SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER
THAN THE REGISTRANT [ ]
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MFS Multimarket Income Trust
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MFS(R) Proxy Information
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THE 2001 SHAREHOLDER PROXY FOR MFS(R) FUNDS
Streamlined processes for greater efficiencies
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[Logo] M F S(R)
INVESTMENT MANAGEMENT
QUESTIONS & ANSWERS
Your proxy vote: your right and responsibility to your fellow shareholders
YOUR VOTE IS IMPORTANT
Starting in August 2001, the MFS(R) funds are asking all of their account
holders for their support by voting on the 2001 proxy. That means that more than
4.5 million account holders will receive a proxy. Because this is such a massive
undertaking, these proxy mailings will be sent in groups from late August
through mid-September.
Your proxy vote is important. It is your right, and it is your responsibility to
your fellow shareholders.
ALL SHARES IN ALL ACCOUNTS MUST BE VOTED
If you have more than one account, you'll receive more than one proxy --
possibly even in the same package. To conserve mailing costs, we have tried to
send all of your proxies together. However, the staggered mailings may mean that
you'll get several of these "householded" packages. It's very important that you
vote every proxy that you receive. Otherwise, there may not be enough votes to
conduct the shareholder meetings. And that will require costly follow-up
mailings to nonvoting account holders.
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Proxy mailings are a fund expense, so
are follow-up solicitations and
mailings. Please vote all of your
proxies now, and save your fund some
money.
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FOCUS ON SIMPLIFICATION
The proposals contained in the proxy for each fund vary in the specifics, but
the general theme for most of them is the same: simplification. For example, we
currently have three different Boards of Trustees; we believe it would be more
efficient if we had just one. The questions and answers that follow will explain
the proxy process and help you wade through the proposals.
Please take the time to read the enclosed proxy material and vote your proxy.
You can vote by
o mailing your completed and signed proxy card in the enclosed postage-paid
envelope
o voting on the Internet
o voting by telephone on a toll-free number
You'll find the complete voting instructions included in this package.
Both we and your fellow shareholders thank you for voting now. We look forward
to hearing from you.
1. WHO IS ASKING FOR MY VOTE?
The Trustees of your MFS fund(s) are asking you to vote on several proposals
at the upcoming shareholder meetings. The election of new Trustees requires a
shareholder vote, and MFS recommended to the Trustees that certain other
changes be made.
2. HOW DO THE TRUSTEES RECOMMEND SHAREHOLDERS TO VOTE?
The Trustees recommend that you vote FOR all proposals.
3. WHO IS ELIGIBLE TO VOTE?
If you were the shareholder of record on the record date, you are entitled to
vote at the meeting or at any adjournment of the meeting. You may cast one
vote for each share of record that you own on each matter presented at the
meeting that affects your fund.
4. WHAT WILL I BE ASKED TO VOTE ON?
o To elect a Board of Trustees
The purpose of this proposal is to streamline the oversight of the MFS
funds by creating a combined Board that will oversee all MFS funds
organized in the United States. Currently, three separate Boards of
Trustees serve these MFS funds. Due to a number of pending Trustee
retirements, the combined Board will avoid the need to add new Trustees to
the various Boards in the near future.
The combined Board would reduce the duplication of Board materials and
reports and avoid repeated presentations by the same personnel at different
meetings.
o To authorize the Trustees to adopt an amended and restated Declaration of
Trust
The Declaration of Trust is the charter document that describes how a fund
conducts business and how it is governed.
This proposal would modernize the Declaration of Trust and make it the same
for almost all MFS funds.
o To amend, remove, or add certain fundamental investment policies
The MFS funds have certain fundamental investment policies that cannot be
changed without shareholder approval. Some of these policies are no
longer needed due to changes in applicable laws and can now be eliminated
or revised.
This proposal would modernize the funds' fundamental investment policies
and make them the same for almost all of the MFS funds. The funds will
continue to be managed in accordance with the investment policies described
in their prospectuses. The Trustees do not expect that the revised policies
will change significantly the level of investment risk associated with an
investment in the funds.
o To approve a new Investment Advisory Agreement with MFS
Each MFS fund has an Investment Advisory Agreement with MFS.
This proposal would modernize these Agreements and make them the same for
almost all of the MFS funds.
UNDER THIS PROPOSAL, THE INVESTMENT MANAGEMENT FEE PAYABLE BY THE FUNDS
WOULD NOT CHANGE.
o To ratify the selection of the independent public accountants for the
current fiscal year
This is a standard, routine item on proxy statements.
5. HOW WILL MY VOTES BE RECORDED?
Votes that are received prior to a fund's shareholder meeting will be voted
as you specify on each proposal. If you simply sign and date the proxy card
but do not specifically vote on one or more of the proposals, your shares
will be voted FOR all of the nonspecified proposals.
6. WHAT IF I WANT TO REVOKE MY PROXY?
You can revoke your proxy at any time by sending us a written revocation or a
more recently dated proxy card. Your request or new proxy card must be
received before the shareholder meeting.
7. WHAT HAPPENS IF THERE AREN'T ENOUGH VOTES TO APPROVE A PROPOSAL BY THE
SHAREHOLDER MEETING DATE?
The shareholder meeting for that fund will be adjourned to a later date, and
shareholders who have not voted will be solicited again. Follow-up
solicitations, which are a fund expense, are costly. That's why your vote is
so important and why we urge you to vote your proxy now. You should also know
that a fund may adjourn its meeting more than once.
8. HOW CAN I GET MORE INFORMATION ABOUT THE FUNDS?
A copy of the annual report for each fund was mailed previously to you. If
you would like us to send you free copies of any fund's most recent annual or
semiannual report, please call us toll free at 1-800-637-2304 or write to the
funds at MFS Service Center, Inc., 2 Avenue de Lafayette, Boston,
Massachusetts 02111-1738.
9. WHOM DO I CALL IF I HAVE QUESTIONS?
You may call Georgeson Shareholder Communications Inc., the MFS funds' proxy
solicitor, at 1-888-832-6971.
Your vote is important to us and to your fellow shareholders. Please vote
your proxies as soon as possible and return them in the envelope provided.
We look forward to receiving your vote.
[Logo] M F S(R)
INVESTMENT MANAGEMENT
(C)2001 MFS Investment Management(R).
MFS(R)investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MFS-4MFMMMT-8/01
MFS Multimarket Income Trust
500 Boylston Street
Boston, Massachusetts 02116
August 10, 2001
Dear Shareholder:
An annual meeting of shareholders of MFS Multimarket Income Trust (referred
to as the Fund) will be held at the Fund's offices, 500 Boylston Street, Boston,
Massachusetts, on October 12, 2001, at 9:30 a.m. (Boston time).
At the meeting, you will be asked to elect Trustees of your Fund. Certain
nominees already serve as Trustees, and other nominees are currently Trustees of
other MFS funds. The new Board will combine your Fund's current Trustees with
Trustees supervising other funds in the MFS Family of Funds. The combined Board
is designed to simplify and streamline oversight of all funds in the MFS Family
of Funds.
You will also be asked to approve an amended and restated declaration of
trust, the revision or elimination of certain investment policies and a new
investment advisory agreement. These items are designed to modernize and
standardize the agreements and investment restrictions governing the funds in
the MFS Family of Funds, including your Fund, and to provide for efficiencies
and flexibility in the Fund's operations.
As a shareholder, you cast one vote for each share you own. THE TRUSTEES
RESPONSIBLE FOR YOUR FUND UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR EACH OF THESE
PROPOSALS.
YOUR VOTE ON THESE MATTERS IS IMPORTANT. PLEASE VOTE PROMPTLY BY COMPLETING
AND SIGNING THE PROXY CARD AND RETURNING IT IN THE ENVELOPE PROVIDED OR BY
FOLLOWING THE ENCLOSED INSTRUCTIONS TO VOTE BY TELEPHONE OR OVER THE INTERNET.
If you have any questions about the proposals to be voted on, please call
Georgeson Shareholder Communications Inc. at 1-888-832-6971.
Thank you for your participation in the meeting.
Sincerely,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman
MFS MULTIMARKET INCOME TRUST
500 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02116
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 12, 2001
An Annual Meeting of Shareholders of MFS Multimarket Income Trust (referred
to as the Fund) will be held at the Fund's offices, 500 Boylston Street, Boston,
Massachusetts, at 9:30 a.m. (Boston time) on Friday, October 12, 2001, for the
following purposes:
ITEM 1. To elect a Board of Trustees, 10 of whom are independent of the
Fund's investment adviser.
ITEM 2. To authorize the Trustees to adopt an Amended and Restated
Declaration of Trust.
ITEM 3. To amend or remove certain fundamental investment policies.
ITEM 4. To approve a new investment advisory agreement with
Massachusetts Financial Services Company.
ITEM 5. To ratify the selection of the independent public accountants
for the current fiscal year.
ITEM 6. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE FOR ALL ITEMS.
Shareholders of record on July 27, 2001 are entitled to vote at the Annual
Meeting of Shareholders and at any adjournments thereof.
Stephen E. Cavan, Secretary and Clerk
August 10, 2001
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of MFS Multimarket Income
Trust (referred to as the Fund) to be used at the Annual Meeting of Shareholders
of the Fund to be held at 9:30 a.m. on Friday, October 12, 2001 at the Fund's
offices, 500 Boylston Street, Boston Massachusetts, and at any adjournment
thereof. The Meeting will be held for the purposes set forth in the accompanying
Notice. If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked prior to its exercise by a signed writing filed with the
Secretary of the Fund or delivered at the Meeting. Solicitation of proxies is
being made by the mailing of this Notice and Proxy Statement with its enclosures
on or about August 27, 2001.
Shareholders of record at the close of business on July 27, 2001 will be
entitled to one vote for each share held. The number of shares of the Fund
outstanding on July 27, 2001 was 124,846,052.3620.
The mailing address of the Fund is 500 Boylston Street, Boston,
Massachusetts 02116. A copy of the Annual or Semi-Annual Report for the Fund may
be obtained without charge by contacting MFS Service Center, Inc., P.O. Box
9024, Boston, Massachusetts 02205-9824, or calling MFS by telephone toll- free
1-800-637-2304.
VOTE REQUIRED: Each nominee named in Item 1 must be elected by a plurality of
the shares of the Fund voted at the Meeting. Approval of Item 2 requires the
affirmative vote of 66 2/3% of the shares of the Fund outstanding and entitled
to vote. Approval of Items 3 and 4 requires the affirmative vote of a "majority
of the outstanding voting securities" of the Fund. Approval of Item 5 requires
the affirmative vote of a majority of the shares of the Fund voted at the
Meeting.
Under applicable law, the vote of "a majority of the outstanding voting
securities" means the affirmative vote of the lesser of (a) 67% or more of the
voting securities of the Fund that are present at the Meeting or represented by
proxy if holders of more than 50% of the outstanding voting securities of the
Fund are present or represented by proxy or (b) more than 50% of the outstanding
voting securities of the Fund.
The following table summarizes these voting requirements:
VOTE REQUIRED FOR APPROVAL
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ITEM 1 Each nominee must be elected by a
(Election of Trustees) plurality of the shares of the Fund
voted at the Meeting
ITEM 2 Approved by 66 2/3% of the shares of the
(Approval of Amended and Restated Fund outstanding and entitled to vote
Declaration of Trust)
ITEM 3 Approved by a "majority of the
(Changes to Fundamental Investment outstanding voting securities" of the
Policies) Fund
ITEM 4 Approved by a "majority of the
(Approval of Investment Advisory outstanding voting securities" of the
Agreement) Fund
ITEM 5 Approved by a majority of the shares of
(Ratification of Selection of the Fund voted at the Meeting
Auditors)
GENERAL BACKGROUND
At the Meeting, you will be asked to elect Trustees of your Fund. Certain
nominees already serve as Trustees, and other nominees are currently Trustees of
other MFS funds. The new Board will combine your Fund's current Trustees with
Trustees supervising other funds in the MFS Family of Funds. The combined Board
is designed to simplify and streamline oversight of the funds in the MFS Family
of Funds, including the Fund.
You will also be asked to approve an amended and restated declaration of
trust, the revision or elimination of certain investment policies and a new
investment advisory agreement. These items are designed to modernize and
standardize the agreements and restrictions governing the funds in the MFS
Family of Funds, including the Fund, and to provide for efficiencies and
flexibility in the Fund's operations.
If approved, each proposal will take effect on January 1, 2002, or in the
event that shareholder approval has not been obtained by that date, as soon as
reasonably practicable after shareholders have approved the proposal.
ITEM 1 -- TO ELECT A BOARD OF TRUSTEES.
At the Meeting, you will be asked to elect a Board of Trustees for your
Fund. The existing Trustees of the Fund have determined, pursuant to the Fund's
declaration of trust, that the number of Trustees of the combined Board of the
Fund shall be fixed for the time being at 13. Proxies not containing specific
instructions to the contrary will be voted for the election as Trustees of the
13 nominees listed below.
Currently, funds in the MFS Family of Funds are served by three separate
Boards of Trustees. Under this proposal, the separate Boards will be
consolidated so that the same individuals serve on the Boards of all of the MFS
Funds.
Historically, the three separate Boards have had separate meetings but often
have reviewed the same policy issues, contractual arrangements and other
matters. Among other potential efficiencies, consolidating into one Board would
reduce the duplication of Board materials and reports covering the same topics
and would avoid the need for repeated presentations by the same personnel at
different meetings. The Trustees of the three Boards, including the Trustees of
your Fund, have agreed that both the MFS Funds and their adviser, Massachusetts
Financial Services Company (referred to as MFS), would enjoy efficiencies and
potential future cost savings if the same individuals served as Trustees of all
of the MFS Funds.
The Trustees who currently supervise your Fund are John W. Ballen, William
R. Gutow, J. Atwood Ives, Lawrence T. Perera, William J. Poorvu, Charles W.
Schmidt, Arnold D. Scott, Jeffrey L. Shames, Elaine R. Smith and David B.
Stone. The Trustees who currently supervise your Fund have served in that
capacity continuously since originally elected or appointed. These Trustees,
other than Messrs. Schmidt and Stone who will be retiring at the end of 2001,
are nominees to serve on the combined Board of the MFS Funds.
The other nominees listed on pages 2 and 3 were nominated by your Fund's
Board of Trustees on June 20, 2001, subject to approval by the shareholders.
These nominees do not currently serve as Trustees of your Fund, but have agreed
to do so if elected by shareholders. These nominees currently serve on one other
Board of the MFS Funds, and have served in that capacity continuously since
originally elected or appointed.
The Board of Trustees of your Fund is currently divided into three classes,
each having a term of three years. Each year the term of one class expires. The
term of office of the class containing Messrs. Ives and Perera expires at this
Annual Meeting of Shareholders. The terms of office of Messrs. Schmidt and Stone
would have expired at the 2002 and 2003 annual meetings of shareholders,
respectively, but these Trustees will be retiring at the end of 2001. In
connection with the election of the new Trustees and the anticipated retirement
of Messrs. Schmidt and Stone, the new Trustees will be assigned to particular
classes and existing Trustees may be assigned to new classes in order to achieve
a balanced number of Trustees among the classes. The proposed new class
assignments are listed below. Each Trustee's term of office will expire at the
Annual Meeting of Shareholders noted below.
TERM EXPIRES AT 2002 TERM EXPIRES AT 2003 TERM EXPIRES AT 2004
ANNUAL MEETING ANNUAL MEETING ANNUAL MEETING
-------------------- -------------------- --------------------
William R. Gutow John W. Ballen Lawrence H. Cohn
J. Atwood Ives William J. Poorvu Sir J. David Gibbons
Abby M. O'Neill J. Dale Sherratt Lawrence T. Perera
Jeffrey L. Shames Ward Smith Arnold D. Scott
Charles W. Schmidt* Elaine R. Smith
David B. Stone*
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* As noted above, these Trustees are retiring as of December 31, 2001.
If, before the election, any nominee refuses or is unable to serve, proxies
will be voted for a replacement nominee designated by your current Trustees. You
are being asked to elect all of the nominees listed in the table below and to
re-elect your current Trustees. Aside from those Trustees who are retiring at
the end of the year and Messrs. Ives and Perera (whose terms expire at this
Annual Meeting of Shareholders), your current Trustees will continue to serve as
Trustees of your Fund even if shareholders do not approve Item 1.
The following table presents certain information regarding the Trustees
(other than Messrs. Schmidt and Stone, who will be retiring) and nominees for
Trustee, including their principal occupations, which, unless specific dates are
shown, are of more than five years duration, although the titles may not have
been the same throughout.
NAME, POSITION WITH THE FUND, AGE
PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS(1)
JEFFREY L. SHAMES* (born 6/2/55) Trustee, Chairman and President
Massachusetts Financial Services Company, Chairman and Chief Executive
Officer.
JOHN W. BALLEN* (born 9/12/59) Trustee
Massachusetts Financial Services Company, President and Director.
LAWRENCE H. COHN, M.D. (born 3/11/37) Nominee for Trustee
Brigham and Women's Hospital, Chief of Cardiac Surgery; Harvard Medical
School, Professor of Surgery.
THE HON. SIR J. DAVID GIBBONS, KBE (born 6/15/27) Nominee for Trustee
Edmund Gibbons Limited (diversified holding company), Chief Executive Officer;
Colonial Insurance Company Ltd., Director and Chairman; Bank of Butterfield,
Chairman (until 1997).
WILLIAM R. GUTOW (born 9/27/41) Trustee
Private investor and real estate consultant; Capitol Entertainment Management
Company (video franchise), Vice Chairman.
J. ATWOOD IVES (born 5/1/36) Trustee
Private investor; Eastern Enterprises (diversified services company), Chairman,
Trustee and Chief Executive Officer (until November 2000); KeySpan Corporation
(energy related services), Director.
ABBY M. O'NEILL (born 4/27/28) Nominee for Trustee
Private investor; Rockefeller Financial Services, Inc. (investment advisers),
Chairman and Chief Executive Officer.
LAWRENCE T. PERERA (born 6/23/35) Trustee
Hemenway & Barnes (attorneys), Partner.
WILLIAM J. POORVU (born 4/10/35) Trustee
Harvard University Graduate School of Business Administration, Adjunct
Professor; CBL & Associates Properties, Inc. (real estate investment trust),
Director; The Baupost Fund (a mutual fund), Vice Chairman and Trustee.
ARNOLD D. SCOTT* (born 12/16/42) Trustee
Massachusetts Financial Services Company, Senior Executive Vice President and
Director.
J. DALE SHERRATT (born 9/23/38) Nominee for Trustee
Insight Resources, Inc. (acquisition planning specialists), President;
Wellfleet Investments (investor in health care companies), Managing General
Partner (since 1993); Cambridge Nutraceuticals (professional nutritional
products), Chief Executive Officer (until May 2001); Paragon Trade Brands,
Inc. (disposable consumer products), Director.
ELAINE R. SMITH (born 4/25/46) Trustee
Independent consultant.
WARD SMITH (born 9/13/30) Nominee for Trustee
Private investor
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(1) Directorships or trusteeships of companies required to report to the
Securities and Exchange Commission (i.e., "public companies").
* "Interested person" of MFS within the meaning of the Investment Company Act
of 1940 (referred to as the 1940 Act), which is the principal federal law
governing investment companies like your Fund. The address of MFS is 500
Boylston Street, Boston, Massachusetts.
Each Trustee holds comparable positions with certain affiliates of MFS or
with certain other funds of which MFS or a subsidiary is the investment adviser
or distributor. Messrs. Ballen, Ives, Perera, and Poorvu and Ms. Smith serve as
board members of 45 funds within the MFS Family of Funds. Dr. Cohn, Messrs.
Gibbons, Sherratt and Smith and Ms. O'Neill serve as board members of 42 funds
within the MFS Family of Funds. Mr. Gutow serves as board member of 73 funds
within the MFS Family of Funds. Messrs. Scott and Shames serve as board members
of 115 funds within the MFS Family of Funds.
Information about Trustee compensation, Trustee retirement plan arrangements
and the executive officers of your Fund appears under "Fund Information"
beginning on page 14.
