: (a) ___ the Social Security Taxable Wage Base (b) ___ 80% of the Social Security Taxable Wage Base (c) ___ 50% of the Social Security Taxable Wage Base 4. For Matching or Non-Matching Contributions, the Compensation to be used is: (a) ___ total salary and wages (includes overtime and bonus) ___ includingexcluding salary reduction contributions ___ (b) ___ basic salary and wages (no overtime, bonus, etc.) ___ including ___ excluding salary reduction contributions 5. Contributions will be remitted: For Matching Contributions For Non-Matching Contributions (a) ___monthly (a) ___monthly (b) ___quarterly (b) ___ quarterly (c) ___semi-annually (c) ___semi-annually (d) ___annually (d) ___annually (e) ___other* (e) ___other* (*specify period, may not be less frequent than annually) V. VESTED PERCENTAGE A. For Matching or Non-Matching Contributions, a Participant's vested percentage upon termination prior to Normal Retirement Age is: [check one] (a) ___ 100% immediate (b) ___ 100% after ___ complete Years of Service for Vesting (not more than 5) (c) ___ a percentage determined in accordance with the following schedule Years of Service Percentage* Minimum For Vesting Percentage* at least 1 0 2 0 3 20 4 40 5 60 6 80 7 or more 100 * Note: Insert the desired applicable Percentage opposite each Year of Service for Vesting which must at least equal the Minimum Percentage. B. For Matching or Non-Matching Contributions, a Participant's vested percentage upon termination on or after Normal Retirement Age is 100%. C. For Salary Reduction Pre-Tax Contributions and any Voluntary after-tax contributions, a Participant's vested percentage is always 100%. VI. NORMAL RETIREMENT AGE The Normal Retirement Age under the Plan is: (a) ___ age 65 (b) ___ age ___ (specify between 55 and 64) VII. VOLUNTARY CONTRIBUTIONS Voluntary after-tax contributions by Participants to the Plan (a) ___ are permitted (b) ___ are not permitted VIII. ROLLOVER CONTRIBUTIONS Rollover contributions from another 403(b) plan to the Plan in accordance with the Plan (a) ___ are permitted (b) ___ are not permitted IX. PLAN TO PLAN TRANSFERS Direct transfers from another 403(b) plan to the Plan in accordance with the Plan (a) ___ are permitted (b) ___ are not permitted X. HARDSHIP WITHDRAWALS In Service Withdrawals for hardship in accordance with the Plan (a) ___ are permitted (b) ___ are not permitted XI. OTHER WITHDRAWALS In Service Withdrawals in accordance with applicable Plan limits (a) ___ are permitted only after the Participant attains age 59 1/2 (b) ___ are not permitted XII. LOANS In Service Loans in accordance with the Plan (a) ___are permitted (b) ___ are not permitted XIII. DISTRIBUTIONS AND PAYMENTS Distributions under the Plan may be paid as (check one or more as desired): (a) ___ lump sum (b) ___ under systematic withdrawal plan (installments) (c) ___ purchase of annuity contract (d) ___ other (specify) Note: Under the Plan, if a Participant's Account does not exceed $3,500, distribution will be made in a lump sum as soon as practicable following retirement or termination of employment. Note also: Distributions selected in the Adoption Agreement must be consistent with the provisions of the Plan, the Custodial Account or other plan funding vehicle, and applicable law. XIV. FUNDING A.