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Of the RIC's launched during the years in issue, those remaining
in the same form as originally launched contained over $109
billion in assets as of 1995, or approximately 30 percent of the
total assets under petitioner's management for that year.
Management Contracts
The provisions of the management contracts between each of
the RIC's and FMR Co. are substantially identical, except for the
actual management fees and other minor differences. FMR Co.
utilizes two basic forms of management contract, Spartan and
non-Spartan. Spartan RIC's pay an all-inclusive management fee,
which fee is greater than the management fee paid by equivalent
non-Spartan RIC's, in exchange for FMR Co.'s paying most of the
RIC's expenses, including the transfer agent fees. Spartan RIC's
require shareholders to open an account with a higher minimum
investment than the non-Spartan RIC's.
In accordance with the individual contracts entered into
between petitioner and the RIC's, each RIC pays a management fee
to FMR Co. In Spartan contracts, the management fee is a fixed
percentage of the average net assets of the RIC. In non-Spartan
contracts, this fee consists of a group fee rate (payable in
accordance with the schedule included in the management
contract), an individual RIC fee rate, and, in the case of some
equity RIC's, a performance fee. The group fee is based upon the
monthly average of the net assets of all petitioner's proprietary
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