Your current Board of Trustees meets regularly throughout the year to
discuss matters relating to your Fund. The Board has a standing Audit Committee,
currently composed of Ms. Smith and Messrs. Perera, Poorvu, and Stone, to review
the internal and external accounting and auditing procedures of your Fund and,
among other things, to consider the selection of independent public accountants
for your Fund, to approve all significant services proposed to be performed by
those accountants and to consider the possible effect of the services on the
independence of those accountants. The Audit Committee consists only of Trustees
who are not "interested persons" of your Fund as defined in the 1940 Act and who
are independent of the Fund as defined by New York Stock Exchange Listing
Standards. The Fund's Audit Committee Charter appears in Appendix A to this
proxy statement. The Audit Committee's report on the Fund's most recent audited
financials is included in Item 5 below.
The Board has also created a Nominating Committee, composed solely of all of
the current Trustees who are not "interested persons" of the Fund as defined in
the 1940 Act, that is responsible for recommending qualified candidates to the
Board in the event that a position is vacated or created. The Nominating
Committee would consider recommendations by shareholders if a vacancy were to
exist. Shareholders wishing to recommend Trustee candidates for consideration by
the Nominating Committee may do so by writing the Fund's Secretary. Members of
the Nominating Committee confer periodically and hold meetings as required.
Information about Board and Committee meetings held by the Fund appears
under "Fund Information" beginning on page 14. Each Trustee attended at least
75% of the Board and applicable Committee meetings noted.
The Fund's declaration of trust currently provides that the Fund will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Fund, unless it is finally adjudicated or, in case of a
settlement, it has been determined by Trustees not involved in the matter or
independent legal counsel, that they have not acted in good faith in the
reasonable belief that their actions were in the best interests of the Fund or
that they engaged in willful misfeasance or acted with bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
REQUIRED VOTE
Approval of this proposal as to any nominee will require the affirmative
vote of a plurality of the outstanding shares of your Fund voting at the Meeting
in person or by proxy.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
EACH NOMINEE AS A TRUSTEE.
ITEM 2 -- TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND RESTATED DECLARATION
OF TRUST.
The Fund is organized as a Massachusetts business trust. Under Massachusetts
law, a business trust usually operates under a charter or organizational
document, called a declaration of trust, that contains various provisions
relating primarily to how the trust conducts business and how the trust is
governed. The Fund operates under a declaration of trust.
At the Meeting, you will be asked to authorize your Trustees to adopt for
your Fund the Amended and Restated Declaration of Trust appearing in Appendix B
to this proxy statement (called, in this proxy statement, the Restated
Declaration). The Restated Declaration amends and restates the existing
declaration of trust of the Fund (called, in this proxy statement, the Existing
Declaration) in its entirety. The Trustees have approved the Restated
Declaration and recommend that you authorize the Trustees to adopt it. The
Restated Declaration is the standard form that will be used for all MFS
closed-end funds organized as Massachusetts business trusts in the future.
The Restated Declaration gives the Trustees more flexibility and, subject to
applicable requirements of the 1940 Act and Massachusetts law, broader authority
to act. This increased flexibility may allow the Trustees to react more quickly
to changes in competitive and regulatory conditions and, as a consequence, may
allow the Fund to operate in a more efficient and economical manner. Adoption of
the Restated Declaration will not alter in any way the Trustees' existing
fiduciary obligations to act with due care and in the shareholders' interests.
You should note that your Fund's investments and investment policies will
not change by virtue of the adoption of the Restated Declaration. However,
certain of your Fund's investment policies will be affected by other items in
this proxy statement.
The Restated Declaration makes a number of significant changes to the
Existing Declaration. Certain of these changes give the Trustees greater
flexibility and broader authority to act without shareholder approval. The most
significant changes are summarized below. In addition to the changes described
below, there are other substantive and stylistic differences between the
Restated Declaration and the Existing Declaration. The following summary is
qualified in its entirety by reference to the Restated Declaration itself in
Appendix B. The attached Restated Declaration has been marked to show changes
from the Existing Declaration.
SIGNIFICANT CHANGES
1. REORGANIZATION. The Restated Declaration permits the Trustees, without
shareholder approval, to change the Fund's form of organization, reorganize all
or a portion of the Fund into a newly created entity or a newly created series
of an existing entity, or incorporate all or a portion of the Fund as a newly
created entity. The Existing Declaration requires shareholder approval for this
type of reorganization.
Under certain circumstances, it may not be in the shareholders' interests to
require a shareholder meeting to permit all or a portion of the Fund to
reorganize into another entity or to incorporate. For example, in order to
reduce the cost and scope of state regulatory requirements or to take advantage
of a more favorable tax treatment offered by another state, the Trustees may
determine that it would be in the shareholders' interests to reorganize the Fund
to domicile it in another state or to change its legal form. Under the Existing
Declaration, the Trustees cannot effectuate such a potentially beneficial
reorganization without first conducting a shareholder meeting and incurring the
attendant costs and delays. The Restated Declaration gives the Trustees the
flexibility to reorganize all or a portion of the Fund and achieve potential
shareholder benefits without incurring the delay and potential costs of a proxy
solicitation. This flexibility should help to assure that the Fund operates
under the most appropriate form of organization.
The Restated Declaration requires that shareholders receive written
notification of any reorganization transaction.
The Restated Declaration does not permit the Fund to merge with or sell its
assets to another operating entity without first obtaining shareholder approval.
2. FUTURE AMENDMENTS. The Restated Declaration may be amended without
shareholder approval in most cases. The Existing Declaration may be amended
without shareholder approval only in certain limited circumstances. Under the
Restated Declaration, shareholders generally retain the right to vote on any
amendment affecting their voting powers, on any amendment affecting the
amendment provisions of the Restated Declaration, on any amendment required by
law or by the Fund's registration statement to be approved by shareholders, and
on any amendment submitted to shareholders by the Trustees. By allowing
amendment of the Restated Declaration without shareholder approval (except as
noted above), the Restated Declaration gives the Trustees the necessary
authority to react quickly to future contingencies.
The Restated Declaration also permits the Trustees to adopt By-Laws
concerning the conduct of business of the Fund and to amend or repeal the By-
Laws at any time so long as the By-Laws are not inconsistent with the Restated
Declaration.
3. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Restated Declaration
permits the Fund to invest in other investment companies to the extent not
prohibited by the 1940 Act, and rules and regulations thereunder. Recent
amendments to the 1940 Act permit investment companies to invest their assets in
one or more registered investment companies so long as certain conditions are
met. It is possible that there could be additional amendments to the 1940 Act in
the future which affect investment companies' ability to invest in other funds.
An investment structure where a fund invests all of its assets in a single
investment company is sometimes referred to as a "master/feeder" structure. An
investment structure where a fund invests its assets in more than one investment
company is sometimes referred to as a "fund of funds" structure. Both the
master/feeder and fund of funds structure attempt to achieve economies of scale
and efficiencies in portfolio management by consolidating portfolio management
with other investment companies, while permitting a fund to retain its own
characteristics and identity.
The Restated Declaration will permit the Fund to take advantage of the
recent changes in law, as well as any future changes in law or regulation on
this topic. Under the Restated Declaration, the Trustees have the power to
implement a master/feeder, fund of funds or other similar structure without
seeking shareholder approval. If the Fund invests in other investment companies,
the Fund will indirectly bear expenses, such as management fees, of those other
investment companies, in addition to the Fund's own expenses. While the Trustees
have no current intention of implementing a master/feeder, fund of funds or
other similar structure at this time, the Trustees believe circumstances could
arise in which it would be in the best interest of the Fund to do so at a future
date. Shareholders of the Fund would be notified if the Trustees decide to
implement such a structure for the Fund, and the Fund will not implement such a
structure unless its investment restrictions permit it to do so. Item 3 below
also seeks approval of changes to the Fund's investment restrictions that would
permit the use of these structures.
4. TERMINATION OF THE FUND. The Restated Declaration permits the Trustees,
without shareholder approval, to terminate the Fund. The Existing Declaration
permits the Trustees to terminate the Fund only with shareholder approval. The
Board of Trustees may determine that it is in the shareholders' best interests
to terminate the Fund, for example, because the Fund is not big enough to
operate on an economical basis. Shareholders of the Fund would be notified if
the Trustees decide to terminate the Fund.
OTHER CHANGES
The Restated Declaration also changes the Existing Declaration as follows:
1. The Restated Declaration permits the Fund to enter into and amend
advisory and subadvisory agreements without shareholder approval if permitted by
applicable law.
2. The Restated Declaration explicitly allows the Trustees, with shareholder
approval, to effect mergers, reorganizations and similar transactions through a
variety of methods, including share-for-share exchanges, transfers or sales of
assets, and exchange offers.
3. The Restated Declaration provides for (i) the removal of any Trustee with
or without cause at any time by the affirmative vote of two-thirds of the
outstanding shares of the trust or by the vote of three-quarters of the
Trustees, and (ii) the automatic retirement of Trustees in accordance with any
retirement policy set by the Trustees. The Restated Declaration does not require
the Trustees to provide notice to shareholders of the appointment of a new
Trustee.
4. The Restated Declaration no longer requires that the number of Trustees
be fixed in writing or that Trustees be appointed in writing, but permits these
actions to be taken at Board meetings. The Restated Declaration also provides
that the Trustees may act by a two-thirds majority (rather than unanimous)
written consent. The Restated Declaration permits electronic delivery to
shareholders of notices and other information, and simplifies the information
delivery requirements for shareholders in the same household. These provisions
are intended to simplify administration of the Fund's affairs.
5. The Restated Declaration confirms and clarifies various existing Trustee
powers. For example, the Restated Declaration clarifies that, among other
things, the Trustees may delegate authority to investment advisers and other
agents, purchase insurance insuring Fund assets, employees, Trustees and
Trustees Emeritus, and invest Fund assets in all types of investments including
derivatives. The Restated Declaration also provides that the Trustees may, but
are not obligated to, employ a custodian for the safekeeping of Fund assets.
6. The Restated Declaration provides that by becoming a shareholder of the
Fund each shareholder shall be held expressly to have assented to and agreed to
be bound by the provisions of the Restated Declaration.
7. The Restated Declaration provides that except when a larger vote is
required by applicable law or by any provision of the Declaration, the By- Laws,
a majority of the shares voted in person or by proxy on a matter will decide
that matter and a plurality will elect a Trustee. A similar provision is
contained in the Fund's By-Laws.
8. The Restated Declaration provides that rights to indemnification or
insurance cannot be limited retroactively.
9. The Restated Declaration provides that shareholders may not bring suit on
behalf of the Fund without first requesting that the Trustees bring such suit
unless there would be irreparable injury to the Fund or if a majority of the
Trustees has personal financial interest in the action. Trustees are not
considered to have a personal financial interest by virtue of being compensated
for their services as Trustees or as trustees of funds with the same or an
affiliated investment adviser or distributor. The effect of this provision may
be to discourage suits brought on behalf of the Fund by its shareholders. This
provision is not intended to impair the rights of shareholders under federal
law. A similar provision currently appears in the Fund's By-Laws.
10. The Restated Declaration provides that actions taken by the Trustees and
officers in good faith and with reasonable care are binding on all concerned.
ADDITIONAL INFORMATION
Like the Existing Declaration, the Restated Declaration has certain
provisions which could have the effect of limiting the ability of other entities
or persons to acquire control of the Fund, to cause it to merge with or sell its
assets to another operating entity, to terminate the Fund, or to modify its
structure. In addition, the Restated Declaration, like the Existing Declaration,
requires the affirmative vote or consent of the holders of 66 2/ 3% of the
Fund's shares (a greater vote than that required by the 1940 Act) to authorize
the conversion of the Fund from a closed-end to an open-end investment company.
The foregoing provisions will make more difficult a change in the Fund's
management without the Trustees' approval, and could have the effect of
depriving shareholders of an opportunity to sell their shares at a premium over
prevailing market prices by discouraging a third party from seeking to obtain
control of the Fund in a tender offer or similar transaction. However, the Board
of Trustees has considered these provisions and believes that they are in the
shareholders' best interests and benefit shareholders by providing the advantage
of potentially requiring persons seeking control of the Fund to negotiate with
its management regarding the price to be paid and facilitating the continuity of
the Fund's management.
REQUIRED VOTE
Approval of the Restated Declaration requires the affirmative vote of
66 2/3% of the shares of the Fund outstanding and entitled to vote.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR AUTHORIZING THE
TRUSTEES TO ADOPT THE AMENDED AND RESTATED DECLARATION OF TRUST.
ITEM 3 -- TO AMEND OR REMOVE CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE
FUND.
The Fund has adopted certain investment restrictions or policies that are
"fundamental," meaning that as a matter of law they cannot be changed without
shareholder approval. The Fund's fundamental policies reflect certain
regulatory, business or industry conditions at the time they were adopted.
Changes in applicable law now permit investment companies like the Fund to
revise or eliminate certain of these policies.
The Fund's Board of Trustees, together with the Fund's officers and MFS,
have reviewed the Fund's current fundamental policies, and have concluded that
certain policies should be eliminated or revised based on the development of new
practices and changes in applicable law and to facilitate administration of the
Fund. The proposed revised policies for the Fund are listed in Appendix C. At
the Meeting, shareholders will be asked to approve the revised policies and to
eliminate all other fundamental policies.
The revised policies maintain important investor protections while providing
flexibility to respond to changing markets, new investment opportunities and
future changes in applicable law. In some cases, only technical changes are
being made. The Trustees believe that implementing the revised policies will
facilitate MFS's management of the Fund's assets and simplify the process of
monitoring compliance with investment policies. The revised policies (with
variations required by the specific investment focus of a fund) will be the
standard form for funds in the MFS fund complex.
THE REVISED POLICIES DO NOT AFFECT THE INVESTMENT OBJECTIVES OF THE FUND,
WHICH REMAIN UNCHANGED. THE FUND WILL CONTINUE TO BE MANAGED IN ACCORDANCE WITH
THE INVESTMENT POLICIES DESCRIBED IN THE PROSPECTUS AND IN ACCORDANCE WITH
FEDERAL LAW. THE REVISED POLICIES WOULD GIVE THE FUND INCREASED ABILITY TO
ENGAGE IN CERTAIN ACTIVITIES. THE TRUSTEES MAY CONSIDER AND ADOPT SUCH NON-
FUNDAMENTAL INVESTMENT POLICIES FOR THE FUND AS THEY DETERMINE TO BE APPROPRIATE
AND IN THE SHAREHOLDERS' BEST INTERESTS. THE TRUSTEES DO NOT ANTICIPATE THAT THE
REVISED POLICIES, INDIVIDUALLY OR IN THE AGGREGATE, WILL CHANGE TO A MATERIAL
DEGREE THE LEVEL OF INVESTMENT RISK ASSOCIATED WITH AN INVESTMENT IN THE FUND.
Each investment policy proposed to be revised, eliminated or added is
discussed below. Appendix C lists the fundamental policies that will apply to
the Fund if shareholders of the Fund approve this proposal. Appendix D lists the
Fund's current fundamental investment policies and the proposed action to be
taken with respect to each policy.
A. BORROWING
It is proposed that the policy concerning borrowing be changed so that the
Fund may borrow money to the fullest extent permitted by applicable law.
Currently, the Fund may borrow up to one-third of its assets or may pledge,
mortgage or hypothecate its assets as a temporary measure for extraordinary or
emergency purposes, for a repurchase of its shares, or for investment in
accordance with its investment objective and policies.
The 1940 Act, which is the federal law that governs investment companies
like the Fund, does not require that borrowings be made only for limited
purposes, nor does the 1940 Act require any limit on assets pledged to secure
borrowings. It is possible that the Fund's existing policies could prevent it
from borrowing when it is in the best interests of shareholders to do so. The
revised policy will give the Fund the maximum amount of flexibility to borrow
permitted by applicable law. Currently, the 1940 Act permits investment
companies like the Fund to borrow money so long as there is 300% asset coverage
of the borrowings at the time of the loan. This means that at the time of the
loan borrowings cannot exceed one-third of an investment company's total assets
after subtracting liabilities other than the borrowings. While the statutory
test currently is similar to the Fund's existing policy, the revised policy
would allow the Fund to take advantage of any future changes in the statutory
test.
Investment companies like the Fund generally borrow money to try to enhance
returns to shareholders (this is referred to as leverage). Borrowing money
creates risks and expenses for the Fund and may make the Fund's net asset value
more volatile. The interest and other costs of borrowing may reduce the Fund's
return. The Fund also could be forced to sell securities at inopportune times to
repay loans.
B. UNDERWRITING SECURITIES
It is proposed that the policy concerning underwriting securities be changed
so that the Fund may not underwrite securities issued by other persons, except
that all or any portion of the assets of the Fund may be invested in one or more
investment companies, to the extent not prohibited by the 1940 Act and exemptive
orders granted under such Act, and except insofar as the Fund may technically be
deemed an underwriter under the Securities Act of 1933, as amended, in selling a
portfolio security. The revised policy also provides that the Fund is not deemed
to underwrite securities by virtue of employing a master/feeder or fund of funds
investment structure as permitted by applicable law. Utilizing these investment
structures is discussed in Item 2 of this proxy statement (under "Significant
Changes -- 3. Investment in Other Investment Companies").
Currently, the Fund is prohibited from underwriting securities issued by
others except to the extent the Fund may be deemed to be an underwriter, under
the federal securities laws, when it sells portfolio securities.
C. ISSUANCE OF SENIOR SECURITIES
It is proposed that the policy concerning the issuance of senior securities
be changed so that the Fund may issue senior securities to the fullest extent
permitted by applicable law. For purposes of this restriction, collateral
arrangements with respect to swaps, options, futures, forwards and initial and
variation margin are not deemed to be the issuance of a senior security.
Currently, the Fund is subject to a fundamental policy that provides that it
may not issue any senior securities except as permitted by the 1940 Act. Certain
technical changes are being made to this policy to clarify the circumstances in
which the Fund may issue senior securities, including pursuant to any exemptive
relief under the 1940 Act. In addition, the revised policy clarifies and expands
the types of collateral arrangements that are excluded from the restriction to
include swaps and forward contracts.
D. LENDING OF MONEY OR SECURITIES
It is proposed that the policy concerning lending money be changed so that
the Fund may make loans to the fullest extent permitted by applicable law.
Currently, the Fund is prohibited from lending money. The Fund may lend its
securities, but not in excess of 30% of its total assets (taken at market
value). Investments in commercial paper, debt securities and repurchase
agreements are not treated as loans for purposes of these policies. The revised
policy will permit the Fund to make loans, whether of money or securities, so
long as the transactions are permitted by applicable law.
Lending securities may be a source of income to the Fund and is permitted
under the 1940 Act, subject to certain limitations. As with other extensions of
credit there are risks of delay in recovery or even loss of rights in the
underlying securities should the borrower of the securities fail financially.
However, loans would be made in accordance with procedures approved by the
Trustees only to firms deemed by MFS to be of good standing, and when, in the
judgment of MFS, the income from securities loans justifies the attendant risk.
It is unlikely that the Fund would lend money, except to the extent that the
purchase of debt securities can be considered a loan; however, the Fund could
lend money to other funds advised by MFS or one of its affiliates. The Fund
would have to obtain exemptive relief from the Securities and Exchange
Commission (referred to as the SEC) to make loans to other MFS-advised funds.
E. REAL ESTATE, OIL AND GAS, MINERAL INTERESTS, AND COMMODITIES
It is proposed that the policy concerning real estate, oil, gas and mineral
interests, and commodities be changed so that the Fund may not purchase or sell
real estate, interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of its business. Under this policy, the Fund
will be able to invest in securities secured by real estate and securities of
companies that deal in real estate, as well as options and futures and forward
contracts, and the Fund also will retain the right to hold and sell real estate,
mineral leases, commodities or commodity contracts acquired as a result of the
ownership of securities.
The revised policy clarifies that the restrictions relating to investments
in real estate and commodities do not apply to investments in currencies, any
type of option contract, futures contracts, forward contracts, and securities of
companies, such as real estate investment trusts, which deal in real estate or
interests therein.
F. INDUSTRY CONCENTRATION
It is proposed that the policy concerning concentration in a particular
industry be changed so that the Fund may not purchase securities of an issuer of
a particular industry if as a result 25% or more of the Fund's total assets
(taken at market value at the time of purchase) would be invested in securities
of issuers whose principal business activities are in the same industry, except
that the Fund may invest up to 40% of the value of its assets in each of the
electric utility and telephone industries.