(a) The Employer has established by separate agreement a Custodial Account under the Plan for all Participants in the form of The Fidelity Investments Section 403(b)(7) Custodial Account Agreement with Fidelity Management Trust Company of Boston, Massachusetts as Custodian of said Account to be invested in shares of regulated investment companies managed by Fidelity Management & Research Company. (b) Each Participant will establish by separate agreement a Custodial Account under the Plan in the form of The Fidelity Investments Section 403(b)(7) Custodial Account Agreement with Fidelity Management Trust Company of Boston, Massachusetts as Custodial of said Account to be invested in shares of regulated investment companies managed by Fidelity Management & Research Company. Note: You must provide the Custodian with a list of Plan Participants and such other information as the Custodian may require. B. Under the Plan, investments in other Custodial Accounts (to be invested in shares of regulated investment companies which are not managed by Fidelity Management & Research Company) or an Annuity Contract ___ are ___ are not available. (If any such other investments have been established, please list them here.) _________________________________________________ _________________________________________________ XV. TRANSFERS BETWEEN FUNDING VEHICLES If funding vehicles other than a Fidelity Investments Section 403(b)(7) Custodial Account are available under the Plan (as designated by the Employer in section XIV-B of this Adoption Agreement), transfers between such available funding vehicles (a) ___ are permitted (b) ___ are not permitted IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be executed this ___ day of ____________, ____ (insert day, month and year). ________________________ Employer By:_______________________ EX-99.B15 10 Exhibit 15 DISTRIBUTION AND SERVICE PLAN of Fidelity Dividend Growth Fund 1. This Distribution and Service Plan (the "Plan"), when effective in accordance with its terms, shall be the written plan contemplated by Rule 12b-1 under the Investment Company Act of 1940 (the "Act") of the single existing series of shares (the "Portfolio") of Fidelity Dividend Growth Fund (the "Fund"). 2. The Fund has entered into a General Distribution Agreement with respect to the Portfolio with Fidelity Distributors Corporation (the "Distributor"), a wholly-owned subsidiary of Fidelity Management & Research Company (the "Adviser"), under which the Distributor uses all reasonable efforts, consistent with its other business, to secure purchasers for the Portfolio's shares of beneficial interest ("shares"). Under the agreement, the Distributor pays the expenses of printing and distributing any prospectuses, reports and other literature used by the Distributor, advertising, and other promotional activities in connection with the offering of shares of the Portfolio for sale to the public. It is understood that the Adviser may reimburse the Distributor for these expenses from any source available to it, including management fees paid to it by the Portfolio. 