More than two years ago, the National Association of Securities Dealers and the Securities and Exchange Commission began investigations into the acceptance by Fidelity equity traders of gifts, gratuities and business entertainment from brokers with whom Fidelity Investments did business in 2002 to late 2004.

In the fall of 2004, Fidelity Investments began its own internal review of the matter and found that certain individuals on its equity trading desk had violated its own policy and procedures by accepting lavish gifts and entertainment from brokers with whom Fidelity does business.

Fidelity took strong disciplinary action against those individuals involved in this misconduct, including sanctions, fines, suspensions, demotions and, in appropriate cases, termination from employment. Those responsible for the most serious misconduct have long since left the firm or been reassigned to projects outside the trading desk.

While Fidelity has stated repeatedly over the last two years that we deeply regret this behavior, it is important to note that this misconduct was an aberration and not at all indicative of Fidelity's record of commitment to the interests of fund shareholders and to other clients. Fidelity has a longstanding record of demonstrating our commitment to ethical conduct and compliance with the rules and regulations of our industry.

Throughout the two-year investigation, the Board of Trustees of the Fidelity Group of mutual funds has been kept apprised of all matters related to Fidelity's own review and to the ongoing regulatory investigations. The Independent Trustees of the Board also embarked on their own investigation of the matter beginning in 2005 and today announced the conclusions of that review.

Fidelity Investments has cooperated fully with the Independent Trustees' investigation and concurs with the conclusion reached by the Trustees that "in spite of the absence of proof that the Funds experienced diminished execution quality" it is appropriate for Fidelity to make a one-time payment of $42 million plus interest to the funds. We will also separately reimburse the funds for expenses incurred by the Independent Trustees in the conduct of their review. We have also committed to make comparable payments to institutional and other accounts we advise.

As the Trustees note, we undertook several other corrective actions in 2004 and early 2005 to address the issues raised by our own internal investigation of this matter in order to further enhance the trading operation and bring benefits to fund shareholders and other clients. Among the steps taken by Fidelity once it became aware of this issue in 2004, were: restructuring and enhancing the trading desk and its management team; expanding the resources and role of the Ethics Office, which is primarily responsible for firm-wide compliance; revamping and enhancing appropriate policies and procedures; and conducting extensive training and education of all investment management and other employees of the new policies and procedures.

It is also important to note that Fidelity's fundamental trading practices are recognized throughout the industry as being sound and well-designed to enable our mutual funds, institutional commingled pools and separate accounts to trade effectively and efficiently. The industry's largest benchmarking consulting firm has established that Fidelity has consistently achieved superior trade execution for its fund shareholders.

Over the past decade alone, Fidelity has invested significant amounts of its own money in state-of-the-art technology and implemented major changes on the trading desk to enhance execution quality, resulting in a savings of $1.5 billion during the 2002-2004 period to Fidelity fund shareholders and other clients, and billions more over the entire decade. The trading desk as a whole has outperformed the market while reducing average commission rates below industry averages. Fidelity is one of only six firms out of 158 tracked by an industry expert that performed in the top quartile of rankings in every quarter from the beginning of 2002 through 2004.

Fidelity has continued its leadership in driving down commission rates and reducing costs for fund shareholders and investors by implementing additional innovations to improve investment returns, such as unbundling the payment of trade execution commissions from research payments.

Fidelity's commitment to its fund shareholders and investors remains absolute.