This revised policy is similar to the Fund's existing concentration policy,
except that the revised policy clarifies that the calculation of concentration
is made with respect to the Fund's total assets taken at market value at the
time of purchase of the security in question. The revised policy also removes
the restriction that the Fund may not invest more than 25% of its total assets
in either of the electric utility and telephone industries unless yields
available for four consecutive weeks in the four highest rating categories on
new issue bonds in such industry (issue size of $50 million or more) have
averaged in excess of 105% of yields of new issue longer term industrial bonds
similarly rated (issue size of $50 million or more). If the Fund concentrates in
the electric utility and telephone industries, its investment performance would
be closely tied to the performance of companies in these industries. Companies
in a single industry often are faced with the same obstacles, issues and
regulatory burdens, and their securities may react similarly and more in unison
to these or other market conditions. Accordingly, the Fund could be riskier than
funds with more broadly diversified portfolios.
G. PURCHASING SECURITIES ON MARGIN -- REMOVAL OF POLICY
The Fund has a fundamental policy that prevents the Fund from purchasing any
security on margin. Margin transactions generally involve the purchase of
securities with money borrowed from a broker, with cash or securities being used
as collateral for the loan. MFS has recommended the elimination of this policy
on margin transactions to provide the Fund with the maximum amount of
flexibility permitted by applicable law, and any future changes in law, on this
topic. Accordingly, it is proposed that this policy be deleted in its entirety.
H. SHORT SALES -- REMOVAL OF POLICY
Currently, the Fund is prohibited from making short sales of securities,
except that the Fund may make short sales "against the box" (short sales where
the Fund owns or has the right to acquire at no added cost securities identical
to those sold short) subject to the limitation that not more than 10% of the
Fund's net assets (taken at market value) is held as collateral for such sales
at any one time. The 1940 Act prohibits investment companies from making short
sales of securities except in accordance with SEC rules and regulations. The SEC
has not adopted any rules or regulations relating to short sales, except that
the staff of the SEC regards a short sale as a form of leverage and has taken
positions with respect to the use of leveraging transactions. Accordingly, the
Fund's investment policy is more restrictive than applicable law. The Fund is
proposing to delete this policy in its entirety in order to have the maximum
amount of flexibility permitted by applicable law, and any future changes in
law, on this topic.
In a typical short sale the Fund borrows securities from a broker that it
anticipates will decline in value in order to sell to a third party. The Fund
becomes obligated to return securities of the same issue and quantity at some
future date, and it realizes a profit or loss depending upon whether the market
price of the security decreases or increases between the date of the short sale
and the date on which the Fund must replace the borrowed security. Because the
value of a particular security can increase without limit, the Fund could
potentially realize losses with respect to short sales that are not "against the
box" that could be significantly greater than the value of the securities at the
time they are sold short, and such losses could also be unlimited.
I. INVESTMENTS IN A SINGLE ISSUER - REMOVAL OF POLICY
Currently, the Fund is prohibited from purchasing the securities of any
issuer if, as a result, the Fund would hold more than 10% of the voting
securities of the issuer.
Although the Fund is non-diversified, the Fund must meet certain
diversification requirements under the Internal Revenue Code in order to qualify
for beneficial tax treatment as a regulated investment company. These
diversification requirements provide in part that as to 50% of the fund's
assets, investments in any one issuer cannot exceed 5% of the fund's assets and
the fund cannot hold more than 10% of the issuer's outstanding voting securities
at the end of each quarter. The Fund intends to qualify as a regulated
investment company for tax purposes.
The Fund's current diversification policies are more restrictive than
required for the Fund to qualify as a regulated investment company. The Trustees
believe that it is unnecessary to have fundamental policies that are more
restrictive than what the Internal Revenue Code requires. Accordingly, the Fund
proposes to delete this investment policy.
To the extent that the Fund invests its assets in a small number of issuers,
the Fund is more susceptible to any single economic, political or regulatory
event affecting those issuers.
REQUIRED VOTE
Approval of this Item will require the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Fund.
THE BOARD OF TRUSTEES HAS CONCLUDED THAT THE PROPOSAL TO AMEND OR REMOVE THE
FUNDAMENTAL INVESTMENT POLICIES OF THE FUND WILL BENEFIT THE FUND AND ITS
SHAREHOLDERS. THE TRUSTEES UNANIMOUSLY RECOMMEND VOTING FOR THE PROPOSAL.
ITEM 4 -- TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT WITH MASSACHUSETTS
FINANCIAL SERVICES COMPANY.
At the Meeting, you will be asked to approve a new Investment Advisory
Agreement between your Fund and MFS. The investment management fee payable by
your Fund will not increase or decrease if shareholders of your Fund approve the
new Investment Advisory Agreement.
Currently, each fund in the MFS Family of Funds, including your Fund, has a
separate Investment Advisory Agreement with MFS. These Investment Advisory
Agreements were entered into at various times over the past several decades, and
their provisions differ. MFS has recommended that the provisions of all of the
Investment Advisory Agreements be standardized and modernized. MFS believes that
the standardization and modernization of the Investment Advisory Agreements will
simplify the administration of the Fund and other funds in the MFS Family of
Funds.
The discussion below describes the principal differences between the current
and proposed Investment Advisory Agreement (referred to as the Current Agreement
and the New Agreement) and provides additional information about MFS and about
the Board's review of the New Agreement. The New Agreement will be the standard
form for all U.S. registered funds in the MFS fund complex.
The information provided herein is intended to be a summary of the material
changes between the Current Agreement and the New Agreement. This summary is
qualified in its entirety by reference to the comparison of the Current
Agreement and the New Agreement in Appendix E. In particular, please refer to
Appendix E for additional information about other technical changes that were
made to the New Agreement.
A. CURRENT AGREEMENT
MFS has served as the investment adviser for the Fund since the commencement
of the Fund's operations. The Current Agreement, dated February 25, 1987, was
last approved by the Fund's sole shareholder on that date in connection with the
Fund's commencement of operations.
Under the Current Agreement, MFS provides the Fund with overall investment
advisory services. Subject to such policies as the Trustees may determine, MFS
makes investment decisions for the Fund. For these services and facilities, MFS
receives an annual management fee, computed and paid monthly in an amount equal
to the sum of 0.34% of the average daily net assets of the Fund and 5.4% of the
daily gross income (i.e., income other than gains from the sale of securities,
short-term gains from options and futures transactions and premium income from
options written). For the fiscal year ended October 31, 2000, MFS received
$5,141,826 from the Fund as compensation under the Current Agreement.
MFS pays the compensation of the Fund's officers and of any Trustee who is
an officer of MFS. MFS also furnishes at its own expense all necessary
administrative services, including office space, equipment, clerical personnel,
investment advisory facilities and all executive and supervisory personnel
necessary for managing the Fund's investments and effecting its portfolio
transactions. The Fund pays the compensation of its Trustees who are not
officers of MFS and all expenses of the Fund (other than those assumed by MFS).
More detailed information about the expenses paid by the Fund is discussed under
"Changes Proposed in the New Agreement" below.
B. CHANGES PROPOSED IN THE NEW AGREEMENT
1. Advice regarding Other Instruments
The Current Agreement provides that MFS will continuously furnish an
investment program for the Fund and determine from time to time what securities
will be purchased, sold or exchanged and what portion of the assets of the Fund
will be held uninvested. The New Agreement provides that MFS will determine what
securities or other instruments will be purchased, sold or exchanged for the
Fund. The change clarifies that MFS may provide advice as to certain
investments, such as some derivative contracts, that may not be considered
securities. Certain other references to "securities" have been changed to
"securities or other instruments" throughout the New Agreement. This change is
not intended to change the type of investments in which the Fund may invest. The
Fund's investments are governed by its registration statement.
2. Proxy Voting
The New Agreement clarifies that MFS will exercise voting rights, rights to
consent to corporate actions and any other rights pertaining to the Fund's
portfolio securities in accordance with policies and procedures that MFS
presents to the Trustees from time to time. The Current Agreement provides that
MFS may make recommendations as to the manner in which rights relating to
portfolio securities are exercised. This provision in the New Agreement more
closely reflects MFS's current practice with respect to the exercise of rights
pertaining to the Fund's portfolio securities.
3. Brokerage Transactions
The Current Agreement provides that in connection with the selection of
brokers and dealers and the placing of orders, MFS is directed to seek for the
Fund execution of transactions at the best available price.
The New Agreement provides that, in connection with the selection of brokers
or dealers and the placing of orders, MFS is directed to seek for the Fund the
best overall price and execution available from responsible brokerage firms,
taking into account all factors it deems relevant, including by way of
illustration: price; the size of the transaction; the nature of the market for
the security; the amount of the commission; the timing and impact of the
transaction taking into account market prices and trends; the reputation,
experience and financial stability of the broker or dealer involved; and the
quality of services rendered by the broker or dealer in other transactions. This
provision clarifies that MFS may consider factors other than just price when
seeking to obtain best execution for the Fund's transactions. Under the policies
of the SEC, MFS considers the full range and quality of a broker's services in
placing brokerage orders in order to fulfill its duty to obtain best execution
for the Fund's transactions.
The New Agreement provides that MFS may cause the Fund to pay a broker or
dealer a higher commission than another broker or dealer might have charged for
effecting that transaction, if MFS determines, in good faith, that the higher
commission was reasonable in relation to the value of brokerage and research
services provided by the broker or dealer. The value of these brokerage and
research services may be viewed in terms of either the Fund's particular
transactions or MFS's overall responsibilities with respect to the Fund and
MFS's other clients. The Fund's Current Agreement provides that subject to the
requirement of seeking the best available price, securities may be bought from
or sold to broker dealers who have furnished statistical, research and other
information or services to MFS.
The New Agreement also provides that, subject to seeking the best price and
execution as described above, and in accordance with applicable rules and
regulations, MFS may consider sales of shares of the Fund or of other MFS funds
or accounts as a factor in the selection of brokers and dealers.
The additional provisions in the New Agreement are not intended to change
the current practice of MFS as to its consideration of brokerage and research
services and sales of Fund shares in the selection of brokers and dealers.
4. Expenses
The Current Agreement provides that the Fund will pay all of its own
expenses. The Current Agreement contains a list of typical Fund expenses. This
list of expenses has been amended to include expenses of soliciting proxies;
organizational and start up costs; and such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or proceedings
to which the Fund is a party or otherwise may have an exposure and the legal
obligation which the Fund may have to indemnify the Trustees and officers with
respect thereto. This amendment is being proposed in order to provide a
standardized list of Fund expenses within the MFS Family of Funds.
The New Agreement provides that if MFS pays or assumes any expenses of the
Fund, MFS is not obligated by the New Agreement to pay or assume the same or
similar expenses of the Fund on any subsequent occasion.
These amendments are designed to clarify the types of expenses which the
Fund may bear.
5. Certain Recordkeeping Services by MFS
The New Agreement adds a provision that MFS must maintain certain records in
a form acceptable to the Fund and in compliance with the rules and regulations
of the SEC. MFS currently maintains such records, even without the express
obligation to do so.
6. Sub-Advisory Agreements
The New Agreement provides that MFS may from time to time enter into
investment sub-advisory agreements with respect to the Fund with one or more
investment advisers with such terms and conditions as MFS may determine,
provided that such investment sub-advisory agreements have been approved in
accordance with the provisions of applicable law. Under applicable law, any new
investment sub-advisory agreement generally must be submitted to shareholders
for approval, subject to limited exceptions. It is not currently intended that
MFS enter into an investment sub-advisory agreement with respect to the Fund,
but MFS has in the past engaged investment sub-advisers with respect to other
MFS funds and may seek to engage sub-advisers for the Fund in the future.
7. Other Agreements with MFS
The New Agreement adds a provision that the Fund may enter into such other
agreements covering the provision of administrative and other additional
services to the Fund as the Trustees may deem appropriate, and that such an
agreement will not expand, reduce or otherwise alter the services which MFS is
required to provide, or the compensation which MFS is due, under the Agreement.
These other agreements may be with MFS, an affiliate of MFS or a third party.
These amendments are not intended to change the services MFS is required to
provide, or change the fees paid to MFS.
8. Other Clients of MFS
The Current Agreement for the Fund provides that the services of MFS to the
Fund are not exclusive, and that MFS is free to render investment and/or other
services to others. The New Agreement adds an express acknowledgment by the Fund
that it is possible that certain funds or accounts managed by MFS or its
affiliates may at times take investment positions or engage in investment
techniques which are contrary to positions taken or techniques engaged in on
behalf of the Fund, but that MFS will at all times endeavor to treat all of its
clients in a fair and equitable manner.
Under the New Agreement, the Fund acknowledges that whenever the Fund and
one or more other funds or accounts advised by MFS have money available for
investment, investments suitable for each will be allocated in a manner believed
by MFS to be fair and equitable to each entity. Similarly, opportunities to sell
investments will be allocated in a manner believed by MFS to be fair and
equitable to each client. In some instances, this may adversely affect the size
of the position that may be acquired or disposed of for the Fund.
9. Other Provisions
The New Agreement adds certain other technical, legal provisions which are
standard for investment advisory contracts in the investment company industry,
including provisions concerning the Fund's ability to use the acronym "MFS" and
related trade or service marks in its name.
C. INFORMATION ABOUT MFS AND ITS AFFILIATES
MFS is a Delaware corporation with offices at 500 Boylston Street, Boston,
Massachusetts 02116. MFS is an 81.8%-owned subsidiary of Sun Life of Canada
(U.S.) Financial Services Holdings, Inc., 500 Boylston Street, Boston,
Massachusetts 02116, which is in turn a wholly-owned subsidiary of Sun Life
Assurance Company of Canada-U.S. Operations Holdings, Inc., One SunLife
Executive Park, Wellesley Hills, Massachusetts 02481. Sun Life Assurance Company
of Canada-U.S. Operations Holdings, Inc. is a wholly-owned subsidiary of Sun
Life Assurance Company of Canada, 150 King Street West, 14th Floor, Toronto,
Canada M5H1J9, which in turn is a wholly-owned subsidiary of Sun Life Financial
Services of Canada, Inc. at the same address.
The Directors of MFS are Arnold D. Scott, James C. Baillie, John W. Ballen,
Kevin R. Parke, Thomas J. Cashman, Jr., Joseph W. Dello Russo, William W. Scott,
Jr., Donald A. Stewart, C. James Prieur and William W. Stinson. The Executive
Officers of MFS are Jeffrey L. Shames, Chairman and Chief Executive Officer; Mr.
Ballen, President; Mr. Arnold Scott, Senior Executive Vice President; Mr. Dello
Russo, Executive Vice President, Chief Financial Officer and Chief
Administrative Officer; Mr. Parke, Executive Vice President and Chief Investment
Officer; Mr. Cashman, Executive Vice President and Mr. William Scott, Jr., Vice
Chairman. As noted above, Messrs. Arnold Scott, Ballen and Shames also serve as
Trustees to the Fund.
The address of each Director and Executive Officer of MFS is 500 Boylston
Street, Boston, Massachusetts 02116. Each Director and Executive Officer
principally devotes his time to his role at MFS.
MFS provides investment advisory services to the following funds in the MFS
Family of Funds which have investment objectives and policies similar to those
of the Fund. The table below lists these other funds advised by MFS, the net
assets of those funds, and the management fee MFS received from those funds
during the fiscal years ended on the date noted.
OTHER FUNDS ADVISED BY MFS
MANAGEMENT FEE (AS
A PERCENTAGE OF MANAGEMENT FEE,
NET ASSETS UNDER AVERAGE DAILY NET AFTER WAIVERS (IF
MANAGEMENT AS OF ASSETS) FOR THE ANY) FOR THE FISCAL
FUND DECEMBER 31, 2000 FISCAL YEAR NOTED YEAR NOTED FISCAL YEAR
---- ----------------- ----------------- ---------- -----------
MFS Intermediate Income Trust $929,936,425 0.76%(1) N/A 10/31/00
MFS/Sun Life Series Trust Strategic Income Series $ 33,318,906 0.75% N/A 12/31/00
----------
(1) Lesser of (a) 0.32% of the Fund's average daily net assets plus 5.65% of the Fund's gross income, or (b) 0.85%.
The Fund has entered into certain other agreements with MFS or its
affiliates for administrative and shareholder services. The approval of the New
Agreement will not affect the services provided by MFS or its affiliates under
these agreements.
MFS provides the Fund with certain financial, legal, compliance, shareholder
communications and other administrative services pursuant to a Master
Administrative Services Agreement. Under this Agreement, the Fund pays MFS an
administrative fee of up to 0.0175% on the first $2.0 billion; 0.0130% on the
next $2.5 billion; 0.0005% on the next $2.5 billion; and 0.0% on amounts in
excess of $7.0 billion, per annum of the Fund's average daily net assets. This
fee reimburses MFS for a portion of the costs it incurs to provide such
services. For the fiscal year ended October 31, 2000, MFS received $86,796 from
the Fund for its services to the Fund under the Master Administrative Services
Agreement.
Pursuant to the Registrar, Transfer Agency and Service Agreement between the
Fund and MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, MFSC
acts as the Fund's registrar and transfer agent as well as dividend disbursing
agent and agent in connection with the Fund's Dividend Reinvestment and Cash
Purchase Plan. For account maintenance, the Fund currently pays MFSC a fee based
on the total number of accounts for all closed-end funds advised by MFS for
which MFSC acts as registrar and transfer agent. If the total number of accounts
is less than 75,000, the annual account fee is $9.00 per account. If the total
number of accounts is 75,000 or more, the annual account fee is $8.00 per
account. For dividend services, MFSC charges $0.75 per dividend reinvestment and
$0.75 per cash infusion. If the total amount of fees related to dividend
services is less than $1,000 per month for all closed-end funds advised by MFS
for which MFSC acts as registrar and transfer agent, the minimum fee for the
Fund for these services will be $167 per month. In addition, MFSC is reimbursed
by the Fund for certain expenses incurred by MFSC on behalf of the Fund. For the
fiscal year ended October 31, 2000, MFSC received $243,173 from the Fund for its
services to the Fund under the Registrar, Transfer Agency and Service Agreement.
D. ACTIONS AND RECOMMENDATIONS OF THE BOARD OF TRUSTEES
At meetings of the Board of Trustees on April 10, June 12 and July 18, 2001,
the Board considered the standardization and modernization of the advisory
agreements of the Fund. The Board reviewed materials comparing the Current and
New Agreement and providing information about the potential benefits and costs
to shareholders of the adoption of the New Agreement. Among other things, the
Board of Trustees considered that the management fees under the Current
Agreement will not change under the New Agreement. The Board also considered the
potential efficiencies from the proposed standardization and modernization of
the Current Agreement's provisions. Based on this review, the Trustees,
including the Independent Trustees, approved the terms of the New Agreement and
submission of the New Agreement for the consideration of the shareholders of the
Fund.
If the New Agreement is approved, it will continue for an initial two-year
term. Thereafter, the New Agreement will continue as to the Fund from year to
year if that continuation is approved in accordance with applicable law.
REQUIRED VOTE
Approval of this Item will require the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Fund.
YOUR TRUSTEES HAVE CONCLUDED THAT THE NEW ADVISORY AGREEMENT WITH MFS WILL
BENEFIT YOUR FUND AND ITS SHAREHOLDERS. THE TRUSTEES UNANIMOUSLY RECOMMEND
VOTING FOR THE PROPOSAL.
ITEM 5 -- TO RATIFY THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS.
At the Meeting, you will be asked to ratify the selection of accountants for
your Fund. The Trustees, including a majority of the Trustees who are not
"interested persons" (within the meaning of the 1940 Act) of the Fund, have
selected Ernst & Young LLP (referred to as Ernst & Young) as independent public
accountants for the Fund for its next fiscal year. It is intended that proxies
not limited to the contrary will be voted in favor of ratifying that selection.
No change to the Fund's accountants is being proposed.
Ernst & Young has no direct or material indirect interest in the Fund.
Representatives of Ernst & Young are not expected to be present at the Meeting.
Audit Committee Report. The Audit Committee of the Board of Trustees issued
the following report concerning the financial statements for the Fund's most
recent fiscal year.
The Audit Committee reviewed and discussed the audited financial
statements with Fund management. The Audit Committee also discussed with
Ernst & Young the matters required to be discussed by SAS 61 (Codification
of Statements on Auditing Standards). The Audit Committee received the
written disclosures and the letter from Ernst & Young required by
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and discussed with Ernst & Young its independence.