3. The Adviser directly, or through the Distributor, may, subject to the approval of the Trustees, make payments to securities dealers and other third parties who engage in the sale of shares or who render shareholder support services, including but not limited to providing office space, equipment and telephone facilities, answering routine inquiries regarding the Portfolio, processing shareholder transactions and providing such other shareholder services as the Fund may reasonably request. 4. The Portfolio will not make separate payments as a result of this Plan to the Adviser, Distributor or any other party, it being recognized that the Portfolio presently pays, and will continue to pay, a management fee to the Adviser. To the extent that any payments made by the Portfolio to the Adviser, including payment of management fees, should be deemed to be indirect financing of any activity primarily intended to result in the sale of shares of the Portfolio within the context of Rule 12b-1 under the Act, then such payments shall be deemed to be authorized by this Plan. 5. This Plan shall become effective upon the first business day of the month following approval by a vote of at least a "majority of the outstanding voting securities of the Portfolio" (as defined in the Act), the plan having been approved by a vote of a majority of the Trustees of the Fund, including a majority of Trustees who are not "interested persons" of the Fund (as defined in the Act) and who have no direct or indirect financial interest in the operation of this Plan or in any agreements related to this Plan (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on this Plan. 6. This Plan shall, unless terminated as hereinafter provided, remain in effect from the date specified above until July 31, 1993, and from year to year thereafter, provided, however, that such continuance is subject to approval annually by a vote of a majority of the Trustees of the Fund, including a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on this Plan. This Plan may be amended at any time by the Board of Trustees, provided that (a) any amendment to authorize direct payments by the Portfolio to finance any activity primarily intended to result in the sale of shares of the Portfolio, to increase materially the amount spent by the Portfolio for distribution, or any amendment of the Management Contract to increase the amount to be paid by the Portfolio thereunder shall be effective only upon approval by a vote of a majority of the outstanding voting securities of the Portfolio, and (b) any material amendments of this Plan shall be effective only upon approval in the manner provided in the first sentence in this paragraph. 7. This Plan may be terminated at any time, without the payment of any penalty, by vote of a majority of the Independent Trustees or by a vote of a majority of the outstanding voting securities of the Portfolio. 8. During the existence of this Plan, the Fund shall require the Adviser and/or Distributor to provide the Fund, for review by the Fund's Board of Trustees, and the Trustees shall review, at least quarterly, a written report of the amounts expended in connection with financing any activity primarily intended to result in the sale of shares of the Portfolio (making estimates of such costs where necessary or desirable) and the purposes for which such expenditures were made. 9. This Plan does not require the Adviser or Distributor to perform any specific type or level of distribution activities or to incur any specific level of expenses for activities primarily intended to result in the sale of shares of the Portfolio. 10. Consistent with the limitation of shareholder liability as set forth in the Fund's Declaration of Trust or other organizational document, any obligations assumed by the Portfolio pursuant to this Plan and any agreements related to this Plan shall be limited in all cases to the Portfolio and its assets, and shall not constitute obligations of any other series of shares of the Fund. 11. If any provision of this Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Plan shall not be affected thereby. LG912940020 EX-99.B16 11 Exhibit 16 (b) SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS CUMULATIVE TOTAL RETURNS and their income and capital components are described in the fund's Statement of Additional Information, and are based on the net asset values, dividends, capital gain distributions, and reinvestment prices of the historical period covered. AVERAGE ANNUAL RETURNS are calculated according to the following formula: Average Annual Return = [(1 + Cumulative Return)1/n] - 1 [where n = the number of years in the base period] Fidelity Growth & Income Fund
Name: Growth & Income (027) A. Pay Date E. Original SharesI. CG Short M. Cap Gain Shares Q. Cap Gains rec'd in Cash Notes: Load Increased from 2% toB. X-Date F. Total Value J. NAV N. Cap Gain Value R. Cost of reinvest'd Distribut ions Load: 0.97 C. Reinvest NAV G. Dividends K. Div Shares O. Total Value Redempt D. Monthend H. CG Long L. Dividend VaP. Divs rec'd in Cash FiscYea31-Jul A B C D E F G H I J K L M N O P Q R 1.00 30-Dec-85 970.000 9700.00 10.00 9700 1.00 Dec-85 970.000 9700.00 10.00 0 0 0 0 9700 0 0 0 1.00 Jan-86 970.000 10252.90 10.57 0 0 0 0 10253 0 0 0 1.00 Feb-86 970.000 11232.60 11.58 0 0 0 0 11233 0 0 0 1.00 Mar-86 970.000 12580.90 12.97 0 0 0 0 12581 0 0 0 1.00 Apr-86 970.000 12697.30 13.09 0 0 0 0 12697 0 0 0 1.00 May-86 970.000 13104.70 13.51 0 0 0 0 13105 0 0 0 1.00 Jun-86 970.000 13444.20 13.86 0 0 0 0 13444 0 0 0 14-Jul 13.38 Jul-86 970.000 12813.70 0.05 13.21 4 48 0 0 12862 49 0 49 1.00 Aug-86 970.000 13502.40 13.92 4 50 0 0 13553 49 0 49 1.00 Sep-86 970.000 12639.10 13.03 4 47 0 0 12686 49 0 49 13-Oct 13.17 Oct-86 970.000 13201.70 0.05 13.61 7 100 0 0 13301 97 0 97 1.00 Nov-86 970.000 13240.50 13.65 7 100 0 0 13340 97 0 97 29-Dec 13.39 Dec-86 970.000 12930.10 0.06 13.33 12 156 0 0 13086 155 0 156 1.00 Jan-87 970.000 14491.80 14.94 12 175 0 0 14667 155 0 156 1.00 Feb-87 970.000 15180.50 15.65 12 183 0 0 15364 155 0 156 1.00 Mar-87 970.000 15636.40 16.12 12 189 0 0 15825 155 0 156 13-Apr 15.90 Apr-87 970.000 15529.70 0.09 16.01 17 276 0 0 15806 243 0 244 1.00 May-87 970.000 15587.90 16.07 17 277 0 0 15865 243 0 244 1.00 Jun-87 970.000 16160.20 16.66 17 288 0 0 16448 243 0 