Based on this review and these discussions, the Audit Committee
recommended to the Board of Trustees that the audited financial statements
be included in the Fund's annual report to shareholders for the fiscal year
ended October 31, 2000 for filing with the Securities and Exchange
Commission.
Lawrence T. Perera
William J. Poorvu
Elaine R. Smith
David B. Stone
Fees Paid to Ernst & Young. The following table sets forth the aggregate
fees paid to Ernst & Young for the Fund's fiscal year ended October 31, 2000,
for professional services rendered for: (i) the audit of the Fund's financial
statements for that fiscal year; (ii) the audits of the annual financial
statements for all funds in the MFS complex audited by Ernst & Young; (iii)
financial information systems design and implementation services to the Fund,
MFS and any entity controlling, controlled by or under common control with MFS
that provides services to the Fund (including MFS Service Center, Inc.); and
(iv) all other services (other than the foregoing services) to the Fund, MFS,
and any entity controlling, controlled by or under common control with MFS that
provides services to the Fund (approximately 80% of this amount represents fees
for tax consulting services rendered to MFS and MFS related entities that
provide services to the Fund). The Audit Committee of the Fund considered
whether the provision of information technology services and of non-audit
services by Ernst & Young is compatible with the maintenance of that firm's
independence.
ALL OTHER FEES
FINANCIAL INFORMATION (OTHER THAN
SYSTEMS DESIGN AND FEES LISTED IN
IMPLEMENTATION ADJOINING COLUMNS)
AGGREGATE AUDIT FEES FEES PAID PAID BY THE FUND,
PAID BY ALL FUNDS IN BY THE FUND, MFS AND MFS AND
AUDIT FEES PAID THE MFS RELATED MFS RELATED
BY THE FUND MFS COMPLEX ENTITIES THAT ENTITIES THAT
FOR ITS MOST RECENT AUDITED BY PROVIDE SERVICES PROVIDE SERVICES
FISCAL YEAR ERNST & YOUNG TO THE FUND TO THE FUND
------------------- ----------------------- ---------------------- --------------------
MFS Multimarket Income Trust $31,600 $728,500 $0 $108,800
REQUIRED VOTE
Approval of this proposal will require the affirmative vote of a majority of
the shares of the Fund voted at the Meeting in person or by proxy.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION
OF THE SELECTION OF ACCOUNTANTS.
FUND INFORMATION
This section provides certain information about the Fund, including
information about executive officers, the number of Board and Committee
meetings, Trustee compensation and the identity of any shareholders holding 5%
or more of the outstanding shares of the Fund.
EXECUTIVE OFFICERS
The following table provides information about the executive officers of the
Fund. Each officer will hold office until his or her successor is chosen and
qualified, or until he or she retires, resigns or is removed from office.
JEFFREY L. SHAMES* (born 6/2/55) Trustee, Chairman and President
Massachusetts Financial Services Company, Chairman and Chief Executive
Officer.
JAMES R. BORDEWICK, JR.* (born 3/6/59) Assistant Secretary and Assistant Clerk
Massachusetts Financial Services Company, Senior Vice President and Associate
General Counsel.
MARK E. BRADLEY* (born 11/23/59) Assistant Treasurer
Massachusetts Financial Services Company, Vice President (since March 1997);
Putnam Investments, Vice President (prior to March 1997).
STEPHEN E. CAVAN* (born 11/6/53) Secretary and Clerk
Massachusetts Financial Services Company, Senior Vice President, General
Counsel and Secretary.
ROBERT R. FLAHERTY* (born 09/18/63) Assistant Treasurer
Massachusetts Financial Services Company, Vice President (since August 2000);
UAM Fund Services, Senior Vice President (since 1996).
LAURA F. HEALY* (born 3/20/64) Assistant Treasurer
Massachusetts Financial Services Company, Vice President (since December 1996);
State Street Bank and Trust Company, Assistant Vice President (prior to December
1996).
ELLEN MOYNIHAN* (born 11/13/57) Assistant Treasurer
Massachusetts Financial Services Company, Vice President (since September
1996).
JAMES O. YOST* (born 6/12/60) Treasurer
Massachusetts Financial Services Company, Senior Vice President.
----------
* "Interested person" (as defined in the 1940 Act) of MFS, the address of which
is 500 Boylston Street, Boston, Massachusetts.
BOARD AND COMMITTEE MEETINGS
The Board of Trustees and the Audit Committee held the following number of
meetings during the Fund's fiscal year ended October 31, 2000:
NUMBER OF
NUMBER OF AUDIT COMMITTEE
BOARD MEETINGS MEETINGS
-------------- --------
MFS Multimarket Income Trust 6 4
The Fund's Nominating Committee met once on June 20, 2001.
TRUSTEE COMPENSATION TABLE
The table below shows the cash compensation paid to the current Trustees
(other than Messrs. Schmidt and Stone, who will be retiring) and the retirement
benefits accrued as part of Fund expenses to those Trustees for the Fund's
fiscal year ended October 31, 2000. As interested persons of MFS, Messrs.
Ballen, Scott and Shames do not receive any compensation or retirement plan
benefits from the Fund for their services as Trustees. Mr. Gutow was appointed
as a Trustee of the Fund effective August 1, 2001, and did not receive
compensation from the Fund for the fiscal year ended October 31, 2000.
TOTAL TRUSTEE
RETIREMENT BENEFITS FEES
TRUSTEE FEES ACCRUED AS PART FROM FUND AND
TRUSTEE FROM FUND(1) OF FUND EXPENSES FUND COMPLEX(2)
------- ------------ ---------------- ---------------
J. Atwood Ives $15,000 $6,600 $152,145
Lawrence T. Perera $15,000 $7,583 $146,230
William J. Poorvu $15,000 $7,583 $153,405
Elaine R. Smith $15,000 $7,350 $144,160
----------
(1) During the fiscal year ended October 31, 2000, Messrs. Ives and Smith
deferred $15,000 of compensation pursuant to the deferred compensation plan.
(2) For calendar year 2000. All Trustees receiving compensation from the Fund
served as Trustee of 48 funds within the MFS Family of Funds having
aggregate net assets at December 31, 2000 of approximately $63.3 billion.
The Fund currently has a retirement plan for non-interested Trustees and
Trustees who are not officers of the trust. Under this plan, Trustees must
retire upon reaching a specified age and thereafter are entitled to annual
payments during their lifetime of up to 50% of their average annual compensation
(based on the three years prior to retirement) depending on length of service.
Trustees must have served as Trustees for at least five years to be entitled to
these payments. A Trustee may also retire prior to the specified retirement age
and receive reduced payments if he or she has completed at least 5 years of
service. Under the plan, a Trustee (or his or her beneficiaries) will also
receive benefits for a period of time in the event the Trustee is disabled or
dies. These benefits will also be based on the Trustee's average annual
compensation and length of service. The Fund will accrue its allocable portion
of compensation expenses under the retirement plan each year to cover the
current year's service and amortize past service cost.
The Trustees will terminate the Fund's retirement plan effective December
31, 2001 with respect to those Trustees listed in the table above, subject to
shareholder approval of Item 1 relating to the consolidation of the Board of
Trustees. The Trustees are considering whether adjustments should be made to the
fees they receive from the Fund in consideration for the loss of future benefit
accruals under the retirement plans. Upon termination of the plan, an amount
equivalent to the present value of each applicable Trustee's accrued benefits
thereunder through the date of termination would be calculated. The Trustees
would defer receipt of these accrued benefits under a new deferred compensation
plan, under which the value of the benefits would be periodically adjusted as
though an equivalent amount had been invested in shares of the Fund. The
deferred compensation would be paid to the Trustees upon retirement or
thereafter.
The Trustees also have adopted a deferred compensation plan for
disinterested Trustees of the Fund that enables these Trustees to elect to defer
all or a portion of the annual fees they are entitled to receive from the Fund
until a payment date elected by the Trustee (or the Trustee's termination of
services). Under the plan, the compensation deferred by Trustees is periodically
adjusted as though an equivalent amount had been invested in shares of one or
more funds in the MFS Family of Funds designated by the Trustee. The amount paid
to the Trustee on the payment date will be determined based on the performance
of the selected funds. To the extent permitted by the 1940 Act, the Fund may
invest in shares of these other selected MFS Funds in order to match the
deferred compensation obligation. Deferral of fees in accordance with the plan
will not materially affect the Fund's assets, liabilities or net income per
share. The plan does not obligate the Fund to retain the services of any Trustee
or pay any particular level of compensation to any Trustee. The plan is not
funded and the Fund's obligation to pay the Trustees' deferred compensation is a
general unsecured obligation.
INTERESTS OF CERTAIN PERSONS
As of July 27, 2001, the following Trustees, Trustee nominees and officers
owned the number of shares of the Fund noted in the table below:
NUMBER OF
NAME OF TRUSTEE OR OFFICER SHARES OWNED PERCENT OF FUND
-------------------------- ------------ ---------------
J. Atwood Ives 1,000.0000 0.000801%
Lawrence T. Perera 2,420.4540 0.001939%
William J. Poorvu 4,550.4950 0.003645%
Arnold D. Scott 415.2529 0.000333%
Elaine R. Smith 218.2812 0.000175%
---------- ---------
TOTAL HOLDINGS OF TRUSTEES AND OFFICERS
AS A GROUP 8,604.4831 0.006893%
As of July 27, 2001, to the best knowledge of the Fund, the following
shareholders beneficially owned 5% or more of the outstanding shares of the
Fund:
NUMBER OF PERCENTAGE OF
OUTSTANDING OUTSTANDING
NAME AND ADDRESS OF SHAREHOLDER SHARES OWNED SHARES OWNED
------------------------------- ------------ ------------
Salomon Smith Barney Inc. 13,147,230 10.53%
Pat Haller
333 West 34th Street
New York, New York 10001
Morgan Stanley DW Inc. 8,837,590 7.08%
Issuer Services
c/o ADP Proxy Services
51 Mercedes Way
Edgewood, New York 11717
MANNER OF VOTING PROXIES
All proxies received by management will be voted on all matters presented at
the Meeting, and if not limited to the contrary, will be voted "for" the matters
listed in the accompanying Notice of Annual Meeting of Shareholders and "for"
any other matters deemed appropriate. The presence in person or by proxy of the
holders of a majority of the outstanding shares of the Fund entitled to vote is
required to constitute a quorum at the Meeting for purposes of voting on Items 1
through 5.
For the purposes of determining the presence of a quorum, abstentions and
broker "non-votes" (that is, proxies from brokers or nominees indicating that
such persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which
brokers or nominees do not have discretionary power) will be treated as shares
that are present but which have not been voted. Abstentions and broker "non-
votes" will not constitute a vote "for" or "against" a matter and will be
disregarded in determining the "votes cast" on an issue. Abstentions and broker
"non-votes" will have the same effect as a vote "against" Items 2, 3 and 4, and
will have no effect on Items 1 or 5.
The Fund has engaged the services of Georgeson Shareholder Communications
Inc. to assist in the solicitation of proxies for the Fund. The costs of the
proxy solicitation are estimated to be $76,363.75 and will be borne by the Fund.
The Fund will reimburse the record holders of its shares for their expenses
incurred in sending proxy material to and obtaining voting instructions from
beneficial owners.
The Fund knows of no other matters to be brought before the Meeting. If,
however, because of any unexpected occurrence, any other matters properly come
before the Meeting, it is the Fund's intention that proxies not limited to the
contrary will be voted in accordance with the judgment of the persons named in
the enclosed form of proxy.
SUBMISSION OF PROPOSALS
Proposals of shareholders which are intended to be presented at the 2002
Annual Meeting of Shareholders must be received by the Fund on or prior to April
29, 2002.
SECTION 16(a) -- BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires trustees,
directors and certain directors and certain officers of the Fund and MFS, and
persons who own more than 10% of the Fund's shares, to file reports of ownership
and changes in ownership with the SEC and the New York Stock Exchange. Such
persons are required by SEC regulation to furnish the Fund with copies of all
Section 16(a) forms they file.
Based solely on review of the copies of Forms 3, 4, and 5 and amendments
thereto furnished to the Fund with respect to its most recent fiscal year, or
written representations that no Forms 5 were required, the Fund believes that,
during the fiscal year ended October 31, 2000, all Section 16(a) filing
requirements applicable to Trustees, directors and certain officers of the Fund
and MFS and greater than ten percent beneficial owners were complied with.
ADDITIONAL INFORMATION
In the event that sufficient votes in favor of the proposals set forth in
the Notice of Annual Meeting are not received by October 12, 2001, the persons
named as appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the session of the Meeting to be
adjourned. The persons named as appointed proxies on the enclosed proxy card
will vote in favor of any such adjournment those proxies required to be voted in
favor of the proposal for which further solicitation of proxies is made. They
will vote against any such adjournment those proxies required to be voted
against such proposal. The Meeting may be adjourned as to one or more items. The
costs of any additional solicitation and of any adjournment session will be
borne by the Fund.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
August 10, 2001
APPENDIX A
AUDIT COMMITTEE CHARTER
This Audit Committee Charter (Charter) has been adopted by the Board of
Trustees (the Board) of funds listed on Exhibit 1 hereto (each a Fund). The
Audit Committee of the Board (the Committee) shall review and reassess this
charter annually and recommend any proposed changes to the Board for approval.
The Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing, internal
control and financial reporting practices of the Fund. It may also have such
other duties as may from time to time be assigned to it by the Board. The
membership of the Committee shall consist of at least three Trustees, who are
each free of any relationship that, in the opinion of the Board, may interfere
with such member's individual exercise of independent judgment. Each Committee
member shall be a non-"interested" Trustee, as such term is defined in Section
2(a)(19) of the Investment Company Act of 1940, and also meet the independence
and financial literacy requirements for serving on audit committees, and at
least one member shall have accounting or related financial management
expertise, all as set forth in the applicable rules of the New York Stock
Exchange. In discharging its oversight role, the Committee shall have the power
to conduct or authorize investigations into any matters within its scope of
responsibilities and shall be empowered to retain, at the expense of the Fund,
independent counsel, accountants, or others to assist it in the conduct of any
investigation. Costs incurred by the Committee in performing its function under
this charter shall be borne by the Fund.
Although the Committee may wish to consider other duties from time to time,
the general recurring activities of the Committee in carrying out its oversight
role are described below. The Committee shall be responsible for:
o Recommending to the Board the independent auditors to be retained (or
nominated for shareholder approval) to audit the financial statements of the
Fund. Such auditors are ultimately accountable to the Board and the Committee,
as representatives of the shareholders.
o Evaluating the performance of the independent auditors and, where appropriate,
recommending to the Board the replacement of such auditors.
o Obtaining annually from the independent auditors a formal written statement
required by Independence Standards Board (ISB) Standard No. 1, as may be
modified or supplemented, and discussing with the auditors their independence,
including information furnished by the auditors detailing all significant
relationships (including non-audit and/or consulting relationships) the
auditors have with the Fund and its investment adviser and affiliates of such
investment adviser and shall consider the compatibility of nonaudit services
with the auditor's independence. The Committee will recommend that the Board
of Trustees take appropriate action on any disclosed relationships that may
reasonably be thought to bear on the independence of the auditors as required
by the Securities Acts administered by the Securities and Exchange Commission.
The Committee's job is one of oversight. Management is responsible for the
preparation of the Fund's financial statements and the independent auditors are
responsible for auditing those financial statements. The Committee and the Board
recognize that management and the independent auditors have more resources and
time, and more detailed knowledge and information regarding the Fund's
accounting, auditing, internal control and financial reporting practices than
the Committee does; accordingly the Committee's oversight role does not provide
any expert or special assurance as to the financial statements and other
financial information provided by the Fund to its shareholders and others or any
professional certification as to the independent auditors' work.
EXHIBIT 1
MFS CHARTER INCOME TRUST
MFS INTERMEDIATE INCOME TRUST
MFS GOVERNMENT MARKETS INCOME TRUST
MFS MULTIMARKET INCOME TRUST
MFS MUNICIPAL INCOME TRUST
MFS SPECIAL VALUE TRUST
APPENDIX B
NOTE: THIS APPENDIX CONTAINS A COMPARISON OF THE EXISTING DECLARATION OF THE
FUND AND THE STANDARDIZED RESTATED DECLARATION PROPOSED TO BE USED FOR CLOSED-
END FUNDS IN THE MFS FAMILY OF FUNDS. THE DECLARATION HAS BEEN MARKED TO SHOW
THE CHANGES THAT WILL BE MADE IF THE RESTATED DECLARATION PROPOSED IN ITEM 2 IS
APPROVED AND ADOPTED. DELETED TEXT IS MARKED THROUGH AND ADDED TEXT APPEARS IN
ITALICS. FOR EDGAR DELETED TEXT IS SET IN BRACKETS AND ADDED TEXT IS SET IN
DOUBLE BRACKETS. THE COVER PAGE AND TABLE OF CONTENTS FOR BOTH THE EXISTING
DECLARATION AND THE RESTATED DECLARATION HAVE BEEN OMITTED.
[[AMENDED AND RESTATED]]
DECLARATION OF TRUST
OF
MFS MULTIMARKET INCOME TRUST
[Dated January 9, 1987]
[[Dated as of________________]]
[DECLARATION OF TRUST made January 9, 1987 by the Trustees:]
[WHEREAS, the Trustees desire to establish a trust]
[[WHEREAS, MFS Multimarket Income Trust was established pursuant to a
Declaration of Trust dated January 9, 1987, as amended (the "Original
Declaration"),]] for the investment and reinvestment of funds contributed
thereto[); and][[;]]
WHEREAS, the Trustees desire that the beneficial interest in the [trust]
[[Trust]] assets [[continue to]] be divided into transferable [shares of
beneficial interest] [[Shares of Beneficial Interest (without par value)]], as
hereinafter provided[:][[;]]
[[WHEREAS, the Trustees wish to amend and restate the Original Declaration
in its entirety, and hereby certify that this Amended and Restated Declaration
of Trust has been amended and restated in accordance with the provisions of the
Original Declaration;]]
NOW THEREFORE, the Trustees hereby [declare] [[confirm]] that
all money and property contributed to the [trust established]
[[Trust]] hereunder shall be held and managed in trust for the benefit
of holders, from time to time, of the [shares of beneficial interest]
[[Shares of Beneficial Interest (without par value)]] issued hereunder
and subject to the provisions hereof[[, and that the Original Declaration,
including all appendices, is amended and restated in its entirety as
follows]].
ARTICLE I
NAME AND DEFINITIONS
Section 1.1[[.]] Name. The name of the [trust created hereby is the "MFS
Multimarket Income Trust."] [[Trust is MFS Multimarket Income Trust.]]
[Section 1.2][[Section 1.2.]] Definitions. Wherever they are used herein,
the following terms have the following respective meanings:
(a) "By-Laws" means the By-laws referred to in Section 3.9 hereof, as
from time to time amended.
(b) [the terms "Commission," "Interested Person," and "Majority
Shareholder Vote," (the 67% or 50% requirement of the third sentence of
Section 2(a)(42) of the 1940 Act, whichever may be applicable) have the
meanings given them] [["Commission" has the meaning given that term]] in the
1940 Act.
(c) "Declaration" means this [[Amended and Restated]] Declaration of
Trust[[,]] as amended from time to time. Reference in this Declaration of
Trust to "Declaration," "hereof," "herein" and "hereunder" shall be deemed
to refer to this Declaration rather than the article or section in which
such words appear.
(d) "Distributor" means [the] [[a]] party[, other than] [[furnishing
services to]] the Trust[,] [[pursuant]] to [the] [[any]] contract described
in Section 4.2 hereof.
(e)[["Interested Person" has the meaning given that term in the 1940
Act.]]
[[(f)]] "Investment Adviser" means a party furnishing services to the
Trust pursuant to any contract described in Section 4.1 hereof.
[[(g) "Majority Shareholder Vote" has the same meaning as the phrase
"vote of a majority of the outstanding voting securities" as defined in the
1940 Act.]]
[[(h)]] [(f) The] "1940 Act" means the Investment Company Act of 1940
and the Rules and Regulations thereunder, as amended from time to time[[,
and as such Act or the Rules and Regulations thereunder may apply to the
Trust pursuant to any exemptive order or similar relief or interpretation
issued by the Commission under such Act.]]
[(g)] [[(i)]] "Person" means and includes individuals, corporations,[[
limited liability companies,]] partnerships, trusts, associations, joint
ventures and other entities, whether or not legal entities, and governments
and agencies and political subdivisions thereof, whether domestic or
foreign.
[(h)] [[(j)]] "Shareholder" means a record owner of outstanding Shares.
[(i)] [[(k)]] "Shares" means the Shares of Beneficial Interest into
which the beneficial interest in the Trust shall be divided from time to
time [and][[. The term "Shares"]] includes fractions of Shares as well as
whole Shares.
[(j)] [[(l)]] "Transfer Agent" means [the party, other than the Trust,
to a] [[a party furnishing services to the Trust pursuant to any transfer
agency]] contract described in Section [4.3] [[4.4]] hereof.
[(k) The]
[[(m)]] "Trust" means the [entity specified in Section 1.1 above.]
[[trust hereunder.]]
[(l) The]
[[(n)]] "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
[(m) The]
[[(o)]] "Trustees" means the persons who have signed the Declaration, so
long as they shall continue in office in accordance with the terms hereof,
and all other persons who may from time to time be duly elected [[or
appointed]], qualified and serving as Trustees in accordance with the
provisions hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees hereunder.
[[(p) "Trustees Emeritus" means any former Trustees who, from time to
time, are appointed by the Trustees to serve as trustees emeritus of the
Trust in accordance with the guidelines and conditions for such service
adopted by the Trustees from time to time, for so long as they serve in that
capacity. Trustees Emeritus, in their capacity as such, are not Trustees of
the Trust for any purpose, and shall not have any powers or obligations of
Trustees hereunder.]]
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees. The number of Trustees shall be such number
as shall be fixed from time to time by a [written instrument signed by a]
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than three (3) nor more than fifteen (15). No reduction in
the number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his [[or her]] term unless the Trustee is
specifically removed pursuant to Section 2.2 [of this Article II] [[hereof]] at
the time of the decrease.
Section 2.2. Term of Office of Trustees. The Board of Trustees shall be
divided into three classes. Within the limits above specified, the number of
Trustees in each class shall be determined by resolution of the Board of
Trustees. The term of office of [all of] the [Trustees] [[first class]] shall
expire on the date of [[the]] first annual meeting of [shareholders]
[[Shareholders]] or special meeting in lieu thereof following [the effective
date of the Registration Statement relating to the Shares under the Securities
Act of 1933, as amended] [[January 1, 2002]]. The term of office of the [first]
[[second]] class shall expire on the date of the second annual meeting of
[shareholders] [[Shareholders]] or special meeting in lieu thereof. The term of
office of the [second] [[third]] class shall expire on the date of the third
annual meeting of [shareholders or special meeting in lieu thereof. The term of
office of the third class shall expire on the date of the fourth annual meeting
of shareholders] [[Shareholders]] or special meeting in lieu thereof. Upon
expiration of the term of office of each class as set forth above, the number of
Trustees in such class, as determined by the Board of Trustees, shall be elected
for a term expiring on the date of the third annual meeting of [shareholders]
[[Shareholders]] or special meeting in lieu thereof following such expiration to
succeed the Trustees whose terms of office expire. The Trustees shall be elected
at an annual meeting of the [shareholders] [[Shareholders]] or special meeting
in lieu thereof called for that purpose, except as provided in Section 2.3 [of
this Article and each] [[hereof.]]
[[Each]] Trustee [elected] shall hold office until [his][[the earlier of his
or her death or the election and qualification of his or her]] successor [shall
have been elected and shall have qualified]; except [(a)] that[[:]]
[[(a)]] any Trustee may resign his [[or her]] trust (without need for
prior or subsequent accounting) by an instrument in writing signed by [him]
[[that Trustee]] and delivered to the [other Trustees] [[Trust]], which
shall take effect upon such delivery or upon such later date as is specified
therein;
(b) [that] any Trustee may be removed [(provided the aggregate number of
Trustees after such removal shall not be less than the number required by
Section 2.1 hereof) with cause, at any time][[at any time, with or without
cause,]] by written instrument[,] signed by at least [two-thirds]
[[three-quarters]] of the [remaining] Trustees, specifying the date when
such removal shall become effective;
(c) [that any Trustee who requests in writing to be retired or who has
become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees, specifying the date
of his retirement; and (d) a Trustee may be removed at any meeting of
Shareholders by a vote of two-thirds of the outstanding Shares] [[any
Trustee who has attained a mandatory retirement age established pursuant to
any written policy adopted from time to time by at least two-thirds of the
Trustees shall, automatically and without action of such Trustee or the
remaining Trustees, be deemed to have retired in accordance with the terms
of such policy, effective as of the date determined in accordance with such
policy; and]]
[[(d) a Trustee may be removed at any meeting of Shareholders by a vote
of Shares representing two-thirds of the outstanding Shares of the Trust
entitled to vote for the election of such Trustee]].
Upon the resignation[[, retirement]] or removal of a Trustee, or his [[or
her]] otherwise ceasing to be a Trustee, [he] [[that individual]] shall execute
and deliver such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or the remaining Trustees any Trust [property]
[[Property]] held in the name of the resigning[[, retiring]] or removed Trustee.
Upon the incapacity or death of any Trustee, [his] [[that Trustee's]] legal
representative shall execute and deliver on his [[or her]] behalf such documents
as the remaining Trustees shall require as provided in the preceding sentence.
[[Except to the extent expressly provided in a written agreement to which
the Trust is a party or in a written policy adopted by the Trustees, no
resigning or removed Trustee shall have any right to any compensation for any
period following his or her resignation or removal, or any right to damages on
account of such removal.]]
Section 2.3. Resignation and Appointment of Trustees. In case of the
declination, death, resignation, retirement[,] [[or]] removal [or inability] of
any of the Trustees, or in case a vacancy shall, by reason of an increase in
number [[of Trustees]], or for any other reason, exist, [[a majority of]] the
remaining Trustees [shall] [[may]] fill such vacancy by appointing such other
[person] [[individual]] as they in their discretion shall see fit. [Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees in office.] Any such appointment shall not become effective,
however, until the person [named in the written instrument or appointment]
[[appointed]] shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of the Declaration. [Within twelve months of
such appointment, the Trustees shall cause notice of such appointment to be
mailed to each Shareholder at his address as recorded on the books of the
Trustees.] An appointment of a Trustee may be made by the Trustees then in
office [and notice thereof mailed to Shareholders as aforesaid] in anticipation
of a vacancy to occur by reason of retirement, resignation[[, removal]] or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation[[, removal]] or increase in number of Trustees. The
power of appointment is subject to [the] [[all applicable]] provisions [of
Section 16(a)] of the 1940 Act.
Section 2.4. Vacancies. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any [one] of them, shall not operate
to annul the Trust or to revoke any existing agency created pursuant to the
terms of [this] [[the]] Declaration. Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled as provided in Section 2.3,
[the][[or while any Trustee is incapacitated, the other]] Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the
Declaration[[, and only such other Trustees shall be counted for the purposes of
the existence of a quorum or the taking of any action to be taken by the
Trustees]]. A written instrument certifying the existence of such vacancy [[or
incapacity]] signed by a majority of the Trustees shall be conclusive evidence
of the existence [of such vacancy] [[thereof]].
Section 2.5. Delegation of Power to Other Trustees. [Any] [[Subject to
requirements imposed by the 1940 Act and other applicable law, any]] Trustee
may, by power of attorney, delegate his power for a period not exceeding six
[(6)] months at any one time to any other Trustee or Trustees; provided that in
no case shall [less] [[fewer]] than two [(2)] Trustees personally exercise the
powers granted to the Trustees under the Declaration except as [herein]
otherwise expressly provided [[herein]].
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. [The][[ Subject to the provisions of the Declaration,
the ]]Trustees shall have exclusive and absolute control over the Trust Property
and over the business of the Trust to the same extent as if the Trustees were
the sole owners of the Trust Property and business in their own right, but with
such powers of delegation as may be permitted by the Declaration. The Trustees
shall have power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both within and
without The Commonwealth of Massachusetts, in any and all states of the United
States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies or
instrumentalities of the United States of America and of foreign
governments[[,]] and to do all such other things and execute all such
instruments as the Trustees deem necessary, proper or desirable in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of the Declaration, the presumption shall be in favor of a grant of
power to the Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power [[or any other power of the Trustees hereunder]].
Such powers of the Trustees may be exercised without order of or resort to any
court.
Section 3.2. Investments. (a) The Trustees shall have the power [to]:
(i) [[to]] conduct, operate and carry on the business of an
investment company;
(ii) [[to]] subscribe for, invest in, reinvest in, purchase or otherwise
acquire, own, hold, pledge, sell, assign, transfer, exchange, distribute,
lend or otherwise deal in or dispose of [United States] [[securities of
every nature and kind, U.S.]] and foreign currencies, any form of gold [and]
[[or]] other precious [metals] [[metal]], commodity contracts, [options]
[[any form of option contract]], contracts for the future acquisition or
delivery of [securities and securities of every nature and kind,][[fixed
income or other securities, derivative instruments of every kind,
"when-issued" or standby contracts, and all types of obligations or
financial instruments,]] including, without limitation, all types of bonds,
debentures, stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, bankers' acceptances, and other
securities of any kind, issued, created, guaranteed or sponsored by any and
all Persons, including, without limitation,
[[(A)]] states, territories and possessions of the United States and
the District of Columbia and any political [subdivisions, agencies or
instrumentalities thereof and the United States] [[subdivision, agency
or instrumentality of any such Person,]]
[[(B) the U.S.]] Government, any foreign government, [any political
subdivisions thereof or their agencies or instrumentalities,
international instrumentalities or by] [[or any political subdivision or
any agency or instrumentality of the U.S. Government or any foreign
government,]]
[[(C) any international instrumentality,]]
[[(D)]] any bank or savings institution, or
[by]
[[(E)]] any corporation or organization organized under the laws of
the United States or of any state, territory or possession thereof, or
[by any corporation or organization organized] under any foreign law[,
or in "when issued" contracts][[;]] [for any such securities, or][[to]]
retain Trust assets in cash and from time to time [[to]] change the
investments [of] [[in which]] the assets of the Trust [[are invested]];
and to exercise any and all rights, powers and privileges of ownership
or interest in respect of any and all such investments of every kind and
description, including, without limitation, the right to consent and
otherwise act with respect thereto, with power to designate one or more
[persons, firms, associations or corporations] [[Persons]] to exercise
any of said rights, powers and privileges in respect of any of said
[instruments.] [[investments; and]]
(iii) to carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary, [suitable or]
proper [[or desirable]] for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore set
forth, and to do every other act or thing incidental or appurtenant to or
connected with the aforesaid purposes, objects or powers.
(b) The Trustees shall not be limited to investing in [[securities or]]
obligations maturing before the possible termination of the Trust, nor shall the
Trustees be limited by any law limiting the investments which may be made by
fiduciaries.
[[(c) Notwithstanding any other provision of the Declaration to the
contrary, the Trustees shall have the power in their discretion without any
requirement of approval by Shareholders to either invest all or a portion of the
Trust Property, or sell all or a portion of such Trust Property and invest the
proceeds of such sales, in one or more other investment companies to the extent
not prohibited by the 1940 Act.]]
Section 3.3. Legal Title. Legal title to all [the] Trust Property shall be
vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person [as] [[or]] nominee, on such terms as the Trustees may determine.
The right, title and interest of the Trustees in the Trust Property shall vest
automatically in each [Person] [[person]] who may hereafter become a Trustee.
Upon the resignation, [[retirement,]] removal or death of a Trustee [he][[, such
Trustee]] shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
Section 3.4. Issuance and Repurchase of Securities. The Trustees shall have
the power to issue, sell, repurchase, [[redeem,]] retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VII and VIII hereof, to apply to any
such [[repurchase, redemption,]] retirement, cancellation or acquisition of
Shares any funds [or property] of the Trust [[or other Trust Property,]] whether
capital or surplus or otherwise[, to the full extent now or hereafter permitted
by the laws of the Commonwealth of Massachusetts governing business
corporations].
Section 3.5. Borrowing Money; Lending Trust Property. The Trustees shall
have power to borrow money or otherwise obtain credit and to secure the same by
mortgaging, pledging or otherwise subjecting as security the [assets of the]
Trust [[Property]], to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other Person and to lend Trust
[property] [[Property]].
Section 3.6. Delegation[; Committees]. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees [or
agents][[, any Investment Adviser, Distributor, custodian, agent or independent
contractor]] of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem [[appropriate or]] expedient.
Section 3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations[[,]] by virtue of which any property is owed to the
Trust; and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of the Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The Trustees
shall fix the compensation of all officers, employees[[, Trustees]] and Trustees
[[Emeritus]].
Section 3.9. Manner of Acting; By-Laws. Except as otherwise provided
herein[[, in the 1940 Act]] or in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting
of Trustees [(][[at which]] a quorum [being present)]
[[is present]], including any meeting held by means of a conference
telephone circuit or similar communications equipment by means of which all
persons participating in the meeting can hear each other, or by written
consents of [all] [[two-thirds of]] the Trustees. The Trustees may
adopt By-Laws not inconsistent with [this] [[the]] Declaration to
provide for the conduct of the business of the Trust and may amend or repeal
such By-Laws to the extent [such power is not reserved to the
Shareholders] [[permitted therein at any time]].
Section 3.10. Miscellaneous Powers. [The] [[Without limiting the foregoing,
the]] Trustees shall have the power to:
(a) employ or contract with such Persons as the Trustees may deem
desirable for the transaction of the business of the Trust;
(b) enter into joint ventures, partnerships and any other combinations
or associations;
(c) [remove Trustees or fill vacancies in or add to their number,] elect
and remove such officers and appoint and terminate such agents or employees
as they consider appropriate, [[in each case with or without cause,]] and
appoint [from their own number,] and terminate[,] any one or more committees
which may exercise some or all of the power and authority of the Trustees as
the Trustees may determine;
(d) purchase, and pay for out of Trust Property, [[such insurance as
they may deem necessary or appropriate for the conduct of the business of
the Trust, including, without limitation,]] insurance policies insuring the
[Shareholders, Trustees,][[assets of the Trust and payment of distributions
and principal on its portfolio investments, and insurance policies insuring
Shareholders, any administrator, Trustees, Trustees Emeritus,]] officers,
employees, agents, [investment advisers, distributors] [[any Investment
Adviser, any Distributor]], selected dealers or independent contractors of
the Trust against all claims arising by reason of holding any such position
or by reason of any action taken or omitted by any such Person in such
capacity, whether or not constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability;
(e) establish pension, profit[[-]]sharing, [share] [[Share]] purchase,
[[deferred compensation,]] and other retirement, incentive and benefit plans
for any Trustees, officers, employees [and] [[or]] agents of the Trust;
(f) to the extent permitted by law, indemnify any person with whom the
Trust has dealings, including [the] [[any]] Investment Adviser,
[[administrator, custodian,]] Distributor, Transfer Agent, [and selected
dealers] [[shareholder servicing agent and any dealer]], to such extent as
the Trustees shall determine;
(g) guarantee indebtedness or contractual obligations of others;
(h) determine and change the fiscal year of the Trust and the method by
which its accounts shall be kept; and
(i) adopt a seal for the Trust [but][[, provided, that]] the absence of
such seal shall not impair the validity of any instrument executed on behalf
of the Trust.
[Section 3.11. Principal Transactions. Except in transactions permitted by
the 1940 Act, or any order of exemption issued by the Commission, the Trustees
shall not, on behalf of the Trust, buy any securities (other than Shares) from
or sell any securities (other than Shares) to, or lend any assets of the Trust
to, any Trustee or officer of the Trust or any firm of which any such Trustee or
officer is a member of the Trust or any firm of which any such Trustee or
officer is a member acting as principal, or have any such dealings with the
Investment Adviser, Distributor, or Transfer Agent or with any Interested Person
of such Person; but the Trust may employ any such Person, or firm or company in
which such Person is an Interested Person, as broker, legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian upon customary terms.]
[Section 3.12. Trustees and Officers as Shareholders. No officer, Trustee or
Member of the Advisory Board of the Trust, and no member, partner, officer,
director or trustee of the Investment Adviser or of the Distributor, and no
Investment Adviser or Distributor of the Trust, shall take long or short
positions in the securities issued by the Trust.]
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR[[, CUSTODIAN]] AND TRANSFER AGENT
Section 4.1. Investment Adviser. Subject to [a Majority Shareholder Vote]
[[applicable requirements of the 1940 Act]], the Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts whereby [a] [[the other]] party to [[each]] such contract
shall undertake to furnish the Trust such management, investment advisory,
statistical and research facilities and services, promotional activities, and
such other facilities and services, if any, as the Trustees shall from time to
time consider desirable and all upon such terms and conditions as the Trustees
may in their discretion determine. Notwithstanding any [provisions]
[[provision]] of the Declaration, the Trustees may delegate to the Investment
Adviser authority (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges of assets of the Trust on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales, loans or exchanges
pursuant to recommendations of the Investment Adviser (and all without further
action by the Trustees). Any [[of]] such purchases, sales, loans or exchanges
shall be deemed to have been authorized by all the Trustees.[[ Such services may
be provided by one or more Persons.]]
Section 4.2. Distributor. [The] [[Subject to applicable requirements of the
1940 Act, the]] Trustees may in their discretion from time to time enter into [a
contract,] [[one or more exclusive or non- exclusive distribution contracts]]
providing for the sale of Shares[[,]] whereby the Trust may either agree to sell
the Shares to the other party to [the] [[any such]] contract or appoint [[any]]
such other party its sales agent for such Shares. In either case, [the] [[any
such]] contract shall be on such terms and conditions as the Trustees may in
their discretion determine[[, provided that such terms and conditions are]] not
inconsistent with the provisions of [this Article IV] [[the Declaration]] or the
By-Laws; and such contract may also provide for the [[repurchase or]] sale of
Shares by such other party as principal or as agent of the Trust and may provide
that such other party may enter into selected dealer agreements [[or agency
agreements]] with [registered] securities dealers [[or other Persons]] to
further the purpose of the distribution [of the Shares.] [[or repurchase of the
Shares. Such services may be provided by one or more Persons.]]
[Section 4.3. ][[Section 4.3. Custodian. The Trustees may in their
discretion from time to time enter into one or more contracts whereby the other
party to each such contract shall undertake to furnish such custody services to
the Trust as the Trustees shall from time to time consider desirable and all
upon such terms and conditions as the Trustees may in their discretion
determine, provided that such terms and conditions are not inconsistent with the
provisions of the 1940 Act, the Declaration or the By- Laws. The Trustees may
authorize any custodian to employ one or more sub- custodians from time to time
to perform such of the services of the custodian as the Trustees shall from time
to time consider desirable. Services described in this Section may be provided
by one or more Persons.]]
[[Section 4.4.]] Transfer Agent. The Trustees may in their discretion from
time to time enter into [a] [[one or more transfer agency or sub-]]transfer
agency and shareholder [service contract or] [[servicing]] contracts whereby the
other party to [[each]] such contract shall undertake to furnish [[such]]
transfer agency and/or shareholder services to the Trust[. The contract or
contracts shall have] [[as the Trustees shall from time to time consider
desirable and all upon]] such terms and conditions as the Trustees may in their
discretion determine[[, provided that such terms and conditions are]] not
inconsistent with [[the provisions of]] the Declaration or the By- Laws. Such
services may be provided by one or more Persons.
Section [4.4] [[4.5]]. Parties to Contract. Any contract of the character
described in [Sections 4.1, 4.2 or 4.3] [[any Section]] of this Article IV [or
any Custodian contract, as described in the By-laws,] may be entered into with
any Person, although one or more of the Trustees or officers of the Trust may be
an officer, partner, director, trustee, shareholder, or member of such other
party to the contract, and no such contract shall be invalidated or rendered
voidable by reason of the existence of any such relationship; nor shall any
Person holding such relationship be liable merely by reason of such relationship
for any loss or expense to the Trust under or by reason of [said] [[any such]]
contract or accountable for any profit realized directly or indirectly
therefrom, provided that the contract when entered into was not inconsistent
with the provisions of this Article IV or the By-[laws] [[Laws]]. The same
Person may be the other party to contracts entered into pursuant to Sections
4.1, 4.2 [and][[,]] 4.3 [[and 4.4]] above [or Custodian contracts], and any
individual may be financially interested or otherwise affiliated with Persons
who are parties to any or all of the contracts mentioned in this Section [4.4]
[[4.5]].