244 13-Jul 16.99 Jul-87 970.000 16916.80 0.14 17.44 25 443 0 0 17360 378 0 382 1.00 Aug-87 970.000 17256.30 17.79 25 452 0 0 17708 378 0 382 1.00 Sep-87 970.000 17120.50 17.65 25 448 0 0 17569 378 0 382 13-Oct 16.04 Oct-87 970.000 12522.70 0.14 1.18 12.91 34 440 73 945 13908 514 1145 1696 1.00 Nov-87 970.000 11853.40 12.22 34 416 73 895 13165 514 1145 1696 22-Dec 12.68 Dec-87 970.000 12222.00 0.08 0.17 12.60 41 515 88 1105 13842 592 1310 1966 1.00 Jan-88 970.000 12988.30 13.39 41 547 88 1174 14710 592 1310 1966 1.00 Feb-88 970.000 13677.00 14.10 41 576 88 1236 15490 592 1310 1966 15-Mar 13.94 Mar-88 970.000 13250.20 0.14 13.66 52 709 88 1198 15157 728 1310 2119 1.00 Apr-88 970.000 13463.60 13.88 52 721 88 1217 15401 728 1310 2119 1.00 May-88 970.000 13638.20 14.06 52 730 88 1233 15601 728 1310 2119 06-Jul 22-Jun 14.58 Jun-88 970.000 14132.90 0.14 14.57 63 912 88 1277 16322 863 1310 2275 1.00 Jul-88 970.000 14123.20 14.56 63 911 88 1276 16311 863 1310 2275 1.00 Aug-88 970.000 13958.30 14.39 63 900 88 1262 16120 863 1310 2275 12-Oct 23-Sep 14.65 Sep-88 970.000 14326.90 0.14 14.77 73 1082 88 1295 16704 999 1310 2432 1.00 Oct-88 970.000 14608.20 15.06 73 1103 88 1320 17032 999 1310 2432 1.00 Nov-88 970.000 14394.80 14.84 73 1087 88 1301 16783 999 1310 2432 30-Dec 16-Dec 14.75 Dec-88 970.000 14404.50 0.20 14.85 89 1316 88 1302 17022 1193 1310 2658 1.00 Jan-89 970.000 15306.60 15.78 89 1398 88 1383 18088 1193 1310 2658 1.00 Feb-89 970.000 15141.70 15.61 89 1383 88 1369 17893 1193 1310 2658 05-Apr 22-Mar 15.68 Mar-89 970.000 15471.50 0.14 15.95 99 1576 88 1398 18446 1329 1310 2818 1.00 Apr-89 970.000 16131.10 16.63 99 1644 88 1458 19233 1329 1310 2818 1.00 May-89 970.000 16887.70 17.41 99 1721 88 1526 20135 1329 1310 2818 05-Jul 21-Jun 17.43 Jun-89 970.000 16868.30 0.14 17.39 108 1880 88 1525 20273 1465 1310 2980 1.00 Jul-89 970.000 18003.20 18.56 108 2007 88 1627 21637 1465 1310 2980 1.00 Aug-89 970.000 18391.20 18.96 108 2050 88 1662 22104 1465 1310 2980 21-Sep 07-Sep 18.08 Sep-89 970.000 17498.80 0.14 0.68 18.04 117 2113 132 2373 21985 1601 1969 3936 1.00 Oct-89 970.000 16945.90 17.47 117 2047 132 2298 21290 1601 1969 3936 1.00 Nov-89 970.000 17227.20 17.76 117 2081 132 2336 21644 1601 1969 3936 21-Dec 07-Dec 16.94 Dec-89 970.000 16654.90 0.33 0.50 0.09 17.17 141 2419 174 2987 22061 1921 2541 5057 1.00 Jan-90 970.000 15781.90 16.27 141 2292 174 2830 20905 1921 2541 5057 1.00 Feb-90 970.000 16024.40 16.52 141 2328 174 2874 21226 1921 2541 5057 21-Mar 09-Mar 16.65 Mar-90 970.000 16169.90 0.14 16.67 152 2529 174 2900 21599 2056 2541 5237 1.00 Apr-90 970.000 15752.80 16.24 152 2464 174 2825 21042 2056 2541 5237 1.00 May-90 970.000 16916.80 17.44 152 2646 174 3034 22596 2056 2541 5237 15-Jun 15-Jun 17.35 Jun-90 970.000 16703.40 0.14 17.22 162 2792 174 2996 22491 2192 2541 5419 1.00 Jul-90 970.000 16587.00 17.10 162 2773 174 2975 22335 2192 2541 5419 1.00 Aug-90 970.000 15170.80 15.64 162 2536 174 2721 20428 2192 2541 5419 07-Sep 07-Sep 15.33 Sep-90 970.000 13968.00 0.14 0.22 14.40 174 2507 193 2775 19250 2328 2755 5889 1.00 Oct-90 970.000 13938.90 14.37 174 2502 193 2769 19210 2328 2755 5889 1.00 Nov-90 970.000 14627.60 15.08 174 2625 193 2906 