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders[, Trustees, etc. Subject
to Section 5.3, no][[. No Shareholder or former]] Shareholder shall be subject
to any personal liability whatsoever to any Person in connection with Trust
Property or the acts, obligations or affairs of the Trust[. No Trustee, officer,
employee or agent of the Trust shall be subject to any personal liability
whatsoever to any Person, other than the Trust or its Shareholders, in
connection with Trust Property or the affairs of the Trust, save only that
arising from bad faith, willful misfeasance, gross negligence or reckless
disregard for his duty to such Person; and all such Persons shall look solely to
the Trust Property for satisfaction of claims of any nature arising in
connection with the affairs of the Trust. If any] [[solely by reason of being or
having been a]] Shareholder[, Trustee, officer, employee, or agent, as such, of
the Trust, is made a party to any suit or proceeding to enforce any such
liability, he shall not, on account thereof, be held to any personal liability].
The Trust shall indemnify and hold each Shareholder [[and former Shareholder]]
harmless from and against all claims and liabilities to which such Shareholder
may become subject [[solely]] by reason of his [[or her]] being or having been a
Shareholder [[(other than taxes payable by virtue of owning Shares)]], and shall
reimburse such Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The rights accruing to a
Shareholder [[or former Shareholder]] under this Section 5.1 shall not exclude
any other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder [[or former Shareholder]] in any appropriate situation
even though not specifically provided herein. [[The Trust shall, upon request by
a Shareholder or former Shareholder, assume the defense of any claim made
against such Shareholder for any act or obligation of the Trust and satisfy any
judgment thereon from the assets of the Trust.]]
[[Section 5.2. Limitation of]] [Section 5.2. Non-] Liability of Trustees[,
etc. Subject to Section 5.3, no] [[and Others. (a) No]] Trustee, [[Trustee
Emeritus,]] officer, employee or agent of the Trust shall be [liable to the
Trust, its Shareholders, or to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach]
[[subject to any liability whatsoever to any Person in connection with Trust
Property or the affairs of the Trust, and no Trustee or Trustee Emeritus shall
be responsible or liable in any event for any neglect or wrongdoing of any
officer, employee or agent of the Trust or for the act of omission of any other
Trustee or Trustee Emeritus. Notwithstanding anything to the contrary in this
Section 5.2 (a) or otherwise, nothing in the Declaration shall protect any
Trustee, Trustee Emeritus, officer, employee or agent of the Trust against any
liability to the Trust or its Shareholders to which he, she or it would
otherwise be subject by reason]] of [trust) except for his own bad faith,]
willful misfeasance, [[bad faith,]] gross negligence or reckless disregard of
[his duties.] [[the duties involved in the conduct of his, her or its office or
position with or on behalf of the Trust.]]
[[(b) All persons extending credit to, contracting with or having claim
against the Trust shall look solely to the assets of the Trust for payment under
such credit, contract or claim; and neither any Trustee or Trustee Emeritus, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.]]
Section 5.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is or has been a Trustee[[, Trustee Emeritus]] or
officer of the Trust [[(hereinafter referred to as a "Covered Person")]]
shall be indemnified by the Trust against all liability and against all
expenses reasonably incurred or paid by him [[or her]] in connection with
any claim, action, suit or proceeding in which [he] [[that individual]]
becomes involved as a party or otherwise by virtue of [his] being or having
been a Trustee[[, Trustee Emeritus]] or officer and against amounts paid or
incurred by [him] [[that individual]] in the settlement thereof;
(ii) the words "claim," "action," "suit[,] " or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal,
[[administrative]] or other, including appeals), actual or threatened; and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement [[or
compromise]], fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a [Trustee or
officer] [[Covered Person]]:
(i) against any liability to the Trust or the Shareholders by reason of
a final adjudication by the court or other body before which the proceeding
was brought that [he] [[the Covered Person]] engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of [his] [[that individual's]] office;
(ii) with respect to any matter as to which [he] [[the
Covered Person]] shall have been finally adjudicated not to have acted
in good faith in the reasonable belief that [his] [[that
individual's]] action was in the best interest of the Trust;
[[or]]
(iii) in the event of a settlement involving a payment by a Trustee[[,
Trustee Emeritus]] or officer or other disposition not involving a final
adjudication as provided in paragraph (b)(i) or (b)[ (ii)][[(ii) above]]
resulting in a payment by a [Trustee or officer] [[Covered Person]], unless
there has been either a determination that such [Trustee or officer]
[[Covered Person]] did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
[his] [[that individual's]] office by the court or other body approving the
settlement or other disposition or by a reasonable determination, based upon
a review of readily available facts (as opposed to a full trial-type
inquiry) that [he] [[that individual]] did not engage in such conduct:
(A) by vote of a majority of the Disinterested Trustees [[(as
defined below)]] acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or
(B) by written opinion of [independent legal counsel.][[ (i) the
then-current legal counsel to the Trustees who are not Interested
Persons of the Trust or (ii) other legal counsel chosen by a majority of
the Disinterested Trustees (or if there are no Disinterested Trustees
with respect to the matter in question, by a majority of the Trustees
who are not Interested Persons of the Trust) and determined by them in
their reasonable judgment to be independent.]]
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any [Trustee or officer] [[Covered Person]] may now or hereafter
be entitled, shall continue as to a [Person] [[person]] who has ceased to be
[such Trustee or officer] [[a Covered Person]] and shall inure to the benefit of
the heirs, executors and administrators of such [Person] [[person]]. Nothing
contained herein shall [[limit the Trust from entering into other insurance
arrangements or]] affect any rights to indemnification to which [[Trust]]
personnel [other than Trustees and officers][[, including Covered Persons,]] may
be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit, or proceeding of the character described in paragraph (a) of this
Section 5.3 shall be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the [recipient] [[Covered
Person]] to repay such amount if it is ultimately determined that [he] [[the
Covered Person]] is not entitled to indemnification under this Section 5.3,
provided that either[[:]]
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising
out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act
on the matter) or [an independent] legal counsel [[meeting the requirement
in Section 5.3(b)(iii)(B) above]] in a written opinion, shall determine,
based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the [recipient]
[[Covered Person]] ultimately will be found entitled to indemnification.
As used in this Section 5.3[,] a "Disinterested Trustee" is one (i)
who is not an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by any rule, regulation or order of
the Commission), and (ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or had been pending.
[[(e) With respect to any such determination or opinion referred to in
clause (b)(iii) above or clause (d)(ii) above, a rebuttable presumption shall be
afforded that the Covered Person has not engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office in accordance with pronouncements of the
Commission.]]
Section 5.4. No Bond Required [of Trustees]. No Trustee[[, Trustee Emeritus
or officer]] shall be obligated to give any bond or other security for the
performance of any of his [[or her]] duties hereunder.
Section 5.5. No Duty of Investigation; Notice in Trust Instruments[, etc].
No purchaser, lender, [transfer agent][[shareholder servicing agent, Transfer
Agent]] or other Person dealing with the Trustees or any officer, employee or
agent of the Trust shall be bound to make any inquiry concerning the validity of
any transaction purporting to be made by the Trustees or by said officer,
employee or agent or be liable for the application of money or property paid,
loaned, or delivered to or on the order of the Trustees or of said officer,
employee or agent. Every obligation, contract, instrument, certificate, Share,
other security of the Trust or undertaking, and every other act or thing
whatsoever executed in connection with the Trust shall be conclusively presumed
to have been executed or done by the executors thereof only in their capacity as
Trustees under the Declaration or in their capacity as officers, employees or
agents of the Trust. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking made or issued by
the Trustees [[or officers]] shall recite that the same is executed or made by
them not individually, but as [[or on behalf of]] Trustees under the
Declaration, and that the obligations of any such instrument are not binding
upon any of the Trustees[[, officers]] or Shareholders[,] individually, but bind
only the [trust] [[Trust]] estate, and may contain any further recital [which
they or he may deem] [[deemed]] appropriate, but the omission of such recital
shall not operate to bind any of the Trustees[[, officers]] or Shareholders
individually. The Trustees [shall at all times] [[may]] maintain insurance for
the protection of the Trust Property, [its] Shareholders, Trustees, [[Trustees
Emeritus,]] officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 5.6. [Reliance on Experts, etc.][[Good Faith Action; Reliance on
Experts]][[. The exercise by the Trustees or the officers of the Trust of their
powers and discretions hereunder in good faith and with reasonable care under
the circumstances then prevailing shall be binding upon everyone interested. The
Trustees or the officers of the Trust shall not be liable for errors of judgment
or mistakes of fact or law.]] Each Trustee and officer or employee of the Trust
shall, in the performance of his [[or her]] duties, be [[under no liability
and]] fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account
or other records of the Trust, upon [an opinion] [[advice]] of counsel, or upon
reports made to the Trust by any of its officers or employees or by the
Investment Adviser, the Distributor, Transfer Agent,[[ custodian, any
shareholder servicing agent,]] selected dealers, accountants, appraisers or
other experts or consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such counsel or expert
may also be a Trustee.
[[Section 5.7. Derivative Actions. No Shareholder shall have the right to
bring or maintain any court action, proceeding or claim on behalf of the Trust
without first making demand on the Trustees requesting the Trustees to bring or
maintain such action, proceeding or claim. Such demand shall be excused only
when the plaintiff makes a specific showing that irreparable injury to the Trust
would otherwise result, or if a majority of the Board of Trustees, or a majority
of any committee established to consider the merits of such action, has a
material personal financial interest in the action at issue. A Trustee shall not
be deemed to have a personal financial interest in an action or otherwise be
disqualified from ruling on a Shareholder demand by virtue of the fact that such
Trustee receives remuneration from his or her service on the Board of Trustees
of the Trust or on the boards of one or more investment companies with the same
or an affiliated investment adviser or underwriter, or the amount of such
remuneration.]]
[[Such demand shall be mailed to the Secretary or Clerk of the Trust at the
Trust's principal office and shall set forth in reasonable detail the nature of
the proposed court action, proceeding or claim and the essential facts relied
upon by the Shareholder to support the allegations made in the demand. The
Trustees shall consider such demand within 45 days of its receipt by the Trust.
In their sole discretion, the Trustees may submit the matter to a vote of
Shareholders of the Trust, as appropriate. Any decision by the Trustees to
bring, maintain or settle (or not to bring, maintain or settle) such court
action, proceeding or claim, or to submit the matter to a vote of Shareholders,
shall be made by the Trustees in their business judgment and shall be binding
upon the Shareholders. Any decision by the Trustees to bring or maintain a court
action, proceeding or suit on behalf of the Trust shall be subject to the right
of the Shareholders under Section 6.8 of the Declaration to vote on whether or
not such court action, proceeding or suit should or should not be brought or
maintained.]]
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the beneficiaries
hereunder [shall] [[may]] be divided into transferable [shares of beneficial
interest, all of one class, without par value. The number of shares of
beneficial interest] [[Shares of Beneficial Interest (without par value). The
number of Shares]] authorized hereunder is unlimited. All Shares issued
hereunder including, without limitation, Shares issued in connection with a
dividend in Shares or a split of Shares, shall be fully paid and non-assessable.
Section 6.2. Rights of Shareholders. The ownership of the Trust Property of
every description and the right to conduct any business hereinbefore described
are vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares,
and they shall have no right to call for any partition or division of any
property, profits, rights or interests of the Trust nor can they be called upon
to assume any losses of the Trust or suffer an assessment of any kind by virtue
of their ownership of Shares. The Shares shall be personal property giving only
the rights [[specifically set forth]] in the Declaration [specifically set
forth]. The Shares shall not entitle the holder to preference, preemptive,
appraisal, conversion or exchange rights.[[ By becoming a Shareholder each
Shareholder shall be held expressly to have assented to and agreed to be bound
by the provisions of the Declaration.]]
Section 6.3. Trust Only. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 6.4. Issuance of Shares. The Trustees, in their discretion may, from
time to time without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times, and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with[[,]] the assumption of liabilities)
and businesses. In connection with any issuance of Shares, the Trustees may
issue fractional Shares. The Trustees may from time to time divide or combine
the Shares into a greater or lesser number without thereby changing their
proportionate beneficial interests in Trust [[Property]]. Contributions to the
Trust may be accepted for whole Shares and/or 1/1,000ths of a Share or integral
multiples thereof.
Section 6.5. Register of Shares. A register [[or registers]] shall be kept
at the principal office of the Trust or at an office of the Transfer Agent which
shall contain the names and addresses [[(which may be addresses for electronic
delivery)]] of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to [him as][[that Shareholder
as provided]] herein or in the By-Laws [provided], until [he] [[the
Shareholder]] has given his [[or her]] address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. The Trustees, in their discretion, may authorize the issuance of Share
certificates and promulgate appropriate rules and regulations as to their use.
Section 6.6. Transfer of Shares. Shares shall be transferable on the records
of the Trust only by the record holder thereof or by [his] [[the record
holder's]] agent thereunto [duly] authorized in writing, upon delivery to the
Trustees or[[, if there is a Transfer Agent with respect to such Shares,]] the
Transfer Agent of a duly executed instrument of transfer[,] together with any
certificate [of] [[or]] certificates (if issued) for such Shares and such
evidence of the [genuiness] [[genuineness]] of each such execution and
authorization and of other matters as may reasonably be required. Upon such
delivery the transfer shall be recorded on the register of the Trust. Until such
record is made, the Shareholder of record shall be deemed to be the holder of
such Shares for all purposes hereunder and neither the Trustees nor any Transfer
Agent or [register] [[registrar]] nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any [person] [[Person]] becoming entitled to any Shares in consequence of
the death, bankruptcy, or incompetence of any Shareholder, or otherwise by
operation of law, shall be recorded on the register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or
the Transfer Agent; but until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.
Section 6.7. Notices. Any and all notices to which any Shareholder may be
entitled and any and all communications shall be deemed duly served or given
[[(i)]] if mailed, postage prepaid, addressed to any Shareholder of record at
[his] [[the Shareholder's]] last known address as recorded on the register of
the Trust[[, (ii) if sent by electronic transmission to the Shareholder of
record at the Shareholder's last known address for electronic delivery as
recorded on the register of the Trust, (iii) if mailed or sent by electronic
delivery to one or more members of the Shareholder's household in accordance
with applicable law or regulation, or (iv) if otherwise sent in accordance with
applicable law or regulation]].
Section 6.8. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees [or for their removal ][[when that issue is
submitted to Shareholders, and for the removal of Trustees]] as provided in
Section 2.2 hereof, (ii) with respect to any investment advisory or management
contract [as provided in Section 4.1 hereof] [[on which a shareholder vote is
required by the 1940 Act]], (iii) with respect to termination of the Trust [[to
the extent and]] as provided in Section 8.2 [[hereof]], (iv) with respect to any
amendment of the Declaration to the extent and as provided in Section 8.3
[[hereof]], (v) with respect to any merger, consolidation, [conversion] or sale
of assets [[to the extent and]] as provided in Sections 8.4[, 8.5] and 8.7
[[hereof]], (vi) with respect to [incorporation] [[any conversion]] of the Trust
[[to an "open-end company"]] to the extent and as provided in Section [8.5]
[[8.6 hereof]], (vii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, and (viii) with respect to such
additional matters relating to the Trust as may be required by the Declaration,
the By- Laws[[,]] or any registration of the Trust with the Commission (or any
successor agency) or any [state] [[other regulator having jurisdiction over the
Trust]], or as the Trustees may consider necessary or desirable.
[Each whole Share shall be entitled to one vote as to any matter on which
it] [[A Shareholder shall be entitled to one vote for each Share owned by such
Shareholder on each matter on which such Shareholder]] is entitled to vote and
each fractional Share shall be entitled to a proportionate fractional vote[,
except that][[.]] Shares held in the treasury of the Trust shall not be voted.
[[Except when a larger vote is required by applicable law or by any
provision of the Declaration or the By-Laws, if any, Shares representing a
majority of the Shares voted in person or by proxy shall decide any questions
and a plurality shall elect a Trustee, provided that abstentions and broker
non-votes shall not be counted as votes cast but shall be counted as being
present for purposes of determining the existence of a quorum.]]
There shall be no cumulative voting in the election of Trustees. Until
Shares are issued [[and during any period when no Shares are outstanding]], the
Trustees may exercise all rights of Shareholders and may take any action
required by law, the Declaration or the By-Laws to be taken by Shareholders. The
By-Laws may include further provisions for [Shareholders'] [[Shareholder]] votes
and meetings and related matters.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
The Trustees, in their absolute discretion, may prescribe and shall set
forth in the By-[Laws] [[laws]] or in a duly adopted vote of the Trustees such
bases and times for determining the per Share net asset value of the Shares or
net income, or the declaration and payment of dividends and distributions, as
they may deem necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.
Section 8.2. Termination of Trust. (a) The Trust may be terminated [[at any
time]] (i) by the affirmative vote of the holders of not less than two- thirds
of the Shares outstanding and entitled to vote at any meeting of Shareholders,
or (ii) by [an instrument in writing, without a meeting, signed by a majority of
the Trustees and consented to by the holders of not less than two-thirds of such
Shares] [[the Trustees by written notice to the Shareholders]]. Upon the
termination of the Trust:
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the Trust and
all the powers of the Trustees under [this] [[the]] Declaration shall
continue until the affairs of the Trust shall have been wound up, including
the power to fulfill or discharge the contracts of the Trust, collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose of all
or any part of the remaining Trust Property to one or more [persons]
[[Persons]] at public or private sale for consideration which may consist in
whole or in part of cash, securities or other property of any kind,
discharge or pay its liabilities, and to do all other acts appropriate to
liquidate its business; [provided, that any] [[and]] [sale, conveyance,
assignment, exchange, transfer or other disposition of all or substantially
all the Trust Property shall require Shareholder approval in accordance with
Section 8.4 hereof; and]
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly in
cash and partly in kind, among the Shareholders [[of the Trust]] according
to their respective rights.
(b) After termination of the Trust and distribution to the Shareholders
[[of the Trust]] as herein provided, a majority of the Trustees shall
execute and lodge among the records of the Trust an instrument in writing
setting forth the fact of such termination, and the Trustees shall thereupon
be discharged from all further liabilities and duties hereunder [[with
respect to the Trust]], and the rights and interests of all Shareholders
[[of the Trust]] shall thereupon cease.
Section 8.3. Amendment Procedure. (a) Except as [provided in paragraph (c)
of this Section 8.3 this Declaration may be amended by a Majority Shareholder
Vote or by an instrument in writing, without a meeting, signed by a majority of
the Trustees and consented to by the holders of not less than a majority of the
Shares outstanding and entitled to vote. The Trustees may also amend this
Declaration without the vote or consent of Shareholders to change the
name][[specifically provided herein, the Trustees may, without any Shareholder
vote, amend or otherwise supplement the Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated Declaration.
Without limiting the foregoing power reserved to the Trustees, the Trustees may,
without any Shareholder vote, amend the Declaration to change the name or
principal office]] of the Trust, to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, or if they
deem it necessary [to conform this] [[or advisable, to conform the]] Declaration
to the requirements of applicable [federal laws or regulations or the
requirements of the regulated investment company provisions of] [[law, including
the 1940 Act and]] the Internal Revenue Code [[of 1986, as amended]], but the
Trustees shall not be liable for failing [so to do.] [[to do so. Shareholders
shall have the right to vote on (i) any amendment that would affect their right
to vote granted in Section 6.8; (ii) any amendment to Section 8.3(a) or (b);
(iii) any amendment as may be required by law or by the Trust's registration
statement to be approved by Shareholders; and (iv) any amendment submitted to
them by the Trustees. Except as otherwise provided in Section 8.3(c), any
amendment on which Shareholders have the right to vote shall require a Majority
Shareholder Vote of the Shareholders of the Trust, or the written consent,
without a meeting, of the holders of Shares representing not less than a
majority of the voting power of the Shares of the Trust.]]
[(b) No amendment may be made under this Section 8.3 which would change any
rights with respect to any Shares by reducing the amount payable thereon upon
liquidation of the Trust or by diminishing or eliminating any voting rights
pertaining thereto, except with the vote or consent of the holders of two-thirds
of the Shares outstanding and entitled to vote.]