20159 2328 2755 5889 14-Dec 14-Dec 15.09 Dec-90 970.000 14763.40 0.16 15.22 188 2865 193 2933 20562 2483 2755 6103 1.00 Jan-91 970.000 16111.70 16.61 188 3127 193 3201 22439 2483 2755 6103 1.00 Feb-91 970.000 17469.70 18.01 188 3391 193 3471 24331 2483 2755 6103 08-Mar 08-Mar 18.56 Mar-91 970.000 18313.60 0.12 18.88 197 3719 193 3638 25671 2600 2755 6265 1.00 Apr-91 970.000 18565.80 19.14 197 3770 193 3688 26025 2600 2755 6265 1.00 May-91 970.000 19632.80 20.24 197 3987 193 3900 27520 2600 2755 6265 14-Jun 14-Jun 19.69 Jun-91 970.000 18206.90 0.10 18.77 204 3827 193 3617 25651 2697 2755 6401 1.00 Jul-91 970.000 19322.40 19.92 204 4062 193 3839 27223 2697 2755 6401 1.00 Aug-91 970.000 19885.00 20.50 204 4180 193 3950 28015 2697 2755 6401 09-Sep 06-Sep 19.33 Sep-91 970.000 18982.90 0.10 0.26 0.38 19.57 211 4129 238 4657 27768 2794 3376 7412 1.00 Oct-91 970.000 19322.40 19.92 211 4202 238 4740 28265 2794 3376 7412 1.00 Nov-91 970.000 18313.60 18.88 211 3983 238 4493 26789 2794 3376 7412 09-Dec 06-Dec 19.10 Dec-91 970.000 19875.30 0.06 20.49 215 4414 238 4876 29165 2852 3376 7497 1.00 Jan-92 970.000 20350.60 20.98 215 4520 238 4992 29862 2852 3376 7497 1.00 Feb-92 970.000 20796.80 21.44 215 4619 238 5102 30517 2852 3376 7497 16-Mar 13-Mar 20.98 Mar-92 970.000 20273.00 0.10 20.90 222 4644 238 4973 29890 2949 3376 7640 1.00 Apr-92 970.000 20728.90 21.37 222 4749 238 5085 30563 2949 3376 7640 1.00 May-92 970.000 20806.50 21.45 222 4766 238 5104 30677 2949 3376 7640 15-Jun 12-Jun 21.18 Jun-92 970.000 20282.70 0.12 20.91 230 4816 238 4976 30074 3065 3376 7811 1.00 Jul-92 970.000 20699.80 21.34 230 4915 238 5078 30693 3065 3376 7811 1.00 Aug-92 970.000 20486.40 21.12 230 4864 238 5026 30376 3065 3376 7811 08-Sep 04-Sep 18.89 Sep-92 970.000 18371.80 0.12 1.03 1.24 18.94 239 4535 411 7780 30687 3182 5578 11249 1.00 Oct-92 970.000 18517.30 19.09 239 4571 411 7842 30930 3182 5578 11249 1.00 Nov-92 970.000 19089.60 19.68 239 4712 411 8084 31886 3182 5578 11249 07-Dec 04-Dec 19.33 Dec-92 970.000 19118.70 0.23 0.11 0.02 19.71 259 5099 422 8311 32530 3405 5704 11832 1.00 Jan-93 970.000 19652.20 20.26 259 5242 422 8543 33437 3405 5704 11832 1.00 Feb-93 970.000 19875.30 20.49 259 5301 422 8640 33817 3405 5704 11832 15-Mar 12-Mar 20.77 Mar-93 970.000 20486.40 0.12 21.12 268 5666 422 8906 35058 3521 5704 12030 1.00 Apr-93 970.000 20457.30 21.09 268 5658 422 8893 35008 3521 5704 12030 1.00 May-93 970.000 20884.10 21.53 268 5776 422 9079 35739 3521 5704 12030 28-Jun 25-Jun 21.47 Jun-93 970.000 21087.80 0.12 21.74 278 6034 422 9167 36289 3637 5704 12229 1.00 Jul-93 970.000 21243.00 21.90 278 6078 422 9235 36556 3637 5704 12229 1.00 Aug-93 970.000 22077.20 22.76 278 6317 422 9598 37992 3637 5704 12229 07-Sep 03-Sep 22.18 Sep-93 970.000 21669.80 0.12 0.26 0.16 22.34 287 6402 453 10127 38198 3754 6111 13131 1.00 Oct-93 970.000 21912.30 22.59 287 6474 453 10240 38626 3754 6111 13131 1.00 Nov-93 970.000 21417.60 22.08 287 6327 453 10009 37754 3754 6111 13131 06-Dec 03-Dec 21.79 Dec-93 970.000 21553.40 0.16 0.19 0.16 22.22 299 6647 481 10682 38882 3909 6451 14003 1.00 Jan-94 970.000 22368.20 23.06 299 6898 481 11086 40352 3909 6451 14003 1.00 Feb-94 970.000 21941.40 