[[(b)]] Nothing contained in [this] [[the]] Declaration shall permit the
amendment of [this] [[the]] Declaration to impair the exemption from personal
liability of the Shareholders, [Trustees, Officers,] [[former Shareholders,
Trustees, Trustees Emeritus, officers,]] employees and agents of the Trust or to
permit [assessment upon Shareholders.] [[assessments upon Shareholders or former
Shareholders. Notwithstanding anything else herein, any amendment to Section 5.3
shall not limit the rights to indemnification or insurance provided therein with
respect to actions or omissions of persons entitled to indemnification under
such Section prior to such amendment.]]
(c) No amendment may be made [under this Section 8.3] which shall amend,
alter[,] change or repeal any of the provisions of [Sections 8.3, 8.4, 8.6 and]
[[Section 2.2, Section 8.2, this Section 8.3(c), Section 8.4, Section 8.6 and
Section]] 8.7 unless the amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote or consent of sixty-six and
two-thirds percent (6623%) of the Shares outstanding and entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of Shares otherwise required by law or by the terms of any class or
series of preferred stock, whether now or hereafter authorized, or any agreement
between the Trust and any national securities exchange.
(d) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders [[(if
applicable)]] or by the Trustees as aforesaid or a copy of the Declaration, as
amended, and executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust.
[Notwithstanding any other provision hereof, until such time as a Registration
Statement under the Securities Act of 1933, as amended, covering the first
public offering of securities of the Trust shall have become effective, this
Declaration may be terminated or amended in any respect by the affirmative vote
of a majority of the Trustees or by an instrument signed by a majority of the
Trustees.]
Section 8.4. Merger, Consolidation and Sale of Assets. [The] [[Subject to
applicable law and except as otherwise provided in Section 8.5 hereof, the]]
Trust may merge or consolidate with any other corporation, association, trust or
other organization or may sell, lease or exchange all or substantially all of
the Trust Property[,] including its good will, upon such terms and conditions
and for such consideration when and as authorized [[(a)]] at any meeting of
Shareholders called for the purpose by the affirmative vote of the holders of
not less than two-thirds of the Shares outstanding and entitled to vote, or [by
an instrument or instruments in writing][[(b) by the written consent,]] without
a meeting, [consented to by] [[of]] the holders of not less than two-thirds of
such Shares, provided, however, that if such merger, consolidation, sale, lease
or exchange is recommended by the Trustees, the vote or written consent of the
holders of a majority of Shares outstanding and entitled to vote, shall be
sufficient authorization[; and any][[. Any]] such merger, consolidation, sale,
lease or exchange shall be deemed for all purposes to have been accomplished
under and pursuant to the statutes of [the] [[The]] Commonwealth of
Massachusetts. [[Such transactions may be effected through share-for-share
exchanges, transfers or sales of assets, in- kind redemptions and purchases,
exchange offers, or any other method approved by the Trustees.]] Nothing
contained herein shall be construed as requiring approval of [shareholder]
[[Shareholders]] for any sale of assets in the ordinary course of [[the]]
business of the Trust[[, or for any transaction, whether deemed a merger,
consolidation, reorganization or exchange of shares or otherwise, whereby the
Trust issues shares in connection with the acquisition of assets (including
those subject to liabilities) from any other investment company or similar
entity]].
Section 8.5. Incorporation [and Reorganization. With the approval of the
holders of a majority of the Shares outstanding and entitled to vote, the
Trustees may][[, Reorganization. The Trustees may, without the vote or
consent of Shareholders,]] cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction, or any other
trust [[(or series or class of a trust), unit investment trust]], partnership,
[[limited liability company,]] association or other organization to [take over]
[[acquire]] all [[or a portion]] of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
to sell, convey and transfer [the] [[such]] Trust Property to any such
corporation, trust [[(or series or class of a trust)]], partnership, [[limited
liability company,]] association or organization in exchange for the shares or
securities thereof or otherwise[[,]] and to lend money to, subscribe for the
shares or securities of, and enter into any contracts with any such corporation,
trust, partnership, association or organization in which the Trust holds or is
about to acquire shares or any other interest. [Subject to section 8.4 hereof,
the] [[The]] Trustees may also[[, without the vote or consent of Shareholders,]]
cause a merger or consolidation between the Trust or any successor thereto and
any such corporation, trust [[(or series or class of a trust)]], partnership,
association or other organization if and to the extent permitted by law [as
provided under the law then in effect. Nothing contained herein shall be
construed as requiring approval of Shareholders for the Trustees to organize or
assist in organizing one or more corporations, trusts, partnerships,
associations or other organizations and selling, conveying or transferring a
portion of the Trust Property to such organization or entities.][[. The Trustees
shall provide written notice to affected Shareholders of each transaction
pursuant to this Section 8.5. Such transactions may be effected through
share-for-share exchanges, transfers or sales of assets, in-kind redemptions and
purchases, exchange offers, or any other method approved by the Trustees.]]
Section 8.6. Conversion. Notwithstanding any other provision of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in [Sections 5(a)(2) and 5
(a)(1), respectively, of] the 1940 Act [as in effect on December 1, 1986], shall
require the affirmative vote or consent of the holders of sixty-six and
two-thirds percent (6623%) of the Shares outstanding and entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of the Shares otherwise required by law or by the terms of any class or
series of preferred stock, whether now or hereafter authorized, or any agreement
between the Trust and any national securities exchange.
Section 8.7. Certain Transactions. (a) Notwithstanding any other provision
of this Declaration and subject to the exceptions provided in paragraph (d) of
this Section, the types of transactions described in paragraph (c) of this
Section shall require the affirmative vote or consent of the holders of sixty-
six and two-thirds [[percent]] (66 2/3%) of the Shares outstanding and entitled
to vote, when a Principal Shareholder (as defined in paragraph (b) of this
Section) is a party to the transaction. Such affirmative vote or consent shall
be in addition to the vote or consent of the [holders of Shares]
[[Shareholders]] otherwise required by law or by the terms of any class or
series of preferred stock, whether now or hereafter authorized, or any agreement
between the Trust and any national securities exchange.
(b) The term "Principal Shareholder" shall mean any corporation, person or
other entity which is the beneficial owner, directly or [directly] [[indirectly,
]]of more than five percent (5%) of the outstanding Shares and shall include any
affiliate or associate, as such terms are defined in clause (ii) below, of a
Principal Shareholder. For the purposes of this Section, in addition to the
Shares which a corporation, person or other entity beneficially owns directly,
(a) any corporation, person or other entity shall be deemed to be the beneficial
owner of any Shares (i) which it has the right to acquire pursuant to any
agreement or upon exercise of conversion rights or warrants, or otherwise (but
excluding share options granted by the Trust) or (ii) which are beneficially
owned, directly or indirectly (including Shares deemed owned through application
of clause (i) above), by any other corporation, person or entity with which its
"affiliate" or "associate" (as defined below) has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
Shares, or which is its "affiliate"[,] or "associate" as those terms are defined
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934 as in effect on December 1, 1986, and (b) the outstanding Shares
shall include Shares deemed owned through application of clauses (i) and (ii)
above but shall not include any other [Shares] [[shares]] which may be issuable
pursuant to any agreement, or upon exercise of conversion rights or warrants, or
otherwise.
(c) This Section shall apply to the following transactions:
(i) [The] [[the]] merger or consolidation of the Trust or any subsidiary
of the Trust with or into any Principal Shareholder[[;]]
(ii) [The] [[the]] issuance of any securities of the Trust to any
Principal Shareholder for cash[[;]]
(iii) [The] [[the]] sale, lease or exchange of all or any substantial
part of the assets of the Trust to any Principal Shareholder (except assets
having an aggregate fair market value of less than $1,000,000, aggregating
for the purpose of such computation all assets sold, leased or exchanged in
any series of similar transactions within a twelve-month [period.)]
[[period);]]
(iv) [The] [[the]] sale, lease or exchange to the Trust or any
subsidiary thereof, in exchange for securities of the Trust of any assets of
any Principal Shareholder (except assets having an aggregate fair market
value of less than $1,000,000, aggregating for the purposes of such
computation all assets sold, leased or exchanged in any series of similar
transactions within a twelve-month period).
(d) The provisions of this Section shall not be applicable to (i) any of the
transactions described in paragraph (c) of this Section if the Board of Trustees
of the Trust shall by resolution have approved a memorandum of understanding
with such Principal Shareholder with respect to and substantially consistent
with such transaction, or (ii) any such transaction with any corporation of
which a majority of the outstanding shares of all classes of stock normally
entitled to vote in elections of directors is owned of record or beneficially by
the Trust and its subsidiaries.
(e) The Board of Trustees shall have the power and duty to determine for the
purposes of this Section on the basis of information known to the Trust, whether
(i) a corporation, person or entity beneficially owns more than five percent
(5%) of the outstanding Shares, (ii) a corporation, person or entity is an
"affiliate" or "associate" (as defined above) of another, (iii) the assets being
acquired or leased to or by the Trust or any subsidiary thereof, constitute a
substantial part of the assets of the Trust and have an aggregate fair market
value of less than $1,000,000, and (iv) the memorandum of understanding referred
to in paragraph (d) hereof is substantially consistent with the transaction
covered thereby. Any such determination shall be conclusive and binding for all
purposes of this Section.
ARTICLE IX
[REPORTS TO SHAREHOLDERS]
[The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the transactions of the Trust, including financial
statements which shall at least annually be certified by independent public
accountants.]
[ARTICLE X]
MISCELLANEOUS
Section [10.1.] [[9.1.]] Filing. [This] [[The]] Declaration and any
[[subsequent]] amendment hereto shall be filed in the office of the Secretary of
[the] [[The]] Commonwealth of Massachusetts and in such other [[place or]]
places as may be required under the laws of [[The Commonwealth of]]
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate[[, provided that the failure to so file shall not
invalidate this instrument or any properly authorized amendment hereto]]. Each
amendment so filed shall be accompanied by a certificate signed and acknowledged
by [a] [[an officer or]] Trustee stating that such action was duly taken in a
manner provided herein, and unless such amendment or such certificate sets forth
some [later] [[other]] time for the effectiveness of such amendment, such
amendment shall be effective upon its filing. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and shall, upon filing with the Secretary of [the]
[[The]] Commonwealth of Massachusetts, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
Section [10.2] [[9.2]]. Governing Law. [This] [[The]] Declaration is
executed by the Trustees and delivered in [the] [[The]] Commonwealth of
Massachusetts and with reference to the laws thereof, and the rights of all
parties and the validity and construction of every provision hereof shall be
subject to and construed according to the laws of said [State.] [[Commonwealth.
The Trust shall be of the type commonly called a Massachusetts business trust,
and without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust, and the absence of a specific
reference herein to any such power, privilege, or action shall not imply that
the Trust may not exercise such power or privilege or take such action.]]
[Section 10.3. Counterparts. This]
[[Section 9.3. Principal Office. The principal office of the Trust is 500
Boylston Street, Boston, Massachusetts. The Trustees, without a vote of
Shareholders, may change the principal office of the Trust.]]
[[Section 9.4. Counterparts. The]] Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section [10.4] [[9.5]]. Reliance by Third Parties. Any certificate executed
by an individual who, according to the records of the Trust[[,]] appears to be
[a] [[an officer or]] Trustee hereunder, certifying to: [(a)] [[(i)]] the number
or identity of Trustees or Shareholders, [(b)] [[(ii)]] the due authorization of
the execution of any instrument or writing, [(c)] [[(iii)]] the form of any vote
passed at a meeting of Trustees or Shareholders, [(d)] [[(iv)]] the fact that
the number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of [this] [[the]] Declaration,
[(e)] [[(v)]] the form of any By-Laws adopted by or the identity of any officers
elected by the Trustees, or [(f)] [[(vi)]] the existence of any fact or facts
which in any manner [relate] [[relates]] to the affairs of the Trust, shall be
conclusive evidence as to the matters so certified in favor of any Person
dealing with the Trustees and their successors.
[[Section 9.6. Provisions in Conflict with Law or Regulations.]]
[Section 10.5. Provisions in Conflict with Law or Regulations.] (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company [[or other]]
provisions of the Internal Revenue Code [[of 1986, as amended]], or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of the Declaration; provided[,] however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument
[this 9th day of January, 1987.] [[as of the ____day of _____, _______.]]
{Trustee Signature Lines}
APPENDIX C
FUNDAMENTAL POLICIES TO APPLY TO
THE FUND UPON SHAREHOLDER APPROVAL
The Fund may not:
(1) Borrow Money: borrow money except to the extent such borrowing is not
prohibited by the 1940 Act and exemptive orders granted under such Act.
(2) Underwrite Securities: underwrite securities issued by other persons,
except that all or any portion of the assets of the Fund may be invested
in one or more investment companies, to the extent not prohibited by the
1940 Act and exemptive orders granted under such Act, and except insofar
as the Fund may technically be deemed an underwriter under the
Securities Act of 1933, as amended, in selling a portfolio security.
(3) Senior Securities: issue any senior securities except to the extent not
prohibited by the 1940 Act and exemptive orders granted under such Act.
For purposes of this restriction, collateral arrangements with respect
to any type of swap, option, Forward Contracts and Futures Contracts and
collateral arrangements with respect to initial and variation margin are
not deemed to be the issuance of a senior security.
(4) Make Loans: make loans except to the extent not prohibited by the 1940
Act and exemptive orders granted under such Act.
(5) Real Estate, Oil and Gas, Mineral Interests, Commodities: purchase or
sell real estate (excluding securities secured by real estate or
interests therein and securities of companies, such as real estate
investment trusts, which deal in real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity
contracts (excluding currencies and any type of option, Futures
Contracts and Forward Contracts) in the ordinary course of its business.
The Fund reserves the freedom of action to hold and to sell real estate,
mineral leases, commodities or commodity contracts (including currencies
and any type of option, Futures Contracts and Forward Contracts)
acquired as a result of the ownership of securities.
(6) Industry Concentration: purchase any securities of an issuer in a
particular industry if as a result 25% or more of its total assets
(taken at market value at the time of purchase) would be invested in
securities of issuers whose principal business activities are in the
same industry, except that the Fund may invest up to 40% of the value of
its assets in each of the electric utility and telephone industries.
APPENDIX D
CURRENT FUNDAMENTAL INVESTMENT POLICIES AND
PROPOSED ACTION TO BE TAKEN
CURRENT FUNDAMENTAL POLICY PROPOSED NEW POLICY OR PROPOSED REMOVAL OF POLICY
-------------------------- -------------------------------------------------
The Fund may not: The Fund may not:
------------------------------------------------------------------------------------------------------------------------------------
(1) borrow money or pledge, mortgage or hypothecate its assets, except (i) Borrow Money: borrow money except to the extent
as a temporary measure for extraordinary or emergency purposes, (ii) such borrowing is not prohibited by the 1940 Act
for a repurchase of its shares, or (iii) for investment in accordance and exemptive orders granted under such Act.
with its investment objective and policies, and in no event shall the
Fund borrow in excess of 1/3 of its assets;
------------------------------------------------------------------------------------------------------------------------------------
(2) purchase any security or evidence of interest therein on margin, except It is proposed that this fundamental policy be
that the Fund may obtain such short-term credit as may be necessary for removed.
the clearance of purchases and sales of securities and except that the
Fund may make deposits on margin in connection with Futures Contracts
and options;
-----------------------------------------------------------------------------------------------------------------------------------
(3) underwrite securities issued by other persons except insofar as the Underwrite Securities: underwrite securities
Fund may technically be deemed an underwriter under the Securities Act issued by other persons, except that all or any
of 1933 in selling a portfolio security; portion of the assets of the Fund may be
invested in one or more investment companies, to
the extent not prohibited by the 1940 Act and
exemptive orders granted under such Act, and
except insofar as the Fund may technically be
deemed an underwriter under the Securities Act
of 1933, as amended, in selling a portfolio
security.
------------------------------------------------------------------------------------------------------------------------------------
(4) purchase or sell real estate (including limited partnership interests Real Estate, Oil and Gas, Mineral Interests,
but excluding securities secured by real estate or interests therein), Commodities: purchase or sell real estate
interests in oil, gas or mineral leases, commodities or commodity (excluding securities secured by real estate or
contracts (except contracts for the future acquisition or delivery of interests therein and securities of companies,
fixed income securities) in the ordinary course of the business of the such as real estate investment trusts, which
Fund (the Fund reserves the freedom of action to hold and to sell real deal in real estate or interests therein),
estate acquired as a result of the ownership of securities); interests in oil, gas or mineral leases,
commodities or commodity contracts (excluding
currencies and any type of option, Futures
Contracts and Forward Contracts) in the ordinary
course of its business. The Fund reserves the
freedom of action to hold and to sell real
estate, mineral leases, commodities or commodity
contracts (including currencies and any type of
option, Futures Contracts and Forward Contracts)
acquired as a result of the ownership of
securities.
------------------------------------------------------------------------------------------------------------------------------------
(5) purchase securities of any issuer if such purchase at the time thereof It is proposed that this fundamental policy be
would cause more than 10% of the voting securities of such issuer to be removed.
held by the Fund;
------------------------------------------------------------------------------------------------------------------------------------
(6) issue any senior security (as that term is defined in the Investment Senior Securities: issue any senior securities
Company Act of 1940 (the "1940 Act"), if such issuance is specifically except to the extent not prohibited by the 1940
prohibited by the 1940 Act or the rules and regulations promulgated Act and exemptive orders granted under such Act.
thereunder (for the purposes of this restriction, collateral For purposes of this restriction, collateral
arrangements with respect to options, Futures Contracts and Options on arrangements with respect to any type of swap,
Futures Contracts and collateral arrangements with respect to initial option, Forward Contracts and Futures Contracts
and variation margin are not deemed to be the issuance of a senior and collateral arrangements with respect to
security); initial and variation margin are not deemed to
be the issuance of a senior security.
------------------------------------------------------------------------------------------------------------------------------------
(7) make loans to other persons except through the lending of its portfolio Make Loans: make loans except to the extent not
securities not in excess of 30% of its total assets (taken at market prohibited by the 1940 Act and exemptive orders
value) and except through the use of repurchase agreements, the granted under such Act.
purchase of commercial paper or the purchase of all or a portion of an
issue of debt securities in accordance with its investment objective,
policies and restrictions;
------------------------------------------------------------------------------------------------------------------------------------
(8) make short sales of securities or maintain a short position, unless at It is proposed that this fundamental policy be
all times when a short position is open it owns an equal amount of such removed.
securities or securities convertible into or exchangeable, without
payment of any further consideration, for securities of the same issue
as, and equal in amount to, the securities sold short ("short sales
against the box"), and unless not more than 10% of the Fund's net
assets (take at market value) is held as collateral for such sales at
any one time; or
------------------------------------------------------------------------------------------------------------------------------------
(9) invest more than 25% of the value of its total assets in any industry, Industry Concentration: purchase any securities
except as described under the subsection "Corporate Fixed Income of an issuer in a particular industry if as a
Securities" of the section "Investment Objective and Policies" above.* result 25% or more of its total assets (taken at
market value at the time of purchase) would be
invested in securities of issuers whose
principal business activities are in the same
industry, except that the Fund may invest up to
40% of the value of its assets in each of the
electric utility and telephone industries.
------------------------------------------------------------------------------------------------------------------------------------
* This investment policy refers to a section in the Fund's currently effective Registration Statement.
APPENDIX E
NOTE: THIS APPENDIX CONTAINS A COMPARISON BETWEEN THE CURRENT AGREEMENT AND
THE STANDARDIZED NEW AGREEMENT THAT THE TRUSTEES PROPOSE TO USE FOR ALL OF THE
FUNDS WITHIN THE MFS FAMILY OF FUNDS. THIS AGREEMENT HAS BEEN MARKED TO SHOW
THE CHANGES THAT WILL BE MADE IF THE NEW AGREEMENT PROPOSED IN ITEM 4 IS
APPROVED AND ADOPTED. DELETED TEXT IS MARKED THROUGH AND ADDED TEXT APPEARS IN
ITALICS. FOR EDGAR DELETED TEXT IS SET IN BRACKETS AND ADDED TEXT IS SET IN
DOUBLE BRACKETS.