22.62 299 6766 481 10875 39582 3909 6451 14003 21-Mar 18-Mar 22.68 Mar-94 970.000 20884.10 0.10 21.53 307 6606 481 10351 37841 4006 6451 14178 1.00 Apr-94 970.000 21301.20 21.96 307 6738 481 10557 38597 4006 6451 14178 1.00 May-94 970.000 21369.10 22.03 307 6760 481 10591 38720 4006 6451 14178 20-Jun 17-Jun 22.07 Jun-94 970.000 20903.50 0.10 21.55 315 6784 481 10360 38048 4103 6451 14353 1.00 Jul-94 970.000 21504.90 22.17 315 6979 481 10658 39143 4103 6451 14353 1.00 Aug-94 970.000 22329.40 23.02 315 7247 481 11067 40643 4103 6451 14353 06-Sep 02-Sep 21.99 Sep-94 970.000 21165.40 0.10 0.70 0.14 21.82 323 7044 548 11962 40171 4200 7265 16013 1.00 Oct-94 970.000 21417.60 22.08 323 7128 548 12104 40650 4200 7265 16013 1.00 Nov-94 970.000 20622.20 21.26 323 6863 548 11655 39140 4200 7265 16013 05-Dec 02-Dec 20.73 Dec-94 970.000 20457.30 0.10 0.39 0.01 21.09 332 6996 584 12311 39764 4297 7653 16933 1.00 Jan-95 970.000 20699.80 21.34 332 7079 584 12457 40235 4297 7653 16933 1.00 Feb-95 970.000 21310.90 21.97 332 7288 584 12824 41423 4297 7653 16933 20-Mar 17-Mar 22.25 Mar-95 970.000 21883.20 0.100000 22.56 340 7675 584 13169 42727 4394 7653 17122 1.00 Apr-95 970.000 22494.30 23.19 340 7889 584 13537 43920 4394 7653 17122 1.00 May-95 970.000 23134.50 23.85 340 8114 584 13922 45170 4394 7653 17122 19-Jun 16-Jun 24.07 Jun-95 970.000 23454.60 0.100000 24.18 348 8416 584 14114 45985 4491 7653 17311 1.00 Jul-95 970.000 24347.00 25.10 348 8736 584 14651 47735 4491 7653 17311
EX-27.11 12
6 0000754510 Fidelity Securities Fund 11 Fidelity OTC Portfolio 1,000 Year jul-31-1995 jul-31-1995 1,577,168 2,107,823 26,341 1 0 2,134,165 14,752 0 9,335 24,087 0 1,533,045 67,863 54,853 0 0 46,379 0 530,654 2,110,078 7,969 9,476 0 12,235 5,210 60,211 493,273 558,694 0 5,090 6,456 0 50,478 37,963 495 880,219 0 (7,717) 0 0 7,611 3 12,255 1,502,474 22.420 .090 8.790 .090 .120 0 31.090 81 0 0 EX-27.21 13
6 0000754510 Fidelity Securities Fund 21 Fidelity Growth & Income Portfolio 1,000 Year jul-31-1995 jul-31-1995 10,025,445 12,121,234 145,854 2,549 0 12,269,637 140,220 0 23,353 163,573 0 9,684,491 482,277 394,940 27,390 0 298,452 0 2,095,731 12,106,064 209,542 88,262 0 77,295 220,509 462,592 1,412,882 2,095,983 0 175,942 508,140 0 136,992 80,408 30,753 3,348,864 8,861 357,175 0 0 51,730 7 78,305 9,991,524 22.170 .430 4.140 .400 1.240 0 25.100 77 0 0 EX-27.31 14
6 0000754510 Fidelity Securities Fund 31 Fidelity Blue Chip Growth Fund 1,000 Year jul-31-1995 jul-31-1995 5,435,520 6,478,332 174,279 4,519 0 6,657,130 217,634 0 18,090 235,724 0 5,064,217 197,040 88,660 3,300 0 309,049 0 1,044,840 6,421,406 33,583 15,320 0 39,339 9,564 348,645 936,474 1,294,683 0 0 64,196 0 162,136 56,233 2,477 4,192,888 10,286 38,676 0 0 26,386 12 40,460 3,842,086 25.140 .070 7.960 0 .580 0 32.590 102 0 0 EX-27.41 15
6 0000754510 Fidelity Securities Fund 41 Fidelity Dividend Growth Fund 1,000 Year jul-31-1995 jul-31-1995 412,931 470,854 8,244 0 0 479,098 10,338 0 3,907 14,245 0 392,873 28,982 6,196 1,276 0 12,781 0 57,923 464,853 2,452 978 0 2,079 1,351 15,508 55,022 71,881 0 74 1,107 0 49,213 26,523 96 392,498 9 (1,622) 0 0 1,232 3 2,114 174,060 11.680 .050 4.470 .010 .150 0 16.040 119 0 0