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this [25th] day of [February, 1987]
[[______, ____]], by and between MFS MULTIMARKET INCOME TRUST, a Massachusetts
business trust (the ["Trust"] [["Fund"]])[[,]] and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a Delaware corporation (the "Adviser").
WITNESSETH:
-----------
WHEREAS, the [Trust] [[Fund]] is engaged in business as [a closed-end]
[[an]] investment company registered under the Investment Company Act of 1940;
and
WHEREAS, the Adviser is willing to provide [business management] services
to the [Trust (the "Fund")] [[Fund]] on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
[[ARTICLE]] 1. DUTIES OF THE ADVISER. [[(a)]] The Adviser shall provide the
Fund with such investment advice and supervision as the latter may from time to
time consider necessary for the proper supervision of its [funds] [[assets]].
The Adviser shall act as [Adviser] [[investment adviser]] to the Fund and as
such shall furnish continuously an investment program and shall determine from
time to time what securities [[or other instruments]] shall be purchased, sold
or exchanged and what portion of the assets of the Fund shall be held
uninvested, subject always to the restrictions of [its] [[the Fund's Amended and
Restated]] Declaration of Trust, dated [January 9, 1987] [[__________]], and
By-Laws, [as] each [may be] [[as]] amended from time to time (respectively, the
"Declaration" and the "By-Laws"), to the provisions of the Investment Company
Act of 1940 and the Rules, Regulations and orders thereunder and to the Fund's
then[[-]]current Prospectus [[and Statement of Additional Information]]. The
Adviser [[also]] shall [also make recommendations as to the manner in which]
[[exercise ]] voting rights, rights to consent to corporate [action] [[actions]]
and any other rights pertaining to the Fund's portfolio securities [shall be
exercised] [[in accordance with the Adviser's policies and procedures as
presented to the Trustees of the Fund from time to time]]. Should the Trustees
at any time, however, make any definite determination as to the investment
policy and notify the Adviser thereof in writing, the Adviser shall be bound by
such determination for the period, if any, specified in such notice or until
similarly notified that such determination [has been] [[shall be]] revoked.
[[(b)]] The Adviser shall take, on behalf of the Fund, all actions which it
deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
portfolio securities [[or other instruments]] for the Fund's account with
brokers or dealers selected by it, and to that end[[,]] the Adviser is
authorized as [[the]] agent of the Fund to give instructions to the Custodian of
the Fund as to [[the]] deliveries of securities [[or other instruments]] and
payments of cash for the account of the Fund. In connection with the selection
of such brokers or dealers and the placing of such orders, the Adviser is
directed to seek for the Fund[ execution at the best available price. Subject to
this requirement of seeking the best available price, securities may be bought
from or sold to broker dealers who have furnished statistical, research and
other information or services to the Adviser.] [[the best overall price and
execution available from responsible brokerage firms, taking account of all
factors it deems relevant, including by way of illustration: price; the size of
the transaction; the nature of the market for the security; the amount of the
commission; the timing and impact of the transaction taking into account market
prices and trends; the reputation, experience and financial stability of the
broker or dealer involved; and the quality of services rendered by the broker or
dealer in other transactions. In fulfilling this requirement, the Adviser shall
not be deemed to have acted unlawfully or to have breached any duty, created by
this Agreement or otherwise, solely by reason of its having caused the Fund to
pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determined in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion. Subject to seeking the
best price and execution as described above, and in accordance with applicable
rules and regulations, the Adviser also is authorized to consider sales of
shares of the Fund or of other funds or accounts of the Adviser as a factor in
the selection of brokers and dealers.]]
[[(c) The Adviser may from time to time enter into sub-investment advisory
agreements with respect to the Fund with one or more investment advisers with
such terms and conditions as the Adviser may determine, provided that such
sub-investment advisory agreements have been approved in accordance with
applicable provisions of the Investment Company Act of 1940 and any rules,
regulations or orders of the Securities and Exchange Commission thereunder.
Subject to the provisions of Article 6, the Adviser shall not be liable for any
error of judgment or mistake of law by any sub-adviser or for any loss arising
out of any investment made by any sub-adviser or for any act or omission in the
execution and management of the Fund by any sub-adviser.]]
[[ARTICLE 2.]] ALLOCATION OF CHARGES AND EXPENSES. [[(a)]] The Adviser shall
furnish at its own expense investment advisory and administrative services,
office space, equipment and clerical personnel necessary for servicing the
investments of the Fund and maintaining its organization, and investment
advisory facilities and executive and supervisory personnel for managing the
investments[,] [[and]] effecting the portfolio transactions of the Fund. The
Adviser shall arrange, if desired by the Fund, for directors, officers and
employees of the Adviser to serve as Trustees, officers or agents of the Fund if
duly elected or appointed to such positions and subject to their individual
consent and to any limitations imposed by law.
(b) It is understood that the Fund will pay all of its own expenses
[[incurred in its operations and in the offering of the Fund's shares, unless
specifically provided otherwise in this Agreement, or except to the extent that
the Adviser agrees in a written instrument executed by the Adviser (specifically
referring to this Article 2(b)) to assume or otherwise pay for specified
expenses of the Fund,]] including, without limitation[,][[:]] compensation of
Trustees [not "][["not]] affiliated" with the Adviser; governmental fees;
interest charges; taxes; membership dues in the Investment Company Institute
allocable to the Fund; fees and expenses of independent auditors, of legal
counsel[[,]] and of any transfer agent, registrar or dividend disbursing agent
of the Fund; expenses of [[repurchasing and redeeming shares and]] servicing
shareholder accounts; expenses of preparing, printing and mailing [share]
[[stock]] certificates, shareholder reports, notices, proxy statements and
reports to governmental officers and commissions; brokerage and other expenses
connected with the execution, recording and settlement of portfolio security
transactions; insurance premiums; fees and expenses [at] [[of]] the custodian
for all services to the Fund, including safekeeping of funds and securities [;]
and maintaining required books and accounts; expenses of calculating the net
asset value of shares of the Fund; [expenses of shareholder meetings,]
[[organizational and start up costs; such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or proceedings
to which the Fund is a party or otherwise may have an exposure, and the legal
obligation which the Fund may have to indemnify the Fund's Trustees and officers
with respect thereto;]] and expenses relating to the issuance, registration and
qualification of shares of the [Trust] [[Fund]] and the preparation, printing
and mailing of prospectuses for such purposes (except to the extent that any
Distribution Agreement to which the Fund is a party provides that another party
is to pay some or all of such expenses).
[[(c) The payment or assumption by the Adviser of any expenses of the Fund
that the Adviser is not obligated by this Agreement or otherwise to pay or
assume shall not obligate the Adviser to pay or assume the same or any similar
expenses of the Fund on any subsequent occasion.]]
[[ARTICLE]] 3. COMPENSATION OF THE ADVISER. For the services to be rendered
and the facilities [to be] provided, the [Trust] [[Fund]] shall pay to the
Adviser [out of the assets of the Fund] an investment advisory fee computed and
paid monthly in an amount equal to the sum of 0.34% of the Fund's average daily
net assets plus 5.4% of the Fund's gross income (i.e., income other than gains
from the sale of securities, short-term gains from options and futures
transactions and premium income from options written), in each case on an annual
basis for the Fund's then-current fiscal year. If the Adviser shall serve for
less than the whole of any period specified in this Article 3, the compensation
[[paid]] to the Adviser will be prorated.
[[ARTICLE 4. ADDITIONAL SERVICES.]] Should the Fund have occasion to request
the Adviser or its affiliates to perform administrative or other additional
services not herein contemplated or to request the Adviser or its affiliates to
arrange for the services of others, the Adviser or its affiliates will act for
the Fund upon request to the best of its ability, with compensation for the
services to be agreed upon with respect to each such occasion as it arises. No
such agreement for additional services shall expand, reduce or otherwise alter
the obligations of the Adviser, or the compensation that the Adviser is due,
under this Agreement.
[[ARTICLE 5]][4]. COVENANTS OF THE ADVISER. The Adviser agrees that it
will not deal with itself, or with the Trustees of the Fund or the [Fund
principal underwriter] [[Fund's distributor]], if any, as principals in making
purchases or sales of securities or other property for the account of the Fund,
except as permitted by the Investment Company Act of 1940 and [the Rules,
Regulations or Orders] [[any rules, regulations or orders of the Securities and
Exchange Commission]] thereunder, will not take a long or short position in the
shares of the Fund except as permitted by [the Declaration] [[applicable law]],
and will comply with all other provisions of the Declaration and [[the]] By-Laws
and the then- current Prospectus [[and Statement of Additional Information]] of
the Fund relative to the Adviser and its directors and officers.
[5]
[[ARTICLE]] 6. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution and management
of the Fund, except for willful misfeasance, bad faith [or][[,]] gross
negligence [in the performance of its duties,] or [by reason of] reckless
disregard of its duties and obligations hereunder. As used in this [Section 5]
[[Article 6]], the term "Adviser" shall include directors, officers and
employees of the Adviser as well as [the] [[that]] corporation itself.
[6]
[[ARTICLE 7.]] ACTIVITIES OF THE ADVISER. [The] [[(a) The Fund
acknowledges that the]] services of the Adviser to the Fund are not [to be
deemed to be] exclusive, the Adviser being free to render investment advisory
and/or other services to others. The [Adviser may permit other Fund clients to
use the initials "MFS" in their names. The Fund agrees that if the Adviser shall
for any reason no longer serve as Adviser to the Fund, the Fund will change its
name so as to delete the initials "MFS".] [[Fund further acknowledges that it is
possible that, based on their investment objectives and policies, certain funds
or accounts managed by the Adviser or its affiliates may at times take
investment positions or engage in investment techniques which are contrary to
positions taken or techniques engaged in on behalf of the Fund. Notwithstanding
the foregoing, the Adviser will at all times endeavor to treat all of its
clients in a fair and equitable manner.]]
[[(b) The Fund acknowledges that whenever the Fund and one or more other
funds or accounts advised by the Adviser have available monies for investment,
investments suitable and appropriate for each shall be allocated in a manner
believed by the Adviser to be fair and equitable to each entity. Similarly,
opportunities to sell securities or other investments shall be allocated in a
manner believed by the Adviser to be fair and equitable to each entity. The Fund
acknowledges that in some instances this may adversely affect the size of the
position that may be acquired or disposed of for the Fund.]]
[[(c)]] It is understood that [[the]] Trustees, officers and shareholders of
the Fund are or may be or become interested in the Adviser, as directors,
officers, employees, or otherwise and that [directors, officers and employees,
or otherwise and that ]directors, officers and employees of the Adviser are or
may [be or] become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
[[ARTICLE 8. MFS NAME. The Fund acknowledges that the names "Massachusetts
Financial Services," "MFS" or any derivatives thereof or logos associated with
those names (collectively, the "MFS Marks") are the valuable property of the
Adviser and its affiliates. The Adviser grants the Fund a non- exclusive and
non-transferable right and sub-license to use the MFS Marks only so long as the
Adviser serves as investment adviser to the Fund. The Fund agrees that if the
Adviser for any reason no longer serves as investment adviser to the Fund, and
the Adviser so requests, the Fund promptly shall cease to use the MFS Marks and
promptly shall amend its registration statement and Declaration of Trust to
delete any references to the MFS Marks. The Fund acknowledges that the Adviser
may permit other clients to use the MFS Marks in their names or other material.
For purposes of this Article, the Fund shall be deemed to have taken the
required action "promptly" if such action is taken within 90 days of the Adviser
no longer serving as the investment adviser to the Fund, or from the date of the
Adviser's request, as the case may be.]]
[[ARTICLE 9]] [7]. DURATION, TERMINATION AND [AMENDMENTS] [[AMENDMENT]] OF
THIS AGREEMENT. [[(a)]] This Agreement shall become effective [on the day and
year first above written and shall govern the relations between the parties
hereto thereafter, and shall remain in force until August 1, 1988] [[on the date
first written above. Thereafter, this Agreement will remain in effect for a
period of two years from the date first written above,]] on which date it will
terminate unless its continuance [after August 1, 1988] is "specifically
approved at least annually" (i) by the vote of a majority of the Trustees of the
Fund who are not "interested persons" of the Fund or of the Adviser at a meeting
specifically called for the purpose of voting on such approval, and (ii) by the
Board of Trustees of the Fund, or by "vote of a majority of the outstanding
voting securities" of the Fund.
[[(b)]] This Agreement may be terminated at any time without the payment of
any penalty by the Trustees or by "vote of a majority of the outstanding voting
securities" of the Fund, or by the Adviser, in each case on not more than sixty
days" nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment".
[[(c)]] This Agreement may be amended only if such amendment [[is in writing
signed by or on behalf of the Fund and the Adviser and]] is approved by "vote of
a majority of the outstanding voting securities" of the Fund [[(if such
shareholder approval is required by the Investment Company Act of 1940).]]
[[ARTICLE 10. SCOPE OF FUND'S OBLIGATIONS. A copy of the Fund's Declaration
of Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts. The Adviser acknowledges that the obligations of or arising out
of this Agreement are not binding upon any of the Fund's Trustees, officers,
employees, agents or shareholders individually, but are binding solely upon the
assets and property of the Fund.]]
[[ARTICLE 11. DEFINITIONS AND INTERPRETATIONS.]] The terms "specifically
approved at least annually," "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person," and "interested person", when
used in this Agreement, shall have the respective meanings specified [in], and
shall be construed in a manner consistent with, the Investment Company Act of
1940 and the [Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by][[rules and regulations promulgated thereunder.
Any question of interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision of the Investment
Company Act of 1940, the Investment Advisers Act of 1940, the Securities Act of
1933, or the Securities Exchange Act of 1934 (collectively, the "Federal
Securities Acts") shall be resolved by reference to such term or provision of
the Federal Securities Acts and to interpretations thereof, if any, by United
States federal courts or, in the absence of any controlling decisions of any
such court, by rules or regulations of]] the Securities and Exchange Commission
[under said Act][[. Where the effect of a requirement of the Federal Securities
Acts reflected in any provision of this Agreement is revised by rule or
regulation of the Securities and Exchange Commission, such provisions shall be
deemed to incorporate the effect of such rule, regulation, order or
administrative interpretation.]]
[[ARTICLE 12. RECORD KEEPING. The Adviser will maintain records in a form
acceptable to the Fund and in compliance with the rules and regulations of the
Securities and Exchange Commission, including but not limited to records
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and the rules thereunder, which at all times will be the property of the Fund
and will be available for inspection and use by the Fund.]]
[[ARTICLE 13. MISCELLANEOUS. (a) This Agreement contains the entire
understanding and agreement of the parties with respect to the subject matter
hereof.]]
[[(b) Headings in this Agreement are for ease of reference only and shall
not constitute a part of the Agreement.]]
[[(c) Should any portion of this Agreement for any reason be held void in
law or equity, the remainder of the Agreement shall be construed to the extent
possible as if such voided portion had never been contained herein.]]
[[(d) This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions thereof,
except that questions of interpretation shall be resolved in accordance with the
provisions of Article 11 above.]]
MFS-14-MMT-8/01
THE 2001 SHAREHOLDER PROXY VOTING INSTRUCTIONS FOR MFS(R) FUNDS
It's fast, it's easy -- you've read through the materials, and you're ready to
vote Internet voting
To make it fast and easy, you have three ways to vote -- by Internet, by phone,
or by mail. Votes by phone or Internet will be confirmed and posted immediately.
If you vote by phone or by Internet, you don't need to mail your proxy card(s).
Internet voting Telephone voting Mail voting
------------------------- ------------------------- ------------------------
1. Go to www.proxyweb.com 1. Call toll free 1. Complete and sign the
or to the proxy voting 1-888-221-0697. proxy card.
link on mfs.com.
2. Enter the 14-digit 2. Place the card in the
2. Enter the 14-digit control number on your postage-paid return
control number on your proxy card. envelope, and put it
proxy card. in the mail.
3. Follow the recorded
3. Follow the instructions.
instructions on the
site.
Your vote is important. It is your right as a shareholder. Please vote now.
Thank you for your participation.
(C)2001 MFS Investment Management(R).
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MFS-10VOTE-R-9/01
THE 2001 SHAREHOLDER PROXY VOTING INSTRUCTIONS FOR MFS(R) FUNDS
It's fast, it's easy -- you've read through the materials, and you're ready to
vote
To make it fast and easy, you have three ways to vote -- by Internet, by
phone, or by mail.
Votes by phone or Internet will be confirmed and posted immediately.
If you vote by phone or by Internet, you don't need to mail your proxy card(s).
Internet voting Telephone voting Mail voting
------------------------- ------------------------- ------------------------
1. Go to the Web site 1. Call the toll free 1. Complete and sign the
indicated on your number on your proxy proxy card.
proxy card. card.
2. Place the card in the
2. Enter the 12-digit 2. Enter the 12-digit postage-paid return
control number on your control number on your envelope, and put it
proxy card. proxy card. in the mail.
3. Follow the 3. Follow the recorded
instructions on the instructions.
site.
Your vote is important. It is your right as a shareholder. Please vote now.
Thank you for your participation.
(C)2001 MFS Investment Management(R).
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MFS-10VOTE-B-8/01
--------------
FIRST CLASS
U.S. POSTAGE
PAID
PROXY
TABULATOR
--------------
P.O. BOX 9131
HINGHAM, MA 02043-9131
4.5 MILLION
MFS(R) fund account holders
are counting on YOU
Please vote all of your proxies
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-888-221-0697
OR LOG ON TO WWW.PROXYWEB.COM
**** CONTROL NUMBER: 999 999 999 999 99 ****
----- Please fold and detach card at perforation before mailing -----
FUND NAME PRINTS HERE PROXY FOR A MEETING OF SHAREHOLDERS
MFS FAMILY OF FUNDS TO BE HELD ON OCTOBER 12, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.
The undersigned hereby appoints James R. Bordewick, Jr., Stephen E. Cavan, James
O. Yost, Arnold D. Scott and Jeffrey L. Shames and each of them separately,
proxies, with power of substitution, and hereby authorizes them to represent,
and to vote, as designated on the reverse side, at the Meeting of Shareholders
of MFS Multimarket Income Trust, on Friday, October 12, 2001 at 9:30 a.m.,
Boston time, and at any adjournments thereof, all of the shares of the Fund
which the undersigned would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL PROPOSALS. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSALS ON THE REVERSE SIDE.
THIS PROXY CARD IS VALID ONLY WHEN
SIGNED AND DATED.
Date _____________________
Signature (PLEASE SIGN WITHIN BOX)
----------------------------------
----------------------------------
NOTE: Please sign exactly as name
appears on this card. All joint
owners should sign. When signing as
executor, administrator, attorney,
trustee or guardian or as custodian
for a minor, please give full title
as such. If a corporation, please
sign in full corporate name and
indicate the signer's office. If a
partnership, sign in the
partnership name.
MFS-MMT
----- Please fold and detach card at perforation before mailing -----
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. PLEASE DO NOT USE FINE POINT PENS. [X]
YOUR TRUSTEES RECOMMEND THAT YOU VOTE FOR ALL ITEMS.
FOR all
nominees listed WITHHOLD
(except as marked authority
to the contrary to vote for
ITEM 1. To elect a Board of Trustees. at left) all nominees
NOMINEES: (01) Jeffrey L. Shames, (02) John W. Ballen, ( ) ( ) 1.
(03) Lawrence H. Cohn, M.D., (04) The Hon. Sir J. David
Gibbons, KBE, (05) William R. Gutow, (06) J. Atwood
Ives, (07) Abby M. O'Neill, (08) Lawrence T. Perera,
(09) William J. Poorvu, (10) Arnold D. Scott, (11) J.
Dale Sherratt, (12) Elaine R. Smith and (13) Ward Smith
INSTRUCTION: To withhold authority to vote for any individual
nominee, write the nominee's name on the space provided below.
FOR AGAINST ABSTAIN
-----------------------------------------------------------------
ITEM 2. To authorize the Trustees to adopt an Amended and Restated ( ) ( ) ( ) 2.
Declaration of Trust.
ITEM 3. To amend, remove or add certain fundamental investment ( ) ( ) ( ) 3.
policies.
ITEM 4. To approve a new investment advisory agreement with ( ) ( ) ( ) 4.
Massachusetts Financial Services Company.
ITEM 5. To ratify the selection of the independent public ( ) ( ) ( ) 5.
accountants for the current fiscal year.
MMT